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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 3, 1997
CAPITA EQUIPMENT RECEIVABLES TRUST 1997-1
(Exact name of registrant as specified in its charter)
Delaware 333-34793 13-7135550
(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification No.)
44 Whippany Road, Morristown, NJ 07962
(Address of principal executive offices)
Registrant's telephone number, including area code: (302) 658-7581
(Former name or former address, if changed since last report)
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Item 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
Item 2. ACQUISITION OF DISPOSITION OF ASSETS.
Not applicable.
Item 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
Item 5. OTHER EVENTS.
On December 3, 1997 the Registrant sold $1,146,940,000 of
Equipment Receivable-Backed Notes (the "Notes"), secured by,
among other items, a pool of equipment leases, installment sales
contracts, promissory notes, loan and security agreements and
similar types of receivables (collectively, the "Contracts").
Item 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not applicable.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
The following is filed herewith. The exhibit numbers correspond
with Item 601(b) of Regulation S-K.
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Exhibit No. Description
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4.1 Transfer and Servicing Agreement, dated as of
November 1, 1997, among Capita Equipment
Receivables Trust 1997-1, Antigua Funding
Corporation, AT&T Capital Corporation and
Bankers Trust Company, as Indenture Trustee.
4.2 Indenture, dated as of November 1, 1997,
between Capita Equipment Receivables Trust
1997-1 and Bankers Trust Company, as Indenture
Trustee.
4.3 Trust Agreement, dated as of November 1, 1997,
between Antigua Funding Corporation and The Bank
of New York, as Owner Trustee.
4.5 Purchase and Sale Agreement, dated as of
November 1, 1997, among Antigua Funding
Corporation, AT&T Capital Leasing Services,
Inc., AT&T Credit Corporation, NCR Credit
Corp., and AT&T Capital Corporation.
4.6 Master ISDA Agreement, dated as of December 3,
1997 between Goldman Sachs Mitsui Marine
Derivative Products, L.P. and Capita Equipment
Receivables Trust 1997-1, Schedule thereto, and
Confirmation thereto.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
CAPITAL EQUIPMENT RECEIVABLES
TRUST 1997-1
Dated: December 11, 1997 By: ANTIGUA FUNDING CORPORATION
as depositor of Capita Equipment
Receivables Trust 1997-1
By: /s/ Madelyn C. Law
______________________________________
Madelyn C. Law
Vice President and Assistant
Secretary
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INDEX TO EXHIBITS
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<CAPTION>
Exhibit
Number Page
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<S> <C> <C>
4.1 Transfer and Servicing Agreement, dated as of November 1, 1997,
among Capita Equipment Receivables Trust 1997-1, Antigua Funding
Corporation, AT&T Capital Corporation and Bankers Trust Company,
as Indenture Trustee.
4.2 Indenture, dated as of November 1, 1997, between Capita Equipment
Receivables Trust 1997-1 and Bankers Trust Company, as Indenture
Trustee.
4.3 Trust Agreement, dated as of November 1, 1997, between Antigua
Funding Corporation and The Bank of New York, as Owner Trustee.
4.5 Purchase and Sale Agreement, dated as of November 1, 1997, among
Antigua Funding Corporation, AT&T Capital Leasing Services, Inc.,
AT&T Credit Corporation, NCR Credit Corp., and AT&T Capital
Corporation.
4.6 Master ISDA Agreement, dated as of December 3, 1997 between Goldman
Sachs Mitsui Marine Derivative Products, L.P. and Capita Equipment
Receivables Trust 1997-1, Schedule thereto, and Confirmation thereto.
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STATEMENT OF DIFFERENCES
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The section symbol shall be expressed as.............................. 'SS'
The registered trademark symbol shall be expressed as................. 'r'
The copyright symbol shall be expressed as............................ 'c'
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TRANSFER AND SERVICING AGREEMENT
AMONG
CAPITA EQUIPMENT RECEIVABLES TRUST 1997-1
ISSUER
ANTIGUA FUNDING CORPORATION
DEPOSITOR
AT&T CAPITAL CORPORATION
IN ITS INDIVIDUAL CAPACITY AND AS SERVICER
BANKERS TRUST COMPANY
INDENTURE TRUSTEE
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DATED AS OF NOVEMBER 1, 1997
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TABLE OF CONTENTS
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Page
<S> <C>
INTRODUCTION .......................................................................... 1
ARTICLE I DEFINITIONS ...................................................................... 1
SECTION 1.1. Definitions ...................................................... 1
SECTION 1.2. Usage of Terms ................................................... 10
SECTION 1.3. Calculations ..................................................... 10
SECTION 1.4. Section References ............................................... 10
SECTION 1.5. No Recourse ...................................................... 10
ARTICLE II CONVEYANCE OF CONTRACTS ......................................................... 12
SECTION 2.1. Conveyance of Contracts and Related Assets ....................... 12
SECTION 2.2. Custody of Contract Files ........................................ 13
SECTION 2.3. Further Assurances ............................................... 15
SECTION 2.4. Representations and Warranties of Depositor ...................... 15
SECTION 2.5. Nonpetition Covenant ............................................. 18
SECTION 2.6. Purchase of Contracts Upon Breach of Representations and
Warranties ....................................................... 18
ARTICLE III ADMINISTRATION AND SERVICING OF CONTRACTS ....................................... 20
SECTION 3.1. Duties of the Servicer ........................................... 20
SECTION 3.2. Collection of Contract Payments; Modifications
of Contracts ..................................................... 21
SECTION 3.3. Realization Upon Contracts ....................................... 23
SECTION 3.4. Insurance, Maintenance and Taxes ................................. 24
SECTION 3.5. Maintenance of Security Interests in Equipment ................... 27
SECTION 3.6. Covenants, Representations, and Warranties of Servicer ........... 27
SECTION 3.7. Sub-Servicers .................................................... 29
SECTION 3.8. Total Servicing Fee; Payment of Expenses by Servicer ............. 30
SECTION 3.9. Servicer's Certificate ........................................... 30
SECTION 3.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event ................................................ 31
SECTION 3.12. Access to Certain Documentation and Information
Regarding Contracts .............................................. 32
SECTION 3.13. Certain Duties of the Servicer under the Trust Agreement ......... 32
SECTION 3.14. Duties of the Servicer under the Indenture ....................... 33
SECTION 3.15. Errors and Omissions Policy or Bond .............................. 34
SECTION 3.16. Duties of the Servicer under the Class A-5
Swap Agreement ................................................... 34
ARTICLE IV COLLECTIONS AND DEPOSITS ........................................................ 35
SECTION 4.1. Initial Deposit .................................................. 35
SECTION 4.2. Collections ...................................................... 35
SECTION 4.3. Application of Collections ....................................... 36
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Page
<S> <C>
SECTION 4.4. Net Deposits ..................................................... 37
SECTION 4.5. Expiration of Lease Contracts .................................... 37
ARTICLE V TERMINATION ..................................................................... 38
SECTION 5.1. Optional Purchase of All Contracts; Liquidation of Trust Assets .. 38
ARTICLE VI THE DEPOSITOR 39
SECTION 6.1. Liability of Depositor ........................................... 39
SECTION 6.2. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor; Amendment of Certificate of
Incorporation .................................................... 39
SECTION 6.3. Limitation on Liability of Depositor and Others .................. 40
SECTION 6.4. Depositor May Own Notes .......................................... 40
ARTICLE VII THE SERVICER.................................................................. 41
SECTION 7.1. Liability of Servicer; Indemnities ............................... 41
SECTION 7.2. Merger or Consolidation of, or Assumption of the Obligations of,
the Servicer ..................................................... 42
SECTION 7.3. Limitation on Liability of Servicer and Others ................... 43
SECTION 7.4. Servicer Not to Resign ........................................... 43
SECTION 7.5. Corporate Existence .............................................. 44
ARTICLE VIII SERVICER TERMINATION EVENTS .................................................. 45
SECTION 8.1. Servicer Termination Event ....................................... 45
SECTION 8.2. Consequences of a Servicer Termination Event ..................... 46
SECTION 8.3. Indenture Trustee to Act; Appointment of Successor ............... 47
SECTION 8.4. Notification to Equity Certificateholder and Noteholders ......... 48
SECTION 8.5. Waiver of Past Defaults .......................................... 48
ARTICLE IX MISCELLANEOUS PROVISIONS ........................................................ 49
SECTION 9.1. Amendment ........................................................ 49
SECTION 9.2. Protection of Title to Trust Assets .............................. 50
SECTION 9.3. Governing Law .................................................... 52
SECTION 9.4. Severability of Provisions ....................................... 52
SECTION 9.5. Assignment ....................................................... 52
SECTION 9.6. Third-Party Beneficiaries ........................................ 52
SECTION 9.7. Counterparts ..................................................... 53
SECTION 9.8. Intention of Parties ............................................. 53
SECTION 9.9. Notices .......................................................... 53
SECTION 9.10. Income Tax Characterization ...................................... 53
SECTION 9.11. Limitation of Liability .......................................... 53
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EXHIBITS
Exhibit A-1 -- Schedule of Lease Contracts and Leased Equipment
Exhibit A-2 -- Schedule of Loan Contracts
Exhibit B -- Form of Servicer's Certificate
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THIS TRANSFER AND SERVICING AGREEMENT, dated as of November
1, 1997, is made among CAPITA EQUIPMENT RECEIVABLES TRUST 1997-1 (the "Issuer"),
ANTIGUA FUNDING CORPORATION, a Delaware corporation, as Depositor (the
"Depositor"), AT&T CAPITAL CORPORATION, a Delawareucorporation, in its
individual capacity and as Servicer (in its individual capacity, "TCC"; in its
capacity as Servicer, the "Servicer"), and BANKERS TRUST COMPANY, a New York
banking corporation, not in its individual capacity but solely as trustee under
the Indenture hereinafter referred to (the "Indenture Trustee").
In consideration of the mutual agreements herein contained,
and of other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. All terms defined in the
Indenture or the Trust Agreement (each as defined below) shall have the same
meaning in this Agreement. Whenever capitalized and used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
Accountants' Report: The report of a firm of nationally
recognized independent accountants described in Section 3.11.
Accounting Date: With respect to a Payment Date, the last
day of the preceding calendar month.
Administrative Fee: With respect to any Collection Period,
all administrative fees, expenses and charges collected in respect of the
Contracts during such Collection Period, including late fees, late payment
interest, documentation fees, insurance administration charges and that portion
of any Extension Fees allocated to the Servicer.
Affiliate: With respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
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Agreement or "this Agreement": This Transfer and Servicing
Agreement, all amendments and supplements thereto and all exhibits and schedules
to any of the foregoing.
Book Value: With respect to any Leased Equipment, the
value of such Leased Equipment as shown on the accounting books and records of
TCC or the applicable Originator, as appropriate, as of the Cut-Off Date. The
Book Value for each item of Leased Equipment shall be set forth on Exhibit A-1
hereto.
Business Day: Any day (other than a Saturday, Sunday or
legal holiday) on which commercial banking institutions in New York, New York,
or any other location of any successor Servicer or successor Indenture Trustee,
are open for regular business.
Collection Account: The account designated as such in, and
established and maintained pursuant to, Section 8.02 of the Indenture.
Collection Period: With respect to a Payment Date, the
calendar month preceding the month in which such Payment Date occurs (such
calendar month being referred to as the "related" Collection Period with respect
to such Payment Date). With respect to an Accounting Date, the Collection Period
in which such Accounting Date occurs is referred to herein as the "related"
Collection Period with respect to such Accounting Date.
Collection Records: All manually prepared or computer
generated records relating to collection efforts or payment histories with
respect to the Contracts.
Contract File: The documents, electronic entries,
instruments and writings listed in Section 2.2 pertaining to a particular
Contract.
Contract Pool Principal Balance: With respect to any
Payment Date, the sum of the Contract Principal Balances (computed as of the
related Accounting Date) for all Contracts.
Contract Principal Balance: As of any Accounting Date,
with respect to any Contract:
(i) if such Contract does not by its terms permit prepayment or
early termination, the present value of the unpaid Scheduled Payments due
on such Lease Contract after such Accounting Date (excluding all
Scheduled Payments due on or prior to, but not received as of, such
Accounting Date, as well as any Scheduled Payments due after, but
received as of, such Accounting Date), after giving effect to any
Prepayments received on or prior to such Accounting Date, discounted
monthly at the rate of 8.00% per annum
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(assuming, for purposes of such calculation, that each Scheduled Payment
is due on the last day of the applicable Collection Period),
(ii) if such Contract permits prepayment or early termination only
upon payment of an amount that is at least equal to the present value
(calculated in the manner described in clause (i) above) of the unpaid
Scheduled Payments due on such Contract after the date of such prepayment
or early termination, the amount specified in clause (i) above, and
(iii) if such Contract permits prepayment or early termination
without payment of an amount at least equal to the amount specified in
clause (ii) above, the lesser of (a) the unpaid principal balance of such
Loan Contract as of such Accounting Date (after giving effect to any
Scheduled Payments due on or prior to such Accounting Date, whether or
not received, as well as any Prepayments, and any Scheduled Payments due
after such Accounting Date, received as of such Accounting Date), and
(b) the present value of the unpaid Scheduled Payments due on such Loan
Contract after such Accounting Date (excluding all Scheduled Payments due
on or prior to, but not received as of, such Accounting Date, as well as
any Scheduled Payments due after, but received as of, such Accounting
Date), after giving effect to any Prepayments received on or prior to
such Accounting Date, discounted monthly at the rate of 8.00% per annum
(assuming, for purposes of such calculation, that each Scheduled Payment
is due on the last day of the applicable Collection Period);
provided that, for purposes of computing the Monthly Principal Amount or the
Requisite Cash Collateral Amount for a given Payment Date (as well as all
Payment Dates thereafter), the Contract Principal Balance of any Contract which
became a Liquidated Contract during the related Collection Period or was
required to be purchased by TCC as of the last day of the related Collection
Period in accordance with Section 2.6, will be deemed to be zero on and after
the last day of such Collection Period.
Contract Representations and Warranties: As defined in
Section 2.6.
Contracts: The Lease Contracts and the Loan Contracts.
Corporate Trust Office: With respect to the Owner Trustee,
the principal office of the Owner Trustee at which at any particular time its
corporate trust business shall be administered, which office on the date of
execution and delivery of this Agreement is located at 101 Barclay Street, Floor
12 East, New York, New York 10286, Attention: Corporate Trust
Administration--Asset Backed Unit; the telecopy number for the Corporate Trust
Office of the Owner Trustee on the date of execution and delivery of this
Agreement is (212) 815-5544; with respect to the Indenture Trustee, the
principal office of the Indenture Trustee at which at any particular time its
corporate trust business shall be administered, which office is
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located at Four Albany Street, 10th Floor, New York, New York 10006 Attn.:
Corporate Trust and Agency Group -- Structured Finance; the telecopy number for
the Corporate Trust Office of the Indenture Trustee on the date of execution and
delivery of this Agreement is (212) 250-6439.
Cut-Off Date: November 1, 1997.
Deposit Date: With respect to any Collection Period, the
Business Day immediately preceding the related Determination Date.
Depositor: Antigua Funding Corporation, a Delaware
corporation, or its successor in interest pursuant to Section 6.2.
Determination Date: With respect to any Collection Period,
the fifth Business Day immediately preceding the related Payment Date.
Eligible Servicer: TCC, the Indenture Trustee or another
Person whichuat the time of its appointment as Servicer (i) is servicing a
portfolio of equipment lease contracts, installment sale contracts, promissory
notes, loan and security agreements and/or other similar types of receivables
comparable to the Contracts, (ii) is legally qualified and has the capacity to
service the Contracts, (iii) has demonstrated the ability professionally and
competently to service a portfolio of equipment lease contracts, installment
sale contracts, promissory notes, loan and security agreements and other similar
types of receivables comparable to the Contracts with reasonable skill and care,
and (iv) has available software which is adequate to perform its duties and
responsibilities under this Agreement.
Equipment: With respect to any Contract, the property which
is leased or purchased pursuant to such Contract, or which otherwise provides
security for the payment of amounts payable thereunder.
Extension Fees: With respect to any Contract, any fee
received by the Servicer in consideration for the granting of an extension on
the payment of any Scheduled Payment due under such Contract. Any Extension Fees
received shall be allocated as follows: (1) 50% thereof shall be allocated to
the Issuer and shall constitute Pledged Revenues; and (2) 50% thereof shall be
allocated to the Servicer and shall constitute an Administrative Fee.
Indenture: The Indenture, dated as of November 1, 1997,
between the Issuer and the Indenture Trustee, as the same may be amended and
supplemented from time to time.
Indenture Trustee: The Person acting as Trustee under the
Indenture, its successors in interest and any successor Trustee under the
Indenture.
Independent Accountants: As defined in Section 3.11(a).
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Initial Contract Pool Principal Balance: $1,146,940,285.
Insurance, Maintenance and Tax Accounts: The accounts which
are established and maintained pursuant to Section 3.4(a).
Insurance Policy: With respect to a Contract, any insurance
policy benefiting the lessor or secured party under the Contract providing loss
or physical damage, theft or similar coverage with respect to the Equipment.
Issuer: Capita Equipment Receivables Trust 1997-1.
Lease Contracts: The lease contracts listed on Exhibit A-1
hereto (excluding any such lease contract which has become a Purchased Contract)
and all rights and obligations under such contracts, including, without
limitation, all monies at any time paid or payable thereon or in respect thereof
from and after the Cut-Off Date (whether in the form of (i) Scheduled Payments
(including those Scheduled Payments due prior to, but not received as of, the
Cut-Off Date, but excluding those Scheduled Payments due on or after, but
received prior to, the Cut-Off Date), (ii) Prepayments, (iii) Liquidation
Proceeds, (iv) Extension Fees, (v) payments to be applied by the Servicer to the
payment of insurance charges, maintenance, taxes or other similar obligations,
(vi) payments to be retained by the Servicer in payment of Administrative Fees,
or otherwise), and all rights of the lessor in the related Equipment (other than
any ownership interest of the lessor in such Equipment), Insurance Policies and
any other security for the payment of amounts due under such contracts.
Leased Equipment: With respect to any Lease Contract, the
Equipment subject to such Lease Contract, as more particularly described on
Exhibit A-1 hereto.
Lien: Any security interest, lien, charge, pledge,
preference, equity or encumbrance of any kind, including tax liens, mechanics'
liens and any liens that attach by operation of law.
Liquidated Contract: With respect to any Collection Period,
(i) a Contract which, during such Collection Period, was charged off as
uncollectible by the Servicer in accordance with its credit and collection
policies and procedures (which shall be no later than the date as of which the
Servicer has repossessed and disposed of the related Equipment and otherwise
collected all proceeds (including any proceeds of insurance to be applied as
described in Section 3.4(c)(ii)) which, in the Servicer's reasonable judgment,
can be collected under such Contract) following a default thereunder or upon
damage to or destruction of such Equipment (if such Equipment is not to be
replaced or repaired in accordance with Section 3.4(c)(i)), or (ii) a Contract
as to which, during such Collection Period,u10% or more of a Scheduled Payment
shall have become 180 days delinquent.
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Liquidation Proceeds: All amounts received by the Servicer
(i) in connection with the liquidation of any Contract and disposition of the
related Equipment or (ii) as insurance proceeds with respect to any damaged or
destroyed Equipment to be applied as described in Section 3.4(c)(ii), in each
case net of (a) reasonable out-of-pocket expenses incurred by or on behalf of
the Servicer in connection with the collection of such Contract and the
maintenance, repossession, repair, storage and disposition of the related
Equipment (including taxes and insurance charges, to the extent in excess of
amounts available therefor and relating to such Contract in the Insurance,
Maintenance and Tax Accounts, as well as attorneys' fees) and (b) amounts that
are required to be refunded to the Obligor on such Contract; provided, however,
that the Liquidation Proceeds with respect to any Contract and disposition of
the related Equipment shall in no event be less than zero. Liquidation Proceeds
shall be allocated as follows: (1) in the case of any Loan Contract, all
Liquidation Proceeds shall be allocated to the Issuer; and (2) in the case of
any Lease Contract, Liquidation Proceeds shall be allocated pro rata between the
Issuer, on the one hand, and the Depositor, on the other, based upon the
Required Payoff Amount for such Lease Contract (determined as of the Collection
Period during which such Lease Contract became a Liquidated Contract) and the
Book Value of the related Leased Equipment, respectively; provided that, in the
event the Liquidation Proceeds exceed the sum of the Required Payoff Amount for
a given Lease Contract plus the Book Value of the related Leased Equipment, any
such excess shall be allocated solely to the Depositor.
Loan Contracts: The installment sale contracts, promissory
notes, loan and security agreements and other similar types of receivables
listed on Exhibit A-2 hereto (excluding any such contract, note, agreement or
receivable which has become a Purchased Contract) and all rights and obligations
under such contracts, including, without limitation, all monies at any time paid
or payable thereon or in respect thereof from and after the Cut-Off Date
(whether in the form of (i) Scheduled Payments (including those Scheduled
Payments due prior to, but not received as of, the Cut-Off Date, but excluding
those Scheduled Payments due on or after, but received prior to, the Cut-Off
Date), (ii) Prepayments, (iii) Liquidation Proceeds, (iv) Extension Fees,
(v) payments to be applied by the Servicer to the payment of insurance charges,
maintenance, taxes or other similar obligations, (vi) payments to be retained by
the Servicer in payment of Administrative Fees, or otherwise), and all rights of
the secured party in the related Equipment, Insurance Policies and any other
security for the payment of amounts due under such contracts.
Monthly Records: All records and data maintained by the
Servicer with respect to the Contracts in accordance with its customary
standards, policies and procedures.
Note Distribution Account: The account designated as such
in, and established and maintained pursuant to, Section 8.04 of the Indenture.
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Note Majority: Holders of Notes representing a majority of
the Principal Balance of each Class of the Notes then Outstanding.
Obligor: The lessee, borrower, purchaser or any other
Person or Persons who are obligated to make payments under a Contract.
Opinion of Counsel: A written opinion of counsel acceptable
in form and substance and from counsel acceptable to the Owner Trustee and, if
such opinion or a copy thereof is required to be delivered to the Indenture
Trustee, to the Indenture Trustee.
Original Term: With respect to any Contract, the term of
such Contract as of the Cut-Off Date (which shall include any renewals or
extensions of the original term thereof prior to the Cut-Off Date), as such term
may be extended in accordance with Section 3.2(c) or as a result of a bankruptcy
proceeding with respect to the related Obligor, but excluding, in the case of
any Lease Contract, any other extensions or renewals thereof.
Originators: AT&T Capital Leasing Services, Inc., AT&T
Credit Corporation and NCR Credit Corp.
Owner Trustee: The Bank of New York, acting not
individually but solely as trustee, or its successor in interest, and any
successor Owner Trustee appointed as provided in the Trust Agreement.
Payment Date: The fifteenth day of each calendar month (or,
if such fifteenth day is not a Business Day, the next succeeding Business Day),
commencing December 15, 1997.
Person: Any legal person, including any individual,
corporation, partnership, joint venture, estate, association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof, or any other entity.
Pledged Revenues: (i) All Scheduled Payments on the
Contracts received on or after the Cut-Off Date (including all Scheduled
Payments due prior to, but not received as of, the Cut-Off Date, but excluding
any Scheduled Payments due on or after, but received prior to, the Cut-Off
Date); (ii) any Prepayments received on the Contracts on or after the Cut-Off
Date (other than, in the case of a Lease Contract, any portion thereof allocated
to the Depositor); (iii) the Purchase Amount of any Contracts purchased by TCC
in accordance with Section 2.6 (other than any portion thereof attributable to
the Book Value of the Leased Equipment); (iv) the amount paid by the Depositor
to purchase the Contracts pursuant to Section 5.1; (v) that portion of the
Liquidation Proceeds received in respect of any Contracts and the disposition of
the related Equipment on or after the Cut-Off Date and allocated to the Issuer;
(vi) that portion of any Extension Fees received on or after
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the Cut-Off Date and allocated to the Issuer; and (vii) any earnings on the
investment of amounts credited to the Collection Account and the Note
Distribution Account.
Prepayment: With respect to any Collection Period for any
Contract, a voluntary prepayment during such Collection Period of amounts due
and owing under such Contract; provided that, in the case of any Lease Contract,
the amount, if any, by which any such Prepayment exceeds the Required Payoff
Amount for such Contract shall be allocated to the Depositor in respect of the
related Leased Equipment.
Principal Balance: As of any date,uwhen used with respect
to a Class of Notes, the original principal balance of such Class, less all
distributions previously made to such Class in respect of principal.
Purchase Agreements: The Purchase and Sale Agreement, dated
as of November 1, 1997, among TCC, the Originators and the Depositor; the
Purchase and Sale Agreement, dated as of December 1, 1996, among TCC, Leasing
Services and the Depositor; the Purchase and Sale Agreement, dated as of March
1, 1997, among TCC, the Originators and the Depositor; and the Purchase and Sale
Agreement, dated as of June 1, 1997, among TCC, the Originators and the
Depositor.
Purchase Amount: With respect to a Contract and related
Equipment required to be purchased by TCC in accordance with Section 2.6, the
sum of (i) the Required Payoff Amount for such Contract as of the Accounting
Date on which such obligation to so purchase arises, plus (ii) in the case of a
Lease Contract, the Book Value of the related Leased Equipment (that portion of
the Purchase Amount attributable to such Book Value to be allocated to the
Depositor).
Purchased Contract: As of any Deposit Date, any Contract
which TCC has purchased as of the related Accounting Date, as required by
Section 2.6, and as to which, on or before such Deposit Date, (i) that portion
of the Purchase Amount relating to the Required Payoff Amount for such Contract
has been deposited in the Collection Account, and (ii) that portion, if any, of
the Purchase Amount relating to the Book Value of the related Leased Equipment
has been distributed to the Depositor.
Related Assets: The assets, in addition to the Contracts,
transferred by the Depositor to the Issuer pursuant to Section 2.1(a).
Related Documents: The Trust Agreement, the Indenture, the
Equity Certificate, the Notes, the Purchase Agreements, the Class A-5 Swap
Agreement and the Cash Collateral Account Agreement. The Related Documents
executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.
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Required Payoff Amount: With respect to any Collection
Period for any Contract, the sum of (i) the Scheduled Payment due in such
Collection Period, together with any Scheduled Payments due in prior Collection
Periods but not yet received, plus (ii) the Contract Principal Balance of such
Contract (after taking into account the Scheduled Payment due in such Collection
Period, whether or not received).
Responsible Officer: When used with respect to the
Servicer, the Depositor or any other Person other than the Indenture Trustee,
the President, any Vice-President or Assistant Vice-President or the Controller
of such Person, or any other officer or employee having similar functions; when
used with respect to the Indenture Trustee, the meaning set forth in the
Indenture.
Schedule of Contracts: Collectively, the schedules of Lease
Contracts and Loan Contracts (which shall be made available to the parties
hereto on a computer disk or other data storage medium) attached hereto as (or
described in) Exhibit A-1 and Exhibit A-2, respectively.
Scheduled Payment: With respect to any Collection Period
for any Contract during the Original Term of such Contract, the scheduled
payment or payments due under such Contract in such Collection Period other than
those portions of such payments which, under such Contract, are to be
(i) applied by the Servicer to the payment of insurance charges, maintenance,
taxes and other similar obligations, or (ii) retained by the Servicer in payment
of Administrative Fees.
Servicer: AT&T Capital Corporation, its successor in
interest pursuant to Section 8.2 or, after any termination of the Servicer upon
a Servicer Termination Event, any successor Servicer.
Servicer Termination Event: An event described in
Section 8.1.
Servicer's Certificate: With respect to each Determination
Date, a certificate, completed by and executed on behalf of the Servicer, in
accordance with Section 3.9, substantially in the form attached hereto as
Exhibit B.
Servicing Account: The account designated as such in, and
established and maintained pursuant to, Section 8.05 of the Indenture.
Servicing Fee: With respect to any Collection Period, the
fee payable to the Servicer for services rendered during such Collection Period,
which shall be equal to one-twelfth of the Servicing Fee Rate multiplied by the
Contract Pool Principal Balance determined as of the last day of the preceding
Collection Period (or, in the case of the Servicing Fee with respect to the
Collection Period commencing on the Cut-Off Date, the Contract Pool Principal
Balance as of the Cut-Off Date).
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Servicing Fee Rate: 1.25% per annum.
Sub-Servicer: The Person named as servicer or sub-servicer
in any agreement between the Servicer and such Person by which such Person is
contractually obligated to perform on the Servicer's behalf all or a part of the
servicing obligations described herein.
TCC: AT&T Capital Corporation, a Delaware corporation.
Total Servicing Fee: The sum of the Servicing Fee, the
Administrative Fees and any earnings on the investment of amounts in the
Servicing Account.
Trust Accounts: The Collection Account, the Class C Funding
Account, the Note Distribution Account, the Servicing Account, the Insurance,
Maintenance and Tax Accounts and such other accounts as may be established in
the name of the Issuer or the Indenture Trustee pursuant to the Trust Agreement
or this Agreement.
Trust Agreement: The Trust Agreement, dated as of November
1, 1997, between the Depositor and the Owner Trustee, as the same may be amended
and supplemented from time to time in accordance with the terms thereof.
UCC: The Uniform Commercial Code as in effect in the
relevant jurisdiction.
SECTION 1.2. Usage of Terms. With respect to all terms used
in this Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other gender; references to "writing"
include printing, typing, lithography, and other means of reproducing words in a
visible form; references to agreements and other contractual instruments include
all subsequent amendments thereto or changes therein entered into in accordance
with their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation."
SECTION 1.3. Calculations. All calculations of the amount
of the Servicing Fee shall be made on the basis of a 360-day year consisting of
twelve 30-day months. All references to the Contract Principal Balance of a
Contract as of any date shall refer to the close of business on such date.
SECTION 1.4. Section References. All references to
Articles, Sections, paragraphs, subsections, exhibits and schedules shall be to
such portions of this Agreement unless otherwise specified.
SECTION 1.5. No Recourse. No recourse may be taken,
directly or indirectly, under this Agreement or any certificate or other writing
delivered in
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connection herewith or therewith, against any stockholder, officer or director,
as such, of the Depositor, TCC, the Servicer, the Indenture Trustee or the Owner
Trustee or of any predecessor or successor of the Depositor, TCC, the Servicer,
the Indenture Trustee or the Owner Trustee.
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ARTICLE II
CONVEYANCE OF CONTRACTS
SECTION 2.1. Conveyance of Contracts and Related Assets.
(a) Subject to the terms and conditions of this Agreement, the Depositor,
pursuant to the mutually agreed upon terms contained herein, hereby transfers,
assigns, and otherwise conveys to the Issuer, without recourse (but without
limitation of its obligations in this Agreement), as of the Closing Date, all of
the right, title and interest, including any security interest, whether now
owned or hereafter acquired, that the Depositor has or has power to convey, in
and to the following:
(i) the Contracts, including, without limitation, (A) all monies
at any time paid or payable thereon or in respect thereof from and after
the Cut-Off Date in the form of (1) Scheduled Payments (including those
Scheduled Payments due prior to, but not received as of, the Cut-Off
Date, but excluding those Scheduled Payments due on or after, but
received prior to, the Cut-Off Date), (2) Prepayments (other than, in the
case of a Lease Contract, any portion thereof allocated to the Depositor
in accordance with this Agreement), (3) Liquidation Proceeds (but only
that portion thereof allocated to the Issuer in accordance with this
Agreement), (4) Extension Fees, (5) payments to be applied by the
Servicer to the payment of insurance charges, maintenance, taxes or other
similar obligations, and (6) payments to be retained by the Servicer in
payment of Administrative Fees, but excluding any payments made and
attributable to the purchase price or use of any Leased Equipment upon
expiration of the related Lease Contract (whether upon completion of the
Original Term thereof, Prepayment thereof or otherwise), (B) all rights
of the lessor or the secured party, as the case may be, in the Equipment
related to the Loan Contracts and all present or future leases and other
contracts relating to such Equipment and all revenues, payments, rights
to payment, profits, accounts, chattel paper, products and contract
rights arising from or related to such Equipment or any use thereof or
from any such lease or other contract, (C) all rights of the lessor or
secured party, as the case may be, in all Insurance Policies and any
other security (other than any ownership interest of the lessor in the
Leased Equipment) for the payment of amounts due under the Contracts
(including all rights, if any, the lessor or the secured party may have
against vendors and other third parties for payments of such amounts),
(D) all items contained in the related Contract Files and any and all
other documents that are kept on file in accordance with the applicable
Originator's customary procedures relating to the Contracts, and (E) all
proceeds of the foregoing;
(ii) all funds on deposit from time to time in the Trust Accounts
and all investments therein and proceeds thereof; and
(iii) the Purchase Agreements (to the extent they relate to the
Contracts), including (A) any Purchase Amount paid (other than any
portion
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thereof attributable to the Book Value of the Leased Equipment),
and (B) any deemed loan made by the Depositor to the Originators and all
security therefor, including the security interest in the Contracts and
Equipment granted by the Originators to the Depositor to secure such
deemed loan, as described in Section 2.2 of the Purchase Agreement, and
all proceeds of the foregoing.
The foregoing does not constitute, nor is it intended to result in, the creation
or assumption by the Issuer, the Owner Trustee, the Indenture Trustee, any
Noteholder or the Equity Certificateholder of any obligation of the Depositor,
the Servicer or any other Person in connection with the Contracts or the related
Equipment or any agreement or instrument relating thereto, including any
obligation to the Obligors.
(b) Subject to the terms and conditions of this Agreement,
upon the transfer of the Contracts and other assets pursuant to Section 2.1(a),
the Depositor will be entitled to (i) the Leased Equipment and any payments made
and attributable to the purchase price or use of the Leased Equipment upon
expiration of the related Lease Contract (whether upon completion of the
Original Term thereof, Prepayment thereof or otherwise), (ii) that portion of
any Prepayments and Liquidation Proceeds received on or after the Cut-Off Date
and allocated to the Depositor in accordance with this Agreement and (iii) that
portion of any Purchase Amount attributable to the Book Value of the Leased
Equipment.
(c) As security for the payment of amounts described in
Section 2.1(a)(i)(3), the Depositor hereby grants to the Issuer a security
interest in all of the right, title and interest that the Depositor has or has
power to convey, whether now owned or hereafter acquired, in and to the Leased
Equipment and all proceeds thereof.
SECTION 2.2. Custody of Contract Files.
(a) The Owner Trustee, on behalf of the Issuer, hereby
appoints the Servicer, and the Servicer hereby accepts such appointment, to act
as the agent of the Issuer as custodian of the following documents or
instruments (with respect to each Contract), which will be, as of the Closing
Date, in the possession of the Servicer or its agents:
(i) The fully executed original of the Contract or a
facsimile copy thereof (together with any agreements modifying the
Contract, including, without limitation, any extension agreements);
(ii) Documents evidencing or related to any Insurance
Policy, or copies thereof; and
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(iii) Such documents, if any, that the applicable
Originator keeps on file in accordance with its customary procedures
indicating that the Equipment is owned or leased by the Obligor and
subject to the interest of the lessor or secured party.
(b) The Servicer agrees to maintain the Contract Files at
the locations where they are currently maintained, or at such other locations as
shall from time to time be identified to the Indenture Trustee by written
notice. The Servicer may temporarily move individual Contract Files or any
portion thereof without notice as necessary to conduct collection and other
servicing activities in accordance with its customary practices and procedures.
(c) As custodian, the Servicer shall have and perform the
following powers and duties:
(i) hold the Contract Files on behalf of the Equity
Certificateholder, the Depositor, the Owner Trustee, the Issuer, the
Noteholders and the Indenture Trustee, maintain accurate records
pertaining to each Contract to enable it to comply with the terms and
conditions of this Agreement and the Related Documents, maintain a
current inventory thereof and certify to the Trustee annually that it
continues to maintain possession of such Contract Files;
(ii) implement written policies and procedures with respect
to persons authorized to have access to the Contract Files and the
receipting for Contract Files taken from their storage area by an
employee of the Servicer for purposes of servicing or any other purposes;
and
(iii) attend to all details in connection with maintaining
custody of the Contract Files on behalf of the Equity Certificateholder,
the Depositor, the Owner Trustee, the Issuer, the Noteholders and the
Indenture Trustee.
(d) In performing its duties under this Section, the
Servicer agrees to act with reasonable care, using that degree of skill and care
that it exercises with respect to similar contracts owned and/or serviced by it.
The Servicer shall promptly report to the Indenture Trustee any failure by it to
hold the Contract Files as herein provided and shall promptly take appropriate
action to remedy any such failure. In acting as custodian of the Contract Files,
the Servicer agrees further not to assert any beneficial ownership interests in
the Contracts or the Contract Files. The Servicer agrees to indemnify the Equity
Certificateholder, the Depositor, the Owner Trustee, the Issuer, the Noteholders
and the Indenture Trustee for any and all liabilities, obligations, losses,
damages, payments, costs or expenses of any kind whatsoever which may be imposed
on, incurred or asserted against the Equity Certificateholder, the Depositor,
the Owner Trustee, the Issuer, the Noteholders or the Indenture Trustee as the
result of any act or omission by the Servicer relating to
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the maintenance and custody of the Contract Files; provided, however, that the
Servicer will not be liable for any portion of any such amount resulting from
the negligence or willful misconduct of the Equity Certificateholder, the
Depositor, the Owner Trustee, the Issuer, any Noteholder or the Indenture
Trustee.
SECTION 2.3. Further Assurances. Following the Closing
Date, the Depositor shall, at the reasonable request of the Owner Trustee, the
Indenture Trustee or the Servicer, and at the Depositor's expense, execute and
deliver any further instruments of transfer or other documents, and shall take
all such other actions that may be necessary, appropriate or desirable, to fully
convey the Contracts and the Related Assets to the Issuer or otherwise to
evidence, effectuate or implement the transactions contemplated hereby. In
addition, the Depositor, as agent for the Issuer, shall defend the Contracts and
the Related Assets against any and all claims and demands of all Persons at any
time claiming the same or any interest therein adverse to that of the Issuer.
SECTION 2.4. Representations and Warranties of Depositor.
By its execution of this Agreement, the Depositor makes the following
representations and warranties. Unless otherwise specified, such representations
and warranties speak as of the Closing Date.
(a) Organization and Good Standing. The Depositor has been
duly organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with power and authority to own
its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and now has, power, authority and legal right to acquire,
own and transfer the Contracts and the other property transferred to the
Issuer.
(b) Due Qualification. The Depositor is duly qualified to
do business as a foreign corporation in good standing, and has obtained
all necessary licenses and approvals, in all jurisdictions where the
failure to do so would materially and adversely affect the performance of
its obligations under this Agreement and the Related Documents.
(c) Power and Authority. The Depositor has the power and
authority to execute and deliver this Agreement and the Depositor's
Related Documents and to carry out the terms hereof and thereof; the
Depositor has full power and authority to transfer and assign the Trust
Assets to be transferred and assigned to and deposited with the Issuer by
it and has duly authorized such transfer and assignment to the Issuer by
all necessary corporate action; and the execution, delivery and
performance of this Agreement and the Depositor's Related Documents have
been duly authorized by the Depositor by all necessary corporate action.
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(d) No Consent Required. No consent, license, approval or
authorization of, or registration or declaration with, any Person or any
governmental authority, bureau or agency is required in connection with
the execution, delivery or performance of this Agreement and the Related
Documents, except for such as have been obtained, effected or made or as
described in paragraph (m) below.
(e) Valid Transfer; Binding Obligations. This Agreement
effects, as of the Closing Date, a valid transfer and assignment of the
Contracts and the other Trust Assets, enforceable against the Depositor
and creditors of and purchasers from the Depositor; and this Agreement
and the Depositor's Related Documents, when duly executed and delivered,
shall constitute legal, valid and binding obligations of the Depositor
enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(f) No Violation. The execution and delivery of this
Agreement and the Related Documents, the consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents
shall not conflict with, result in any breach of any of the terms and
provisions of or constitute (with or without notice or lapse of time, or
both) a default under the certificate of incorporation or by-laws of the
Depositor, or any indenture, agreement, mortgage, deed of trust or other
instrument to which the Depositor is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than this Agreement,
or violate any law, order, rule or regulation applicable to the Depositor
of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Depositor or any of its properties.
(g) No Proceedings. There are no proceedings or
investigations pending or, to the Depositor's knowledge, threatened
against the Depositor, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having
jurisdiction over the Depositor or its properties (A) asserting the
invalidity of this Agreement or any of the Related Documents, (B) seeking
to prevent the consummation of any of the transactions contemplated by
this Agreement or any of the Related Documents, (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents, or
(D) seeking to adversely affect (i) the federal income tax or
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other federal, state or local tax attributes of the Equity Certificate or
the Notes or (ii) the federal, state or local tax treatment of any of the
transactions contemplated by this Agreement and the Related Documents.
(h) Place of Business. The principal executive offices of
the Depositor, and the offices where the Depositor keeps its records
concerning the Contracts and related documents, are located at 44
Whippany Road, Morristown, New Jersey.
(i) Registration Statement. No stop order suspending the
effectiveness of the Registration Statement relating to the Notes has
been issued, and no proceeding for that purpose has been instituted or is
threatened, by the Securities and Exchange Commission.
(j) Filings. Since the effective date of the Registration
Statement relating to the Notes, there has occurred no event required to
be set forth in an amendment or supplement to the Registration Statement
or Prospectus that has not been so set forth, and there has been no
document required to be filed under the Securities Exchange Act of 1934
and the rules and regulations of the Securities and Exchange Commission
thereunder that upon such filing would be deemed to be incorporated by
reference in the Prospectus that has not been so filed.
(k) Right to Transfer. The Depositor has the right to
transfer the Contracts and Related Assets to the Issuer pursuant to
Section 2.1(c) (subject, in the case of amounts in the Insurance,
Maintenance and Tax Accounts, to the rights of the Obligors therein),
free of any Lien. Upon the transfer and assignment of the Contracts and
Related Assets to the Issuer pursuant to Section 2.1(a), the Issuer will
have good title thereto and will be the sole owner thereof (subject, in
the case of amounts in the Insurance, Maintenance and Tax Accounts, to
the rights of the Obligors therein), free of any Lien.
(l) No Impairment. No person has a participation in or
other right to receive Scheduled Payments under any Contract, and the
Depositor has taken no action to convey any right to any Person that
would result in such Person having a right to Scheduled Payments received
with respect to any Contract.
(m) Lawful Assignment. No Contract was originated in, or is
subject to the laws of, any jurisdiction the laws of which would make
unlawful, void or voidable the transfer and assignment of such Contract
from the Depositor to the Issuer under this Agreement. Each Contract may
be sold, assigned and transferred by the Depositor to the Issuer without
the consent of, or prior approval from, or any notification to, the
applicable Obligor, other than (i) certain Contracts (which, in
proportion to the aggregate of all of the
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Contracts, are not material) that require notification of the assignment
to the Obligor, which notification will be given by the Servicer not
later than 10 days following the Closing Date, and (ii) certain Contracts
(which, in proportion to the aggregate of all of the Contracts, are not
material) that require the consent of the Obligor, which consent will be
obtained by the Servicer not later than 10 days following the Closing
Date.
(n) All Filings Made. All filings and other actions
required to be made, taken or performed by any Person in any jurisdiction
to give the Issuer a first priority perfected lien or ownership interest
in the Contracts has been made, taken or performed.
(o) Schedule of Contracts Accurate. The information with
respect to the Contracts contained in the Schedule of Contracts is true
and correct in all material respects.
(p) No Adverse Selection. No selection procedures adverse
to the Noteholders were utilized in selecting the Contracts from those
lease and loan contracts available for transfer by the Depositor to the
Owner Trust.
SECTION 2.5. Nonpetition Covenant. None of the Depositor, the Servicer,
the Owner Trustee (in its individual capacity or on behalf of the Trust)
nor TCC shall petition or otherwise invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Issuer or the Depositor under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Issuer or the Depositor or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the
Issuer or the Depositor.
SECTION 2.6. Purchase of Contracts Upon Breach of
Representations and Warranties. Prior to or concurrently with the execution and
delivery of this Agreement, TCC, the Originators and the Depositor have entered
into the Purchase Agreements, the rights of the Depositor under which (to the
extent they relate to the Contracts) have been assigned by the Depositor to the
Issuer pursuant to Section 2.1(a). Under the Purchase Agreements, TCC and the
Originators have made certain representations and warranties to the Depositor
with respect to the Contracts (the "Contract Representations and Warranties"),
and each Purchase Agreement by its terms provides that, upon transfer of the
Contracts and Related Assets to the Issuer pursuant to this Agreement, such
representations and warranties are deemed made as of the Cut-off Date or the
Closing Date, as applicable. As of the second Accounting Date following its
discovery or its receipt of notice of any breach of the Contract Representations
and Warranties that materially and adversely affects the value of any Contract
(including any Liquidated Contract), TCC shall, unlessusuch breach shall have
been cured in all material respects, (i) purchase such Contract from the Issuer,
and (ii) in the case of a Lease Contract, purchase the related Leased
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Equipment from the Depositor. On or before the related Deposit Date, TCC shall
pay the Purchase Amount to the Servicer on behalf of the Owner Trustee and the
Depositor, as their interests may appear. The obligations of the Depositor with
respect to any such breach of representations and warranties shall be limited to
taking any and all actions necessary to enable the Owner Trustee to enforce
directly the obligations of TCC to purchase the applicable Contract under the
Purchase Agreement. It is understood and agreed that, except as set forth in the
following paragraph, the obligation of TCC to purchase any Contract, together
with the related Equipment, as to which a breach has occurred and is continuing
shall, if such obligation is fulfilled, constitute the sole remedy against TCC
for such breach available to the Owner Trustee on behalf of the Equity
Certificateholder, to the Depositor or the Indenture Trustee on behalf of the
Noteholders and to the Depositor, as their interests may appear.
In addition to the foregoing and notwithstanding whether
the Contract and related Equipment shall have been purchased by TCC, TCC shall
indemnify the Equity Certificateholder, the Depositor, the Owner Trustee, the
Issuer, the Noteholders and the Indenture Trustee against all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of counsel, which may be asserted against or incurred by any of them as a result
of third party claims arising out of the events or facts giving rise to such
breach.
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ARTICLE III
ADMINISTRATION AND SERVICING OF CONTRACTS
SECTION 3.1. Duties of the Servicer. The Servicer is
hereby authorized to act as agent for the Issuer and the Depositor and in such
capacity shall manage, service, administer and make collections on the
Contracts, and perform the other actions required by the Servicer under this
Agreement. The Servicer agrees that its servicing of the Contracts shall be
carried out in accordance with customary and usual procedures of institutions
which service equipment lease contracts, installment sale contracts, promissory
notes, loan and security agreements and other similar types of receivables
comparable to the Contracts and, to the extent more exacting, the degree of
skill and attention that the Servicer exercises from time to time with respect
to all comparable such contracts that it services for itself or others. In
performing such duties, so long as TCC is the Servicer, it shall comply in all
material respects with its customary standards, policies and procedures in
effect from time to time. The Servicer may at any time change its customary
standards, policies and procedures; provided that any such change shall not
materially impair the collectibility of any Contract nor the Servicer's ability
to perform its obligations under this Agreement and the Related Documents. The
Servicer's duties shall include, without limitation, billing, collection and
posting of all payments, responding to inquiries of Obligors on the Contracts,
investigating delinquencies, sending invoices to Obligors, accounting for
collections and furnishing monthly and annual statements to the Owner Trustee
and the Indenture Trustee with respect to distributions, monitoring the status
of Insurance Policies with respect to the Equipment and performing the other
duties specified herein. The Servicer shall also administer and enforce all
material rights and responsibilities of the lessor or secured party under the
Contracts and provided for in the Insurance Policies, to the extent that such
Insurance Policies relate to the Contracts, the Equipment or the Obligors. To
the extent consistent with the standards, policies and procedures otherwise
required hereby, the Servicer shall follow its customary standards, policies and
procedures and shall have full power and authority to do any and all things in
connection with such managing, servicing, administration and collection that it
may deem necessary or desirable, including the authority to forego collection
efforts under circumstances deemed appropriate by the Servicer in accordance
with its customary standards, policies and procedures. Without limiting the
generality of the foregoing, the Servicer is hereby authorized and empowered by
the Owner Trustee to execute and deliver, on behalf of the Equity
Certificateholder, the Depositor and the Issuer or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Contracts
and with respect to the Equipment in accordance with its customary standards,
policies and procedures. The Servicer is hereby authorized to commence, in its
own name (or in the name of the Issuer, provided the Servicer has obtained the
Owner Trustee's consent, which consent shall not be unreasonably withheld), a
legal proceeding to enforce a Contract pursuant to Section 3.3 or to commence or
participate in any other legal proceeding
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(including, without limitation, a bankruptcy proceeding) relating to or
involving a Contract, an Obligor or the related Equipment. If the Servicer
commences or participates in such a legal proceeding in its own name, the Issuer
shall thereupon be deemed to have automatically assigned such Contract to the
Servicer solely for purposes of commencing or participating in any such
proceeding as a party or claimant, and the Servicer is authorized and empowered
by the Owner Trustee to execute and deliver in the Servicer's name any notices,
demands, claims, complaints, responses, affidavits or other documents or
instruments in connection with any such proceeding. The Owner Trustee shall
furnish the Servicer with any powers of attorney and other documents which the
Servicer may reasonably request and which the Servicer deems necessary or
appropriate and take any other steps which the Servicer may deem necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Agreement.
SECTION 3.2. Collection of Contract Payments;
Modifications of Contracts.
(a) Consistent with the standards, policies and procedures
required by this Agreement, the Servicer shall make reasonable efforts to
collect all payments called for under the terms and provisions of the Contracts
as and when the same shall become due, and shall follow such collection
procedures as it follows with respect to all comparable contracts that it
services for itself or others and otherwise act with respect to the Contracts,
the related Equipment, the Insurance Policies and the other Trust Assets in such
manner as will, in the reasonable judgment of the Servicer, maximize the amount
to be received by the Issuer and the Depositor with respect thereto. The
Servicer is authorized in its discretion to waive any Administrative Fees or
Extension Fees that may be collected in the ordinary course of servicing any
Contract.
(b) The Servicer may at any time agree to a modification
or amendment of a Contract in accordance with its credit and collection policies
and procedures (it being acknowledged that any modification or amendment of a
Contract resulting from a bankruptcy proceeding with respect to the Obligor will
not be deemed to have been agreed to by the Servicer hereunder):
(i) in order to (A) change the Obligor's regular due date
to a date within the Collection Period in which such due date occurs or
(B) re-amortize (over the remainder of the original term) the Scheduled
Payments on a Contract following a partial Prepayment (provided that the
sum of such partial Prepayment and the Contract Principal Balance of the
Contract after the re-amortization is at least equal to the Required
Payoff Amount for such Contract prior to the partial Prepayment), or
(ii) for any other purpose, provided that no such
modification or amendment shall:
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(A) change the amount or the due date of any Scheduled
Payment (except as provided in clauses (i)(A) and (B) above,
Section 3.2(c)(i) or Section 3.2(d)),
(B) release the related Equipment from the Contract, unless
(1) equipment of equal or greater value is substituted, (2) the
remaining related Equipment has a value at least equal to the
Required Payoff Amount of the Contract plus the Book Value of such
remaining equipment, or (3) the release is pursuant to a partial
Prepayment (which, in the case of a partial Prepayment on a Lease
Contract, meets the requirements of Section 3.2(d)) and the ratio
of the value of the related Equipment to the Contract Principal
Balance of the Contract after such Prepayment and release is at
least equal to such ratio prior to such Prepayment and release;
(C) cause any of the representations or warranties
contained in the Contract Representations and Warranties
(excluding, for this purpose, those representations and warranties
contained in clauses (F), (N) (except as such representation or
warranty relates to the requirement that payments be made on the
Contract regardless of the condition or suitability of the related
Equipment and notwithstanding any defense, set-off or counterclaim
against the manufacturer, lessor or lender), (B) or (AA)) to cease
to be true; or
(D) except as provided in clause (ii)(A) above, result in
the Contract Principal Balance or Required Payoff Amount of the
Contract being less than it would have been absent such
modification or amendment.
(c) The Servicer may grant payment extensions on a
Contract in accordance with its credit and collection policies and procedures
(it being acknowledged that any extensions on a Contract resulting from a
bankruptcy proceeding with respect to the Obligor will not be deemed to have
been granted by the Servicer hereunder) if the Servicer believes in good faith
that such extension is necessary to avoid a termination and liquidation of such
Contract and will maximize the amount to be received by the Issuer with respect
to such Contract; provided, however, that:
(i) the aggregate period of all extensions granted on a
Contract shall not exceed six months; and
(ii) in no event may any Contract be extended beyond the
Collection Period immediately preceding the final Stated Maturity Date.
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Nothing in this Section 3.2(c) shall be deemed to prevent the Servicer from
extending or renewing, or otherwise accepting the continued performance by the
Obligor under, a Contract after expiration of its stated term.
(d) The Servicer may, in its discretion, allow a
Prepayment, in whole or in part, of any Lease Contract which, by its terms, is
not prepayable, but only if the amount of such Prepayment (or, in the case of a
partial Prepayment, the sum of such Prepayment and the remaining Contract
Principal Balance of the Lease Contract after application of such Prepayment),
together with such additional amounts as are (i) available to the Servicer for
the purpose of prepaying such Lease Contract (excluding any monies otherwise
constituting Pledged Revenues) and (ii) deposited in the Collection Account
contemporaneously with the deposit therein of such Prepayment, is at least equal
to the Required Payoff Amount for such Lease Contract.
(e) The Servicer shall remit all payments by or on behalf
of the Obligors (other than amounts constituting Administrative Fees) received
by the Servicer to the Servicing Account as soon as practicable, but in no event
later than the second Business Day after receipt thereof.
SECTION 3.3. Realization Upon Contracts. Consistent with
the standards, policies and procedures required by this Agreement, the Servicer
shall, except as provided in the following paragraph, take such action as is
reasonably necessary (including making commercially reasonable efforts to
repossess (or otherwise comparably convert the ownership of) and dispose of the
related Equipment) to collect from the Obligor or otherwise all amounts payable
under any Contract as to which the Obligor is in default in the making of one or
more Scheduled Payments thereunder, if the Servicer has determined such default
is not likely to be cured. The Servicer will not be required to repossess (or
otherwise comparably convert the ownership of) any Equipment the repossession of
which, in accordance with the Servicer's credit and collection policies and
procedures, and based on the Servicer's good faith estimate of the value of the
Equipment and its availability, would not be reasonable. The Servicer is
authorized to follow such customary practices and procedures as it shall deem
necessary or advisable, consistent with the standard of care required by Section
3.1, which practices and procedures may include the sale of the related
Equipment at public or private sale, the submission of claims under an Insurance
Policy and other actions by the Servicer in order to realize upon such a
Contract. The foregoing is subject to the provision that, in any case in which
the Equipment shall have suffered damage, the Servicer shall not expend funds in
connection with any repair or towards the repossession of such Equipment unless
it shall determine in its reasonable judgment that such repair and/or
repossession shall increase the proceeds of liquidation of the related Contract
by an amount greater than the amount of such expenses. All amounts received upon
liquidation of a Contract (except as otherwise provided below), including any
proceeds derived from the disposition of the related Equipment, shall be
remitted by the Servicer to the Servicing Account as soon as
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practicable, but in no event later than the second Business Day after receipt
thereof. The Servicer shall, to the extent the proceeds of such liquidation are
sufficient therefor, be entitled to recover all reasonable out-of-pocket
expenses incurred by it in the course of liquidating a Contract, which amounts
may be retained by the Servicer from such proceeds (and shall not be required to
be deposited as provided in Section 3.2(e)) to the extent of such expenses. The
Servicer shall be entitled to retain in the Servicing Account, from liquidation
proceeds, a reserve for out-of-pocket liquidation expenses in an amount equal to
such expenses, in addition to those previously incurred, as it reasonably
estimates will be incurred. Upon completion of such liquidation, the remainder
of any such reserve, after reimbursement to the Servicer of all out-of-pocket
liquidation expenses, shall constitute Liquidation Proceeds and be transferred
as provided in Section 4.2(a). The Servicer shall, in accordance with Section
3.4(f), pay on behalf of the Issuer and the Depositor any sales, use, personal
property and other taxes assessed on repossessed Equipment, as well as any sales
or similar taxes on the disposition thereof, and shall be entitled to
reimbursement of any such tax from liquidation proceeds with respect to the
related Contract as provided in Section 3.4(b).
Although it is intended that the Servicer repossess and
dispose of any Equipment in a commercially reasonable manner with a view to
realizing proceeds at least equal to the fair market value of the Equipment, the
Servicer may, in its discretion, choose to dispose of Equipment through a new
lease or in some other manner which provides for payment for the Equipment over
time. In any such event, the Servicer will be required to pay from its own
funds, and deposit in the Servicing Account, an amount which, in its reasonable
judgment, is equal to the fair market value of such Equipment (less any related
out-of-pocket liquidation expenses), and the Servicer will be entitled to all
payments received thereafter in respect of such Equipment. Any such amounts so
deposited by the Servicer shall be treated as additional Liquidation Proceeds
with respect to the related Contract and Equipment.
SECTION 3.4. Insurance, Maintenance and Taxes.
(a) The Servicer shall establish one or more insurance,
maintenance and tax accounts (collectively, the "Insurance, Maintenance and Tax
Accounts") in the name of the Servicer and for the benefit of the respective
Obligors and, to the extent provided herein, the Issuer and the Depositor. The
Servicer shall deposit into the Insurance, Maintenance and Tax Accounts any
payments made by or on behalf of Obligors which constitute (i) insurance charges
paid by an Obligor to the lessor or secured party under a Contract, (ii) any
insurance payments or recoveries paid by an insurance company or comparable
third party and related to the damage to, or destruction of, the Equipment
related to such Contract (unless paid directly by such insurance company or
comparable third party directly to the Obligor), (iii) any payments made by or
on behalf of Obligors which constitute amounts paid by an Obligor to the lessor
or secured party under a Contract in respect of the maintenance of the related
Equipment, and (iv) taxes paid by the Obligor with
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respect to the related Contract or Equipment (except for any such payments in
respect of taxes which were paid by the applicable Originator prior to the
Cut-Off Date, which payments shall constitute Scheduled Payments hereunder).
None of the foregoing payments shall constitute Pledged Revenues except under
the circumstances described in clause (c)(ii) below.
(b) The Servicer may pay from its own funds, or may
withdraw amounts from the Insurance, Maintenance and Tax Accounts, when and if
appropriate, to pay, when due (i) all insurance charges in the amounts received
under clause (a)(i) above, (ii) any amounts payable under any applicable
maintenance contract or otherwise with respect to the maintenance of the related
Equipment in the amounts received under clause (a)(iii) above, and (iii) all
taxes in the amounts received under clause (a)(iv) above. If the Servicer has
paid any such insurance charges, maintenance costs or taxes from its own funds
(including any such amounts that may have been paid prior to the Closing Date),
the Servicer shall be entitled to reimbursement therefor from any appropriate
amounts available therefor in the Insurance, Maintenance and Tax Accounts, from
payments thereafter received from the applicable Obligor in respect thereof or
from liquidation proceeds in the event such Contract is liquidated. The Servicer
is authorized in its discretion to waive its right to receive reimbursement of
any such amount.
(c) Amounts on deposit in the Insurance, Maintenance and
Tax Accounts which represent amounts received by the Servicer pursuant to clause
(a)(ii) above shall be applied by the Servicer as follows: (i) if equipment is
purchased to replace the Equipment that was damaged or destroyed, and such
replacement equipment is (in the reasonable opinion of the Servicer) of
comparable use and equivalent value to the Equipment that was damaged or
destroyed, or if the Equipment is to be repaired, the Servicer shall release
such amount so received from the insurance company or comparable third party in
payment or reimbursement for such replacement equipment or such repair; and
(ii) if such replacement option is not exercised or the Equipment is not to be
repaired, then the Servicer shall treat such amount as Liquidation Proceeds and
(A) if the related Contract is a Loan Contract, transfer such amount from the
Insurance, Maintenance and Tax Accounts to the Collection Account, and (B) if
the related Contract is a Lease Contract, (I) transfer that portion thereof
which is allocated to the Issuer (as described in the second sentence of the
definition of "Liquidation Proceeds") from the Insurance, Maintenance and Tax
Accounts to the Collection Account, and (II) distribute the balance thereof from
the Insurance, Maintenance and Tax Accounts to the Depositor.
(d) The Servicer may sue to enforce or collect upon the
Insurance Policies, in its own name, if possible, or as agent of the Issuer and
the Depositor. If the Servicer elects to commence a legal proceeding to enforce
an Insurance Policy, the act of commencement shall be deemed to be an automatic
assignment of the rights of the Issuer and the Depositor under such Insurance
Policy to the Servicer for purposes of collection only. If, however, in any
enforcement suit or legal
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proceeding it is held that the Servicer may not enforce an Insurance Policy on
the grounds that it is not a real party in interest or a holder entitled to
enforce the Insurance Policy, the Owner Trustee, on behalf of the Issuer and the
Depositor, shall take such steps as the Servicer deems necessary to enforce such
Insurance Policy, including bringing suit in its name or the name of the Owner
Trustee for the benefit of the Equity Certificateholder and the Depositor and
the Indenture Trustee for the benefit of the Noteholders.
(e) Consistent with its customary standards, policies and
procedures, with respect to each Contract, the Servicer shall maintain insurance
against casualty loss with respect to any Equipment financed by or leased
pursuant to the Contract, to the extent the Contract requires the lessor or
secured party under the Contract to maintain such insurance, and shall otherwise
require the Obligor under the Contract to maintain such insurance, to the extent
the Contract requires that such insurance be maintained by the Obligor. The
Servicer shall not otherwise be liable to the Owner Trustee, the Indenture
Trustee, the Depositor or any Noteholder or Equity Certificateholder for any
casualty loss with respect to any Equipment related to a Contract, except to the
extent otherwise explicitly provided in this Agreement.
(f) The Servicer shall determine and pay when due all
sales, use, personal property and other taxes payable in respect of the
Equipment related to each Contract. To the extent the Servicer has previously
received from the related Obligor payments with respect to such taxes and has
deposited such payments in the Insurance, Maintenance and Tax Accounts in
accordance with clause (a)(iv) above, the Servicer shall, in accordance with
clause (b)(iii) above, either (i) pay such taxes from amounts withdrawn from the
Insurance, Maintenance and Tax Accounts, or (ii) pay such taxes from its own
funds and thereafter reimburse itself from amounts withdrawn from the Insurance,
Maintenance and Tax Accounts. In the event the Servicer has not previously
received payments from the Obligor for this purpose, or to the extent any such
payments received were insufficient to pay the taxes due, the Servicer shall
nonetheless pay such taxes from its own funds and shall bill the Obligor for any
amounts so paid. The Servicer shall be entitled to reimbursement for any taxes
so paid from its own funds, as provided in clause (b)(iii) above. Failure on the
part of the Servicer to perform its duties in a timely fashion under this clause
shall constitute a breach of this Agreement by the Servicer for which indemnity
will be available in accordance with Section 7.1.
(g) The Servicer shall give prompt written notice to the
Indenture Trustee of the Servicer's failure to pay when due any insurance charge
or tax payment required to be paid pursuant to this Section 3.4 and the reason
for such failure. Upon receipt of any such notice, or if the Indenture Trustee
has otherwise received notice of any such failure to pay an insurance charge or
tax payment, the Indenture Trustee shall take such actions as are reasonably
necessary (including the withdrawal of monies, if any, available therefor in the
Insurance, Maintenance and Tax Accounts and attributable to payments previously
made by the related Obligor and payment of such insurance charge or tax payment)
to cause any such amounts
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to be paid. The Indenture Trustee shall be permitted to withdraw monies from the
Insurance, Maintenance and Tax Accounts for purposes of performing its
obligations under this paragraph, but shall not, in any event, be required to
use its own funds for such purposes.
SECTION 3.5. Maintenance of Security Interests in
Equipment. To the extent the Servicer's credit and collection policies and
procedures in this regard would so require (it being acknowledged that, in
certain instances, such credit and collection policies and procedures would not
so require), the Servicer shall take such steps as are necessary to maintain
perfection of any security interest created by each Contract in the related
Equipment on behalf of the Issuer and the Depositor, including, but not limited
to, obtaining the execution by the Obligors and the recording, registering,
filing, re-recording, re-filing, and re-registering of all security agreements,
financing statements and continuation statements as are necessary to maintain
such security interest granted by the Obligors under the respective Contracts.
The Owner Trustee hereby authorizes the Servicer, and the Servicer agrees (to
the extent the Servicer's credit and collection policies and procedures in this
regard would so require), to take any and all steps necessary to re-perfect such
security interest on behalf of the Issuer and the Depositor as necessary because
of the relocation of Equipment or for any other reason.
SECTION 3.6. Covenants, Representations, and Warranties of
Servicer. By its execution and delivery of this Agreement, the Servicer makes
the following representations, warranties and covenants.
(a) The Servicer covenants as follows:
(i) Liens in Force. The Equipment securing
each Contract shall not be released in whole or in part from any
interest the lessor or secured party may have in such Equipment
under the terms of the Contract, except upon payment in full of
the Contract or as otherwise contemplated herein;
(ii) No Impairment. The Servicer shall do
nothing to impair the rights of the Issuer, the Equity
Certificateholder, the Depositor or the Noteholders in the
Contracts, the Insurance Policies or the other Trust Assets; and
(iii) No Amendments. The Servicer shall not
extend or otherwise amend the terms of any Contract with respect
to the Scheduled Payments thereon, except (A) in accordance with
Section 3.2, or (B) at such time as the Notes are no longer
Outstanding, with the consent of the Owner Trustee.
(iv) Licenses and Approvals. The Servicer will
maintain all necessary licenses and approvals in all jurisdictions
where
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the failure to do so would materially and adversely affect
the performance of its obligations under this Agreement and the
Related Documents.
(b) The Servicer represents, warrants and covenants as of
the date of execution and delivery of this Agreement:
(i) Organization and Good Standing. The
Servicer has been duly organized and is validly existing and in
good standing under the laws of its jurisdiction of organization,
with power, authority and legal right to own its properties and to
conduct its business as such properties are currently owned and
such business is currently conducted, and had at all relevant
times, and now has, power, authority and legal right to enter into
and perform its obligations under this Agreement and the
Servicer's Related Documents;
(ii) Due Qualification. The Servicer is duly
qualified to do business as a foreign corporation in good
standing, and has obtained all necessary licenses and approvals,
in all jurisdictions where the failure to do so would materially
and adversely affect the performance of its obligations under this
Agreement and the Related Documents;
(iii) Power and Authority. The Servicer has
the power and authority to execute and deliver this Agreement and
to carry out the terms hereof; and the execution, delivery and
performance of this Agreement and the Servicer's Related Documents
have been duly authorized by the Servicer by all necessary
corporate action;
(iv) Binding Obligation. This Agreement and
the Servicer's Related Documents shall each constitute the legal,
valid and binding obligation of the Servicer enforceable in
accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(v) No Violation. The execution and delivery
of this Agreement, the consummation of the transactions
contemplated by this Agreement and the Servicer's Related
Documents, and the fulfillment of the terms hereof, shall not
conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of
time, or both) a default under, the articles of incorporation or
bylaws of the Servicer, or any indenture, agreement, mortgage,
deed of trust or other instrument to which the Servicer is a party
or by which it is bound, or result in the creation or imposition
of
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any Lien upon any of its properties pursuant to the terms of
any such indenture, agreement, mortgage, deed of trust or other
instrument, other than this Agreement or any Related Document, or
violate any law, order, rule or regulation applicable to the
Servicer of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or any of its properties;
(vi) No Proceedings. There are no proceedings
or investigations pending or, to the Servicer's knowledge,
threatened against the Servicer, before any court, regulatory
body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Servicer or its
properties (A) asserting the invalidity of this Agreement or any
of the Servicer's Related Documents, (B) seeking to prevent the
issuance of the Equity Certificate or the Notes or the
consummation of any of the transactions contemplated by this
Agreement or any of the Servicer's Related Documents, or
(C) seeking any determination or ruling that might materially and
adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this
Agreement or any of the Servicer's Related Documents or
(D) seeking to adversely affect (i) the federal income tax or
other federal, state or local tax attributes of the Equity
Certificate or the Notes or (ii) the federal, state or local tax
treatment of any of the transactions contemplated by this
Agreement and the Related Documents; and
(vii) No Consents. The Servicer is not
required to obtain the consent of any other party or any consent,
license, approval or authorization, or registration or declaration
with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Servicer's Related
Documents.
(viii) All Filings Made. All filings and other
actions required to be made, taken or performed by any Person in
any jurisdiction to give the Issuer a first priority perfected
lien or ownership interest in the Contracts has been made, taken
or performed.
(ix) Schedule of Contracts Accurate. The
information with respect to the Contracts contained in the
Schedule of Contracts is true and correct in all material
respects.
SECTION 3.7. Sub-Servicers. The Servicer may, without the
Owner Trustee's or the Indenture Trustee's consent, maintain or enter into one
or more agreements with Sub-Servicers for the servicing and administration of
the Contracts
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by such Sub-Servicers. Notwithstanding the terms or existence of any such
agreement between the Servicer and a Sub-Servicer, the Servicer shall not be
relieved of any of its obligations under this Agreement by reason of such
agreement and shall be obligated to the same extent and under the same terms and
conditions as if the Servicer alone was servicing and administering the
Contracts, and neither the Owner Trustee nor the Indenture Trustee shall have
any obligation to deal with anyone other than the Servicer with respect to the
servicing of the Contracts.
SECTION 3.8. Total Servicing Fee; Payment of Expenses by
Servicer. On each Payment Date, the Servicer shall be entitled to receive out of
the Collection Account the Servicing Fee (less that portion thereof to be
retained and applied by the Trustee in accordance with the Cash Collateral
Account Agreement) for the related Collection Period pursuant to Section
8.03(i) of the Indenture. The Servicer shall be entitled to retain, as
additional servicing compensation under this Agreement, any Administrative Fees
and any earnings on the investment of amounts in the Servicing Account. The
Servicer shall be required to pay all expenses incurred by it in connection with
its activities under this Agreement (including taxes imposed on the Servicer and
all expenses incurred in connection with reports to Noteholders). In addition,
the Servicer (i) shall pay to the Indenture Trustee, and the Indenture Trustee
shall be entitled to, certain annual fees and shall reimburse the Indenture
Trustee for all ordinary and reasonable out-of-pocket expenses incurred or made
by it in connection with the performance of its duties under the Indenture and
its other Related Documents (excluding those incurred or made in the performance
of its duties under Article V of the Indenture, as referred to in Section
6.07(b) of the Indenture), and (ii) shall pay to the Owner Trustee, and the
Owner Trustee shall be entitled to, certain annual fees and shall reimburse the
Owner Trustee for all ordinary and reasonable out-of-pocket expenses incurred or
made by it in connection with the performance of its duties under the Trust
Agreement. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the agents, counsel, accountants and experts of
the Indenture Trustee and the Owner Trustee, as appropriate.
SECTION 3.9. Servicer's Certificate. No later than 10:00
a.m. New York City time on each Determination Date, the Servicer shall deliver
to the Owner Trustee, the Indenture Trustee, the Class A-5 Swap Counterparty and
each Rating Agency a Servicer's Certificate executed by a Responsible Officer of
the Servicer containing, among other things, (i) all information necessary to
enable the Indenture Trustee to make the withdrawals and distributions required
by Sections 8.03, 8.04 and 8.06 of the Indenture, (ii) all information necessary
to enable the Indenture Trustee to send the statements to Noteholders required
by Section 7.05 of the Indenture,uand (iii) all information necessary to enable
the Indenture Trustee to reconcile all deposits to, and withdrawals from, the
Servicing Account and the Collection Account for the related Collection Period
and Payment Date, including the accounting required by Section 4.4. Contracts
purchased by TCC on the related Deposit Date or by the Depositor on the related
Accounting Date, and each Contract which became a Liquidated Contract or which
was paid in full during the related
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Collection Period, shall be identified by account number (as set forth in the
Schedule of Contracts). A copy of such Servicer's Certificate may be obtained by
any Noteholder (or by any Note Owner, upon certification that such Person is a
Note Owner and payment of any expenses associated with the distribution thereof)
by a request in writing to the Indenture Trustee addressed to the Corporate
Trust Office.
SECTION 3.10. Annual Statement as to Compliance; Notice of
Servicer Termination Event.
(a) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and each Rating Agency, on or before March 31 (or 90 days
after the end of the Servicer's fiscal year, if other than December 31) of each
year, beginning on March 31, 1998, a certificate signed by any Responsible
Officer of the Servicer, dated as of December 31 (or other applicable date) of
the immediately preceding year, stating that (i) a review of the activities of
the Servicer during the preceding 12-month period (or such other period as shall
have elapsed from the Closing Date to the date of the first such certificate)
and of its performance under this Agreement has been made under such officer's
supervision, and (ii) to such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
period, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
(b) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and each Rating Agency, promptly after having obtained
knowledge thereof, but in no event later than two Business Days thereafter,
written notice in a certificate signed by any Responsible Officer of the
Servicer of any event which with the giving of notice or lapse of time, or both,
would become a Servicer Termination Event under Section 8.1(a). The Depositor or
the Servicer shall deliver to the Owner Trustee, the Indenture Trustee, the
Servicer or the Depositor (as applicable) and each Rating Agency promptly after
having obtained knowledge thereof, but in no event later than three Business
Days thereafter, written notice in a certificate signed by any Responsible
Officer of the Servicer of any event which with the giving of notice or lapse of
time, or both, would become a Servicer Termination Event under any other clause
of Section 8.1.
SECTION 3.11. Annual Independent Accountants' Report.
(a) The Servicer shall cause a firm of nationally
recognized independent certified public accountants (the "Independent
Accountants"), who may also render other services to the Servicer, to deliver to
the Owner Trustee, the Indenture Trustee and each Rating Agency, on or before
March 31 (or 90 days after the end of the Servicer's fiscal year, if other than
December 31) of each year, beginning on March 31, 1998, with respect to the
twelve months ended the immediately preceding December 31 (or other applicable
date) (or such other period as shall have elapsed from the Closing Date to the
date of such certificate), a
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statement (the "Accountant's Report") addressed to the Board of Directors of the
Servicer, to the Owner Trustee and to the Indenture Trustee, to the effect that
such firm has (i) audited the financial statements of the Servicer and issued
its report thereon and that such audit was made in accordance with generally
accepted auditing standards, which require that the Independent Accountants plan
and perform the audit to obtain reasonable assurance as to whether the financial
statements of the Servicer are free of material misstatement, and (ii) examined
management's assertion that the Servicer maintained effective control over the
servicing of equipment lease contracts, installment sales contracts, promissory
notes, loan and security agreements and/or other similar types of receivables
under servicing agreements substantially similar one to another, in accordance
with established or stated criteria, and that such examination was performed in
accordance with standards established by the American Institute of Certified
Public Accountants. In the event such firm requires the Indenture Trustee to
agree to the procedures performed by such firm, the Servicer shall direct the
Indenture Trustee in writing to so agree; it being understood and agreed that
the Indenture Trustee will deliver such letter of agreement in conclusive
reliance upon the direction of the Servicer, and the Indenture Trustee makes no
independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.
(b) The Accountants' Report shall also indicate that the
firm is independent of the Depositor and the Servicer within the meaning of the
Code of Professional Ethics of the American Institute of Certified Public
Accountants.
(c) A copy of the Accountants' Report may be obtained by
any Noteholder (or by any Note Owner, upon certification that such Person is a
Note Owner and payment of any expenses associated with the distribution thereof)
by a request in writing to the Indenture Trustee addressed to the Corporate
Trust Office.
SECTION 3.12. Access to Certain Documentation and
Information Regarding Contracts. The Servicer shall provide to representatives
of the Owner Trustee and the Indenture Trustee reasonable access to the
documentation regarding the Contracts. In each case, such access shall be
afforded without charge but only upon reasonable request and during normal
business hours. Nothing in this Section shall derogate from the obligation of
the Servicer to observe any applicable law, rule or contractual provision with
an Obligor prohibiting disclosure of information regarding the Obligors, and the
failure of the Servicer to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this Section.
SECTION 3.13. Certain Duties of the Servicer under the
Trust Agreement. The Servicer shall, and hereby agrees that it will, monitor the
Issuer's compliance with all applicable provisions of federal securities laws,
notify the Issuer of any actions to be taken by the Issuer necessary for
compliance with such laws and
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prepare on behalf of the Issuer all notices, filings or other documents or
instruments required to be filed under such laws.
SECTION 3.14. Duties of the Servicer under the Indenture.
The Servicer shall, and hereby agrees that it will, perform on behalf of the
Issuer and the Owner Trustee the following duties of the Issuer or the Owner
Trustee, as applicable, under the Indenture (references are to the applicable
Sections in the Indenture):
(a) the direction to the Paying Agents, if any, to
deposit moneys with the Indenture Trustee (Section 3.03);
(b) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes and each other instrument and
agreement included in the Trust Estate (Section 3.04);
(c) the preparation of all supplements, amendments,
financing statements, continuation statements, instruments of further
assurance and other instruments, in accordance with Section 3.05 of the
Indenture, necessary to protect the Trust Estate (Section 3.05);
(d) the annual delivery of Opinions of Counsel, in
accordance with Section 3.06 of the Indenture, as to the Trust Estate,
and the annual delivery of the Officer's Certificate and certain other
statements, in accordance with Section 3.09 of the Indenture, as to
compliance with the Indenture (Sections 3.06 and 3.09);
(e) the preparation and obtaining of documents and
instruments required for the release of the Issuer from its obligations
under the Indenture (Section 4.01);
(f) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officer's Certificate and the obtaining of the Opinion of Counsel and the
Independent Certificate relating thereto (Section 4.01);
(g) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee
and any written instruments necessary in connection with the resignation
or removal of any co-trustee or separate trustee (Sections 6.08 and
6.11);
(h) the opening of one or more accounts in the Issuer's
name, the preparation of Issuer Orders, Officer's Certificates and
Opinions of
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Counsel and all other actions necessary with respect to
investment and reinvestment of funds in the Trust Accounts (Sections
8.02, 8.04 and 8.05);
(i) the determination, and giving notice, of the amounts,
if any, specified in clauses (i) through (iii) of Section 8.06(c) of the
Indenture for each Payment Date (Section 8.06);
(j) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures (Sections 9.01, 9.02 and 9.03);
(k) the preparation of all Officer's Certificates, Opinions
of Counsel and Independent Certificates with respect to any requests by
the Issuer to the Indenture Trustee to take any action under the
Indenture (Section 11.01); and
(l) the recording of the Indenture, if applicable
(Section 11.15).
SECTION 3.15. Errors and Omissions Policy or Bond. Within
30 days after the Closing Date, the Servicer shall obtain, and shall thereafter
maintain, a policy or policies of insurance or a financial guaranty bond
covering errors and omissions by the Servicer. Such policy or bond shall be in
such form and amount as is generally customary among persons that service a
portfolio of equipment lease contracts, installment sale contracts, promissory
notes, loan and security agreements and/or other similar types of receivables
having an unpaid balance of at least $100,000,000 and which are generally
regarded as servicers acceptable to institutional investors. Each such policy or
bond shall name the Issuer, the Indenture Trustee and the Depositor as
additional insured parties or loss payees thereunder as their respective
interests may appear.
SECTION 3.16. Duties of the Servicer under the Class A-5
Swap Agreement. The Servicer shall, and hereby agrees that it will, perform on
behalf of the Issuer and the Owner Trustee the following duties of the Issuer or
the Owner Trustee, as applicable, under the Class A-5 Swap Agreement (references
are to the applicable Sections or (in the case of the Schedule constituting a
part thereof) Parts of the Class A-5 Swap Agreement):
(a) Part 3(b) (fourth, fifth, eighth and ninth items
referred to therein) of the Schedule thereto;
(b) Part 5(p) of the Schedule thereto (to the extent the
Servicer is required to deliver any such documents to the Owner Trustee
in accordance with this Agreement or any Related Document); and
(c) Section 6(d)(i).
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ARTICLE IV
COLLECTIONS AND DEPOSITS
SECTION 4.1. Initial Deposit. On the Closing Date, the
Servicer shall deposit in the Servicing Account (i) all Scheduled Payments and
Prepayments of Contracts received by the Servicer on or after the Cut-Off Date
(including those Scheduled Payments due prior to, but not received as of, the
Cut-Off Date, but excluding those Scheduled Payments due on or after, but
received prior to, the Cut-Off Date) and on or prior to the second Business Day
immediately preceding such date and (ii) all Liquidation Proceeds (including
proceeds of Insurance Policies to be treated as such in accordance with Section
3.4) realized in respect of the Contracts and related Equipment and applied by
the Servicer after the Cut-Off Date.
SECTION 4.2. Collections.
(a) Pursuant to the Indenture, the Indenture Trustee has
established the Servicing Account. The Servicer shall make deposits to and
transfers from the Servicing Account, and shall be entitled to make withdrawals
therefrom, as provided in this Agreement. The Servicer shall remit to the
Servicing Account all payments by or on behalf of the Obligors on the Contracts
(other than amounts constituting Administrative Fees) and all Liquidation
Proceeds (including (1) proceeds of Insurance Policies to be treated as such in
accordance with Section 3.4 and (2) deficiency amounts paid by the Servicer with
respect to the disposition of Equipment to be treated as such in accordance with
the last paragraph of Section 3.3) received by the Servicer, in each case, as
soon as practicable, but in no event later than the second Business Day after
receipt thereof. Within three Business Days after the deposit of such payments
and proceeds therein, the Servicer shall transfer all amounts credited to the
Servicing Account on account of such payments and proceeds (i) to the extent
they constitute Pledged Revenues, to the Collection Account, and (ii) to the
extent they represent amounts allocated to the Depositor, to the Depositor.
Notwithstanding the foregoing, the Servicer may utilize an alternative
remittance schedule acceptable to the Servicer if the Servicer provides to the
Indenture Trustee written confirmation from each Rating Agency that such
alternative remittance schedule will not result in the downgrading or withdrawal
by the Rating Agency of the rating then assigned to the Notes. Amounts from time
to time in the Servicing Account shall be invested in accordance with Section
8.07 of the Indenture, and the Servicer shall be entitled to any earnings on
such investments as additional servicing compensation hereunder. In the event of
any losses on such investments, the Servicer shall deposit in the Servicing
Account the amount thereof, net of any earnings otherwise distributable to the
Servicer.
(b) The Servicer shall remit to the Collection Account
(i) that portion of any Purchase Amount relating to the Required Payoff Amount
received by the Servicer upon the purchase by TCC of any Contract pursuant to
Section 2.6, and (ii) that portion of the amount paid by the Depositor to
purchase the Contracts
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pursuant to Section 5.1 as is required to be deposited in the Collection Account
pursuant to such Section.
(c) Notwithstanding the provisions of subsections (a) and
(b) hereof, the Servicer will be entitled to be reimbursed from amounts on
deposit in the Servicing Account or the Collection Account with respect to a
Collection Period for amounts previously deposited in the Servicing Account or
the Collection Account but later determined by the Servicer in good faith to
(i) have resulted from mistaken deposits or postings or checks returned for
insufficient funds, or (ii) be required to be repaid to an Obligor. The amount
to be reimbursed hereunder may be retained pursuant to Section 4.4 at any time
or may otherwise be paid to the Servicer on the related Payment Date pursuant to
Section 8.03(i) of the Indenture upon certification by the Servicer of such
amounts and the provision of such information to the Indenture Trustee as may be
necessary to verify the accuracy of such certification.
(d) The Servicer shall remit directly to the Depositor that
portion of any Purchase Amount relating to the Book Value of any Leased
Equipment received by the Servicer upon the purchase by TCC of any Contract
pursuant to Section 2.6.
SECTION 4.3. Application of Collections. For the purposes
of this Agreement, all collections for a Collection Period shall be applied by
the Servicer as follows:
(a) With respect to each Contract, payments by or on behalf
of the Obligor thereof (other than Administrative Fees with respect to
such Contract, to the extent collected) shall be applied to Scheduled
Payments and Prepayments in accordance with the terms of such Contract
and the Servicer's credit and collection policies and procedures. With
respect to each Liquidated Contract, that portion of the Liquidation
Proceeds allocated to the Issuer shall be applied, for purposes of this
Agreement and the Indenture only, to Scheduled Payments and Prepayment on
the Contract as if the Liquidation Proceeds had been paid by the Obligor
on the Accounting Date, and then to any other amounts due and payable
with respect to such Contract. The Servicer shall not be entitled to any
Administrative Fees with respect to a Liquidated Contract unless the
Required Payoff Amount for such Contract has been deposited in the
Collection Account.
(b) With respect to each Contract that has become a
Purchased Contract as of any Deposit Date, that portion of the Purchase
Amount relating to the Required Payoff Amount shall be applied, for
purposes of this Agreement and the Indenture only, to Scheduled Payments
and Prepayment on the Contract as if the Purchase Amount had been paid by
the Obligor on the related Accounting Date. All payments by or on behalf
of an Obligor received with respect to any Purchased Contract after the
Accounting Date immediately preceding the Deposit Date on which the
Purchase Amount was
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paid by TCC, shall be paid to TCC and shall not be included in Pledged
Revenues.
(c) With respect to each Contract that has been purchased
by the Depositor pursuant to Section 5.1, the purchase price shall be
applied, for purposes of this Agreement and the Indenture only, to
Scheduled Payments and Prepayments on the Contract as if such purchase
price had been paid by the Obligor on the Accounting Date. All payments
by or on behalf of an Obligor received with respect to any Contract so
purchased after the Accounting Date on which the purchase price was paid
by the Depositor, shall be paid to the Depositor and shall not be
included in the Amount Available.
SECTION 4.4. Net Deposits. So long as no Servicer
Termination Event shall have occurred and be continuing with respect to the
Servicer, the Servicer may make the remittances or transfers to be made by it
pursuant to Section 4.2 net of amounts (which amounts may be netted prior to any
such remittance or transfer) that would otherwise be distributed to it pursuant
to Section 8.03(i) of the Indenture; provided, however, that the Servicer shall
account for all of such amounts in the related Servicer's Certificate as if such
amounts were deposited and distributed separately; and provided, further, that
the amounts that would otherwise be distributed to the Servicer pursuant to
Section 8.03(i) of the Indenture shall not include that portion of the Servicing
Fee for the related Collection Period to be applied by the Indenture Trustee in
accordance with the Cash Collateral Account Agreement. If an error is made by
the Servicer in calculating the amount to be deposited or retained by it, with
the result that an amount less than required is deposited in the Collection
Account, the Servicer shall make a payment of the deficiency to the Collection
Account immediately upon becoming aware, or receiving notice from the Indenture
Trustee, of such error.
SECTION 4.5. Expiration of Lease Contracts. In the case of
any Lease Contract which has reached the end of its Original Term, is not in
default and as to which, in accordance with the terms of such Lease Contract,
the lessor thereunder is entitled to the related Equipment, the Servicer shall
take such action as the Depositor shall direct to cause title to such Equipment
in the Depositor to be free and clear of any Liens created by this Agreement or
any Related Document. Any payments thereafter made by the Obligor in respect of
such Equipment, whether on the related Lease Contract or otherwise, shall be the
property of the Depositor or its designated assignee.
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ARTICLE V
TERMINATION
SECTION 5.1. Optional Purchase of All Contracts;
Liquidation of Trust Assets.
(a) At such time as the sum of the Aggregate Principal
Balance of the Notes is less than 10% of the Initial Contract Pool Principal
Balance, the Depositor shall have the option to purchase the corpus of the
Issuer (excluding any rights the Issuer may have with respect to the Cash
Collateral Account); provided, however, that the amount to be paid for such
purchase (as set forth in the following sentence) shall, in any event, be
sufficient to pay the full amount of unpaid principal of and interest payable on
the Notes on the related Payment Date. To exercise such option, the Depositor
shall, (i) furnish written notice to the Servicer, the Owner Trustee and the
Indenture Trustee of its intent to exercise such option, not later than 25 days
(or such lesser number of days as shall be satisfactory to the Indenture
Trustee) prior to the related Payment Date, and (ii) on the related Accounting
Date, pay to the Servicer the aggregate purchase price for the Contracts (which
shall be an amount equal to the sum of the Required Payoff Amounts for all of
the Contracts), plus the appraised value of any other property (including the
right to receive any future recoveries) held as part of the Issuer, such
appraisal to be conducted by an appraiser mutually agreed upon by the Depositor
and the Indenture Trustee (or, if the Notes are no longer Outstanding, the Owner
Trustee), and shall succeed to all interests in and to the Trust Assets. The
fees and expenses related to such appraisal shall be paid by the Depositor. The
Servicer shall immediately deposit the purchase price so paid into the
Collection Account, to be treated as Available Pledged Revenues and distributed
in accordance with Section 8.03 of the Indenture.
(b) Notice of any termination of the Issuer shall be given
by the Servicer to the Owner Trustee and the Indenture Trustee as soon as
practicable (but in no event more than three Business Days) after the Servicer
has received notice thereof.
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ARTICLE VI
THE DEPOSITOR
SECTION 6.1. Liability of Depositor. The Depositor shall be
liable hereunder only to the extent of the obligations in this Agreement
specifically undertaken by the Depositor and the representations made by the
Depositor.
SECTION 6.2. Merger or Consolidation of, or Assumption of
the Obligations of, Depositor; Amendment of Certificate of Incorporation.
(a) The Depositor shall not merge or consolidate with any
other Person or permit any other Person to become the successor to the
Depositor's business except in accordance with the requirements of this Section.
The certificate of incorporation of any corporation (i) into which the Depositor
may be merged or consolidated, (ii) resulting from any merger or consolidation
to which the Depositor shall be a party, or (iii) succeeding to the business of
Depositor, shall contain provisions relating to limitations on business and
other matters substantively identical to those contained in the Depositor's
certificate of incorporation. Any such successor corporation shall execute an
agreement of assumption of every obligation of the Depositor under this
Agreement and each Related Document and, whether or not such assumption
agreement is executed, shall be the successor to the Depositor under this
Agreement without the execution or filing of any document or any further act on
the part of any of the parties to this Agreement. The Depositor shall provide
prompt written notice of any merger, consolidation or succession pursuant to
this Section 6.2 to the Owner Trustee, the Indenture Trustee and the Rating
Agencies. Notwithstanding the foregoing, the Depositor shall not merge or
consolidate with any other Person or permit any other Person to become a
successor to the Depositor's business, unless (w) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 2.4 shall have been breached (for purposes hereof, such representations
and warranties shall speak as of the date of the consummation of such
transaction) and no event that, after notice or lapse of time, or both, would
become an Event of Default or a Servicer Termination Event shall have occurred
and be continuing, (x) the Depositor shall have delivered to the Owner Trustee
and the Indenture Trustee a certificate of a Responsible Officer of the
Depositor and an Opinion of Counsel each stating that such consolidation, merger
or succession and such agreement of assumption comply with this Section 6.2 and
that all conditions precedent, if any, provided for in this Agreement relating
to such transaction have been complied with, (y) the Depositor shall have
delivered to the Owner Trustee and the Indenture Trustee an Opinion of Counsel,
stating that, in the opinion of such counsel, either (A) all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary to preserve and protect the interest of the Issuer
in the Trust Assets and reciting the details of the filings or (B) no such
action shall be necessary to preserve and protect such interest, and (z) the
Rating Agency Condition shall have been satisfied.
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(b) The Depositor hereby agrees that it shall not (i) take
any action prohibited by Article XVI of its certificate of incorporation or
(ii) without the prior written consent of the Owner Trustee and the Indenture
Trustee and without satisfaction of the Rating Agency Condition, amend Article
III, Article IX, Article XIV or Article XVI of its certificate of incorporation.
SECTION 6.3. Limitation on Liability of Depositor and
Others. The Depositor and any director or officer or employee or agent of the
Depositor may rely in good faith on the advice of counsel or on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising under this Agreement. The Depositor shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its obligations as transferor of the Contracts under this
Agreement and that in its opinion may involve it in any expense or liability.
SECTION 6.4. Depositor May Own Notes. Each of the Depositor
and any Affiliate of the Depositor may in its individual or any other capacity
become the owner or pledgee of Notes with the same rights as it would have if it
were not the Depositor or an Affiliate thereof except as otherwise specifically
provided herein or in the Related Documents. Notes so owned by or pledged to the
Depositor or such Affiliate shall have an equal and proportionate benefit under
the provisions of this Agreement or any Related Document, without preference,
priority, or distinction as among all of the Notes; provided that the Notes
owned by the Depositor or any Affiliate thereof, during the time such Notes are
owned by them, shall be without voting rights for any purpose set forth in this
Agreement or any Related Document. The Depositor shall notify the Owner Trustee
and the Indenture Trustee in writing promptly after it or any of its Affiliates
become the owner or pledgee of a Note.
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ARTICLE VII
THE SERVICER
SECTION 7.1. Liability of Servicer; Indemnities.
(a) The Servicer (in its capacity as such and, in the case
of TCC, without limitation of its obligations under the Purchase Agreement)
shall be liable hereunder only to the extent of the obligations in this
Agreement specifically undertaken by the Servicer and the representations made
by the Servicer.
(b) The Servicer shall indemnify, defend and hold harmless
the Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, their
respective officers, directors, agents and employees, the Equity
Certificateholder and the Noteholders from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent that such cost,
expense, loss, claim, damage or liability arose out of, or was imposed upon the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the Equity
Certificateholder or the Noteholders through the Servicer's breach of this
Agreement, the gross negligence, willful misfeasance or bad faith of the
Servicer in the performance of its duties under this Agreement or by reason of
reckless disregard of its obligations and duties under this Agreement.
(c) The Servicer shall indemnify, defend and hold harmless
the Owner Trustee, in its individual capacity, its officers, directors, agents
and employees, from and against all costs, taxes (other than income taxes on
fees and expenses payable to the Owner Trustee), expenses, losses, claims,
damages and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties contained in the Trust
Agreement and the Related Documents, except to the extent that such cost, taxes
(other than income taxes), expense, loss, claim, damage or liability (A) is due
to the willful misfeasance or gross negligence of the Owner Trustee, or
(B) arises from the Owner Trustee's breach of any of its representations or
warranties set forth in Section 7.3 of the Trust Agreement.
(d) The Servicer shall indemnify, defend and hold harmless
the Indenture Trustee, in its individual capacity, its officers, directors,
agents and employees, from and against all costs, taxes (other than income taxes
on fees and expenses payable to the Indenture Trustee), expenses, losses,
claims, damages and liabilities arising out of or incurred in connection with
the acceptance or performance of the trusts and duties contained in the
Indenture and the Related Documents, except to the extent that such cost, taxes
(other than income taxes), expense, loss, claim, damage or liability (A) is due
to the willful misfeasance or gross negligence of the Indenture Trustee, or
(B) arises from the Indenture Trustee's breach of any of its representations or
warranties set forth in Section 6.13 of the Indenture. Indemnification under
this Section 7.1(d) shall be available, however, only if and to the extent that
reimbursement pursuant to Section 6.07 of the
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Indenture is not available (either because the Indenture Trustee is deemed not
to be entitled to reimbursement under such Section 6.07 for such cost, taxes
(other than income taxes), expense, loss, claim, damage or liability, or because
insufficient funds are available to the Indenture Trustee pursuant to such
Section 6.07).
(e) Indemnification under this Article shall include,
without limitation, reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer has made any indemnity payments pursuant to this
Article and the recipient thereafter collects any of such amounts from others,
the recipient shall promptly repay such amounts collected to the Servicer,
together with any interest earned thereon.
(f) TCC, in its individual capacity, hereby acknowledges
that the indemnification provisions in each of the Purchase Agreements
benefiting the Depositor (to the extent they relate to the Contracts) have been
assigned to the Issuer, the Owner Trustee and the Indenture Trustee, and are
enforceable by each hereunder.
(g) The provisions of this Section shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee and the
termination of the Related Documents.
SECTION 7.2. Merger or Consolidation of, or Assumption of
the Obligations of, the Servicer. The Servicer shall not merge or consolidate
with any other Person, convey, transfer or lease substantially all its assets as
an entirety to another Person, or permit any other Person to become the
successor to the Servicer's business unless, after the merger, consolidation,
conveyance, transfer, lease or succession, the successor or surviving entity
shall be an Eligible Servicer and shall be capable of fulfilling the duties of
the Servicer contained in this Agreement. Any corporation (i) into which the
Servicer may be merged or consolidated, (ii) resulting from any merger or
consolidation to which the Servicer shall be a party, (iii) which acquires by
conveyance, transfer, or lease substantially all of the assets of the Servicer,
or (iv) succeeding to the business of the Servicer, in any of the foregoing
cases shall execute an agreement of assumption to perform every obligation of
the Servicer under this Agreement and, whether or not such assumption agreement
is executed, shall be the successor to the Servicer under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties to this Agreement, anything in this Agreement to the contrary
notwithstanding; provided, however, that nothing contained herein shall be
deemed to release the Servicer from any obligation. The Servicer shall provide
written notice of any merger, consolidation or succession pursuant to this
Section to the Owner Trustee, the Indenture Trustee and each Rating Agency.
Notwithstanding the foregoing, the Servicer shall not merge or consolidate with
any other Person or permit any other Person to become a successor to the
Servicer's business, unless (a) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.6 shall
have been breached (for purposes hereof, such representations and
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warranties shall speak as of the date of the consummation of such transaction)
and no event that, after notice or lapse of time, or both, would become a
Servicer Termination Event shall have occurred and be continuing, (b) the
Servicer shall have delivered to the Owner Trustee and the Indenture Trustee a
certificate of a Responsible Officer of the Servicer and an Opinion of Counsel
each stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, (c) the Servicer shall have delivered to the Owner Trustee and the
Indenture Trustee an Opinion of Counsel, stating that, in the opinion of such
counsel, either (1) all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary to preserve
and protect the interest of the Owner Trustee in the Trust Assets and reciting
the details of the filings or (2) no such action shall be necessary to preserve
and protect such interest, and (d) the Rating Agency Condition has been
satisfied.
SECTION 7.3. Limitation on Liability of Servicer and
Others. Neither the Servicer nor any of the directors or officers or employees
or agents of the Servicer shall be under any liability to the Issuer, the Equity
Certificateholder, the Depositor, the Noteholders, the Owner Trustee or the
Indenture Trustee except as provided in this Agreement, for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement; provided, however, that this provision shall not protect the Servicer
or any such person against any liability that would otherwise be imposed by
reason of a breach of this Agreement or willful misfeasance, bad faith or gross
negligence (excluding errors in judgment) in the performance of duties, by
reason of reckless disregard of obligations and duties under this Agreement or
any violation of law by the Servicer or such person, as the case may be;
provided further, that this provision shall not affect any liability to
indemnify the Owner Trustee and the Indenture Trustee for costs, taxes,
expenses, claims, liabilities, losses or damages paid by the Owner Trustee or
the Indenture Trustee, each in its individual capacity. The Servicer and any
director, officer, employee or agent of the Servicer may rely in good faith on
the advice of counsel or on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising under this
Agreement.
SECTION 7.4. Servicer Not to Resign. Subject to the
provisions of Section 7.2, the Servicer shall not resign from the obligations
and duties imposed on it by this Agreement as Servicer except upon a
determination that by reason of a change in legal requirements the performance
of its duties under this Agreement would cause it to be in violation of such
legal requirements in a manner which would have a material adverse effect on the
Servicer, and a Note Majority does not elect to waive the obligations of the
Servicer to perform the duties which render it legally unable to act or to
delegate those duties to another Person. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Owner Trustee and the Indenture Trustee. No resignation
of the Servicer shall become effective until a successor
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Servicer that is an Eligible Servicer shall have assumed the responsibilities
and obligations of the Servicer; provided, however, that in the event a
successor Servicer is not appointed within 60 days after the Servicer has given
notice of its resignation and has provided the Opinion of Counsel required by
this Section, the Servicer may petition a court for its removal.
SECTION 7.5. Corporate Existence. The Servicer shall
maintain its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which the failure to so qualify would have an adverse effect on the validity or
enforceability of any Contract or this Agreement or on the ability of the
Servicer to perform its duties under this Agreement.
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ARTICLE VIII
SERVICER TERMINATION EVENTS
SECTION 8.1. Servicer Termination Event. For purposes of
this Agreement, each of the following shall constitute a "Servicer Termination
Event":
(a) Any failure by the Servicer to deposit within the time
periods specified in this Agreement in the Collection Account for
distribution to Noteholders, or to distribute to the Depositor, any
proceeds or payment required to be so deposited or distributed under the
terms of this Agreement (or, if TCC is the Servicer, the Purchase
Agreement) that continues unremedied for a period of five Business Days
(three Business Days with respect to payment of Purchase Amounts) after
written notice is received by the Servicer from the Indenture Trustee or
after discovery of such failure by a Responsible Officer of the Servicer;
or
(b) Failure by the Servicer to deliver to the Indenture
Trustee and the Owner Trustee the Servicer's Certificate by the third
Business Day prior to the related Payment Date, or failure on the part of
the Servicer to observe its covenants and agreements set forth in Section
7.2; or
(c) Failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement (or, if TCC is the Servicer, any of
the Purchase Agreements (to the extent they relate to the Contracts),
which failure (i) materially and adversely affects the rights of the
Issuer, the Equity Certificateholder or the Noteholders, and
(ii) continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Owner Trustee, the Indenture
Trustee or any Noteholder; or
(d) (i) The commencement of an involuntary case under the
federal bankruptcy laws, as now or hereinafter in effect, or another
present or future federal or state bankruptcy, insolvency or similar law
and such case is not dismissed within 60 days; or (ii) the entry of a
decree or order for relief by a court or regulatory authority having
jurisdiction in respect of the Servicer in an involuntary case under the
federal bankruptcy laws, as now or hereafter in effect, or another
present or future, federal or state, bankruptcy, insolvency or similar
law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Servicer or of any
substantial part of their respective properties or ordering the winding
up or liquidation of the affairs of the Servicer; or
(e) The commencement by the Servicer of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect, or any
other
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present or future, federal or state, bankruptcy, insolvency or
similar law, or the consent by the Servicer to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Servicer or of
any substantial part of its property or the making by the Servicer of an
assignment for the benefit of creditors or the failure by the Servicer
generally to pay its debts as such debts become due or the taking of
corporate action by the Servicer in furtherance of any of the foregoing;
or
(f) Any representation, warranty or statement of the
Servicer made in this Agreement or any certificate, report or other
writing delivered by the Servicer pursuant hereto shall prove to be
incorrect in any material respect as of the time when the same shall have
been made, the incorrectness of such representation, warranty or
statement has a material adverse effect on the Issuer or Noteholders,
and, within 30 days after written notice thereof shall have been given to
the Servicer or the Depositor by the Owner Trustee, the Indenture Trustee
or any Noteholder, the circumstances or condition in respect of which
such representation, warranty or statement was incorrect shall not have
been eliminated or otherwise cured.
SECTION 8.2. Consequences of a Servicer Termination Event.
If a Servicer Termination Event shall occur and be continuing, the Indenture
Trustee may, and at the written direction of a Note Majority (or, at such time
as the Notes are no longer Outstanding, an Equity Certificate Majority) shall,
by notice given in writing to the Servicer and the Owner Trustee, terminate all
of the rights and obligations of the Servicer under this Agreement. On or
afteruthe receipt by the Servicer of such written notice, all authority, power,
obligations and responsibilities of the Servicer under this Agreement, whether
with respect to the Equity Certificate, the Notes, the Trust Assets or
otherwise, shall be terminated and automatically shall pass to, be vested in and
become obligations and responsibilities of the Indenture Trustee (unless and
until a successor Servicer is appointed in accordance with Section 8.3);
provided, however, that the Indenture Trustee shall have no liability with
respect to any obligation which was required to be performed by the terminated
Servicer prior to the date that the Indenture Trustee becomes the Servicer or
any claim of a third party based on any alleged action or inaction of the
terminated Servicer. The Indenture Trustee is authorized and empowered by this
Agreement to execute and deliver, on behalf of the terminated Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination. The terminated Servicer agrees to
cooperate with the Indenture Trustee in effecting the termination of the
responsibilities and rights of the terminated Servicer under this Agreement,
including, without limitation, the transfer to the Indenture Trustee for
administration by it of all cash amounts that shall at the time be held by the
terminated Servicer for deposit, or have been deposited by the terminated
Servicer, in any of the Trust Accounts or thereafter received with respect to
the Contracts and the delivery to the Indenture Trustee of all Contract Files,
Monthly Records and Collection Records and a computer tape in
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readable form (in the format then being used by the Servicer) as of the most
recent Business Day containing all information necessary to enable the Indenture
Trustee or a successor Servicer to service the Contracts and the other Trust
Assets. The terminated Servicer shall grant the Owner Trustee, the Indenture
Trustee and the successor Servicer reasonable access to the terminated
Servicer's premises at the terminated Servicer's expense.
SECTION 8.3. Indenture Trustee to Act; Appointment of
Successor.
(a) On and afteruthe time the Servicer receives a notice of
termination pursuant to Section 8.2, the Indenture Trustee shall be the
successor in all respects to the Servicer in its capacity as servicer under this
Agreement and the transactions set forth or provided for in this Agreement, and
shall be subject to all the responsibilities, restrictions, duties, liabilities
and termination provisions relating thereto placed on the Servicer by the terms
and provisions of this Agreement. As compensation therefor, the Indenture
Trustee shall be entitled to receive the Total Servicing Fee. The Owner Trustee
and the Indenture Trustee shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(b) Notwithstanding the foregoing, the Indenture Trustee
may, if it shall be unwilling to so act, or shall, if it is legally unable to so
act, appoint, or petition a court of competent jurisdiction to appoint, any
Eligible Servicer as the successor to the Servicer hereunder in the performance
of all or any part of the responsibilities, duties or liabilities of the
Servicer hereunder. Pending appointment of a successor pursuant to the preceding
sentence, the Indenture Trustee shall act as successor Servicer unless it is
legally unable to do so, in which event the outgoing Servicer shall continue to
act as Servicer until a successor has been appointed and accepted such
appointment.
(c) In connection with such appointment and assumption, the
Indenture Trustee may make such arrangements for the compensation of such
successor out of payments on the Contracts as it and such successor shall agree;
provided, however, that no such monthly compensation shall, without the written
consent of the Depositor and 100% of the Noteholders, exceed the Total Servicing
Fee. The Indenture Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
(d) If a successor Servicer is acting as Servicer
hereunder, it shall be subject to termination under Section 8.2 upon the
occurrence of any Servicer Termination Event applicable to it as Servicer.
(e) At such time as any successor Servicer (including the
Indenture Trustee) becomes Servicer hereunder, it shall agree to perform all of
the obligations of the Servicer under, and be subject to the terms of, the Cash
Collateral Account
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<PAGE>
Agreement, and shall take such actions as the parties to the Cash Collateral
Account Agreement may reasonably request to evidence such agreement.
SECTION 8.4. Notification to Equity Certificateholder and
Noteholders. Upon any termination of, or appointment of a successor to, the
Servicer pursuant to this Article VIII, the Owner Trustee shall give prompt
written notice thereof to the Equity Certificateholder and to each Rating
Agency, and the Indenture Trustee shall give prompt written notice thereof to
Noteholders at their respective addresses appearing in the Note Register.
SECTION 8.5. Waiver of Past Defaults. A Note Majority may
waive any default by the Servicer in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Termination Event arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
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<PAGE>
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. Amendment.
(a) This Agreement may be amended by the Depositor, the
Servicer, the Issuer and the Indenture Trustee without the consent of any of the
Noteholders (i) to cure any ambiguity, (ii) to correct or supplement any
provisions in this Agreement that may be inconsistent with any other provision
herein, or (iii) to make any other provisions with respect to matters or
questions arising under this Agreement that are not inconsistent with the
provisions hereof; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the interests
of the Noteholders.
(b) This Agreement may also be amended from time to time by
the Depositor, the Servicer, the Issuer and the Indenture Trustee with the
consent of a Note Majority (which consent of any Holder of a Note given pursuant
to this Section or pursuant to any other provision of this Agreement shall be
conclusive and binding on such Holder and on all future Holders of such Note and
of the Note issued upon the transfer thereof or in exchange thereof or in lieu
thereof whether or not notation of such consent is made upon the Note) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement, or of modifying in any manner the rights of
the Holders of Notes; provided, however, that no such amendment shall
(a) increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Contracts or distributions required to be
made on any Note or the rate of interest payable thereon, (b) amend any
provisions of Section 5.06 or 8.03 of the Indenture in such a manner as to
affect the priority of payment of interest or principal to Noteholders, or
(c) reduce the aforesaid percentage required to consent to any such amendment or
any waiver hereunder, without the consent of the Holders of all Notes then
Outstanding and affected thereby; and provided, further, that no such amendment
shall be effective unless and until the Rating Agency Condition has been
satisfied.
(c) Promptly after the execution of any such amendment or
consent, the Indenture Trustee shall furnish written notification of the
substance of such amendment or consent to each Noteholder.
(d) It shall not be necessary for the consent of
Noteholders pursuant to Section 9.1(b) to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of Noteholders provided for in this Agreement) and of evidencing
the authorization of the execution thereof by Noteholders shall be subject to
such reasonable requirements as the Indenture Trustee may prescribe, including
the establishment of record dates.
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(e) Prior to the execution of any amendment to this
Agreement, the Owner Trustee and the Indenture Trustee shall be entitled to
receive and conclusively rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement, in
addition to the Opinion of Counsel referred to in Section 9.2(h). The Owner
Trustee and the Indenture Trustee may, but shall not be obligated to, enter into
any such amendment which affects the Owner Trustee's or the Indenture Trustee's,
as the case may be, own rights, duties or immunities under this Agreement or
otherwise.
SECTION 9.2. Protection of Title to Trust Assets.
(a) The Depositor shall execute and file such financing
statements and cause to be executed and filed such continuation and other
statements (including those prepared by the Servicer pursuant to Section
3.14(c)), all in such manner and in such places as may be required by law fully
to preserve, maintain and protect the interest of the Issuer, the Owner Trustee
and the Indenture Trustee in the Trust Assets and in the proceeds thereof;
except that (i) UCC-1 financing statements and continuation statements, listing
the Obligor as debtor and the related Equipment as collateral, need be filed
only as required by Section 3.5; and (ii) no assignments of any such financing
statements relating to the Equipment shall be filed to reflect the assignment of
the Contracts by the Originators to the Depositor and by the Depositor to the
Issuer. The Depositor shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither the Depositor nor the Issuer shall change its
name, identity or corporate structure in any manner that would, could or might
make any financing statement or continuation statement filed by the Depositor in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Owner Trustee and
the Indenture Trustee at least 60 days' prior written notice thereof, and shall
promptly file appropriate amendments to all previously filed financing
statements and continuation statements.
(c) Each of the Depositor, the Servicer and the Issuer
shall give the Owner Trustee and the Indenture Trustee at least 60 days' prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement. The Servicer shall at all times
maintain each office from which it services Contracts and its principal
executive office within the United States of America.
(d) The Servicer shall maintain accounts and records as to
each Contract accurately and in sufficient detail to permit (i) the reader
thereof to know at
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any time the status of such Contract, including payments and recoveries made and
payments owing (and the nature of each) and (ii) reconciliation between payments
or recoveries on (or with respect to) each Contract and the amounts from time to
time deposited in the Collection Account in respect of such Contract.
(e) The Servicer shall maintain its computer systems so
that, from and after the time of transfer and assignment under this Agreement of
the Contracts to the Issuer, the Servicer's master computer records (including
any backup archives) that refer to any Contract indicate clearly that the
Contract is owned by the Issuer. Indication of the Issuer's ownership of a
Contract shall be deleted from or modified on the Servicer's computer systems
when, and only when, the Contract has been paid in full, liquidated (including
receipt of all recoveries reasonably expected to be collected) or purchased by
the Depositor or TCC.
(f) Upon receipt by the Servicer of reasonable prior
notice, the Servicer shall permit any of the Owner Trustee, the Indenture
Trustee and their respective agents, at any time during the Servicer's normal
business hours to inspect, audit and make copies of and abstracts from the
Servicer's records regarding any Contracts or any other portion of the Trust
Assets. Upon receipt by the Servicer of reasonable prior notice, the Servicer
shall permit any of the Owner Trustee, the Indenture Trustee and the Depositor
and their respective agents, at any time during the Servicer's normal business
hours but no more frequently than once per calendar year (or, if a Servicer
Termination Event shall have occurred and be continuing, as often as reasonably
requested), to inspect, audit and make copies of and abstracts from the
Servicer's records regarding the Servicer's servicing procedures and the
Servicer's properties relating to its servicing activities.
(g) The Servicer shall furnish to the Owner Trustee and the
Indenture Trustee at any time upon request a list (which may, at the option of
the Servicer, be on a computer disk or other electronic storage medium) of all
Contracts then held as part of the Trust Assets, together with a reconciliation
of such list to the Schedule of Contracts and to each of the Servicer's
Certificates furnished before such request indicating removal of Contracts from
the Issuer. Upon request, the Servicer shall furnish a copy of any list to the
Depositor. Subject to the following sentence, the Owner Trustee shall hold any
such list and Schedule of Contracts for examination by interested parties during
normal business hours at the Corporate Trust Office upon reasonable notice by
such Persons of their desire to conduct an examination. The Owner Trustee shall
and shall cause its representatives to hold in confidence all information
thereon relating to the identity of the Obligors except to the extent disclosure
may be required by 'SS' 9-208 of the UCC or by other applicable law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Owner Trustee may reasonably determine that such disclosure
is consistent with its obligations under the Indenture.
(h) The Depositor and the Servicer shall deliver to the
Owner Trustee and the Indenture Trustee simultaneously with the execution and
delivery
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of this Agreement and of each amendment thereto and upon the occurrence of the
events giving rise to an obligation to give notice pursuant to Section 9.2(b) or
(c), an Opinion of Counsel either (a) stating that, in the opinion of such
Counsel, all financing statements and continuation statements have been executed
and filed that are necessary fully to preserve and protect the interest of the
Issuer and the Indenture Trustee in the Contracts and the other Trust Assets,
and reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (b) stating that, in the opinion of
such counsel, no such action is necessary to preserve and protect such interest.
(i) The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee, within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months after
the Closing Date, an Opinion of Counsel, either (a) stating that, in the opinion
of such counsel, all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the interest
of the Issuer and the Indenture Trustee in the Contracts, and reciting the
details of such filings or referring to prior Opinions of Counsel in which such
details are given, or (b) stating that, in the opinion of such counsel, no
action shall be necessary to preserve and protect such interest.
SECTION 9.3. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 9.4. Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Equity
Certificate or the Notes or the respective rights of the Holders thereof.
SECTION 9.5. Assignment. Notwithstanding anything to the
contrary contained in this Agreement, except as provided in Section 7.2 or
Section 8.2 (and as provided in the provisions of the Agreement concerning the
resignation of the Servicer), this Agreement may not be assigned by the
Depositor or the Servicer without (i) the prior written consent of the Owner
Trustee, the Indenture Trustee and a Note Majority, and (ii) satisfaction of the
Rating Agency Condition.
SECTION 9.6. Third-Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Nothing in this Agreement, express
or implied,
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shall give to any Person, other than the parties hereto and their successors
hereunder, any benefit or any legal or equitable right, remedy or claim under
this Agreement.
SECTION 9.7. Counterparts. For the purpose of facilitating
its execution and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute but
one and the same instrument.
SECTION 9.8. Intention of Parties. The parties hereto
intend that, in the event that the conveyance of the Contracts and other Trust
Assets pursuant to this Agreement is determined to be made as security for a
loan made by the Issuer, the Equity Certificateholder or the Noteholders to the
Depositor, the Depositor hereby grants to the Issuer to secure such loan a first
priority security interest in all of the Depositor's right, title and interest
in and to the rights and property intended to be conveyed to the Issuer pursuant
to Section 2.1(a). This Agreement shall, in such event, constitute a security
agreement under applicable law.
SECTION 9.9. Notices. All demands, notices and
communications under this Agreement shall be in writing, personally delivered or
mailed by certified mail-return receipt requested, or by facsimile transmission,
and shall be deemed to have been duly given upon receipt (a) in the case of TCC,
the Depositor or the Servicer, at the following address: 44 Whippany Road,
Morristown, New Jersey 07962, Attention: General Counsel, (b) in the case of the
Owner Trustee, at its Corporate Trust Office, and (c) in the case of the
Indenture Trustee, at its Corporate Trust Office, or at such other address as
shall be designated by any such party in a written notice to the other parties.
SECTION 9.10. Income Tax Characterization. The Depositor
has structured the Trust Agreement, the Indenture, the Cash Collateral Account
Agreement, the Notes and the Equity Certificate with the intention that the
Notes will qualify under applicable federal, state, local and foreign tax law as
indebtedness of the Depositor secured by the Contracts. The Depositor and the
Servicer agree to treat and to take no action inconsistent with the treatment of
the Notes as such indebtedness for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income.
SECTION 9.11. Limitation of Liability. It is expressly
understood and agreed by the parties hereto that (a) this Agreement is executed
and delivered by The Bank of New York, not individually or personally but solely
as Owner Trustee of the Issuer under the Trust Agreement, in the exercise of the
powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by The Bank of New York but is made and intended for the purpose for
binding only the Issuer, (c) nothing
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herein contained shall be construed as creating any liability on The Bank of New
York, individually or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly waived by
the parties to this Agreement and by any person claiming by, through or under
them and (d) under no circumstances shall The Bank of New York be personally
liable for the payment of any indebtedness or expenses of the Issuer or be
liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Issuer under this Agreement or any related
documents.
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IN WITNESS WHEREOF, the Issuer, the Depositor, TCC, the
Servicer and the Indenture Trustee have caused this Transfer and Servicing
Agreement to be duly executed by their respective officers as of the day and
year first above written.
ISSUER:
CAPITA EQUIPMENT RECEIVABLES
TRUST 1997-1
By THE BANK OF NEW YORK,
not in its individual capacity but solely
as Owner Trustee
By /s/ Cheryl L. Laser
----------------------------------------
Name: Cheryl L. Laser
Title: Assistant Vice President
DEPOSITOR:
ANTIGUA FUNDING CORPORATION
By /s/ Glenn A. Votek
----------------------------------------
Name: Glenn A. Votek
Title: Treasurer
AT&T CAPITAL CORPORATION
In its individual capacity and as Servicer
By /s/ Glenn A. Votek
----------------------------------------
Name: Glenn A. Votek
Title: Vice President and Treasurer
INDENTURE TRUSTEE:
BANKERS TRUST COMPANY
not in its individual capacity but
solely as Indenture Trustee
By /s/ Alfia Monestra
----------------------------------------
Name: Alfia Monestra
Title: Trust Officer
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===============================================================================
CAPITA EQUIPMENT RECEIVABLES TRUST 1997-1
5.79% RECEIVABLE-BACKED NOTES, CLASS A-1
6.03% RECEIVABLE-BACKED NOTES, CLASS A-2
6.12% RECEIVABLE-BACKED NOTES, CLASS A-3
6.19% RECEIVABLE-BACKED NOTES, CLASS A-4
FLOATING RATE RECEIVABLE-BACKED NOTES, CLASS A-5
6.45% RECEIVABLE-BACKED NOTES, CLASS B
6.48% RECEIVABLE-BACKED NOTES, CLASS C
----------------------------
INDENTURE
DATED AS OF NOVEMBER 1, 1997
----------------------------
BANKERS TRUST COMPANY
TRUSTEE
===============================================================================
<PAGE>
<PAGE>
CROSS REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
<S> <C>
310(a)(1).................................................................. 6.11
(a)(2)................................................................. 6.11
(a)(3)................................................................. 6.10
(a)(4)................................................................. N.A.2
(a)(5)................................................................. 6.11
(b).................................................................... 6.08; 6.11
(c).................................................................... N.A.
311(a)..................................................................... 6.12
(b).................................................................... 6.12
(c).................................................................... N.A.
312(a)..................................................................... 7.01
(b).................................................................... 7.02
(c).................................................................... 7.02
313(a)..................................................................... 7.04
(b)(1)................................................................. 7.04
(b)(2)................................................................. 7.04
(c).................................................................... 11.05
(d).................................................................... 7.04
314(a)..................................................................... 7.03
(b).................................................................... 3.06;11.15
(c)(1)................................................................. 11.01
(c)(2)................................................................. 11.01
(c)(3)................................................................. 11.01
(d).................................................................... 11.01
(e).................................................................... 11.01
(f).................................................................... 11.01
315(a)..................................................................... 6.01
(b).................................................................... 6.05;11.05
(c).................................................................... 6.01
(d).................................................................... 6.01
(e).................................................................... 5.14
316(a)(last sentence)...................................................... 1.01
(a)(1)(A).............................................................. 5.12
(a)(1)(B).............................................................. 5.13
(a)(2)................................................................. N.A.
(b).................................................................... 5.08
(c).................................................................... N.A.
317(a)(1).................................................................. 5.03
(a)(2)................................................................. 5.03
(b).................................................................... 3.03
318(a)..................................................................... 11.07
</TABLE>
1 Note: This Cross Reference Table shall not, for any purpose, be deemed to
be part of this Indenture.
2 N.A. means Not Applicable.
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I Definitions and Incorporation by Reference .................................. 3
SECTION 1.01. Definitions ................................................ 3
SECTION 1.02. Incorporation by Reference of Trust Indenture Act ........... 27
SECTION 1.03. Rules of Construction ....................................... 28
ARTICLE II The Notes .................................................................... 29
SECTION 2.01. Form......................................................... 29
SECTION 2.02. Execution, Authentication and Delivery ...................... 29
SECTION 2.03. Temporary Notes ............................................. 30
SECTION 2.04. Registration; Registration of Transfer and Exchange ......... 30
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes .................. 32
SECTION 2.06. Person Deemed Owner ......................................... 33
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest ....... 33
SECTION 2.08. Cancellation ................................................ 34
SECTION 2.09. Book-Entry Notes ............................................ 34
SECTION 2.10. Notices to Depository ....................................... 35
SECTION 2.11. Definitive Notes ............................................ 35
SECTION 2.12. Calculations ................................................ 35
SECTION 2.13. Deposit of Series 1997-1 Note Proceeds ...................... 36
ARTICLE III Covenants .................................................................... 37
SECTION 3.01. Payment of Principal and Interest ........................... 37
SECTION 3.02. Maintenance of Office or Agency ............................. 37
SECTION 3.03. Money for Payments To Be Held in Trust ...................... 37
SECTION 3.04. Existence ................................................... 39
SECTION 3.05. Protection of Trust Estate .................................. 39
SECTION 3.06. Opinions as to Trust Estate ................................. 40
SECTION 3.07. Performance of Obligations; Servicing of Contracts .......... 40
SECTION 3.08. Negative Covenants .......................................... 42
SECTION 3.09. Annual Statement as to Compliance ........................... 42
SECTION 3.10. Issuer May Consolidate or Merge Only on Certain Terms........ 43
SECTION 3.11. Successor or Transferee ..................................... 45
SECTION 3.12. No Other Business ........................................... 45
SECTION 3.13. No Borrowing ................................................ 45
SECTION 3.14. Servicer's Obligations ...................................... 46
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities ........... 46
SECTION 3.16. Income Tax Characterization ................................. 46
SECTION 3.17. Restricted Payments ......................................... 46
SECTION 3.18. Notice of Events of Default.................................. 46
SECTION 3.19. Further Instruments and Acts ................................ 47
SECTION 3.20. Compliance with Laws ........................................ 47
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 3.21. Amendments of Transfer and Servicing Agreement
and Trust Agreement ......................................... 47
SECTION 3.22. Trust Obligation ............................................ 47
SECTION 3.23. Enforcement of Class A-5 Swap Agreement ..................... 47
ARTICLE IV Satisfaction and Discharge ................................................... 48
SECTION 4.01. Satisfaction and Discharge of Indenture ..................... 48
SECTION 4.02. Application of Trust Money .................................. 49
SECTION 4.03. Repayment of Moneys Held by Paying Agent .................... 49
SECTION 4.04. Release of Trust Estate ..................................... 49
ARTICLE V Remedies...................................................................... 51
SECTION 5.01. Events of Default ........................................... 51
SECTION 5.02. Rights upon Event of Default ................................ 52
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Trustee; Authority of Trustee ............................ 52
SECTION 5.04. Remedies .................................................... 54
SECTION 5.05. Optional Preservation of the Contracts ...................... 55
SECTION 5.06. Priorities .................................................. 55
SECTION 5.07. Limitation of Suits ......................................... 57
SECTION 5.08. Unconditional Rights of Noteholders To Receive
Principal and Interest ...................................... 57
SECTION 5.09. Restoration of Rights and Remedies .......................... 58
SECTION 5.10. Rights and Remedies Cumulative .............................. 58
SECTION 5.11. Delay or Omission Not a Waiver .............................. 58
SECTION 5.12. Control by Noteholders ...................................... 58
SECTION 5.13. Waiver of Past Defaults ..................................... 59
SECTION 5.14. Undertaking for Costs ....................................... 59
SECTION 5.15. Waiver of Stay or Extension Laws ............................ 59
SECTION 5.16. Action on Notes ............................................. 60
SECTION 5.17. Performance and Enforcement of Certain Obligations .......... 60
ARTICLE VI The Trustee................................................................... 61
SECTION 6.01. Duties of Trustee ........................................... 61
SECTION 6.02. Rights of Trustee ........................................... 63
SECTION 6.03. Individual Rights of Trustee ................................ 64
SECTION 6.04. Trustee's Disclaimer ........................................ 65
SECTION 6.05. Notice of Defaults .......................................... 65
SECTION 6.06. Reports by Trustee to Holders ............................... 65
SECTION 6.07. Compensation and Indemnity .................................. 65
SECTION 6.08. Replacement of Trustee ...................................... 66
SECTION 6.09. Successor Trustee by Merger ................................. 67
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee ............... 68
SECTION 6.11. Eligibility; Disqualification ............................... 69
SECTION 6.12. Preferential Collection of Claims Against Issuer ............ 69
SECTION 6.13. Representations and Warranties of the Trustee ............... 69
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ARTICLE VII Noteholders' Lists and Reports ........................................ 71
SECTION 7.01. Note Registrar To Furnish Trustee Names and
Addresses to Noteholders .................................... 71
SECTION 7.02. Preservation of Information; Communications to
Noteholders ................................................. 71
SECTION 7.03. Reports by Issuer ........................................... 71
SECTION 7.04. Reports by Trustee .......................................... 72
SECTION 7.05. Statements to Noteholders ................................... 72
ARTICLE VIII Trust Accounts, Disbursements and Releases ............................ 73
SECTION 8.01. Collection of Money ......................................... 73
SECTION 8.02. Collection Account .......................................... 73
SECTION 8.03. Distributions ............................................... 73
SECTION 8.04. Note Distribution Account ................................... 74
SECTION 8.05. Servicing Account ........................................... 76
SECTION 8.06. Cash Collateral Account ..................................... 77
SECTION 8.07. Class C Funding Account ..................................... 78
SECTION 8.08. General Provisions Regarding Servicing
Account, Collection Account, Note Distribution
Account, Class C Funding Account and Cash
Collateral Account .......................................... 79
ARTICLE IX Supplemental Indentures ...................................................... 83
SECTION 9.01. Supplemental Indentures Without Consent of
Noteholders ................................................. 83
SECTION 9.02. Supplemental Indentures With Consent of
Noteholders ................................................. 84
SECTION 9.03. Execution of Supplemental Indentures ........................ 86
SECTION 9.04. Effect of Supplemental Indenture ............................ 86
SECTION 9.05. Conformity With Trust Indenture Act ......................... 86
SECTION 9.06. Reference in Notes to Supplemental Indentures ............... 86
ARTICLE X Redemption and Purchase of Notes ............................................. 87
SECTION 10.01. Redemption .................................................. 87
SECTION 10.02. Form of Redemption Notice ................................... 87
SECTION 10.03. Notes Payable on Redemption Date ............................ 88
SECTION 10.04. Optional Purchase of Class A-5 Notes ........................ 88
SECTION 10.05. Form of Purchase Notice ..................................... 88
SECTION 10.06. Class A-5 Notes to be Purchased on Purchase Date ............ 89
ARTICLE XI Miscellaneous ............................................................... 91
SECTION 11.01. Compliance Certificates and Opinions, etc. .................. 91
SECTION 11.02. Form of Documents Delivered to Trustee ...................... 93
SECTION 11.03. Acts of Noteholders ......................................... 94
SECTION 11.04. Notices, etc., to Trustee, Issuer and Rating Agencies ....... 94
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SECTION 11.05. Notices to Noteholders; Waiver .............................. 95
SECTION 11.06. Limitation of Liability ..................................... 96
SECTION 11.07. Conflict with Trust Indenture Act ........................... 96
SECTION 11.08. Effect of Headings and Table of Contents .................... 96
SECTION 11.09. Successors and Assigns ...................................... 96
SECTION 11.10. Severability ................................................ 96
SECTION 11.11. Benefits of Indenture ....................................... 97
SECTION 11.12. Legal Holidays .............................................. 97
SECTION 11.13. Governing Law ............................................... 97
SECTION 11.14. Counterparts ................................................ 97
SECTION 11.15. Recording of Indenture ...................................... 97
SECTION 11.16. No Petition ................................................. 97
SECTION 11.17. Inspection .................................................. 98
SECTION 11.18. Amendment of Cash Collateral Account Agreement .............. 98
SECTION 11.19. Amendment of Class A-5 Swap Agreement ....................... 99
SECTION 11.20. Events of Default and Termination Events Under
Class A-5 Swap Agreement..................................... 100
Testimonium, Signatures and Seals .................................................... 101
Exhibit A Form of Depository Agreement
Exhibit B-1 Form of Class A Note
Exhibit B-2 Form of Class B Note
Exhibit B-3 Form of Class C Note
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INDENTURE, dated as of November 1, 1997, between CAPITA
EQUIPMENT RECEIVABLES TRUST 1997-1, a trust formed pursuant to the laws of the
State of New York (the "Issuer"), and BANKERS TRUST COMPANY, a New York banking
corporation, in its capacity as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Issuer's 5.79%
Receivable-Backed Notes, Class A-1 (the "Class A-1 Notes"), 6.03%
Receivable-Backed Notes, Class A-2 (the "Class A-2 Notes"), 6.12%
Receivable-Backed Notes, Class A-3 (the "Class A-3 Notes"), 6.19%
Receivable-Backed Notes, Class A-4 (the "Class A-4 Notes"), Floating Rate
Receivable-Backed Notes, Class A-5 (the "Class A-5 Notes"), 6.45%
Receivable-Backed Notes, Class B (the "Class B Notes") and 6.48%
Receivable-Backed Notes, Class C (the "Class C Notes" and, together with the
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes,
the Class A-5 Notes and the Class B Notes, the "Notes"):
As security for the payment and performance by the Issuer
of its obligations under this Indenture and the Notes, the Issuer hereby Grants
to the Trustee, on behalf of and for the benefit of the Noteholders to secure
the payment and performance of the Secured Obligations, the following
(collectively, the "Trust Estate"):
GRANTING CLAUSE FIRST
All rights, title, interest (including security interests)
and privileges of the Issuer, whether now owned or hereafter acquired, whether
now existing or hereafter arising and wherever located, in and to:
(a) the Contracts and the related Equipment (subject to the
rights of the Depositor therein, as set forth in the Transfer and Servicing
Agreement);
(b) the Pledged Revenues;
(c) the Trust Accounts and all cash, checks, drafts, certificates
and instruments (including Eligible Investments) at any time deposited or
held therein;
(d) the Cash Collateral Account and the Insurance, Maintenance and
Tax Accounts and all cash, checks, drafts, certificates and instruments
(including investments) at any time deposited or held therein;
(e) the Transfer and Servicing Agreement, including (i) any deemed
loan made by the Issuer to the Depositor and the security therefor,
including the security interest granted by the Depositor to the Issuer to
secure such deemed loan, as described in Section 9.8 of the Transfer and
Servicing Agreement, and (ii) the obligation of the Depositor pursuant to
Section 2.1(a)(i)(3) of the Transfer and Servicing Agreement to cause
payment of the
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allocable portion of Liquidation Proceeds to the Issuer and the security
interest in the Leased Equipment granted by the Depositor to the Issuer
pursuant to Section 2.1(c) of the Transfer and Servicing Agreement;
(f) each Purchase Agreement (to the extent it relates to the
Contracts), including (i) any Purchase Amount paid (other than any
portion thereof attributable to the Book Value of the Leased Equipment)
and (ii) any deemed loan made by the Depositor to the applicable
Originators and the security therefor, including the security interest in
the Contracts and Equipment granted by such Originators to the Depositor
to secure such deemed loan, as described in Section 2.2 of the Purchase
Agreement;
(g) the Class A-5 Swap Agreement, provided that any payments
received thereunder shall be solely for the benefit of the Class A-5
Notes and applied only to the payment of interest thereon in accordance
with the provisions hereof;
(h) all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise payable in respect
of, or in exchange for, any or all of the foregoing; and
(i) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion,
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivables, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any
time constitute all or part of or are included in the proceeds of any of
the foregoing.
GRANTING CLAUSE SECOND
All other property of every name and nature from time to
time hereafter by delivery or by writing of any kind conveyed, pledged, assigned
or transferred, as and for additional security hereunder by the Issuer or by
anyone in its behalf or with its written consent to the Trustee, which is hereby
authorized to receive any and all such property at any and all times and to hold
and apply the same subject to the terms hereof.
The Trustee, for the benefit of the Holders of the Notes,
acknowledges such Grant. The Trustee, on behalf of the Holders of the Notes,
accepts the trusts under this Indenture, and agrees to perform its duties
required in this Indenture, in accordance with the provisions of this Indenture.
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ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
All terms defined in the Transfer and Servicing Agreement
or the Trust Agreement (each as defined below) shall have the same meaning in
this Indenture. Except as otherwise specified herein or as the context may
otherwise require, the following terms have the respective meanings set forth
below for all purposes of this Indenture.
"Accounting Date" means, with respect to a Payment Date,
the last day of the preceding calendar month.
"Act" has the meaning specified in Section 11.03(a).
"Affiliate" means, with respect to any specified Person,
any other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Aggregate Principal Balance" means, as of any date, the
aggregate of the Principal Balances of each Class of Notes.
"Amount Available" means, with respect to any Payment Date,
the sum of (i) the Available Pledged Revenues for such Payment Date, (ii) that
portion of the balance in the Cash Collateral Account available for withdrawal
by the Trustee in accordance with Section 8.06(c), (iii) with respect to the
Class A-5 Notes only, amounts, if any, paid to the Trustee pursuant to the Class
A-5 Swap Agreement, and (iv) with respect to the Class C Notes only, amounts on
deposit in the Class C Funding Account. For purposes of allocating the Amount
Available on any Payment Date to the payment of interest on the Class A-5 Notes,
the Class A-5 Notes will be assumed to bear interest at the Class A-5 Assumed
Fixed Rate.
"Authorized Officer" means, with respect to the Issuer, any
officer of the Owner Trustee who is authorized to act for the Owner Trustee in
matters relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter).
"Available Cash Collateral Amount" means, with respect to a
Payment Date, the amount of funds equal to the lesser of (i) the amount on
deposit in the
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Cash Collateral Account (determined (a) exclusive of any net investment earnings
thereon, and (b) before giving effect to any deposit to be made to or
withdrawals from the Cash Collateral Account with respect to such Payment Date),
and (ii) the Requisite Cash Collateral Amount.
"Available Pledged Revenues" means, with respect to any
Payment Date, the sum of (i) the Related Collection Period Pledged Revenues for
such Payment Date, (ii) all Purchase Amounts (other than any portion thereof
attributable to the Book Value of the Leased Equipment) on deposit in the
Collection Account as of the immediately preceding Deposit Date, (iii) the
amount paid by the Depositor to purchase the Contracts pursuant to Section 5.1
of the Transfer and Servicing Agreement on deposit in the Collection Account as
of the immediately preceding Deposit Date, (iv) all net income from investments
of funds in the Collection Account, the Class C Funding Account and the Note
Distribution Account during the related Collection Period, and (v) to the extent
necessary to pay the Note Interest Distributable Amount for such Payment Date,
the Current Collection Period Pledged Revenues for such Payment Date.
"Book-Entry Note" means any Note registered in the name of
the Depository or its nominee, ownership of which is reflected on the books of
the Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
"Business Day" means any day (other than a Saturday, Sunday
or legal holiday) on which commercial banking institutions in New York, New
York, or any other location of any successor Servicer or successor Trustee, are
open for regular business.
"Cash Collateral Account" means the Eligible Account
established and maintained by the Trustee in accordance with Section 8.06.
"Cash Collateral Account Agreement" means the Loan
Agreement, dated as of December 3, 1997, among the Depositor, the Owner Trustee,
the Trustee, the Cash Collateral Account Lenders and the Cash Collateral Account
Lenders' Agent, as the same may be amended, supplemented or otherwise modified
in accordance with the terms thereof.
"Cash Collateral Account Lenders" means the parties
identified as lenders in the Cash Collateral Account Agreement.
"Cash Collateral Account Lenders' Agent" means the party
identified as agent for the Cash Collateral Account Lenders in the Cash
Collateral Account Agreement.
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"Class" means, when used with respect to the Notes, all
Notes of a given Class.
"Class A Notes" means, collectively, the Class A-1 Notes,
the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-5
Notes.
"Class A-1 Interest Carryover Shortfall" means, with
respect to any Payment Date, the excess, if any, of the Class A-1 Interest
Distributable Amount for the preceding Payment Date over the amount that was
actually distributed in respect of interest on the Class A-1 Notes on such
preceding Payment Date, plus, to the extent permitted by law, an amount equal to
the product of (i) the Class A-1 Interest Rate, (ii) such excess, and (iii) a
fraction equal to the number of days in the related Interest Period divided by
360.
"Class A-1 Interest Distributable Amount" means, with
respect to any Payment Date, the sum of the Class A-1 Monthly Interest
Distributable Amount and the Class A-1 Interest Carryover Shortfall for such
Payment Date.
"Class A-1 Interest Rate" means 5.79% per annum.
"Class A-1 Monthly Interest Distributable Amount" means,
with respect to any Interest Period and the related Payment Date, an amount
equal to the product of (i) the Class A-1 Interest Rate, (ii) the Principal
Balance of the Class A-1 Notes on the immediately preceding Payment Date, after
giving effect to all payments of principal to Class A-1 Noteholders on or prior
to such immediately preceding Payment Date (or, in the case of the first Payment
Date, the Original Principal Balance of the Class A-1 Notes), and (iii) a
fraction equal to the number of days in such Interest Period divided by 360.
"Class A-1 Notes" means the 5.79% Receivable-Backed Notes,
Class A-1, substantially in the form of Exhibit B-1.
"Class A-1 Stated Maturity Date" means December 15,
1998 (or, if such day is not a Business Day, the next succeeding Business Day
thereafter).
"Class A-2 Interest Carryover Shortfall" means with respect
to any Payment Date, the excess, if any, of the Class A-2 Interest Distributable
Amount for the preceding Payment Date over the amount that was actually
distributed in respect of interest on the Class A-2 Notes on such preceding
Payment Date, plus, to the extent permitted by law, an amount equal to the
product of (i) the Class A-2 Interest Rate, (ii) such excess, and (iii) a
fraction equal to one-twelfth.
"Class A-2 Interest Distributable Amount" means, with
respect to any Payment Date, the sum of the Class A-2 Monthly Interest
Distributable Amount and the Class A-2 Interest Carryover Shortfall for such
Payment Date.
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"Class A-2 Interest Rate" means 6.03% per annum.
"Class A-2 Monthly Interest Distributable Amount" means (a)
with respect to the first Interest Period and the related Payment Date, an
amount equal to the product of (i) the Class A-2 Interest Rate, (ii) the
Original Principal Balance of the Class A-2 Notes, and (iii) a fraction equal to
12 divided by 360, and (b) with respect to each subsequent Interest Period and
the related Payment Date, an amount equal to the product of (i) the Class A-2
Interest Rate, (ii) the Principal Balance of the Class A-2 Notes on the
immediately preceding Payment Date, after giving effect to all payments of
principal to Class A-2 Noteholders on or prior to such immediately preceding
Payment Date, and (iii) a fraction equal to one-twelfth.
"Class A-2 Notes" means the 6.03% Receivable-Backed Notes,
Class A-2, substantially in the form of Exhibit B-1.
"Class A-2 Stated Maturity Date" means February 15, 2000
(or, if such day is not a Business Day, the next succeeding Business Day
thereafter).
"Class A-3 Interest Carryover Shortfall" means, with
respect to any Payment Date, the excess, if any, of the Class A-3 Interest
Distributable Amount for the preceding Payment Date over the amount that was
actually distributed in respect of interest on the Class A-3 Notes on such
preceding Payment Date, plus, to the extent permitted by law, an amount equal to
the product of (i) the Class A-3 Interest Rate, (ii) such excess, and (iii) a
fraction equal to one-twelfth.
"Class A-3 Interest Distributable Amount" means, with
respect to any Payment Date, the sum of the Class A-3 Monthly Interest
Distributable Amount and the Class A-3 Interest Carryover Shortfall for such
Payment Date.
"Class A-3 Interest Rate" means 6.12% per annum.
"Class A-3 Monthly Interest Distributable Amount" means (a)
with respect to the first Interest Period and the related Payment Date, an
amount equal to the product of (i) the Class A-3 Interest Rate, (ii) the
Original Principal Balance of the Class A-3 Notes, and (iii) a fraction equal to
12 divided by 360, and (b) with respect to each subsequent Interest Period and
the related Payment Date, an amount equal to the product of (i) the Class A-3
Interest Rate, (ii) the Principal Balance of the Class A-3 Notes on the
immediately preceding Payment Date, after giving effect to all payments of
principal to Class A-3 Noteholders on or prior to such immediately preceding
Payment Date, and (iii) a fraction equal to one-twelfth.
"Class A-3 Notes" means the 6.12% Receivable-Backed Notes,
Class A-3, substantially in the form of Exhibit B-1.
"Class A-3 Stated Maturity Date" means September 15, 2000
(or, if such day is not a Business Day, the next succeeding Business Day
thereafter).
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"Class A-4 Interest Carryover Shortfall" means, with
respect to any Payment Date, the excess, if any, of the Class A-4 Interest
Distributable Amount for the preceding Payment Date over the amount that was
actually distributed in respect of interest on the Class A-4 Notes on such
preceding Payment Date, plus, to the extent permitted by law, an amount equal to
the product of (i) the Class A-4 Interest Rate, (ii) such excess, and (iii) a
fraction equal to one-twelfth.
"Class A-4 Interest Distributable Amount" means, with
respect to any Payment Date, the sum of the Class A-4 Monthly Interest
Distributable Amount and the Class A-4 Interest Carryover Shortfall for such
Payment Date.
"Class A-4 Interest Rate" means 6.19% per annum.
"Class A-4 Monthly Interest Distributable Amount" means (a)
with respect to the first Interest Period and the related Payment Date, an
amount equal to the product of (i) the Class A-4 Interest Rate, (ii) the
Original Principal Balance of the Class A-4 Notes, and (iii) a fraction equal to
12 divided by 360, and (b) with respect to each subsequent Interest Period and
the related Payment Date, an amount equal to the product of (i) the Class A-4
Interest Rate, (ii) the Principal Balance of the Class A-4 Notes on the
immediately preceding Payment Date, after giving effect to all payments of
principal to Class A-4 Noteholders on or prior to such immediately preceding
Payment Date, and (iii) a fraction equal to one-twelfth.
"Class A-4 Notes" means the 6.19% Receivable-Backed Notes,
Class A-4, substantially in the form of Exhibit B-1.
"Class A-4 Stated Maturity Date" means February 15, 2002
(or, if such day is not a Business Day, the next succeeding Business Day
thereafter).
"Class A-5 Assumed Fixed Rate" means a fixed rate of 6.25%
per annum.
"Class A-5 Interest Carryover Shortfall" means, with
respect to any Payment Date, the excess, if any, of the Class A-5 Interest
Distributable Amount for the preceding Payment Date over the amount that was
actually distributed in respect of interest on the Class A-5 Notes on such
preceding Payment Date, plus, to the extent permitted by law, an amount equal to
the product of (i) the Class A-5 Interest Rate, (ii) such excess, and (iii) a
fraction equal to the number of days in the related Interest Period divided by
360.
"Class A-5 Interest Distributable Amount" means, with
respect to any Payment Date, the sum of the Class A-5 Monthly Interest
Distributable Amount and the Class A-5 Interest Carryover Shortfall for such
Payment Date.
"Class A-5 Interest Rate" means .125% plus One-Month LIBOR.
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"Class A-5 Monthly Interest Distributable Amount" means,
with respect to any Interest Period and the related Payment Date, except as
otherwise provided herein, an amount equal to the product of (i) the Class A-5
Interest Rate, (ii) the Principal Balance of the Class A-5 Notes on the
immediately preceding Payment Date, after giving effect to all payments of
principal to Class A-5 Noteholders on or prior to such immediately preceding
Payment Date (or, in the case of the first Payment Date, the Original Principal
Balance of the Class A-5 Notes), and (iii) a fraction equal to the number of
days in such Interest Period divided by 360.
"Class A-5 Notes" means the Floating Rate Receivable-Backed
Notes, Class A-5, substantially in the form of Exhibit B-1.
"Class A-5 Principal Distribution Percentage" means
10.06026578%.
"Class A-5 Stated Maturity Date" means February 15, 2002
(or, if such day is not a Business Day, the next succeeding Business Day
thereafter).
"Class A-5 Swap Agreement" means the ISDA Master Agreement,
dated December 3, 1997, between the Issuer and the Class A-5 Swap Counterparty,
including the related schedule and confirmation.
"Class A-5 Swap Counterparty" means Goldman Sachs Mitsui
Marine Derivative Products, L.P., in its capacity as swap counterparty under the
Class A-5 Swap Agreement, and its successors and assigns in such capacity.
"Class B Interest Carryover Shortfall" means, with respect
to any Payment Date, the excess, if any, of the Class B Interest Distributable
Amount for the preceding Payment Date over the amount that was actually
distributed in respect of interest on the Class B Notes on such preceding
Payment Date, plus, to the extent permitted by law, an amount equal to the
product of (i) the Class B Interest Rate, (ii) such excess, and (iii) a fraction
equal to one-twelfth.
"Class B Interest Distributable Amount" means, with respect
to any Payment Date, the sum of the Class B Monthly Interest Distributable
Amount and the Class B Interest Carryover Shortfall for such Payment Date.
"Class B Interest Rate" means 6.45% per annum.
"Class B Monthly Interest Distributable Amount" means (a)
with respect to the first Interest Period and the related Payment Date, an
amount equal to the product of (i) the Class B Interest Rate, (ii) the Original
Principal Balance of the Class B Notes, and (iii) a fraction equal to 12 divided
by 360, and (b) with respect to each subsequent Interest Period and the related
Payment Date Payment Date, an amount equal to the product of (i) the Class B
Interest Rate, (ii) the Principal Balance
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of the Class B Notes on the immediately preceding Payment Date, after giving
effect to all payments of principal to Class B Noteholders on or prior to such
immediately preceding Payment Date, and (iii) a fraction equal to one-twelfth.
"Class B Notes" means the 6.45% Receivable-Backed Notes,
Class B, substantially in the form of Exhibit B-2.
"Class B Stated Maturity Date" means August 15, 2002 (or,
if such day is not a Business Day, the next succeeding Business Day thereafter).
"Class C Funding Account" means the Eligible Account
established and maintained by the Trustee in accordance with Section 8.07.
"Class C Interest Carryover Shortfall" means, with respect
to any Quarterly Payment Date, the excess, if any, of the Class C Interest
Distributable Amount for the preceding Quarterly Payment Date over the amount
that was actually distributed in respect of interest on the Class C Notes on
such preceding Quarterly Payment Date, plus, to the extent permitted by law, an
amount equal to the product of (i) the Class C Interest Rate, (ii) such excess,
and (iii) a fraction equal to one-fourth (or, in the case of the Quarterly
Payment Date which is the Class C Stated Maturity Date, one-sixth).
"Class C Interest Distributable Amount" means, with respect
to any Quarterly Payment Date, the sum of the Class C Monthly Interest
Distributable Amount and the Class C Interest Carryover Shortfall for such
Quarterly Payment Date.
"Class C Interest Rate" means 6.48% per annum.
"Class C Monthly Interest Distributable Amount" means:
(a) with respect to the first Interest Period and the related
Quarterly Payment Date, an amount equal to the sum of (i) the product of
(A) the Class C Interest Rate, (B) the Original Principal Balance of the
Class C Notes, and (C) a fraction equal to 12 divided by 360, and (ii)
the product of (A) the Class C Interest Rate, (B) the Original Principal
Balance of the Class C Notes, and (C) one-sixth;
(b) with respect to each subsequent Interest Period and the
related Quarterly Payment Date, an amount equal to (i) the product of (A)
the Class C Interest Rate, (B) the Principal Balance of the Class C Notes
on the immediately preceding Quarterly Payment Date, after giving effect
to all payments of principal to Class C Noteholders on or prior to such
immediately preceding Quarterly Payment Date, and (C) a fraction equal to
one-fourth (or, in the case of the Quarterly Payment Date which is the
Class C Stated Maturity Date, one-sixth), less (ii) that portion of the
balance of the Class C Funding
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Account, if any, deposited therein pursuant to Section 8.04(d) in
respect of interest on the Class C Notes;
(c) with respect to the first Interest Period and the first two
Monthly Payment Dates occurring during such Interest Period, an amount
equal to the amount described in clause (a)(i) for the first Monthly
Payment Date and an amount equal to one-half of the amount described in
clause (a)(ii) for the second Monthly Payment Date;
(d) with respect to each subsequent Interest Period prior to the
Interest Period next preceding the Class C Stated Maturity Date and the
first two Monthly Payment Dates occurring during such Interest Period, an
amount equal to one-third of the amount described in clause (b)(i) for
such Interest Period; and
(e) with respect to the Interest Period next preceding the Class
C Stated Maturity Date and the first Monthly Payment Date occurring
during such Interest Period, an amount equal to one-half of the amount
described in clause (b)(i) for such Interest Period.
"Class C Notes" means the 6.48% Receivable-Backed Notes,
Class C, substantially in the form of Exhibit B-3.
"Class C Stated Maturity Date" means October 16, 2006 (or,
if such day is not a Business Day, the next succeeding Business Day thereafter).
"Closing Date" means December 3, 1997.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and Treasury Regulations promulgated thereunder.
"Collection Account" means the Eligible Account or Accounts
established and maintained by the Trustee in accordance with Section 8.02.
"Collection Period" means, with respect to any Payment
Date, the calendar month preceding the month in which such Payment Date occurs
(such calendar month being referred to as the "related" Collection Period with
respect to such Payment Date). With respect to an Accounting Date, the
Collection Period in which such Accounting Date occurs is referred to herein as
the "related" Collection Period with respect to such Accounting Date.
"Contract Pool Principal Balance" means, with respect to
any Payment Date, the sum of the Contract Principal Balances (computed as of the
related Accounting Date) for all Contracts.
"Contract Principal Balance" means, as of any Accounting
Date:
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(i) in the case of any Contract that does not by its terms permit
prepayment or early termination, the present value of the unpaid
Scheduled Payments due on such Contract after such last day of the
Collection Period (excluding all Scheduled Payments due on or prior to,
but not received as of, such last day, as well as any Scheduled Payments
due after such last day and received on or prior thereto), after giving
effect to any Prepayments received on or prior to such last day,
discounted monthly at the rate of 8.00% per annum (assuming, for purposes
of such calculation, that each Scheduled Payment is due on the last day
of the applicable Collection Period);
(ii) in the case of any Contract that permits prepayment or early
termination only upon payment of an amount that is at least equal to the
present value (calculated in the manner described in clause (i) above) of
the unpaid Scheduled Payments due on such Contract after the date of such
prepayment, the amount specified in clause (i) above; and
(iii) in the case of any Contract that permits prepayment or early
termination without payment of an amount at least equal to the amount
specified in clause (ii) above, the lesser of (a) the outstanding
principal balance of such Contract after giving effect to Scheduled
Payments due on or prior to such last day of the Collection Period,
whether or not received, as well as any Prepayments, and any Scheduled
Payments due after such last day, received on or prior to such last day,
and (b) the amount specified in clause (i) above;
provided that, for purposes of computing the Monthly Principal Amount or the
Requisite Cash Collateral Amount for a given Payment Date (as well as all
Payment Dates thereafter), the Contract Principal Balance of any Contract which
became a Liquidated Contract during the related Collection Period or was
required to be purchased by TCC as of the last day of the related Collection
Period in accordance with Section 2.6 of the Transfer and Servicing Agreement,
will be deemed to be zero on and after the last day of such Collection Period.
"Contracts" means the Lease Contracts and the Loan
Contracts.
"Corporate Trust Office" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at date of the execution of this Agreement is located
at Four Albany Street, 10th Floor, New York, New York 10006, Attention:
Corporate Trust and Agency Group--Structured Finance; or at such other address
as the Trustee may designate from time to time by notice to the Noteholders and
the Issuer, or the principal corporate trust office of any successor Trustee
(the address of which the successor Trustee will notify the Noteholders and the
Issuer).
"Current Collection Period Pledged Revenues" means, with
respect to any Payment Date, the amount of Pledged Revenues in the Collection
Account as of
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the immediately preceding Deposit Date which were received by the Servicer after
the related Collection Period, including all Liquidation Proceeds so received
but excluding any Purchase Amounts.
"Current Realized Losses" means, with respect to any
Payment Date, the aggregate Liquidation Losses of all Contracts that became
Liquidated Contracts during the related Collection Period.
"Cut-Off Date" means November 1, 1997.
"Cut-Off Date Contract Pool Principal Balance" is
$1,146,940,285.
"Default" means any occurrence that is, or with notice or
the lapse of time or both would become, an Event of Default.
"Deposit Date" means, with respect to any Collection
Period, the Business Day immediately preceding the related Determination Date.
"Definitive Notes" means any Note evidenced by a
definitive, fully registered Note and any Note issued in lieu of a Book-Entry
Note pursuant to Section 2.11.
"Depositor" means Antigua Funding Corporation, a Delaware
corporation.
"Depository" means the initial Depository, The Depository
Trust Company, the nominee of which is Cede & Co., as the registered Holder of
the Class A Notes, the Class B Notes and the Class C Notes as of the Closing
Date, and any permitted successor depository. The Depository shall at all times
be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York.
"Depository Agreement" means the agreement among the
Issuer, the Trustee and The Depository Trust Company, as the initial Depository,
dated as of the Closing Date, relating to the Notes, substantially in the form
of Exhibit A.
"Depository Participant" means a broker, dealer, bank or
other financial institution or other Person for whom from time to time a
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.
"Determination Date" means, with respect to any Collection
Period, the fifth Business Day immediately preceding the related Payment Date.
"Duff & Phelps" means Duff & Phelps Credit Rating Co., or
any successor thereto.
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"Eligible Account" means (i) an account maintained at an
Eligible Institution; (ii) an account or accounts the deposits in which are
fully insured by either the Bank Insurance Fund or the Savings Association
Insurance Fund of the FDIC; (iii) a trust account (which shall be a "segregated
trust account") maintained with the corporate trust department of a federal or
state chartered depository institution or trust company with trust powers and
acting in its fiduciary capacity for the benefit of the Trustee, which
depository institution or trust company (or, if such depository institution or
trust company is a subsidiary of a bank holding company, such bank holding
company) shall have capital and surplus of not less than $50,000,000 and the
securities of such depository institution or trust company (or, if such
depository institution or trust company is a subsidiary of a bank holding
company and has no securities which are rated, the securities of such bank
holding company) shall have a credit rating from each of the Rating Agencies (if
rated by such Rating Agency) in one of its generic credit rating categories
which signifies investment grade; or (iv) an account that will not cause any
Rating Agency to downgrade or withdraw its then-current rating assigned to the
Notes, as confirmed in writing by such Rating Agency.
"Eligible Institution" means any depository institution
(which may be the Trustee or an Affiliate of the Trustee) organized under the
laws of the United States or any state, the deposits of which are insured to the
full extent permitted by law by the Bank Insurance Fund of the FDIC, which is
subject to supervision and examination by federal or state authorities and whose
short-term deposits, commercial paper or other short-term debt obligations have
been rated at least P-1 by Moody's, A-1+ by S&P, F-1 by Fitch (if rated by
Fitch) and D-1 by Duff & Phelps (if rated by Duff & Phelps) or whose unsecured
long-term debt has been rated in one of the two highest rating categories by
each Rating Agency (if rated by such Rating Agency).
"Eligible Investments" means any one or more of the
following types of investments:
(i) direct obligations of, and obligations fully guaranteed as to
timely receipt of principal and interest by, the United States of
America, or any agency or instrumentality of the United States of America
the obligations of which are backed by the full faith and credit of the
United States of America;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Trustee or any Affiliate of
the Trustee, acting in its commercial capacity) incorporated under the
laws of the United States of America or any state thereof and subject to
supervision and examination by federal or state authorities, so long as,
at the time of such investment or contractual commitment providing for
such investment, the short-term deposits, commercial paper or other
short-term debt obligations of
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such depository institution or trust company are rated at least P-1 by
Moody's, A-1+ by S&P, F-1+ by Fitch (if rated by Fitch) and D-1+ by
Duff & Phelps (if rated by Duff & Phelps); and (B) any other demand or
time deposit or certificate of deposit which is fully insured by the
Bank Insurance Fund of the FDIC;
(iii) shares of an investment company registered under the
Investment Company Act of 1940, whose shares are registered under the
Securities Act of 1933, as amended, and have a rating from each of the
Rating Agencies in its highest rating category;
(iv) repurchase obligations with respect to (A) any security
described in clause (i) above or (B) any other security issued or
guaranteed by an agency or instrumentality of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (ii)(A) above;
(v) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of
America or any state thereof which, at the time of such investment, have
a credit rating of at least Aa3 from Moody's, AAA from S&P, AAA from
Fitch (if rated by Fitch) and AAA from Duff & Phelps (if rated by Duff
Phelps);
(vi) commercial paper having a rating of at least P-1 by Moody's,
A-1+ by S&P, F-1+ by Fitch (if rated by Fitch) and D-1+ by Duff & Phelps
(if rated by Duff & Phelps) at the time of such investment;
(vii) investments in money market funds rated in the highest
rating category by each of Moody's, S&P, Fitch (if rated by Fitch) and
Duff & Phelps (if rated by Duff & Phelps), including funds for which the
Trustee or any of its Affiliates is investment manager or advisor; and
(viii) any other investment which will not cause any Rating Agency
to downgrade or withdraw its then-current rating assigned to the Notes,
as confirmed in writing by such Rating Agency.
Eligible Investments may be purchased by or through the
Trustee or any of its Affiliates. No Eligible Investment may have an "r" or
comparable symbol affixed to its rating.
"Equipment" means, with respect to any Contract, the
property which is leased or purchased pursuant to such Contract, or which
otherwise provides security for the payment of amounts payable thereunder.
"Equity Certificateholder" means the holder of an Equity
Certificate, as reflected in the certificate register maintained by the Owner
Trustee.
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"Event of Default" has the meaning specified in Section
5.01.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Executive Officer" means, with respect to any corporation,
the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, any Responsible
Officer, any Authorized Officer, the Secretary or the Treasurer of such
corporation; and with respect to any partnership, any general partner thereof.
"Fitch" means Fitch Investors Service, L.P., or any
successor thereto.
"Grant" means mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and grant a lien
upon and a security interest in and right of set-off against, deposit, set over
and confirm pursuant to this Indenture. A Grant of the Trust Estate or of any
other agreement or instrument shall include all rights, powers and options (but
none of the obligations) of the Granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Trust Estate and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the Granting party or otherwise and generally
to do and receive anything that the Granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"Holder" or "Noteholder" means the Person in whose name a
Note is registered on the Note Register.
"Indebtedness" means, with respect to any Person at any
time, (a) indebtedness or liability of such Person for borrowed money whether or
not evidenced by bonds, debentures, notes or other instruments, or for the
deferred purchase price of property or services (including trade obligations);
(b) obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person;
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or (h) obligations of such Person under any interest rate or currency exchange
agreement.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Independent" means, when used with respect to any
specified Person, that the Person (a) is in fact independent of the Issuer, any
other obligor upon the Notes, the Depositor, the Servicer and any Affiliate of
any of the foregoing Persons, (b) does not have any direct financial interest or
any material indirect financial interest in the Issuer, any such other obligor,
the Depositor, the Servicer or any Affiliate of any of the foregoing Persons and
(c) is not connected with the Issuer, any such other obligor, the Depositor, the
Servicer or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
"Independent Certificate" means a certificate or opinion to
be delivered to the Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Interest Periods" means (a) for each Class of Notes other
than the Class C Notes, the initial period from and including the Closing Date
to but excluding December 15, 1997, and thereafter each successive period (i)
for the Class A-2, Class A-3, Class A-4 and Class B Notes, from and including
the first day following completion of the preceding period to but excluding the
15th day of the following month (in each case without respect to whether such
days are Business Days), or (ii) for the Class A-1 and Class A-5 Notes, from and
including each Payment Date to but excluding the following Payment Date, in each
case until the Principal Balance of such Class has been reduced to zero, and (b)
for the Class C Notes, the initial period from and including the Closing Date to
but excluding February 15, 1998, and thereafter each successive period from and
including the first day following completion of the preceding period to but
excluding the 15th day of the third following month (in each case without
respect to whether such days are Business Days) or, in the case of the last
Interest Period, the Class C Stated Maturity Date, until the Principal Balance
of the Class C Notes has been reduced to zero. The Payment Date with respect to
each Interest Period will be the Monthly Payment Date next succeeding the end of
such Interest Period.
"Interest Rate" means the Class A-1 Interest Rate, the
Class A-2 Interest Rate, the Class A-3 Interest Rate, the Class A-4 Interest
Rate, the Class A-5 Interest Rate, the Class B Interest Rate and the Class C
Interest Rate, as applicable.
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"Issuer" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order
or request signed in the name of the Issuer by any one of its Authorized
Officers and delivered to the Trustee.
"Lease Contracts" means the lease contracts listed on
Exhibit A-1 to the Transfer and Servicing Agreement (excluding any such lease
contract which has become a Purchased Contract) and all rights and obligations
under such contracts, including, without limitation, all monies at any time paid
or payable thereon or in respect thereof from and after the Cut-Off Date
(whether in the form of (i) Scheduled Payments (including those Scheduled
Payments due prior to, but not received as of, the Cut-Off Date, but excluding
those Scheduled Payments due on or after, but received prior to, the Cut-Off
Date), (ii) Prepayments, (iii) Liquidation Proceeds, (iv) Extension Fees, (v)
payments to be applied by the Servicer to the payment of insurance charges,
maintenance, taxes or other similar obligations, (vi) payments to be retained by
the Servicer in payment of Administrative Fees, or otherwise), and all rights of
the lessor in the related Equipment (other than any ownership interest of the
lessor in such Equipment), Insurance Policies and any other security for the
payment of amounts due under such contracts.
"LIBOR Determination Date" means (a) for the Interest
Period from and including the Closing Date to but excluding December 15, 1997,
December 1, 1997, and (b) for each Interest Period thereafter, the second
business day prior to the Monthly Payment Date for the preceding Interest
Period. For purposes of computing One-Month LIBOR on a LIBOR Determination Date,
a business day is any business day on which dealings in deposits in United
States dollars are transacted in the London interbank market.
"Lien" means any security interest, lien, charge, pledge,
preference, equity or encumbrance of any kind, including tax liens, mechanics'
liens and any liens that attach by operation of law.
"Liquidated Contract" means, with respect to any Collection
Period, (i) a Contract which, during such Collection Period, was charged off as
uncollectible by the Servicer in accordance with its credit and collection
policies and procedures (which shall be no later than the date as of which the
Servicer has repossessed and disposed of the related Equipment and otherwise
collected all proceeds (including any proceeds of insurance to be applied as
described in Section 3.4(c)(ii) of the Transfer and Servicing Agreement) which,
in the Servicer's reasonable judgment, can be collected under such Contract)
following a default thereunder or upon damage to or destruction of such
Equipment (if such Equipment is not to be replaced in accordance with Section
3.4(c)(i) of the Transfer and Servicing Agreement), or (ii)
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a Contract as to which, during such Collection Period, 10% or more of a
Scheduled Payment shall have become 180 days delinquent.
"Liquidation Loss" means, with respect to any Liquidated
Contract, the amount, if any, by which (a) the Required Payoff Amount for such
Liquidated Contract as of the date such Contract became a Liquidated Contract
exceeds (b) that portion of the Liquidation Proceeds for such Liquidated
Contract allocated to the Issuer.
"Liquidation Proceeds" means all amounts received by the
Servicer (i) in connection with the liquidation of any Contract and disposition
of the related Equipment or (ii) as insurance proceeds with respect to any
damaged or destroyed Equipment to be applied as described in Section 3.4(c)(ii)
of the Transfer and Servicing Agreement, in each case net of (a) reasonable
out-of-pocket expenses incurred by or on behalf of the Servicer in connection
with the collection of such Contract and the maintenance, repossession, repair,
storage and disposition of the related Equipment (including taxes and insurance
charges, to the extent in excess of amounts available therefor and relating to
such Contract in the Insurance, Maintenance and Tax Accounts, as well as
attorneys' fees) and (b) amounts that are required to be refunded to the Obligor
on such Contract; provided, however, that the Liquidation Proceeds with respect
to any Contract and disposition of the related Equipment shall in no event be
less than zero. Liquidation Proceeds shall be allocated as follows: (1) in the
case of any Loan Contract, all Liquidation Proceeds shall be allocated to the
Issuer; and (2) in the case of any Lease Contract, Liquidation Proceeds shall be
allocated pro rata between the Issuer, on the one hand, and the Depositor, on
the other, based upon the Required Payoff Amount for such Lease Contract
(determined as of the Collection Period during which such Lease Contract became
a Liquidated Contract) and the Book Value of the related Leased Equipment,
respectively; provided that, in the event the Liquidation Proceeds exceed the
sum of the Required Payoff Amount for a given Lease Contract plus the Book Value
of the related Leased Equipment, any such excess shall be allocated solely to
the Depositor.
"Loan Contracts" means the installment sale contracts,
promissory notes, loan and security agreements and other similar types of
receivables listed on Exhibit A-2 to the Transfer and Servicing Agreement
(excluding any such contract, note, agreement or receivable which has become a
Purchased Contract) and all rights and obligations under such contracts,
including, without limitation, all monies at any time paid or payable thereon or
in respect thereof from and after the Cut-Off Date (whether in the form of
(i) Scheduled Payments (including those Scheduled Payments due prior to, but not
received as of, the Cut-Off Date, but excluding those Scheduled Payments due on
or after, but received prior to, the Cut-Off Date), (ii) Prepayments,
(iii) Liquidation Proceeds, (iv) Extension Fees, (v) payments to be applied by
the Servicer to the payment of insurance charges, maintenance, taxes or other
similar obligations, (vi) payments to be retained by the Servicer in payment of
Administrative Fees, or otherwise), and all rights of the secured party in the
related
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Equipment, Insurance Policies and any other security for the payment of
amounts due under such contracts.
"Monthly Payment Date" means the fifteenth day of each
calendar month (or, if such fifteenth day is not a Business Day, the next
succeeding Business Day), commencing December 15, 1997.
"Monthly Principal Amount" means, with respect to any
Payment Date,the excess, if any, of (i) the Aggregate Principal Balance of the
Notes as of such Payment Date (determined prior to the payment of any principal
in respect thereof on such Payment Date), over (ii) the Contract Pool Principal
Balance as of the last day of the Collection Period relating to such Payment
Date; provided that the amount referred to in clause (ii) shall be deemed to be
zero on any Payment Date on which the Contract Pool Principal Balance is less
than $1,000,000.
"Moody's" means Moody's Investors Service, Inc., or any
successor thereto.
"Note" means a Class A-1 Note, Class A-2 Note, Class A-3
Note, Class A-4 Note, Class A-5 Note, Class B Note or Class C Note, as
applicable.
"Note Distribution Account" means the Eligible Account or
Accounts established and maintained by the Trustee in accordance with Section
8.04.
"Note Interest Distributable Amount" means, with respect to
any Payment Date, the sum of the Class A-1 Interest Distributable Amount, the
Class A-2 Interest Distributable Amount, the Class A-3 Interest Distributable
Amount, the Class A-4 Interest Distributable Amount, the Class A-5 Interest
Distributable Amount, the Class B Interest Distributable Amount and the Class C
Interest Distributable Amount.
"Note Majority" means Holders representing a majority of
the Principal Balance of each Class of the Notes then Outstanding.
"Note Owner" means, with respect to a Book-Entry Note, the
Person who is the beneficial owner of such Book-Entry Note, as reflected on the
books of the Depository, or on the books of a Person maintaining an account with
such Depository (directly or as an indirect participant, in each case in
accordance with the rules of such Depository) and with respect to any Definitive
Notes, the Holder.
"Note Pool Factor" means, with respect to any Payment Date
and each Class of Notes, a six-digit decimal figure equal to the Principal
Balance of such Class of Notes as of such Payment Date (after giving effect to
all distributions on such date) divided by the original Principal Balance of
such Class of Notes.
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"Note Principal Distributable Amount" means, with respect
to any Monthly Payment Date (other than the Stated Maturity Date with respect to
any Class of Notes), the Monthly Principal Amount for such Monthly Payment Date.
The Note Principal Distributable Amount on the Stated Maturity Date for any
Class of Notes will equal the sum of (i) the Monthly Principal Amount, plus
(ii) the excess, if any, of the Principal Balance of such Class of Notes over
the amount in clause (i). In no event may the Note Principal Distributable
Amount for any Payment Date exceed the Principal Balance of the Notes
immediately prior to such Payment Date.
"Note Register" and "Note Registrar" have the respective
meanings specified in Section 2.04.
"Notes" means the Class A Notes, the Class B Notes and the
Class C Notes.
"N.Y. UCC" means the UCC as in effect in the State of New
York from time to time.
"Officer's Certificate" means a certificate signed by any
Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01, and
delivered to the Trustee. Unless otherwise specified, any reference in this
Indenture to an Officer's Certificate shall be to an Officer's Certificate of
any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of
counsel who may, except as otherwise expressly provided in this Indenture, be
employees of or counsel to the Issuer or the Servicer and which shall comply
with any applicable requirements of Section 11.01.
"One-Month LIBOR" means, as of any LIBOR Determination Date
and with respect to the related Interest Period, the rate of interest per annum
equal to the London interbank offered rate for deposits in U.S. dollars having a
maturity of one month (commencing on the first day of such Interest Period)
which appears on Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR
Determination Date. If such rate does not appear on Telerate Page 3750,
One-Month LIBOR for such LIBOR Determination Date will be determined on the
basis of the rates at which deposits in U.S. dollars having a maturity of one
month and in a principal amount of not less than U.S. $1,000,000, are offered at
approximately 11:00 a.m., London time, on such LIBOR Determination Date to prime
banks in the London interbank market by the Reference Banks. The Servicer will
request the principal London office of each of the Reference Banks to provide a
quotation of its rate to the Trustee. If at least two such quotations are
provided, One-Month LIBOR will be the arithmetic mean (rounded upwards, if
necessary, to the nearest .01%) of such offered rates. If fewer than two such
quotations are provided, One-Month LIBOR will be the arithmetic mean (rounded
upwards, if necessary, to the nearest .01%) of the rates
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quoted at approximately 11:00 a.m., New York City time, on such LIBOR
Determination Date to the Trustee by three major banks in New York, New York,
selected by the Servicer, for loans in United States dollars to leading European
banks having a maturity of one month and in a principal amount of not less than
U.S. $1,000,000; provided, however, that if the banks selected as aforesaid do
not quote a rate to the Trustee as described in this sentence, One-Month LIBOR
will be the One-Month LIBOR in effect for the immediately preceding Interest
Period.
"Original Principal Balance" means (i) with respect to the
Class A-1 Notes, $272,500,000, (ii) with respect to the Class A-2 Notes,
$252,000,000, (iii) with respect to the Class A-3 Notes, $153,000,000, (iv) with
respect to the Class A-4 Notes, $261,210,000, (v) with respect to the Class A-5
Notes, $105,000,000, (vi) with respect to the Class B Notes, $68,820,000, and
(vii) with respect to the Class C Notes, $34,410,000.
"Outstanding" means, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Notes (provided, however,
that if such Notes are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor, satisfactory
to the Trustee, has been made);
(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Trustee is presented that any such Notes are held by
a bona fide purchaser ; and
(iv) Class A-5 Notes deemed purchased pursuant to Section 10.06;
provided, however, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Related Document,
Notes owned by the Issuer, any other obligor upon the Notes, the Depositor or
any Affiliate of any of the foregoing Persons shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Responsible Officer of the Trustee
knows to be so owned shall be so disregarded. Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not the
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Issuer, any other obligor upon the Notes, the Depositor or any Affiliate of any
of the foregoing Persons.
"Outstanding Amount" means the Aggregate Principal Balance
of the Notes, or the Principal Balance of a Class of Notes, as applicable,
Outstanding at the date of determination.
"Owner Trustee" means The Bank of New York, not in its
individual capacity but solely as Owner Trustee under the Trust Agreement, or
any successor trustee under the Trust Agreement.
"Paying Agent" means the Trustee or any other Person that
meets the eligibility standards for the Trustee specified in Section 6.11 and is
authorized by the Issuer to make the distributions from the Note Distribution
Account, including payment of principal of or interest on the Notes on behalf of
the Issuer.
"Payment Date" means each Monthly Payment Date; provided
that, when used with respect to payment of interest or principal on the Class C
Notes, "Payment Date" shall mean each Quarterly Payment Date. The Payment Date
with respect to each Interest Period will be the Monthly Payment Date next
succeeding the end of such Interest Period.
"Person" means any individual, corporation, estate,
partnership, joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"Pledged Revenues" means (i) all Scheduled Payments on the
Contracts received on or after the Cut-Off Date (including all Scheduled
Payments due prior to, but not received as of, the Cut-Off Date, but excluding
any Scheduled Payments due on or after, but received prior to, the Cut-Off
Date); (ii) any Prepayments received on the Contracts on or after the Cut-Off
Date (other than, in the case of a Lease Contract, any portion thereof allocated
to the Depositor); (iii) the Purchase Amount of any Contracts purchased by TCC
in accordance with Section 2.6 of the Transfer and Servicing Agreement (other
than any portion thereof attributable to the Book Value of the Leased
Equipment); (iv) the amount paid by the Depositor to purchase the Contracts
pursuant to Section 5.1 of the Transfer and Servicing Agreement; (v) that
portion of the Liquidation Proceeds received in respect of any Contracts and the
related Equipment on or after the Cut-Off Date and allocated to the Issuer; (vi)
that portion of any Extension Fees received on or after the Cut-Off Date and
allocated to the Issuer; and (vii) any earnings on the investment of amounts
credited to the Collection Account, the Class C Funding Account and the Note
Distribution Account.
"Prepayment" means, with respect to any Collection Period
for any Contract, a voluntary prepayment during such Collection Period of
amounts due
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and owing under such Contract; provided that, in the case of any Lease Contract,
the amount, if any, by which any such Prepayment exceeds the Required Payoff
Amount for such Contract shall be allocated to the Depositor in respect of the
related Leased Equipment.
"Predecessor Note" means, with respect to any particular
Note, every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition, any
Note authenticated and delivered under Section 2.05 in lieu of a mutilated,
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Principal Balance" means, when used with respect to a
Class of Notes, the Original Principal Balance of such Class, less all
distributions previously made to such Class in respect of principal.
"Principal Deficiency Amount" means, with respect to any
Monthly Payment Date, the lesser of (a) the Current Realized Losses for the
related Collection Period or (b) the excess, if any, of (i) the Aggregate
Principal Balance of the Notes less, with respect to each Monthly Payment Date
occurring after the Principal Balance of the Class B Notes has been reduced to
zero, that portion of the balance of the Class C Funding Account, if any,
deposited therein pursuant to Section 8.04(d) in respect of principal of the
Class C Notes (in each case, after giving effect to all distributions of
principal, or the deposit to the Class C Funding Account in respect thereof,
from Available Pledged Revenues on such Monthly Payment Date), over (ii) the
aggregate of the Required Payoff Amounts for all Contracts as of the last day of
the related Collection Period.
"Proceeding" means any suit in equity, action at law or
other judicial or administrative proceeding.
"Purchase Agreements" means the Purchase and Sale
Agreement, dated as of November 1, 1997, among TCC, the Originators and the
Depositor; the Purchase and Sale Agreement, dated as of December 1, 1996, among
TCC, Leasing Services and the Depositor; the Purchase and Sale Agreement, dated
as of March 1, 1997, among TCC, the Originators and the Depositor; and the
Purchase and Sale Agreement, dated as of June 1, 1997, among TCC, the
Originators and the Depositor.
"Purchase Amount" means, with respect to a Contract and
related Equipment required to be purchased by TCC in accordance with Section 2.6
of the Transfer and Servicing Agreement, the sum of (i) the Required Payoff
Amount for such Contract as of the Accounting Date on which such obligation to
so purchase arises, plus (ii) in the case of a Lease Contract, the Book Value of
the related Leased Equipment (that portion of the Purchase Amount attributable
to such Book Value to be allocated to the Depositor).
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"Purchase Date" means, in the case of a purchase by the
Depositor of the Class A-5 Notes pursuant to Section 10.04, the Monthly Payment
Date specified by the Depositor pursuant to Section 10.04.
"Purchased Contract" means, as of any Deposit Date, any
Contract which TCC has purchased as of the related Accounting Date, as required
by Section 2.6 of the Transfer and Servicing Agreement, and as to which, on or
before such Deposit Date, (i) that portion of the Purchase Amount relating to
the Required Payoff Amount for such Contract has been deposited in the
Collection Account, and (ii) that portion, if any, of the Purchase Amount
relating to the Book Value of the related Leased Equipment has been distributed
to the Depositor.
"Quarterly Payment Date" means (i) each Monthly Payment
Date occurring in February, May, August and November, commencing, in the case of
payment of interest on the Class C Notes, February 17, 1998, and, in the case of
payment of principal on the Class C Notes, the first such date occurring on or
after the Monthly Payment Date on which the Principal Balance of the Class B
Notes has been reduced to zero, and (ii) the Class C Stated Maturity Date.
"Rating Agency" means each of Moody's, S&P, Fitch and
Duff & Phelps, so long as such Persons maintain a rating on the Notes; and, if
none of Moody's, S&P, Fitch or Duff & Phelps maintains a rating on the Notes,
such other nationally recognized statistical rating organization, if any,
selected by the Depositor.
"Rating Agency Condition" means, with respect to any
action, that each Rating Agency shall have been given 10 days' prior notice
thereof and that each of the Rating Agencies shall have notified the Issuer,
the Servicer, the Trustee, and the Depositor in writing that such action will
not result in a reduction, qualification or withdrawal of the then-current
rating of the Notes.
"Record Date" means, with respect to a Payment Date or
Redemption Date, the close of business on the last Business Day immediately
preceding such Payment Date or Redemption Date (so long as the Notes are
Book-Entry Notes), or the last day of the prior calendar month (if Definitive
Notes have been issued).
"Redemption Date" means, in the case of a redemption of the
Notes pursuant to Section 10.01(a) or a payment to Noteholders pursuant to
Section 10.01(b), the Payment Date specified by the Servicer or the Issuer
pursuant to Section 10.01(a) or 10.01(b), as applicable.
"Redemption Price" means (a) in the case of a redemption of
the Notes pursuant to Section 10.01(a), an amount equal to the principal amount
of the Notes redeemed plus accrued and unpaid interest on the principal amount
of each Class of Notes at the respective Interest Rate for each such Class of
Notes being so redeemed to but excluding the Redemption Date, or (b) in the case
of a payment made to
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Noteholders pursuant to Section 10.01(b), the amount on deposit in the Note
Distribution Account, but not in excess of the amount specified in clause (a)
above.
"Reference Banks" means four leading banks, selected by the
Servicer and identified to the Trustee, engaged in transactions in Eurodollar
deposits in the international Eurocurrency market and having an established
place of business in London.
"Registered Holder" means the Person in whose name a Note
is registered on the Note Register on the applicable Record Date.
"Related Collection Period Pledged Revenues" means, with
respect to any Payment Date, the amount of Pledged Revenues in the Collection
Account which were received by the Servicer during the related Collection
Period, including all Liquidation Proceeds so received but excluding any
Purchase Amounts.
"Related Documents" means the Trust Agreement, the Notes,
the Transfer and Servicing Agreement, the Purchase Agreements, the Class A-5
Swap Agreement, the Cash Collateral Account Agreement, the Depository Agreement
and the underwriting agreement between the Depositor and the underwriters of the
Notes. The Related Documents executed by any party are referred to herein as
"such party's Related Documents," "its Related Documents" or by a similar
expression.
"Required Payoff Amount" means, with respect to any
Collection Period for any Contract, the sum of (i) the Scheduled Payment due in
such Collection Period, together with any Scheduled Payments due in prior
Collection Periods but not yet received, plus (ii) the Contract Principal
Balance of such Contract (after taking into account the Scheduled Payment due in
such Collection Period, whether or not received).
"Requisite Cash Collateral Amount" means, (i) with respect
to any Monthly Payment Date on or prior to the Monthly Payment Date occurring in
December, 1998, an amount equal to $83,153,171, and (ii) with respect to any
Monthly Payment Date thereafter, an amount equal to the greater of (a) the sum
of (1) 8.50% of the Contract Pool Principal Balance for such Payment Date, plus
(2) the excess, if any, of (A) the Aggregate Principal Balance of the Notes
less, with respect to each Monthly Payment Date occurring after the Principal
Balance of the Class B Notes has been reduced to zero, that portion of the
balance of the Class C Funding Account, if any, deposited therein pursuant to
Section 8.04(d) in respect of principal of the Class C Notes (in each case,
after giving effect to all distributions of principal, or the deposit to the
Class C Funding Account in respect thereof, on such Monthly Payment Date), over
(B) the Contract Pool Principal Balance for such Monthly Payment Date, and (b)
$22,938,806; provided that in no event will the Requisite Cash Collateral Amount
exceed the Aggregate Principal Balance of the Notes.
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"Responsible Officer" means, when used with respect to the
Trustee, any officer within the Corporate Trust Office, including any Vice
President, Managing Director, Assistant Vice President, Secretary, Assistant
Secretary, Treasurer or Assistant Treasurer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers, and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge and
familiarity with the particular subject.
"S&P" means Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc., or any successor thereto.
"Schedule of Contracts" means, collectively, the schedules
of Lease Contracts and Loan Contracts (which shall be made available to the
parties to the Transfer and Servicing Agreement on a computer disk or other data
storage medium) attached to the Transfer and Servicing Agreement as (or
described in) Exhibit A-1 and Exhibit A-2, respectively.
"Scheduled Payment" means, with respect to any Collection
Period for any Contract during the Original Term of such Contract, the scheduled
payment or payments due under such Contract in such Collection Period other than
those portions of such payments which, under such Contract, are to be
(i) applied by the Servicer to the payment of insurance charges, maintenance,
taxes and other similar obligations, or (ii) retained by the Servicer in payment
of Administrative Fees.
"Secured Obligations" means all amounts and obligations
which the Issuer may at any time owe to or on behalf of the Trustee for the
benefit of the Noteholders under this Indenture.
"Servicing Account" means the Eligible Account or Accounts
established and maintained pursuant to Section 8.05.
"State" means any one of the 50 states of the United States
of America or the District of Columbia.
"Stated Maturity Date" means, with respect to each Class of
Notes, the Class A-1 Stated Maturity Date, the Class A-2 Stated Maturity Date,
the Class A-3 Stated Maturity Date, the Class A-4 Stated Maturity Date, the
Class A-5 Stated Maturity Date, the Class B Stated Maturity Date and the Class C
Stated Maturity Date, as appropriate.
"TCC" means AT&T Capital Corporation, a Delaware
corporation.
"Telerate Page 3750" means the display page so designated
on the Dow Jones Telerate Service (or such other page as may replace that page
on that service for the purpose of displaying comparable rates or prices).
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"Termination Date" means the date on which the Trustee
shall have received payment and performance of all Secured Obligations, the
obligations of (a) the Trustee to the Cash Collateral Account Lenders and the
Depositor under the Cash Collateral Account Agreement, and (b) the Issuer to the
Class A-5 Swap Counterparty under the Class A-5 Swap Agreement shall have been
satisfied, or such earlier date on which the Issuer is terminated in accordance
with the Trust Agreement.
"Transfer and Servicing Agreement" means the Transfer and
Servicing Agreement, dated as of November 1, 1997, among the Depositor, the
Servicer, the Trustee and the Issuer.
"Trust Accounts" means the Servicing Account, the
Collection Account, the Class C Funding Account and the Note Distribution
Account, and such other accounts as may be established in the name of the Issuer
or the Trustee pursuant to the Trust Agreement or the Transfer and Servicing
Agreement.
"Trust Agreement" means the Trust Agreement, dated as of
November 1, 1997, between the Depositor and the Owner Trustee, as the same may
be amended and supplemented from time to time in accordance with the terms
thereof.
"Trust Estate" means the Trust Estate as described in the
Granting Clauses hereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture
Act of 1939, as amended, as in force on the date hereof, unless otherwise
specifically provided.
"Trustee" means Bankers Trust Company, a New York banking
corporation, as Trustee under this Indenture, or any successor Trustee under
this Indenture.
"UCC" means, unless the context otherwise requires, the
Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended
from time to time.
SECTION 1.02. Incorporation by Reference of Trust Indenture
Act. Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
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"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or defined by Commission
rule have the meaning assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless otherwise
specified:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) references to Sections, Subsections, Schedules and Exhibits
shall refer to such portions of this Indenture.
Unless the context shall clearly indicate otherwise, or may
otherwise require, in this Indenture the terms "herein," "hereunder," "hereby,"
"hereto," "hereof" and any similar terms refer to this Indenture as a whole and
not to any particular article, section or subdivision hereof.
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ARTICLE II
The Notes
SECTION 2.01. Form. Each Class of Class A Notes, the Class
B Notes and the Class C Notes, in each case together with the Trustee's
certificate of authentication, shall be in substantially the forms set forth in
Exhibits B-1, B-2 and B-3, respectively, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
The Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
The terms of the Notes set forth in Exhibits B-1, B-2 and
B-3 are part of the terms of this Indenture.
SECTION 2.02. Execution, Authentication and Delivery. The
Notes shall be executed on behalf of the Issuer by any of its Authorized
Officers. The signature of any such Authorized Officer on the Notes may be
manual or facsimile.
Notes bearing the manual or facsimile signature of
individuals who were at any time Authorized Officers of the Issuer shall bind
the Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or did
not hold such offices at the date of such Notes.
The Trustee shall upon receipt of an Issuer Order
authenticate and deliver Class A-1 Notes for original issue in an aggregate
principal amount of $272,500,000, Class A-2 Notes for original issue in an
aggregate principal amount of $252,000,000, Class A-3 Notes for original issue
in an aggregate principal amount of $153,000,000, Class A-4 Notes for original
issue in an aggregate principal amount of $261,210,000, Class A-5 Notes for
original issue in an aggregate principal amount of $105,000,000, Class B Notes
for original issue in an aggregate principal amount of $68,820,000 and Class C
Notes in an aggregate principal amount of $34,410,000. The aggregate principal
amount of Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes,
Class A-5 Notes, Class B Notes and Class C Notes outstanding at any time may not
exceed such respective amounts except as provided in Section 2.05.
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Each Note shall be dated the date of its authentication.
The Notes shall be issuable as registered Notes in the minimum denomination of
$10,000 and in integral multiples thereof.
No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears on
such Note a certificate of authentication substantially in the form provided for
herein executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
SECTION 2.03. Temporary Notes. Pending the preparation of
definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order
the Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause
definitive Notes to be prepared without unreasonable delay. After the
preparation of definitive Notes, the temporary Notes shall be exchangeable for
definitive Notes upon surrender of the temporary Notes at the office or agency
of the Issuer to be maintained as provided in Section 3.02, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary Notes,
the Issuer shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 2.04. Registration; Registration of Transfer and
Exchange. The Issuer shall cause to be kept a register (the "Note Register") in
which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The Trustee shall be the initial "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. The Issuer may
revoke the appointment of, and remove, any Note Registrar if the Issuer
determines in its sole discretion that such Note Registrar failed to perform its
obligations under this Indenture in any material respect. Any Note Registrar
shall be permitted to resign as Note Registrar upon 30 days' notice to the
Issuer and, if the Note Registrar is not the Trustee, to the Trustee; provided,
however, that such resignation shall not be effective and such Note Registrar
shall continue to perform its duties as Note Registrar until the Issuer has
appointed a successor Note Registrar or elected to assume such duties. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of Note
Registrar.
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If a Person other than the Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Trustee prompt written notice
of the appointment of such Note Registrar and of the location, and any change in
the location, of the Note Register, and the Trustee shall have the right to
inspect the Note Register at all reasonable times and to obtain copies thereof,
and the Trustee shall have the right to rely upon a certificate executed on
behalf of the Note Registrar by an Executive Officer thereof as to the names and
addresses of the Holders of the Notes and the principal amounts and number of
such Notes.
Upon surrender for registration of transfer of any Note at
the office or agency of the Issuer to be maintained as provided in Section 3.02,
or on the Purchase Date with respect to Class A-5 Notes deemed purchased
pursuant to Section 10.06, whether or not surrendered on the Purchase Date, the
Issuer shall execute, and the Trustee shall authenticate and the Noteholder
shall obtain from the Trustee, in the name of the designated transferee or
transferees, including the Depositor and transferees designated by the Depositor
with respect to Class A-5 Notes deemed purchased pursuant to Section 10.06, one
or more new Notes of the same Class in any authorized denominations, of a like
aggregate principal amount.
At the option of the Holder, Notes may be exchanged for
other Notes in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and the Trustee shall authenticate and make available for delivery to such
Noteholder, the Notes which the Noteholder making the exchange is entitled to
receive.
All Notes issued upon any registration of transfer or
exchange of Notes, including Class A-5 Notes issued in lieu of Class A-5 Notes
deemed purchased pursuant to Section 10.06, whether or not surrendered, shall be
the valid obligations of the Issuer, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
Every Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in a "signature guarantee program" determined by the Note
Registrar in accordance with the Exchange Act, and such other documents as the
Trustee may require.
No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Issuer or the Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed
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in connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.03 or 9.06 not involving any transfer.
The preceding provisions of this Section notwithstanding,
the Issuer shall not be required to make and the Note Registrar need not
register transfers or exchanges of Notes selected for redemption or of any Note
for a period of 15 days preceding the due date for any payment with respect to
the Note.
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes.
If (i) any mutilated Note is surrendered to the Trustee, or the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note, and
(ii) there is delivered to the Trustee such security or indemnity as may be
required by the Issuer and the Trustee to hold the Issuer and the Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Trustee that such Note has been acquired by a bona fide purchaser, the
Issuer shall execute and upon its request the Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a replacement Note; provided, however, that if any such destroyed,
lost or stolen Note, but not a mutilated Note, shall have become or within seven
days shall be due and payable, or shall have been called for redemption, instead
of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer
and the Trustee shall be entitled to recover such replacement Note (or such
payment) from the Person to whom it was delivered or any Person taking such
replacement Note from such Person to whom such replacement Note was delivered or
any assignee of such Person, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Trustee in
connection therewith.
Upon the issuance of any replacement Note under this
Section, the Issuer or the Trustee may require the payment by the Holder of such
Note of a sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other reasonable expenses (including the
fees and expenses of the Trustee or the Note Registrar) connected therewith.
Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
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The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. Person Deemed Owner. Prior to due presentment
for registration of transfer of any Note, the Issuer, the Trustee and any agent
of the Issuer or the Trustee may, except as otherwise provided in Section 10.06
with respect to Class A-5 Notes deemed purchased under such section, treat the
Person in whose name any Note is registered (as of the day of determination) as
the owner of such Note for the purpose of receiving payments of principal of and
interest, if any, on such Note and for all other purposes whatsoever, whether or
not such Note be overdue, and none of the Issuer, the Trustee nor any agent of
the Issuer or the Trustee shall be affected by notice to the contrary.
SECTION 2.07. Payment of Principal and Interest; Defaulted
Interest.
(a) The Notes shall accrue interest as provided in the
forms of the Class A Notes, the Class B Notes and the Class C Notes set forth in
Exhibits B-1, B-2 and B-3, respectively, and such interest shall be payable on
each Payment Date as specified therein, subject to Section 3.01. Any installment
of interest or principal, if any, payable on any Note which is punctually paid
or duly provided for by the Issuer on the applicable Payment Date shall be paid
to the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the Record Date, by check mailed first-class, postage prepaid to
such Person's address as it appears on the Note Register on such Record Date,
except that, unless Definitive Notes have been issued pursuant to Section 2.11,
with respect to Notes registered on the Record Date in the name of the nominee
of the Depository, payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a Payment
Date, which shall be payable as provided below. The funds represented by any
such checks returned undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in
installments on each Payment Date as provided in the forms of the Class A Notes,
the Class B Notes and the Class C Notes set forth in Exhibits B-1. B-2 and B-3,
respectively. Notwithstanding the foregoing, the entire unpaid principal amount
of the Notes shall be due and payable, if not previously paid, on the date on
which an Event of Default shall have occurred and be continuing and the Trustee
or a Note Majority have declared the Notes to be immediately due and payable in
the manner provided in Section 5.02. All principal payments on a class of Notes
shall be made pro rata to the Noteholders of such Class entitled thereto. The
Trustee shall notify the Person in whose name a Note is registered at the close
of business on the Record Date preceding the Payment Date on which the Issuer
expects that the final installment of principal of and interest on such Note
will be paid. Such notice shall be mailed no later than five days prior to such
final Payment Date and shall specify that such final installment will be payable
only upon presentation and surrender of such Note and
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shall specify the place where such Note may be presented and surrendered for
payment of such installment. Notices in connection with redemptions of Notes
shall be mailed to Noteholders as provided in Section 10.02.
SECTION 2.08. Cancellation. All Notes surrendered for
payment, registration of transfer, exchange, purchase or redemption shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by the Trustee. The Issuer may at any time
deliver to the Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly canceled by the Trustee. No Notes
shall be authenticated in lieu of or in exchange for any Notes canceled as
provided in this Section, except as expressly permitted by this Indenture. All
canceled Notes shall be disposed of by the Trustee in accordance with its
standard disposal policy as in effect at the time.
SECTION 2.09. Book-Entry Notes. The Notes, upon original
issuance, will be issued in the form of a typewritten Note or Notes representing
the Book-Entry Notes, to be delivered to The Depository Trust Company, the
initial Depository, by, or on behalf of, the Issuer. Each such Note shall
initially be registered on the Note Register in the name of Cedeu& Co., the
nominee of the initial Depository, and no Note Owner will receive a Definitive
Note representing such Note Owner's interest in such Note, except as provided in
Section 2.11. Unless and until Definitive Notes have been issued to Note Owners
pursuant to Section 2.11:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Trustee shall be entitled to deal
with the Depository for all purposes of this Indenture (including the
payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole holder of the Notes,
and shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
(iv) the rights of Note Owners shall be exercised only through the
Depository and shall be limited to those established by law and
agreements between such Note Owners and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and
until Definitive Notes are issued pursuant to Section 2.11, the initial
Depository will make book-entry transfers among the Depository
Participants and receive and transmit payments of principal of and
interest on the Notes to such Depository Participants; and
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(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the Notes,
the Depository shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Note Owners
and/or Depository Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has
delivered such instructions to the Trustee.
SECTION 2.10. Notices to Depository. Whenever a notice or
other communication to the Noteholders is required under this Indenture, unless
and until Definitive Notes shall have been issued to Note Owners pursuant to
Section 2.11, the Trustee shall give all such notices and communications
specified herein to be given to Holders of the Notes to the Depository and shall
have no obligation to the Note Owners.
SECTION 2.11. Definitive Notes. If (i) the Depositor
advises the Trustee in writing that the Depository is no longer willing or able
properly to discharge its responsibilities with respect to the Notes, and the
Depositor is unable to locate a qualified successor, (ii) the Depositor at its
option advises the Trustee in writing that it elects to terminate the book-entry
system through the Depository or (iii) after the occurrence of an Event of
Default, a Note Majority advises the Trustee and the Depository in writing that
the continuation of a book-entry system through the Depository is no longer in
the best interests of the Note Owners, then the Depository shall notify all Note
Owners and the Trustee of the occurrence of any such event and of the
availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Trustee of the Note or Notes representing the Book-Entry Notes
by the Depository, accompanied by registration instructions, the Issuer shall
execute and the Trustee shall authenticate the Definitive Notes in accordance
with the instructions of the Depository. None of the Issuer, the Note Registrar
or the Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Notes, all references herein to
obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed upon and performed by the Trustee or a Paying Agent (if other than
the Trustee), to the extent applicable with respect to such Definitive Notes,
and the Trustee shall recognize the Holders of the Definitive Notes as
Noteholders.
SECTION 2.12. Calculations. All calculations of the amount
of interest accrued on the Notes (other than the Class A-1 and Class A-5 Notes)
and all calculations of the amount of the Servicing Fee shall be made on the
basis of a 360-day year consisting of twelve 30-day months. All calculations of
the amount of interest accrued on the Class A-1 Notes shall be made on the basis
of actual days elapsed and a 360-day year. All calculations of the amount of
interest accrued on the Class A-5 Notes shall be made (i) as to interest
computed at the Class A-5 Interest Rate, on the basis of actual days elapsed and
a 360-day year, and (ii) as to interest
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computed at the Class A-5 Assumed Fixed Rate, on the basis of a 360-day year
consisting of twelve 30-day months.
SECTION 2.13. Deposit of Series 1997-1 Note Proceeds. From
the proceeds derived from the sale of the Notes, including any accrued interest
paid as part of the purchase price thereof, there shall be deposited with the
Trustee:
(1) for credit to the Note Distribution Account, an amount equal
to any accrued interest on the Notes paid as part of the purchase price
thereof; and
(2) for credit to the Cash Collateral Account, as the initial
deposit required to be made by the Depositor in accordance with the Cash
Collateral Account Agreement, an amount equal to $43,009,171.
The balance of the proceeds of the Notes shall be paid to or upon the
order of the Depositor.
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ARTICLE III
Covenants
SECTION 3.01. Payment of Principal and Interest. The Issuer
will duly and punctually pay the principal and interest on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing, the Issuer will cause to be distributed all amounts on deposit in the
Note Distribution Account on a Payment Date in accordance with Section 8.04(b).
Amounts properly withheld under the Code by any Person from a payment to any
Noteholder of interest and/or principal shall be considered as having been paid
by the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer
will maintain in the Borough of Manhattan, City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange, and
where notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Trustee to
serve as its agent for the foregoing purposes. The Issuer will give prompt
written notice to the Trustee of the location, and of any change in the
location, of any such office or agency. If at any time the Issuer shall fail to
maintain any such office or agency or shall fail to furnish the Trustee with the
address thereof, such surrenders, notices and demands may be made or served at
the Corporate Trust Office, and the Issuer hereby appoints the Trustee as its
agent to receive all such surrenders, notices and demands.
SECTION 3.03. Money for Payments To Be Held in Trust. As
provided in Section 8.04, all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Note
Distribution Account pursuant to Section 8.04(b) shall be made on behalf of the
Issuer by the Trustee or by another Paying Agent, and no amounts so withdrawn
from the Note Distribution Account for payments of Notes shall be paid over to
the Issuer.
On or before the Business Day preceding each Payment Date
and Redemption Date, the Issuer shall deposit or cause to be deposited in the
Note Distribution Account an aggregate sum sufficient to pay the amounts then
becoming due, such sum to be held in trust for the benefit of the Persons
entitled thereto and (unless the Paying Agent is the Trustee) shall promptly
notify the Trustee of its action or failure so to act.
The Issuer will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee (and if the Trustee acts as Paying Agent, it
hereby so agrees), subject to the provisions of this Section, that such Paying
Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto
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until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;
(ii) give the Trustee notice of any default (of which it has
actual knowledge) by the Issuer (or any other obligor upon the Notes) in
the making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Trustee all sums held by it in trust for the payment of Notes if at any
time it ceases to meet the standards required to be met by a Paying Agent
at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which the sums were held by such Paying Agent; and upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of
funds, any money held by the Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
two years after such amount has become due and payable shall be discharged from
such trust and upon Issuer Request shall be deposited by the Trustee in the
Collection Account; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in The City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to or for the account of the Issuer. The Trustee may also adopt
and employ, at the expense of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such
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repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Trustee or of
any Paying Agent, at the last address of record for each such Holder).
SECTION 3.04. Existence. The Issuer will keep in full
effect its existence, rights and franchises as a trust under the laws of the
State of New York (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States of
America, in which case the Issuer will keep in full effect its existence, rights
and franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Contracts and each other
instrument or agreement included in the Trust Estate.
SECTION 3.05. Protection of Trust Estate. The Issuer
intends the security interest Granted pursuant to this Indenture in favor of the
Trustee to be prior to all other liens in respect of the Trust Estate, and the
Issuer shall take all actions necessary to obtain and maintain, in favor of the
Trustee, for the benefit of the Noteholders, a first lien on and a first
priority, perfected security interest in the Trust Estate. The Issuer will from
time to time execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, all as prepared by the Servicer and delivered
to the Issuer, and will take such other action necessary or advisable to:
(i) grant more effectively all or any portion of the Trust
Estate;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) in favor of the Trustee for the benefit of the Trustee
created by this Indenture or carry out more effectively the purposes
hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Contracts and each other instrument or
agreement included in the Trust Estate;
(v) preserve and defend title to the Trust Estate and the rights
of the Trustee in such Trust Estate against the claims of all persons and
parties; or
(vi) pay all taxes or assessments levied or assessed upon the
Trust Estate when due.
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The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute any financing statement, continuation statement or other instrument
provided to it which is necessary to effectuate the provisions of this Section.
SECTION 3.06. Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer shall furnish to the
Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording and filing of
this Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements, as are necessary to perfect and make
effective the first priority lien and security interest in favor of the Trustee,
for the benefit of the Noteholders, created by this Indenture and reciting the
details of such action, or stating that, in the opinion of such counsel, no such
action is necessary to make such lien and security interest effective.
(b) On or before April 30 in each calendar year, beginning
in 1998, the Issuer shall furnish to the Trustee an Opinion of Counsel with
respect to each jurisdiction in which the Contracts are located or a Uniform
Commercial Code financing statement has been filed by the Servicer either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and continuation
statements as is necessary to maintain the first priority lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until April 30 in the following calendar
year.
SECTION 3.07. Performance of Obligations; Servicing of
Contracts.
(a) The Issuer will not take any action and will use its
best efforts not to permit any action to be taken by others that would release
any Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Transfer and Servicing Agreement or
such other instrument or agreement.
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(b) The Issuer may contract with other Persons to assist it
in performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Trustee in an Officer's Certificate of the
Issuer shall be deemed to be action taken by the Issuer. Initially, the Issuer
has contracted with the Servicer to assist the Issuer in performing its duties
under this Indenture. The Owner Trustee shall not be responsible for the action
or inaction of the Servicer.
(c) The Issuer will punctually perform and observe all of
its obligations and agreements contained in this Indenture, the Related
Documents and in the instruments and agreements included in the Trust Estate,
including but not limited to filing or causing to be filed all UCC financing
statements and continuation statements required to be filed by the terms of this
Indenture and the Transfer and Servicing Agreement in accordance with and within
the time periods provided for herein and therein. Except as expressly provided
herein, the Issuer shall not waive, amend, modify, supplement or terminate any
of its Related Documents or any provision thereof without the consent of the
Trustee (acting at the direction of a Note Majority) or a Note Majority.
(d) If the Issuer shall have knowledge of the occurrence of
a Servicer Termination Event under the Transfer and Servicing Agreement, the
Issuer shall promptly notify the Trustee and the Rating Agencies thereof, and
shall specify in such notice the action, if any, the Issuer is taking with
respect of such default. If a Servicer Termination Event shall arise from the
failure of the Servicer to perform any of its duties or obligations under the
Transfer and Servicing Agreement with respect to the Contracts, the Issuer shall
take all reasonable steps available to it to remedy such failure.
(e) If the Issuer has given notice of termination to the
Servicer of the Servicer's rights and powers pursuant to Section 8.2 of the
Transfer and Servicing Agreement, as promptly as possible thereafter, the Issuer
shall appoint a successor servicer in accordance with Section 8.3 of the
Transfer and Servicing Agreement.
(f) Upon any termination of the Servicer's rights and
powers pursuant to the Transfer and Servicing Agreement, the Issuer shall
promptly notify the Trustee. As soon as a successor Servicer is appointed, the
Issuer shall notify the Trustee of such appointment, specifying in such notice
the name and address of such successor Servicer.
(g) The Issuer agrees that it will not waive timely
performance or observance by the Servicer or the Depositor of their respective
duties under the Related Documents if the effect thereof would adversely affect
the Holders of the Notes.
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SECTION 3.08. Negative Covenants. Until the Termination
Date, the Issuer shall not:
(i) except as expressly permitted by this Indenture or the Trust
Agreement, sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included in the Trust
Estate, unless directed to do so by the Trustee;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code or applicable state law) or
assert any claim against any present or former Noteholder by reason of
the payment of the taxes levied or assessed upon any part of the Trust
Estate;
(iii) dissolve or liquidate in whole or in part;
(iv) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien in favor of the Trustee created by this
Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture except as may
be expressly permitted hereby;
(v) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien in favor of the
Trustee created by this Indenture) to be created on or extend to or
otherwise arise upon or burden the Trust Estate or any part thereof or
any interest therein or the proceeds thereof (other than tax liens,
mechanics' liens and other liens that arise by operation of law, in each
case on the Equipment and arising solely as a result of an action or
omission of the related Obligor);
(vi) permit the lien in favor of the Trustee created by this
Indenture not to constitute a valid first priority (other than with
respect to any such tax, mechanics' or other lien described in clause (v)
above) security interest in the Trust Estate; or
(vii) amend, modify or fail to comply with the provisions of the
Related Documents without the prior written consent of the Trustee.
SECTION 3.09. Annual Statement as to Compliance. The Issuer
will deliver to the Trustee, within 120 days after the end of each fiscal year
of the Issuer (commencing with the fiscal year ended December 31, 1997), an
Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that
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(i) a review of the activities of the Issuer during such year and
of performance under this Indenture has been made under such Authorized
Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a
default in the compliance of any such condition or covenant, specifying
each such default known to such Authorized Officer and the nature and
status thereof.
SECTION 3.10. Issuer May Consolidate or Merge Only on
Certain Terms.
(a) The Issuer shall not consolidate or merge with or into
any other Person, unless
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any State and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form and substance satisfactory to the
Trustee, the due and punctual payment of the principal of and interest on
all Notes and the performance or observance of every agreement and
covenant of this Indenture and each other Related Document on the part of
the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel which
shall be delivered to and shall be satisfactory to the Trustee to the
effect that such transaction will not have any material adverse tax
consequence to the Trust or any Noteholder;
(v) any action as is necessary to maintain the lien and security
interest created in favor of the Trustee by this Indenture shall have
been taken;
(vi) the Issuer shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel (which shall describe the actions
taken as required by clause (a)(v) of this Section or that no such
actions will be taken) each stating that such consolidation or merger and
such supplemental indenture comply with this Article III and that all
conditions precedent
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herein provided for relating to such transaction have been compiled with
(including any filing required by the Exchange Act); and
(vii) the Issuer or the Person (if other than the Issuer) formed
by or surviving such consolidation or merger has a net worth, immediately
after such consolidation or merger, that is (a) greater than zero and
(b) not less than the net worth of the Issuer immediately prior to giving
effect to such consolidation or merger.
(b) The Issuer shall not convey or transfer all or
substantially all of its properties or assets, including those included in the
Trust Estate, to any Person (except as expressly permitted by the Indenture or
the Transfer and Servicing Agreement), unless
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer shall (A) be a United States citizen
or a Person organized and existing under the laws of the United States of
America or any State, (B) expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form and substance
satisfactory to the Trustee, the due and punctual payment of the
principal of and interest on all Notes and the performance or observance
of every agreement and covenant of this Indenture and each Related
Document on the part of the Issuer to be performed or observed, all as
provided herein, (C) expressly agree by means of such supplemental
indenture that all right, title and interest so conveyed or transferred
shall be subject and subordinate to the rights of Holders of the Notes,
(D) unless otherwise provided in such supplemental indenture, expressly
agree to indemnify, defend and hold harmless the Issuer against and from
any loss, liability or expense arising under or related to this Indenture
and the Notes and (E) expressly agree by means of such supplemental
indenture that such Person (or if a group of Persons, then one specified
Person) shall make all filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection with the
Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel which
shall be delivered to and shall be satisfactory to the Trustee to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer or any Noteholder;
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(v) any action as is necessary to maintain the lien and security
interest created in favor of the Trustee by this Indenture shall have
been taken;
(vi) the Issuer shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel (which shall describe the actions
taken as required by clause (b)(v) of this Section or that no such
actions will be taken) each stating that such conveyance or transfer and
such supplemental indenture comply with this Article III and that all
conditions precedent herein provided for relating to such transaction
have been complied with (including any filing required by the Exchange
Act); and
(vii) the Person acquiring by conveyance or transfer the
properties or assets of the Issuer has a net worth, immediately after
such conveyance or transfer, that is (a) greater than zero and (b) not
less than the net worth of the Issuer immediately prior to giving effect
to such conveyance or transfer.
SECTION 3.11. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in
accordance with Section 3.10(a), the Person formed by or surviving such
consolidation or merger (if other than the Issuer) shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein.
(b) Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to Section 3.10(b), Capita Equipment
Receivables Trust 1997-1 will be released from every covenant and agreement of
this Indenture to be observed or performed on the part of the Issuer with
respect to the Notes immediately upon the delivery of written notice to the
Trustee stating that Capita Equipment Receivables Trust 1997-1 is to be so
released.
SECTION 3.12. No Other Business. The Issuer shall not
engage in any business other than financing, purchasing, owning, selling and
managing the Contracts and the related Equipment in the manner contemplated by
this Indenture and the Related Documents and activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue,
incur, assume, guarantee or otherwise become liable, directly or indirectly, for
any Indebtedness except for (i) the Notes and (ii) any other Indebtedness
permitted by or arising under the Related Documents. The proceeds of the Notes
shall be used exclusively to fund the Depositor's purchase of the Contracts and
the other assets specified in the Transfer and Servicing Agreement and to pay
the Issuer's organizational, transactional and start-up expenses.
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SECTION 3.14. Servicer's Obligations. The Issuer shall
monitor the performance of the Servicer under the Transfer and Servicing
Agreement, and shall use its reasonable good faith efforts to cause the Servicer
duly and punctually to perform all of its duties and obligations thereunder.
SECTION 3.15. Guarantees, Loans, Advances and Other
Liabilities. Except as contemplated by the Transfer and Servicing Agreement or
this Indenture, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuming another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, any other interest in, or make any capital
contribution to, any other Person.
SECTION 3.16. Income Tax Characterization. The Depositor
has structured the Trust Agreement, this Indenture, the Cash Collateral Account
Agreement, the Class A-5 Swap Agreement and the Notes with the intention that
the Notes will qualify under applicable federal, state, local and foreign tax
law as indebtedness of the Depositor secured by the Contracts. The Depositor,
the Servicer, each Noteholder and each Note Owner agree to treat and to take no
action inconsistent with the treatment of the Notes as such indebtedness for
purposes of federal, state, local and foreign income or franchise taxes and any
other tax imposed on or measured by income. Each Noteholder and each Note Owner,
by acceptance of its Note or beneficial interest therein, agrees to be bound by
the provisions of this Section. Each Noteholder agrees that it will cause any
Note Owner acquiring an interest in a Note through it to comply with this
Indenture as to treatment as indebtedness under applicable tax law, as described
in this Section.
SECTION 3.17. Restricted Payments. Except as expressly
permitted by this Indenture, the Trust Agreement or the Transfer and Servicing
Agreement, the Issuer shall not, directly or indirectly, (i) make any
distribution (by reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, to any owner of a beneficial interest in
the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire
or otherwise acquire for value any such ownership or equity interest or security
or (iii) set aside or otherwise segregate any amounts for any such purpose. The
Issuer will not, directly or indirectly, make payments to or distributions from
any of the Trust Accounts except in accordance with this Indenture and the
Related Documents.
SECTION 3.18. Notice of Events of Default. The Issuer
agrees to give the Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder and each default on the part of the Servicer or the
Depositor of its obligations under the Transfer and Servicing Agreement.
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SECTION 3.19. Further Instruments and Acts. Upon request of
the Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.20. Compliance with Laws. The Issuer shall comply
with the requirements of all applicable laws, the non-compliance with which
would, individually or in the aggregate, materially and adversely affect the
ability of the Issuer to perform its obligations under the Notes, this Indenture
or any Related Document.
SECTION 3.21. Amendments of Transfer and Servicing
Agreement and Trust Agreement. The Issuer shall not agree to any amendment to
Section 9.1 of the Transfer and Servicing Agreement or Section 11.1 of the Trust
Agreement to eliminate the requirements thereunder that the Trustee or the
Holders of the Notes consent to amendments thereto as provided therein.
SECTION 3.22. Trust Obligation. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Trustee on the Notes or under this Indenture or any certificate
or other writing delivered in connection herewith or therewith, against (i) the
Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director, employee or agent of the Trustee or the Owner Trustee
in its individual capacity, any holder of a beneficial interest in the Issuer,
the Owner Trustee or the Trustee or of any successor or assign of the Trustee or
the Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Trustee and the Owner Trustee
have no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity. For
all purposes of this Indenture, in the performance of any duties or obligations
of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to
the benefits of, the terms and provisions of Articles VI, VII and VIII of the
Trust Agreement.
SECTION 3.23. Enforcement of Class A-5 Swap Agreement. The
Issuer will maintain the Class A-5 Swap Agreement and will diligently enforce
its rights thereunder and will not voluntarily consent to or permit any
rescission of or, except as permitted by Section 11.19, consent to any amendment
to or otherwise take any action under or in connection with the Class A-5 Swap
Agreement which in any manner will adversely affect the rights of the Holders
from time to time of the Class A-5 Notes.
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ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to the Notes except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal and interest thereon, (iv) Sections 3.03, 3.04,
3.05, 3.07, 3.08, 3.10, 3.12, 3.13, 3.16, 3.20 and 3.21, (v) the rights,
obligations and immunities of the Trustee hereunder (including the rights of the
Trustee under Section 6.07 and the obligations of the Trustee under Section
4.02) and (vi) the rights of Noteholders as beneficiaries hereof with respect to
the property so deposited with the Trustee payable to all or any of them, and
the Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and
delivered (other than (i) Notes that have been destroyed, lost or
stolen and that have been replaced or paid as provided in Section
2.05 and (ii) Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Issuer
and thereafter repaid to the Issuer or discharged from such trust,
as provided in Section 3.03) have been delivered to the Trustee
for cancellation; or
(2) all Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity Date within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited
with the Trustee as part of the Trust Estate cash or direct
obligations of or obligations guaranteed by the United States of
America (which will mature prior to the date such amounts are
payable), in trust in an Eligible Account in the name of the
Trustee for such purpose, in an amount sufficient to
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pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation when due to
their Stated Maturity Date or Redemption Date (if Notes shall
have been called for redemption pursuant to Section 10.01(a)), as
the case may be;
(B) the Issuer has paid or caused to be paid all Secured
Obligations;
(C) all amounts payable to the Class A-5 Swap Counterparty under
the Class A-5 Swap Agreement have been paid; and
(D) the Issuer has delivered to the Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the
Trustee) an Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of Section 11.01(a)
and the applicable provisions of the TIA and each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with and the Rating Agency
Condition has been satisfied.
Notwithstanding the satisfaction and discharge of this
Indenture with respect to the Notes, the obligations of the Trustee to the Cash
Collateral Account Lenders and the Depositor under the Cash Collateral Account
Agreement shall survive until the payment of all amounts due and owing to the
Cash Collateral Account Lenders and the Depositor under the Cash Collateral
Account Agreement or the termination of the Issuer in accordance with the Trust
Agreement.
SECTION 4.02. Application of Trust Money. All moneys
deposited with the Trustee pursuant to Section 4.01 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Trustee may determine, to the Holders of the particular Notes for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest; but such moneys
need not be segregated from other funds except to the extent required herein or
in the Transfer and Servicing Agreement or required by law.
SECTION 4.03. Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all moneys then held by any Paying Agent other than the Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuer, be paid to the Trustee to be held and applied according to
Section 3.03 and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
SECTION 4.04. Release of Trust Estate. The Trustee shall,
on or after the Termination Date, release any remaining portion of the Trust
Estate from the lien created by this Indenture and deposit in the Collection
Account any funds then
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on deposit in any other Trust Account. The Trustee shall release property from
the lien created by this Indenture pursuant to this Section only upon receipt of
an Issuer Request accompanied by an Officer's Certificate, an Opinion of Counsel
and (if required by the TIA) Independent Certificates in accordance with TIA
'SS''SS' 314(c) and 314(d)(1) meeting the applicable requirements of Section
11.01.
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ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default,"
wherever used herein, means any one of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(i) default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a
period of five days; provided that a default in the payment of interest
on the Class A-5 Notes due entirely to the failure of the Class A-5 Swap
Counterparty to make a required payment under the Class A-5 Swap
Agreement shall not constitute a default under this clause; or
(ii) default in the payment of the principal of any Note on the
Redemption Date or Stated Maturity Date applicable thereto; or
(iii) default in the observance or performance in any material
respect of any covenant or agreement of the Issuer made in this Indenture
(other than a covenant or agreement, a default in the observance or
performance of which is elsewhere in this Section specifically dealt
with), or any representation or warranty of the Issuer made in this
Indenture or in any certificate or other writing delivered pursuant
hereto or in connection herewith proving to have been incorrect in any
material respect as of the time when the same shall have been made, and
such default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a period
of 30 days after there shall have been given, by registered or certified
mail, to the Issuer by the Trustee or to the Issuer and the Trustee by
the Holders of at least 25% of the Outstanding Amount of the Notes, a
written notice specifying such default or incorrect representation or
warranty and requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder; or
(iv) the commencement of an involuntary case against the Issuer or
the Depositor under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, and such case
is not dismissed within 60 days; or
(v) (A) the commencement by the Issuer or the Depositor of a
voluntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, (B) the entry
of an order for relief in an involuntary case against the Issuer or the
Depositor under any
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such law, (C) the consent by the Issuer or the Depositor to the entry of
any such order for relief, (D) the consent by the Issuer or the Depositor
to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or the Depositor or for any substantial part of the Trust Estate,
(E) the making by the Issuer or the Depositor of any general assignment
for the benefit of creditors, (F) the failure by the Issuer or the
Depositor generally to pay its debts as such debts become due, (G) the
liquidation of the Issuer or the Depositor, or (H) the taking of action
by the Issuer or the Depositor, as applicable, in furtherance of any of
the foregoing.
The Issuer shall deliver to the Trustee, within five days
after obtaining knowledge of the occurrence thereof, written notice in the form
of an Officer's Certificate of any event which with the giving of notice and the
lapse of time would become an Event of Default under clause (iii) or (iv), its
status and what action the Issuer is taking or proposes to take with respect
thereto.
SECTION 5.02. Rights upon Event of Default.
If an Event of Default shall have occurred and be
continuing, a Note Majority or the Trustee may declare by written notice to the
Issuer (with a copy to each Rating Agency) that the Notes become, whereupon they
shall become, immediately due and payable at par, together with accrued interest
thereon. Notwithstanding anything to the contrary in this Section, if an Event
of Default specified in Section 5.01(iv) or (v) shall occur and be continuing,
the Notes shall become immediately due and payable at par, together with accrued
interest thereon. If an Event of Default shall have occurred and be continuing,
the Trustee may exercise any of the remedies specified in Sections 5.03 and
5.04.
SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee; Authority of Trustee.
(a) The Issuer covenants that if any Notes are accelerated
following the occurrence of an Event of Default, the Issuer will, upon demand of
the Trustee, pay to it, for the benefit of the Holders of such Notes, the whole
amount then due and payable on such Notes for principal and interest, with
interest upon the overdue principal, and, to the extent payment at such rate of
interest shall be legally enforceable, upon overdue installments of interest, at
the applicable Interest Rate and in addition thereto such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee and
its agents and counsel.
(b) If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the
rights of the Noteholders, by such appropriate Proceedings as the Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement
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of any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Trustee by this Indenture or by law.
(c) In case there shall be pending, relative to the Issuer,
the Depositor or any other obligor upon the Notes or any Person having or
claiming an ownership interest in the Trust Estate, Proceedings under Title 11
of the United States Code or any other applicable Federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of the Issuer, the Depositor or such
other obligor or Person, or its property, or in case of any other comparable
judicial Proceedings relative to the Issuer, the Depositor or other obligor upon
the Notes, or to the creditors or property of the Issuer, the Depositor or such
other obligor, the Trustee, irrespective of whether the principal of any Notes
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee, and
their respective agents, attorneys and counsel, and for reimbursement of
all expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee, except as a result of negligence or
bad faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Trustee on their
behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
or the Holders of Notes allowed in any judicial proceedings relative to
the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of
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payments directly to such Noteholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Trustee, each
predecessor Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee except as a result of negligence or bad faith.
(d) Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or vote for or accept or adopt on behalf
of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Noteholder in any
such proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.
(e) All rights of action and of asserting claims under this
Indenture or under any of the Notes, may be enforced by the Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment, subject to the payment of the expenses, disbursements
and compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Notes.
(f) In any Proceedings brought by the Trustee (including
any Proceedings involving the interpretation of any provision of this
Indenture), the Trustee shall be held to represent all the Holders of the Notes,
and it shall not be necessary to make any Noteholder a party to any such
Proceedings.
SECTION 5.04. Remedies. If an Event of Default shall have
occurred and be continuing, the Trustee may (subject to Section 5.05) and, in
the case of an Event of Default described in Section 5.01(iv) or (v), shall, as
to the actions described in the following clauses (i), (ii) and (iii):
(i) institute Proceedings in its own name and as or on behalf of a
trustee of an express trust for the collection of all amounts then
payable on the Notes or under this Indenture with respect thereto,
whether by declaration or otherwise, enforce any judgment obtained, and
collect from the Issuer and any other obligor upon such Notes moneys
adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
any other remedy available to the Trustee and take any other appropriate
action to protect and enforce the rights and remedies of the Trustee on
behalf of the Noteholders; and
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(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law; provided, however, that the
Trustee may not sell or otherwise liquidate the Trust Estate following an
Event of Default unless
(A) the Holders of 100% of the Outstanding Amount
of the Notes consent thereto,
(B) the proceeds of such sale or liquidation
distributable to the Noteholders will be sufficient to discharge
in full all amounts then due and unpaid upon such Notes for
principal and interest, or
(C) the Trustee determines that the Trust Estate
will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have become
due if the Notes had not been declared due and payable, and the
Trustee provides prior written notice to the Rating Agencies and
obtains the consent of Holders of 66-2/3% of the Outstanding
Amount of the Notes.
In determining such sufficiency or insufficiency with respect to clause (B) or
(C), the Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
SECTION 5.05. Optional Preservation of the Contracts. If
any Notes have been declared to be due and payable under Section 5.02 following
an Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Trustee may, but need not, elect to maintain
possession of the Trust Estate. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes, and the Trustee shall take such desire
into account when determining whether or not to maintain possession of the Trust
Estate. In determining whether to maintain possession of the Trust Estate, the
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
SECTION 5.06. Priorities.
If the Trustee collects any money or property pursuant to
this Article V, including any money or property in respect of liquidation of the
Trust Estate pursuant to Section 5.04(iv), the Trustee shall pay as promptly as
practicable out the money or property in the following order:
FIRST: amounts due and owing to the Trustee pursuant to
Section 6.07;
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SECOND: amounts due and owing and required to be distributed to
the Servicer pursuant to priority (i) of Section 8.03 and not previously
distributed;
THIRD: except as otherwise provided in the following paragraph, to
Class A Noteholders for amounts due and unpaid on the Class A Notes for
interest (assuming, for this purpose, that the Class A-5 Notes bear
interest at the Class A-5 Assumed Fixed Rate), ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class A Notes for interest;
FOURTH: to Class A Noteholders for amounts due and unpaid on the
Class A Notes for principal, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class A Notes
for principal;
FIFTH: to Class B Noteholders for amounts due and unpaid on the
Class B Notes for interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class B Notes
for interest;
SIXTH: to Class B Noteholders for amounts due and unpaid on the
Class B Notes for principal, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class B Notes
for principal;
SEVENTH: to Class C Noteholders for amounts due and unpaid on the
Class C Notes for interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class C Notes
for interest;
EIGHTH: to Class C Noteholders for amounts due and unpaid on the
Class C Notes for principal, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class C Notes
for principal;
NINTH: to the parties entitled thereto in accordance with the Cash
Collateral Agreement for amounts due and unpaid thereunder; and
TENTH: the remainder, if any, to the Owner Trustee for
distribution to the Equity Certificateholder.
In the event that, on the date of any such distribution,
any amount is payable to the Class A-5 Swap Counterparty under the Class A-5
Swap Agreement, the Trustee shall, from the amount available to pay interest on
the Class A-5 Notes pursuant to clause THIRD above, first pay to the Class A-5
Swap Counterparty such amount, and thereafter apply the balance of such amount
available to the payment of interest on the Class A-5 Notes. In the event that,
on the date of any such
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distribution, any amount is payable to the Trustee under the Class A-5 Swap
Agreement, the Trustee shall apply all of the amount available to pay interest
on the Class A-5 Notes pursuant to clause THIRD above, together with any amount
received under the Class A-5 Swap Agreement, to the payment of interest on the
Class A-5 Notes.
SECTION 5.07. Limitation of Suits. No Holder of any Note
shall have any right to institute any Proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount of
the Notes have made written request to the Trustee to institute such
Proceeding in respect of such Event of Default in its own name as Trustee
hereunder;
(iii) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such Proceedings;
and
(v) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority of the Outstanding Amount of the Notes;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the Outstanding Amount of the Notes,
the Trustee may conclusively rely on and act upon the request of the group
representing the largest Outstanding Amount of the Notes.
SECTION 5.08. Unconditional Rights of Noteholders To
Receive Principal and Interest. Notwithstanding any other provisions in this
Indenture, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such Note
on or after the
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respective due dates thereof expressed in such Note or in this Indenture (or, in
the case of redemption, on or after the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Trustee or to
such Noteholder, then and in every such case the Issuer, the Trustee and the
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Noteholders shall continue as
though no such Proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not a Waiver. No delay or
omission of the Trustee or any Holder of any Note to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such right
or remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Trustee or to the Noteholders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Noteholders, as the
case may be.
SECTION 5.12. Control by Noteholders. The Holders of a
majority of the Outstanding Amount of the Notes shall have the right to direct
the time, method and place of conducting any Proceeding for any remedy available
to the Trustee with respect to the Notes or exercising any trust or power
conferred on the Trustee; provided that
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction
to the Trustee to sell or liquidate all or any portion of the Trust
Estate shall be by the Holders of Notes representing not less than 100%
of the Outstanding Amount of the Notes; and
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(iii) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction; provided, however,
that, subject to Section 6.01, the Trustee need not take any action that
it determines might involve it in liability or might materially adversely
affect the rights of any Noteholders not consenting to such action.
SECTION 5.13. Waiver of Past Defaults.
The Holders of Notes of not less than a majority of the
Outstanding Amount of the Notes may waive any past Default or Event of Default
and its consequences except a Default (a) in payment of principal of or interest
on any of the Notes or (b) in respect of a covenant or provision hereof which
cannot be modified or amended without the consent of the Holder of each Note. In
the case of any such waiver, the Issuer, the Trustee and the Holders of the
Notes shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and
be deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
SECTION 5.14. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Note by such Holder's acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to (a) any suit instituted by the Trustee, (b) any suit
instituted by any Noteholder, or group of Noteholders, in each case holding in
the aggregate more than 10% of the Outstanding Amount of the Notes or (c) any
suit instituted by any Noteholder for the enforcement of the payment of
principal of or interest on any Note on or after the respective due dates
expressed in such Note and in this Indenture (or, in the case of redemption, on
or after the Redemption Date).
SECTION 5.15. Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the
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Issuer (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantages of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 5.16. Action on Notes. The Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Trustee against the Issuer or by the levy of any execution
under such judgment upon any portion of the Trust Estate or upon any of the
assets of the Issuer.
SECTION 5.17. Performance and Enforcement of Certain
Obligations.
(a) Promptly following a request from the Trustee to do so
and at the Depositor's expense, the Issuer agrees to take all such lawful action
as the Trustee may request to compel or secure the performance and observance by
the Depositor or the Servicer, as applicable, of each of their obligations to
the Issuer under or in connection with the Transfer and Servicing Agreement in
accordance with the terms thereof, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with the Transfer and Servicing Agreement to the extent and in the manner
directed by the Trustee, including the transmission of notices of default on the
part of the Depositor or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Depositor or the Servicer of each of their obligations under the Transfer and
Servicing Agreement.
(b) If an Event of Default has occurred and is continuing,
the Trustee may, and at the direction (which direction shall be in writing,
including facsimile) of the Holders of at least 66-2/3% of the Outstanding
Amount of the Notes shall, exercise all rights, remedies, powers, privileges and
claims of the Issuer against the Depositor or the Servicer under or in
connection with the Transfer and Servicing Agreement, including the right or
power to take any action to compel or secure performance or observance by the
Depositor or the Servicer of each of their obligations to the Issuer thereunder
and to give any consent, request, notice, direction, approval, extension or
waiver under the Transfer and Servicing Agreement, and any right of the Issuer
to take such action shall be suspended.
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ARTICLE VI
The Trustee
SECTION 6.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise the rights and powers vested in it by this Indenture
with the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; however, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture and, if applicable, the Trustee's other Related Documents.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.12.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section.
(e) The Trustee shall not be liable for interest on any
money received by it.
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(f) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Transfer and Servicing Agreement.
(g) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayments of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(h) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
(i) In no event shall the Trustee be required to perform,
or be responsible for the manner of performance of, any of the obligations of
the Servicer, or any other party, under the Transfer and Servicing Agreement,
except during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, powers, duties and privileges of the Servicer, in
accordance with the terms of the Transfer and Servicing Agreement.
(j) The Trustee shall, and hereby agrees that it will,
perform all of the obligations and duties required of it under the Transfer and
Servicing Agreement and the Class A-5 Swap Agreement.
(k) Without limiting the generality of this Section, the
Trustee shall have no duty (i) to see to any recording, filing or depositing of
this Indenture or any agreement referred to herein or any financing statement
evidencing a security interest in the Equipment, or to see to the maintenance of
any such recording or filing or depositing or to any recording, refiling or
redepositing of any thereof, (ii) to see to any insurance of the Equipment or
Obligors or to effect or maintain any such insurance, (iii) except as
specifically provided in the Transfer and Servicing Agreement, to see to the
payment or discharge of any tax, assessment or other governmental charge or any
Lien or encumbrance of any kind owing with respect to, assessed or levied
against any part of the Trust Estate, (iv) to confirm or verify the contents of
any reports or certificates delivered to the Trustee pursuant to this Indenture
or the Transfer and Servicing Agreement believed by the Trustee to be genuine
and to have been signed or presented by the proper party or parties, or (v) to
inspect the Equipment at any time or ascertain or inquire as to the performance
of observance of any of the Issuer's, the Depositor's or the Servicer's
representations, warranties or covenants or the Servicer's duties and
obligations as Servicer under the Transfer and Servicing Agreement.
(l) Except for actions expressly authorized by this
Indenture or the Transfer and Servicing Agreement or taken by the Trustee
pursuant to Section 6.01(a), the Trustee shall take no action reasonably likely
to impair (i) the interests of
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the Trust Estate in any contract or agreement now existing or hereafter created
or (ii) the value of any contract or agreement now existing or hereafter
created.
(m) The Trustee shall have no power to vary the corpus of
the Trust Estate, except as expressly provided in this Indenture.
(n) In the event that the Note Registrar or the Paying
Agent (if other than the Trustee) shall fail to perform any obligation, duty or
agreement in the manner or on the day required to be performed by the Note
Registrar or the Paying Agent, as the case may be, under this Indenture, the
Trustee shall be obligated, as soon as possible upon knowledge of a Responsible
Officer thereof and receipt of appropriate records, if any, to perform such
obligation, duty or agreement in the manner so required.
(o) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any Event of Default (other than an Event
of Default pursuant to Section 5.01(i) or (ii)) unless a Responsible Officer of
the Trustee shall have received written notice thereof or otherwise has actual
knowledge thereof. In the absence of receipt of such notice or knowledge, the
Trustee may conclusively assume that there is no Event of Default.
SECTION 6.02. Rights of Trustee.
Except as otherwise provided in Section 6.01:
(a) the Trustee may conclusively rely on any document believed by
it to be genuine and to have been signed or presented by the proper
person. The Trustee need not (except under the circumstances described in
paragraph (g) below) investigate any fact or matter stated in the
document;
(b) before the Trustee acts or refrains from acting, it may
require an Officer's Certificate (with respect to factual matters) or an
Opinion of Counsel, as applicable. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on the
Officer's Certificate or Opinion of Counsel, as applicable, or as
directed by the requisite amount of Note Owners as provided herein;
(c) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys or a custodian or nominee, and the Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed
with due care by it hereunder;
(d) the Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or
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powers; provided, however, that the Trustee's conduct does
not constitute willful misconduct, negligence or bad faith;
(e) the Trustee may consult with counsel of its choice, and the
advice or opinion of such counsel with respect to legal matters relating
to this Indenture and the Notes shall be full and complete authorization
and protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice
or opinion of such counsel;
(f) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order
or direction of any of the Holders of Notes, pursuant to the provisions
of this Indenture, unless such Holders of Notes shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby;
(g) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
approval, bond or other paper or document, unless requested in writing to
do so by the Holders of Notes evidencing not less than 25% of the
Outstanding Amount thereof; provided, however, that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture or the Transfer
and Servicing Agreement, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to so proceeding;
the reasonable expense of every such examination shall be paid by the
Person making such request, or, if paid by the Trustee, shall be
immediately reimbursed by the Person making such request upon demand; and
(h) The right of the Trustee to perform any discretionary act
enumerated in this Indenture shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.
SECTION 6.03. Individual Rights of Trustee. The Trustee in
its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee is required to comply with Sections 6.11 and 6.12.
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SECTION 6.04. Trustee's Disclaimer. The Trustee shall not
be responsible for and, except as provided in Section 6.13, makes no
representation as to the validity or adequacy of this Indenture, the Trust
Estate or the Notes, it shall not be accountable for the Issuer's use of the
proceeds from the Notes, and it shall not be responsible for any statement of
the Issuer in the Indenture or in any document issued in connection with the
sale of the Notes or in the Notes other than the Trustee's certificate of
authentication.
SECTION 6.05. Notice of Defaults. If a Default occurs and
is continuing and if it is known to a Responsible Officer of the Trustee, the
Trustee shall mail to each Noteholder notice of the Default within 90 days after
it occurs. Except in the case of a Default in payment of principal of or
interest on any Note (including payments pursuant to the mandatory redemption
provisions of such Note), the Trustee may withhold the notice if and so long as
a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Noteholders.
SECTION 6.06. Reports by Trustee to Holders. The Trustee
shall provide or cause to be provided to each Noteholder all such tax
information as may be required by law to be distributed to enable such holder to
prepare its federal and state income tax returns.
SECTION 6.07. Compensation and Indemnity.
(a) The Servicer, pursuant to the Transfer and Servicing
Agreement, has covenanted and agreed to pay to the Trustee, and the Trustee
shall be entitled to, certain annual fees and to reimburse the Trustee for all
ordinary and reasonable out-of-pocket expenses incurred or made by it in
connection with the performance of its duties hereunder (excluding those
incurred or made in the performance of its duties under Article V, as referred
to in paragraph (b) below). Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts.
(b) The Trustee shall also be entitled to reimbursement,
from moneys available therefor in accordance with Section 5.06, for all
reasonable out-of-pocket expenses (including the reasonable fees of any
attorneys, investment bankers and public accountants) incurred or made by it in
connection with the performance of its duties under Article V. When the Trustee
incurs expenses after the occurrence of a Default specified in Section 5.01(iv)
or (v) with respect to the Issuer or a Servicer Termination Event specified in
Section 8.1(d) or (e) of the Transfer and Servicing Agreement with respect to
the Servicer, the expenses are intended to constitute expenses of administration
under Title 11 of the United States Code or any other applicable Federal or
state bankruptcy, insolvency or similar law. Notwithstanding anything else set
forth in this Indenture or the Related Documents, the Trustee agrees that the
obligations of the Issuer to the Trustee hereunder and under the
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Related Documents shall be recourse to the Trust Estate only. In addition, the
Trustee agrees that its recourse to the Issuer or the Trust Estate shall be
limited to the right to receive the reimbursement referred to in the first
sentence of this paragraph.
(c) The Trustee and any director, officer, employee or
agent of the Trustee shall be indemnified by the Issuer and held harmless
against any loss, liability or reasonable expense incurred in connection with
this Indenture or the Notes or any other Related Document, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance by the Trustee of its duties hereunder or any
loss, liability or expense incurred by the Trustee in connection with the
performance of its duties pursuant to Section 6.01, including, without
limitation, any such loss, liability or expense incurred in connection with any
legal action or resulting from any error in any tax or information return
prepared by any Person other than the Trustee.
(d) In the event that the Trustee is also acting as Paying
Agent, Servicer, or Note Registrar hereunder, the rights and protection afforded
to the Trustee pursuant to this Section 6.07 shall also be afforded to such
Paying Agent, Servicer or Note Registrar.
(e) The obligations of the Issuer under this Section 6.07
shall survive the resignation or removal of the Trustee and the satisfaction and
discharge of this Indenture.
SECTION 6.08. Replacement of Trustee. The Trustee may
resign at any time by so notifying the Issuer in writing. The Issuer may remove
the Trustee if:
(i) the Trustee fails to comply with Section 6.11;
(ii) a court having jurisdiction in the premises in respect of
the Trustee in an involuntary case or proceeding under federal or state
banking or bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law,
shall have entered a decree or order granting relief or appointing a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or similar official) for the Trustee or for any substantial
part of the Trustee's property, or ordering the winding-up or liquidation
of the Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws, as
now or hereafter in effect, or another present or future federal or state
bankruptcy, insolvency or similar law is commenced with respect to the
Trustee and such case is not dismissed within 60 days;
(iv) the Trustee commences a voluntary case under any federal or
state banking or bankruptcy laws, as now or hereafter constituted, or any
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other applicable federal or state bankruptcy, insolvency or other similar
law, or consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or other similar official) for the Trustee or for any
substantial part of the Trustee's property, or makes any assignment for
the benefit of creditors or fails generally to pay its debts as such
debts become due or takes any corporate action in furtherance of any of
the foregoing;
(v) the Trustee otherwise becomes incapable of acting; or
(vi) the rating assigned to the long-term unsecured debt
obligations of the Trustee (or the holding company thereof) by the Rating
Agencies shall be lowered below the rating of "BBB", "Baa3" or equivalent
rating or be withdrawn by any Rating Agency.
If the Trustee resigns or is removed or if a vacancy exists
in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Issuer shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee, to the Issuer and to each Rating
Agency. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. The successor Trustee shall mail
a notice of its succession to Noteholders. The retiring Trustee shall promptly
transfer all property constituting the Trust Estate held by it as Trustee to the
successor Trustee.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Issuer or the Holders of a majority in Outstanding Amount of the Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
Any resignation or removal of the Trustee and appointment
of a successor Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Trustee
pursuant to this Section and payment of all fees and expenses owed to the
retiring Trustee. Notwithstanding the replacement of the Trustee pursuant to
this Section, the retiring Trustee shall be entitled to payment or reimbursement
of such amounts as such Person is entitled pursuant to Section 6.07.
SECTION 6.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its
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corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee; provided that no such merger,
conversion or consolidation shall relieve the Trustee of its obligation to
comply with Section 6.11. The Trustee shall provide the Rating Agencies prompt
notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificate
of the Trustee shall have.
SECTION 6.10. Appointment of Co-Trustee or Separate
Trustee.
(a) Notwithstanding any other provisions of this Indenture,
at any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Issuer may at the time be located, the
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Trust, or any part hereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Trustee may consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor Trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Trustee joining in such
act), except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Issuer or any portion thereof in any such
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jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Indenture, specifically including every provision of this Indenture
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Trustee
shall at all times satisfy the requirements of TIA 'SS' 310(a). The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition. The Trustee shall
comply with TIA 'SS' 310(b), including the optional provision permitted by the
second sentence of TIA 'SS' 310(b)(9); provided, however, that there shall be
excluded from the operation of TIA 'SS' 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA 'SS' 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against
Issuer. The Trustee shall comply with TIA 'SS' 311(a), excluding any creditor
relationship listed in TIA 'SS' 311(b). A Trustee who has resigned or been
removed shall be subject to TIA 'SS' 311(a) to the extent indicated.
SECTION 6.13. Representations and Warranties of the
Trustee. The Trustee represents and warrants as of the Closing Date that:
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(i) the Trustee is a banking corporation organized and validly
existing under the laws of the State of New York;
(ii) the Trustee has full power, authority and right to execute,
deliver and perform this Indenture and each of the Trustee's Related
Documents, and has taken all necessary action to authorize the execution,
delivery and performance by it of this Indenture and each such Related
Document; and
(iii) each of this Indenture and the Trustee's Related
Documents has been duly executed and delivered by the Trustee and
represents a legal, valid and binding obligation of the Trustee
enforceable against the Trustee in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in
equity).
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ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Note Registrar To Furnish Trustee Names and
Addresses to Noteholders. The Note Registrar will furnish or cause to be
furnished to the Trustee (a) not more than five days after the earlier of
(i) each Record Date and (ii) three months after the last Record Date, a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the Holders of Notes as of such Record Date, (b) at such other times as the
Trustee may request in writing, within 30 days after receipt by the Note
Registrar of any such request, a list of similar form and content as of a date
not more than 10 days prior to the time such list is furnished; provided,
however, that so long as the Trustee is the Note Registrar, no such list shall
be required to be furnished.
SECTION 7.02. Preservation of Information; Communications
to Noteholders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Trustee as provided in
Section 7.01 and the names and addresses of Holders of Notes received by the
Trustee in its capacity as Note Registrar. The Trustee may destroy any list
furnished to it as provided in such Section 7.01 upon receipt of a new list so
furnished.
(b) Noteholders may communicate pursuant to TIA 'SS' 312(b)
with other Noteholders with respect to their rights under this Indenture or
under the Notes.
(c) The Issuer, the Trustee and the Note Registrar shall
have the protection of TIA 'SS' 312(c).
SECTION 7.03. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Trustee, within 15 days after the Issuer is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Issuer may be required
to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Trustee and the Commission in accordance with
rules and regulations prescribed from time to time by the Commission such
additional information, documents and reports with respect to compliance
by
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the Issuer with the conditions and covenants of this Indenture as may
be required from time to time by such rules and regulations; and
(iii) supply to the Trustee a sufficient number of copies (and the
Trustee shall transmit by mail to all Noteholders described in TIA 'SS'
313(c)) of such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this paragraph as may be required by rules and regulations prescribed
from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year
of the Issuer shall end on December 31 of each year. In the event the Issuer
changes its fiscal year, it shall promptly notify the Trustee.
SECTION 7.04. Reports by Trustee. If required by TIA 'SS'
313(a), within 60 days after each March 31 beginning with March 31, 1998, the
Trustee shall mail to each Noteholder as required by TIA 'SS' 313(c) a brief
report dated as of such date that complies with TIA 'SS' 313(a). The Trustee
also shall comply with TIA 'SS' 313(b).
A copy of each report at the time of its mailing to
Noteholders shall be filed by the Trustee with the Commission and each stock
exchange, if any, on which the Notes are listed. The Issuer shall notify the
Trustee if and when the Notes are listed on any stock exchange.
SECTION 7.05. Statements to Noteholders.
(a) On each Payment Date, the Trustee shall forward to each
Noteholder and each Rating Agency a copy of the Servicer's Certificate delivered
on the related Determination Date pursuant to Section 3.9 of the Transfer and
Servicing Agreement.
(b) Note Owners may obtain copies of the Servicer's
Certificates forwarded by the Trustee pursuant to subsection (a) above upon
written request to the Trustee at its Corporate Trust Office (together with a
written certification that such Person is a Note Owner and payment of any
expenses associated with the distribution thereof).
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ARTICLE VIII
Trust Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money. Except as otherwise
expressly provided herein, the Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Trustee pursuant to this Indenture. The Trustee shall apply
all such money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or performance under any agreement or instrument that is part of this
Indenture or the Notes, the Trustee may take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.02. Collection Account. On or prior to the
Closing Date, the Trustee shall establish the Collection Account in the name of
the Trustee for the benefit of the Noteholders. The Collection Account shall be
an Eligible Account and initially shall be a segregated trust account
established with the Trustee and maintained with the Trustee, into which (i) the
Servicer shall deposit or cause to be deposited all amounts described in
Sections 4.1, 4.2 and 5.1 of the Transfer and Servicing Agreement, and (ii) the
Trustee shall deposit the amounts described in Section 8.06(c).
SECTION 8.03. Distributions. On each Monthly Payment Date,
the Trustee shall (based solely on the information contained in the Servicer's
Certificate delivered on the related Determination Date, upon which the Trustee
may conclusively rely) distribute the following amounts and in the order of
priority specified below. Within each order of priority, amounts shall be deemed
withdrawn first from Available Pledged Revenues, and second (but only as to
amounts described in clauses (ii) and (iii) below) from amounts deposited in the
Collection Account pursuant to Section 8.06(c).
(i) first, from the Available Pledged Revenues then on deposit in
the Collection Account, to the Servicer, the Servicing Fee for the
related Collection Period (less that portion thereof to be applied by the
Trustee in accordance with the Cash Collateral Account Agreement) and any
amounts specified in Section 4.2(c) of the Transfer and Servicing
Agreement, to the extent the Servicer has not reimbursed itself in
respect of such amounts pursuant to Section 4.4 of the Transfer and
Servicing Agreement;
(ii) second, from the Amount Available then remaining on deposit
in the Collection Account, to the Note Distribution Account an amount
equal to
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the Note Interest Distributable Amount for such Monthly Payment
Date (assuming, for this purpose, that the Class A-5 Notes bear interest
at the Class A-5 Assumed Fixed Rate);
(iii) third, from the Amount Available then remaining on deposit
in the Collection Account, to the Note Distribution Account, an amount
equal to (A) the Note Principal Distributable Amount for such Monthly
Payment Date, less (B) with respect to each Monthly Payment Date
occurring after the Principal Balance of the Class B Notes has been
reduced to zero, that portion of the balance of the Class C Funding
Account, if any, deposited therein pursuant to Section 8.04(d) in respect
of principal of the Class C Notes;
(iv) fourth, from the Amount Available then remaining on deposit
in the Collection Account, to the Cash Collateral Account, the amount, if
any, necessary to increase the balance therein to the Requisite Cash
Collateral Amount;
(v) fifth, from the Amount Available then remaining on deposit in
the Collection Account, to the parties entitled thereto in accordance
with the Cash Collateral Account Agreement, any amounts due and unpaid
thereunder;
(vi) sixth, from the Amount Available then remaining on deposit in
the Collection Account, to payment of any shortfalls in the payment of
interest on the Class A-5 Notes due to the failure of the Class A-5 Swap
Counterparty to pay amounts payable to the Trustee under the Class A-5
Swap Agreement, together with interest on such shortfalls at the Class
A-5 Interest Rate; and
(vii) seventh, any remaining Amount Available to the Owner Trustee
for distribution to the Equity Certificateholder.
SECTION 8.04. Note Distribution Account.
(a) On or prior to the Closing Date, the Trustee shall
establish the Note Distribution Account in the name of the Trustee for the
benefit of the Noteholders. The Note Distribution Account shall be an Eligible
Account and initially shall be a segregated trust account established with the
Trustee and maintained with the Trustee. The Trustee shall deposit in the Note
Distribution Account all amounts to be deposited therein from the Collection
Account, the Cash Collateral Account and the Class C Funding Account, as well as
all amounts received by the Trustee pursuant to the Class A-5 Swap Agreement.
(b) On each Monthly Payment Date and Redemption Date, the
Trustee shall distribute (based on information contained in the Servicer's
Certificate delivered on the related Determination Date) all amounts on deposit
in the Note
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Distribution Account (other than any portion of such amounts received by the
Trustee pursuant to the Class A-5 Swap Agreement) in the following amounts and
in the following order of priority (except as otherwise provided in paragraphs
(c), (d) and (e) below or in Section 5.06, and provided that amounts deposited
therein from the Class C Funding Account may only be applied to the amounts
described in clauses (i)(C) and (ii)(D) below, any such amounts in respect of
interest on the Class C Notes to be deemed applied to the payment of interest on
the Class C Notes prior to the application of other amounts in the Note
Distribution Account to the payment of such interest):
(i) interest on the Notes in the following order of priority:
(A) to the Class A-1 Noteholders, the Class A-1
Interest Distributable Amount, to the Class A-2 Noteholders, the
Class A-2 Interest Distributable Amount, to the Class A-3
Noteholders, the Class A-3 Interest Distributable Amount, to the
Class A-4 Noteholders, the Class A-4 Interest Distributable
Amount, and, subject to paragraph (c) below, to the Class A-5
Noteholders, the Class A-5 Interest Distributable Amount
(assuming, for this purpose, that the Class A-5 Notes bear
interest at the Class A-5 Assumed Fixed Rate), or, if the
remaining amount on deposit in the Note Distribution Account is
less than the sum of the amounts specified in this clause (A),
such remaining amount pro rata to each of such Classes based upon
their respective entitlements to interest pursuant to this clause
(A);
(B) to the Class B Noteholders, the Class B
Interest Distributable Amount; and
(C) to the Class C Noteholders, the Class C
Interest Distributable Amount; and
(ii) principal on the Notes in the following order of priority:
(A) the Class A-5 Principal Distribution Percentage
of the remaining amounts in the Note Distribution Account in
respect of principal of the Class A-5 Notes until the Principal
Balance thereof has been reduced to zero, and the balance of such
amounts as follows:
(1) principal of the Class A-1 Notes until
the Principal Balance thereof has been reduced to zero;
(2) principal of the Class A-2 Notes until
the Principal Balance thereof has been reduced to zero;
(3) principal of the Class A-3 Notes until
the Principal Balance thereof has been reduced to zero; and
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(4) principal of the Class A-4 Notes until
the Principal Balance thereof has been reduced to zero;
(B) principal of the Class B Notes until the Principal
Balance thereof has been reduced to zero; and
(C) principal of the Class C Notes until the Principal
Balance thereof has been reduced to zero.
(c) In the event that, on a given Monthly Payment Date, an
amount is payable by the Issuer to the Class A-5 Swap Counterparty under the
Class A-5 Swap Agreement, the Trustee shall, from the amount available to pay
interest on the Class A-5 Notes pursuant to clause (b)(i)(A) above, first pay to
the Class A-5 Swap Counterparty such amount on such Monthly Payment Date, and
thereafter apply the balance of such amount available to the payment of interest
on the Class A-5 Notes. In the event that, on a given Monthly Payment Date, an
amount is payable by the Class A-5 Swap Counterparty to the Trustee under the
Class A-5 Swap Agreement, the Trustee shall apply all of the amount available to
pay interest on the Class A-5 Notes pursuant to clause (b)(i)(A) above, together
with any amount received under the Class A-5 Swap Agreement on such Monthly
Payment Date, to the payment of the Class A-5 Interest Distributable Amount.
Notwithstanding the provisions of paragraph (b) above or Section 5.06, any such
amounts so received under the Class A-5 Swap Agreement shall be applied to the
payment of the Class A-5 Interest Distributable Amount and shall not be
available to pay any other amounts payable from the Note Distribution Account.
(d) On any Monthly Payment Date other than a Quarterly
Payment Date, any amount described in clause (b)(i)(C) or (b)(ii)(D) above shall
be deposited in the Class C Funding Account.
(e) On the date Class A-5 Notes are to be purchased in
accordance with Section 10.06, the Trustee shall distribute all amounts
deposited in the Note Distribution Account by or on behalf of the Depositor for
such purpose to the payment of the purchase price of the Class A-5 Notes.
Notwithstanding the provisions of paragraph (b) above or Section 5.06, any such
amounts so deposited, and only such amounts, shall be applied to the payment of
the purchase price of Class A-5 Notes and shall not be available to pay any
other amounts payable from the Note Distribution Account.
SECTION 8.05. Servicing Account. On or prior to the
Closing Date, the Trustee shall establish the Servicing Account in the name of
the Trustee for the benefit of the Noteholders and the Depositor. The Servicing
Account shall be an Eligible Account. The Servicer shall deposit or cause to
be deposited in the Servicing Account all amounts described in Sections 4.1 and
4.2 of the Transfer and Servicing Agreement, subject to Section 4.4 thereof.
The Servicer shall make
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transfers from the Servicing Account, and shall be entitled to make withdrawals
from the Servicing Account, as provided in the Transfer and Servicing Agreement.
SECTION 8.06. Cash Collateral Account.
(a) On or prior to the Closing Date, the Cash Collateral
Account will be established in accordance with the requirements of the Cash
Collateral Account Agreement for the benefit of (i) the Noteholders, and (ii)
the Cash Collateral Account Lenders and the Depositor, as their interests may
appear. The Cash Collateral Account shall be an Eligible Account and initially
shall be a segregated trust account established with the Trustee and maintained
with the Trustee. The Cash Collateral Account will be funded in an amount equal
to the Requisite Cash Collateral Amount as of the Closing Date from (1) the
proceeds of loans made by the Cash Collateral Account Lenders in an amount equal
to $40,144,000, which proceeds shall be deposited in the Cash Collateral Account
on or prior to the Closing Date, and (2) proceeds of the Notes to be deposited
therein in accordance with Section 2.13.
(b) If the amount on deposit in the Cash Collateral Account
on any Monthly Payment Date (after giving effect to any deposits therein
pursuant to Section 8.03(iv) and any withdrawals therefrom pursuant to Section
8.06(c), but excluding for this purpose any net earnings on the investment of
funds therein, which will not constitute Available Cash Collateral Amount and
will be distributed in accordance with Section 8.08(a)) is greater than the
Requisite Cash Collateral Amount for such Monthly Payment Date, the Servicer
shall direct the Trustee to distribute the amount of the excess in accordance
with the Cash Collateral Account Agreement. Amounts properly distributed
pursuant to the prior sentence shall be deemed released from the Trust Estate
and the security interest herein granted to the Trustee, and the Issuer shall in
no event thereafter be required to refund any such distributed amounts.
(c) On the last Business Day preceding each Monthly Payment
Date, the Trustee shall, in accordance with directions from the
Servicer, withdraw from amounts on deposit in the Cash Collateral Account,
and deposit into the Collection Account, an amount equal to the lesser of the
Available Cash Collateral Amount for such Monthly Payment Date and the sum of
the following amounts, if any:
(i) the amount, if any, by which the Available Pledged Revenues
with respect to such Monthly Payment Date, after payment of the amounts
specified in clause (i) of Section 8.03, is less than the amount
specified in clause (ii) of Section 8.03; plus
(ii) the Principal Deficiency Amount, if any, for such Monthly
Payment Date; plus
(iii) with respect to the Stated Maturity Date for any Class of
Notes or on the first Quarterly Payment Date on which the Contract Pool
Principal
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Balance is less than $1,000,000, the amount, if any, by which
the Available Pledged Revenues, after payment of all amounts specified in
clauses (i) through (iii) of Section 8.03, is less than (A) in the case
of the Stated Maturity Date for a Class of Notes, the remaining Principal
Balance of such Class of Notes, and (B) in the case of the first
Quarterly Payment Date on which the Contract Pool Principal Balance is
less than $1,000,000, the Aggregate Principal Balance of all Outstanding
Notes.
In the event that the Available Cash Collateral Amount for any Monthly Payment
Date is less than the total amount, if any, specified above for such Monthly
Payment Date, the amount actually withdrawn by the Trustee shall be applied in
the order of priority specified above, and, within each clause specified above,
in the order of priority specified in Sections 8.03 and 8.04. The Servicer
shall, in accordance with the Transfer and Servicing Agreement, give the Trustee
and the Cash Collateral Account Lenders' Agent notice, at least three Business
Days prior to each Monthly Payment Date, of the amounts, if any, specified in
clauses (i) through (iii) above for such Monthly Payment Date.
SECTION 8.07. Class C Funding Account.
(a) On or prior to the Closing Date, the Trustee shall
establish the Class C Funding Account in the name of the Trustee for the benefit
of the Class C Noteholders. The Class C Funding Account shall be an Eligible
Account and initially shall be a segregated trust account established with the
Trustee and maintained with the Trustee. The Trustee shall deposit in the Class
C Funding Account all amounts transferred thereto from the Note Distribution
Account pursuant to Section 8.04(d).
(b) On each Quarterly Payment Date, the Trustee shall
transfer to the Note Distribution Account (based on information contained in the
Servicer's Certificate delivered on the related Determination Date) from amounts
on deposit in the Class C Funding Account (excluding, for this purpose, any
investment earnings therein, which will be deposited in the Collection Account
in accordance with Section 8.08), as follows:
(i) those amounts deposited in the Class C Funding Account in
respect of Class C Interest Distributable Amount, such amounts to be
applied solely to the payment of interest on the Class C Notes; and
(ii) any remaining balance therein, such remainder to be applied
solely to the payment of principal of the Class C Notes.
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SECTION 8.08. General Provisions Regarding Servicing
Account, Collection Account, Note Distribution Account, Class C Funding Account
and Cash Collateral Account.
(a) So long as no Default or Event of Default shall have
occurred and be continuing, all amounts held in the Servicing Account, the
Collection Account, the Note Distribution Account, the Class C Funding Account
and the Cash Collateral Account shall, to the extent permitted by applicable
laws, rules and regulations, be invested, as directed by the Servicer, in
Eligible Investments that mature not later than one Business Day prior to the
Payment Date for the Collection Period to which such amounts relate (or, in the
case of the Cash Collateral Account or the Class C Funding Account, in Eligible
Investments that mature not later than one Business Day prior to the next
Payment Date with respect to which amounts may be withdrawn therefrom). Any such
written direction shall certify that any such investment is authorized by this
Section. Investments in Eligible Investments shall be made in the name of the
Trustee on behalf of the Trust, and such investments shall not, as determined by
the Servicer, be (1) purchased at a price in excess of the principal amount
thereof plus accrued interest thereon, nor (2) sold or disposed of prior to
their maturity at a price less than the principal amount thereof plus accrued
interest thereon. Any investment of funds in the Servicing Account, the
Collection Account, the Note Distribution Account, the Class C Funding Account
or the Cash Collateral Account shall be made in Eligible Investments held by a
financial institution in accordance with the following requirements:
(i) all Eligible Investments shall be held in an account
with such financial institution in the name of the Trustee;
(ii) all Eligible Investments held in such account shall be
delivered to the Trustee in the following manner:
(A) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i)
of the UCC (other than certificated securities) and are
susceptible of physical delivery, transferred to the Trustee by
physical delivery to the Trustee, indorsed to, or registered in
the name of, the Trustee or its nominee or indorsed in blank; or
such additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any
such Eligible Investments to the Trustee free of any adverse
claims, consistent with changes in applicable law or regulations
or the interpretation thereof;
(B) with respect to a "certificated security" (as defined
in Section 8-102(a)(4) of the UCC), transferred:
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(1) by physical delivery of such certificated
security to the Trustee, provided that if the certificated
security is in registered form, it shall be indorsed to, or
registered in the name of, the Trustee or indorsed in
blank;
(2) by physical delivery of such certificated
security in registered form to a "securities intermediary"
(as defined in Section 8-102(a)(14) of the UCC) acting on
behalf of the Trustee if the certificated security has been
specially indorsed to the Trustee by an effective
indorsement.
(C) with respect to any security issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the
Federal National Mortgage Association that is a book-entry
security held through the Federal Reserve System pursuant to
Federal book entry regulations, the following procedures, all in
accordance with applicable law, including applicable federal
regulations and Articles 8 and 9 of the UCC: book-entry
registration of such property to an appropriate book-entry account
maintained with a Federal Reserve Bank by a securities
intermediary which is also a "depositary" pursuant to applicable
federal regulations and issuance by such securities intermediary
of a deposit advice or other written confirmation of such
book-entry registration to the Trustee of the purchase by the
securities intermediary on behalf of the Trustee of such
book-entry security; the making by such securities intermediary of
entries in its books and records identifying such book-entry
security held through the Federal Reserve System pursuant to
Federal book-entry regulations as belonging to the Trustee and
indicating that such securities intermediary holds such book-entry
security solely as agent for the Trustee; or such additional or
alternative procedures as may hereafter become appropriate to
effect complete transfer of ownership of any such Eligible
Investments to the Trustee free of any adverse claims, consistent
with changes in applicable law or regulations or the
interpretation thereof;
(D) with respect to any "uncertificated security" (as
defined in Section 8-102(a)(18) of the UCC) that is not governed
by clause (C) above, transferred:
(1)(A) by registration to the Trustee as the
registered owner thereof, on the books and records of the
issuer thereof, or
(B) by another Person (not a securities
intermediary) either becomes the registered owner of the
uncertificated security on behalf of the Trustee, or having
become the registered owner acknowledges that it holds for
the Trustee; or
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(2) by the issuer thereof having agreed that
it will comply with instructions originated by the Trustee
without further consent of the registered owner thereof;
(E) with respect to any "security entitlement" (as
defined in Section 8-102(a)(17) of the UCC):
(1) if a securities intermediary (A) indicates
by book entry that a "financial asset" (as defined in
Section 8-102(a)(9) of the UCC) has been credited to the
Trustee's "securities account" (as defined in Section
8-501(a) of the UCC), (B) receives a financial asset (as so
defined) from the Trustee or acquires a financial asset for
the Trustee, and in either case, accepts it for credit to
the Trustee's securities account (as so defined),
(C) becomes obligated under other law, regulation or rule
to credit a financial asset to the Trustee's securities
account, or (D) has agreed that it will comply with
"entitlement orders" (as defined in Section 8-102(a)(8) of
the UCC) originated by the Trustee, without further consent
by the "entitlement holder" (as defined in Section
8-102(a)(7) of the UCC), of a confirmation of the purchase
and the making by such securities intermediary of entries
on its books and records identifying as belonging to the
Trustee of (I) a specific certificated security in the
securities intermediary's possession, (II) a quantity of
securities that constitute or are part of a fungible bulk
of certificated securities in the securities intermediary's
possession, or (III) a quantity of securities that
constitute or are part of a fungible bulk of securities
shown on the account of the securities intermediary on the
books of another securities intermediary.
(F) in each case of delivery contemplated pursuant
to clauses (A) through (E) of subsection (ii) hereof, the Trustee
shall make appropriate notations on its records, and shall cause
the same to be made on the records of its nominees, indicating
that such Eligible Investment is held in trust pursuant to and as
provided in this Indenture.
Any cash held by the Trustee shall not be considered a "financial asset" for
purposes of this Section 8.08. All interest, dividends, gains upon transfer and
other income from, or earnings on, investments of funds in the Collection
Account, the Note Distribution Account and the Class C Funding Account shall be
deposited in the Collection Account and distributed on the next Payment Date in
accordance with Section 8.03. All interest, dividends, gains upon transfer and
other income from, or earnings on, investments of funds in the Servicing Account
shall be retained therein until distributed to the Servicer as additional
servicing compensation in accordance with Section 3.8 of the Transfer and
Servicing Agreement. All interest,
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dividends, gains upon transfer and other income from, or earnings on,
investments of funds in the Cash Collateral Account shall be retained therein
until applied in accordance with the Cash Collateral Account Agreement.
(b) Subject to Section 6.01(c), the Trustee shall not in
any way be held liable by reason of any insufficiency in any of the Servicing
Account, the Collection Account, the Note Distribution Account, the Class C
Funding Account or the Cash Collateral Account resulting from any loss on any
Eligible Investment included therein except for losses attributable to the
Trustee's failure to make payments on such Eligible Investments issued by the
Trustee, in its individual capacity, in accordance with their terms. In no event
shall the Trustee be liable for the selection of Eligible Investments. The
Trustee shall have no liability in respect of losses incurred as a result of the
liquidation of any Eligible Investment prior to its stated maturity or the
failure of the Servicer to provide timely written investment direction. The
Trustee shall have no obligation to invest or reinvest any amounts held
hereunder in the absence of written investment direction.
(c) The Trustee, in holding all funds in the Servicing
Account, the Collection Account, the Note Distribution Account, the Class C
Funding Account and the Cash Collateral Account, and in making distributions as
provided in this Agreement, shall act solely on behalf of and as agent for the
Noteholders and (as to the Cash Collateral Account) the Cash Collateral Account
Lenders and the Depositor.
(d) Any account which is required to be established as an
Eligible Account pursuant to this Indenture and which ceases to be an Eligible
Account shall within five Business Days (or such longer period, not to exceed 30
days, as to which each Rating Agency may consent) be established by the Trustee
as a new account which shall be an Eligible Account, and any cash and/or any
investments shall be transferred to such new account.
(e) Any transfers or deposits required to be made by the
Trustee pursuant to Section 8.03, 8.05 or 8.06 or this Section 8.07 shall be
made in accordance with information provided by the Servicer.
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ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of
Noteholders.
(a) Without the consent of the Holders of any Notes, but
with prior notice to the Rating Agencies, the Issuer and the Trustee, when
authorized by an Issuer Order, at any time and from time to time, may enter into
one or more indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as in force at the date of the execution
thereof), in form satisfactory to the Trustee, for any of the following
purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Trustee any property subject to, or required to be
subjected to, the lien created by this Indenture, or to subject to the
lien created by this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another Person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee;
(v) to cure any ambiguity or to correct or supplement any
provision herein which may be inconsistent with any other provision
herein;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to
or change any of the provisions of this Indenture as shall be necessary
to facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI;
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
Federal statute hereafter enacted and to add to this Indenture such other
provisions as may be expressly required by the TIA; or
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(viii) to avoid a reduction, qualification or withdrawal of any
rating on the Notes.
The Trustee is hereby authorized to join in the execution
of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Holders of the Notes,
but upon satisfaction of the Rating Agency Condition, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
SECTION 9.02. Supplemental Indentures With Consent of
Noteholders.
(a) The Issuer and the Trustee, when authorized by an
Issuer Order, also may, with prior notice to the Rating Agencies and the consent
of a Note Majority of each Class affected thereby, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that, no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Note affected thereby:
(i) change the date, timing or method of determination of payment
of any installment of principal of or interest on any Note, or reduce the
principal amount thereof, the interest rate thereon or the Redemption
Price with respect thereto, change the provision of this Indenture
relating to the application of collections on, or the proceeds of the
sale of, the Trust Estate to payment of principal of or interest on the
Notes, or change any place of payment where, or the coin or currency in
which, any Note or the interest thereon is payable, or impair the right
to institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in
Article V, to the payment of any such amount due on the Notes on or after
the respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
(ii) impair the right of the Holder to institute suit pursuant
to Section 5.08;
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(iii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Trustee to direct the Issuer to sell or liquidate
the Trust Estate pursuant to Section 5.04;
(vi) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Related Documents cannot be modified
or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien created by this Indenture with respect to any part
of the Trust Estate or, except as otherwise permitted or contemplated
herein, terminate the lien created by this Indenture on any property at
any time subject hereto or deprive the Holder of any Note of the security
provided by the lien created by this Indenture;
(viii) modify or alter the definition of the term "Requisite Cash
Collateral Amount"; or
(ix) result in a reduction, qualification or withdrawal of the
rating of any class of Notes.
Any supplemental indenture to be entered into in accordance
with this Section shall be deemed to affect all Outstanding Notes other than any
Class of Notes with respect to which an Opinion of Counsel for the Issuer is
addressed and delivered to the Trustee to the effect that the interests of the
Holders of Notes of such Class are not affected in any material respect by the
supplemental indenture.
It shall not be necessary for any Act of Noteholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof. The manner of obtaining such approvals shall be subject to such
reasonable requirements as the Trustee may prescribe.
(b) Promptly after the execution by the Issuer and the
Trustee of any supplemental indenture pursuant to this Section, the Trustee
shall mail to the Holders of the Notes to which such amendment or supplemental
indenture relates
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a notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In
executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, or in executing any amendment to any Trustee
Related Document, the Trustee shall be entitled to receive, and subject to
Sections 6.01 and 6.02 shall be fully protected in relying upon, an Officer's
Certificate and an Opinion of Counsel stating that the execution of such
supplemental indenture or amendment is authorized or permitted by this Indenture
or the Trustee Related Document, as the case may be. The Trustee may, but shall
not be obligated to, enter into any such supplemental indenture or amendment to
a Trustee Related Document that affects the Trustee's own rights, duties,
liabilities or immunities under this Indenture, such Trustee Related Document or
otherwise.
SECTION 9.04. Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Trustee, the Issuer and the Holders of the Notes shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.05. Conformity With Trust Indenture Act. Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article IX shall conform to the requirements of the Trust Indenture Act
as then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
SECTION 9.06. Reference in Notes to Supplemental
Indentures. Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and if required by the
Trustee shall, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new notes so modified as to conform, in the opinion of the Issuer, to any such
supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Trustee in exchange for Outstanding Notes.
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ARTICLE X
Redemption and Purchase of Notes
SECTION 10.01. Redemption.
(a) In the event that the Depositor pursuant to Section 5.1
of the Transfer and Servicing Agreement purchases the corpus of the Trust, the
Notes are subject to redemption in whole, but not in part, on the Monthly
Payment Date on which such repurchase occurs, for a purchase price equal to the
Redemption Price; provided, however, that the Issuer has available funds
sufficient to pay the Redemption Price. The Depositor, the Servicer or the
Issuer shall furnish the Rating Agencies notice of such redemption. If the Notes
are to be redeemed pursuant to this paragraph, the Servicer or the Issuer shall
furnish notice of such election to the Trustee not later than 25 days (or such
lesser number of days as shall be satisfactory to the Trustee) prior to the
Redemption Date, and the Issuer shall deposit, or cause to be deposited, into
the Note Distribution Account the Redemption Price of the Notes to be redeemed,
whereupon all such Notes shall be due and payable on the Redemption Date upon
the furnishing of a notice complying with Section 10.02 to each Holder of the
Notes.
(b) In the event that the assets of the Issuer are sold
pursuant to Section 9.1 of the Trust Agreement, the proceeds of such sale shall
be distributed as provided in Section 5.06. If amounts are to be paid to
Noteholders pursuant to this paragraph, the Servicer or the Issuer shall, to the
extent practicable, furnish notice of such event to the Trustee not later than
25 days (or such lesser number of days as shall be satisfactory to the Trustee)
prior to the Redemption Date whereupon all such amounts shall be payable on the
Redemption Date.
SECTION 10.02. Form of Redemption Notice.
(a) Notice of redemption under Section 10.01(a) shall be
given by the Trustee not less than five days prior to the applicable Redemption
Date by first-class mail, postage prepaid, mailed to each Holder of Notes, as of
the close of business on the Record Date with respect to the Payment Date
immediately preceding the applicable Redemption Date, at such Holder's address
appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
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(iii) the place where such Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency of the
Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.
(b) Prior notice of redemption under Section 10.01(b) is
not required to be given to Noteholders.
SECTION 10.03. Notes Payable on Redemption Date. The Notes
or portions thereof to be redeemed shall, following notice of redemption (if
any) as required by Section 10.02, on the Redemption Date, become due and
payable at the Redemption Price upon surrender thereof at the office or agency
specified pursuant Section 10.02(a)(iii) and (unless the Issuer shall default in
the payment of the Redemption Price) no interest shall accrue on the Redemption
Price for any period after the date to which accrued interest is calculated for
purposes of calculating the Redemption Price.
SECTION 10.04. Optional Purchase of Class A-5 Notes by
Depositor. The Depositor shall have the right to purchase all, but not less than
all, of the Class A-5 Notes, at a price equal to the Principal Balance thereof,
on any Monthly Payment Date. Interest payable on the Class A-5 Notes on such
Purchase Date shall be paid to the Holders of record on the related Record Date
in the ordinary manner. If the Depositor elects to purchase the Class A-5 Notes
as described in this paragraph, the Depositor shall furnish notice of such
election and the Purchase Date to the Trustee not less than 25 days (or such
lesser number of days as shall be satisfactory to the Trustee) prior to such
Purchase Date, and shall thereafter deposit, or cause to be deposited, into the
Note Distribution Account the purchase price of the Class A-5 Notes, whereupon
all Class A-5 Notes shall be subject to purchase on such Purchase Date upon the
furnishing of a notice complying with Section 10.05 to each Holder of Class A-5
Notes.
SECTION 10.05. Form of Purchase Notice. Notice of purchase
under Section 10.04 shall be given by the Trustee not less than five days prior
to the Purchase Date by first-class mail, postage prepaid, mailed to each Holder
of Class A-5 Notes, as of the close of business on the Record Date with respect
to the Payment Date immediately preceding the Purchase Date, at such Holder's
address appearing in the Note Register.
All notices of purchase shall state:
(i) the Purchase Date;
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(ii) the place where such Notes are to be surrendered for payment
of the purchase price (the "Place of Purchase," which shall be the office
or agency of the Issuer to be maintained as provided in Section 3.02);
and
(iii) that interest payable on the Class A-5 Notes on such
Purchase Date shall be paid to the Holders of record on the related
Record Date in the ordinary manner.
Notice of purchase of the Notes shall be given by the
Trustee in the name and at the expense of the Depositor. Failure to give notice
of purchase, or any defect therein, to any Holder of any Class A-5 Note shall
not impair or affect the validity of the purchase of any other Class A-5 Note.
SECTION 10.06. Class A-5 Notes to be Purchased on Purchase
Date.
(a) The Class A-5 Notes shall, following notice of purchase
as required by Section 10.05, be purchased on the Purchase Date, but solely from
the moneys deposited in the Note Distribution Account for such purpose, at the
purchase price therefor, such purchase price to be payable upon presentation and
surrender of the Class A-5 Notes to the Trustee at the Place of Purchase.
(b) All Class A-5 Notes must be surrendered for purchase on
the Purchase Date and, provided that funds are available and on hand with the
Trustee to pay the purchase price thereof, (1) the Class A-5 Notes shall be
"deemed purchased" on the Purchase Date, whether or not received by the Trustee
on such date, (2) interest on the Class A-5 Notes, whether or not such Class A-5
Notes are received by the Trustee, shall cease to accrue on the Purchase Date
and the former Holders of such Class A-5 Notes shall have no further interest or
rights in such Class A-5 Notes except that said former Holders shall be entitled
to payment of the purchase price thereof, exclusively from moneys in the Note
Distribution Account held by the Trustee for such payment, upon presentation of
such Class A-5 Notes to the Trustee at the Place of Purchase at or before 10:00
a.m., New York City time, on such Purchase Date or any Business Day thereafter,
(3) on and after the Purchase Date, the Trustee, the Note Registrar and each
Paying Agent shall no longer treat the former Holders of such Class A-5 Notes as
the Holders thereof except for purposes of such Holders' right to receive
payment of the purchase price of such Class A-5 Notes, and (4) on the Purchase
Date, the Trustee shall authenticate one or more new Class A-5 Notes, of
authorized denominations and in the aggregate principal amount of the Class A-5
Notes, in the name of the Depositor or any other Person or Persons designated by
the Depositor, as provided in and subject to the terms of this Indenture.
(c) Any Class A-5 Notes issued in lieu of Class A-5 Notes
purchased or otherwise deemed purchased pursuant to this Section 10.06 shall not
be canceled or the indebtedness represented thereby otherwise extinguished, it
being the intention of the Issuer and the Depositor that such Class A-5 Notes
remain
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outstanding and represent a continuing indebtedness of the Issuer, whether such
Class A-5 Notes are held by the Depositor or any other purchaser.
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ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Trustee (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is necessary
to enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any property or securities with
the Trustee that is to be made the basis for the release of any property
subject to the lien created by this Indenture, the Issuer shall, in
addition to any obligation imposed in Section 11.01(a) or elsewhere in
this Indenture, furnish to the Trustee (1) an Officer's Certificate
certifying or stating the opinion of each person signing such certificate
as to the fair value (within 90 days of such deposit) to the Issuer of
the property or securities to be so deposited, (2) an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been
taken with respect to the recording and filing of this
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Indenture and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the first
priority lien and security interest in favor of the Trustee, for the
benefit of the Trustee, created by this Indenture in the property or
securities to be so deposited, and reciting the details of such action,
or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective, and (3)
evidence that the Rating Agency Condition has been satisfied.
(ii) Whenever the Issuer is required to furnish to the Trustee an
Officer's Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (i) above, the Issuer shall
also deliver to the Trustee an Independent Certificate as to the same
matters, if the fair value to the Issuer of the property to be so
deposited and of all other such property made the basis of any such
withdrawal or release since the commencement of the then-current fiscal
year of the Issuer, as set forth in the certificates delivered pursuant
to clause (i) above and this clause (ii), is 10% or more of the
Outstanding Amount of the Notes, but such a certificate need not be
furnished with respect to any property so deposited, if the fair value
thereof to the Issuer as set forth in the related Officer's Certificate
is less than $25,000 or less than one percent of the Outstanding Amount
of the Notes.
(iii) Other than with respect to any release described in clause
(A) or (B) of Section 11.01(b)(v), whenever any property or securities
are to be released from the lien created by this Indenture, the Issuer
shall also furnish to the Trustee an Officer's Certificate certifying or
stating the opinion of each person signing such certificate as to the
fair value (within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person
the proposed release will not impair the security created by this
Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Trustee an
Officer's Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (iii) above, the Issuer
shall also furnish to the Trustee an Independent Certificate as to the
same matters if the fair value of the property or securities and of all
other property or securities (other than property described in clauses
(A) or (B) of Section 11.01(b)(v)) released from the lien created by this
Indenture since the commencement of the then current fiscal year, as set
forth in the certificates required by clause (iii) above and this clause
(iv), equals 10% or more of the Outstanding Amount of the Notes, but such
certificate need not be furnished in the case of any release of property
or securities if the fair value thereof as set forth in the related
Officer's Certificate is less than $25,000 or less than one percent of
the then Outstanding Amount of the Notes.
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(v) Notwithstanding any other provision of this Section, the
Issuer may, without compliance with the other provisions of this Section,
(A) collect, liquidate, sell or otherwise dispose of Contracts as and to
the extent permitted or required by the Related Documents (including as
provided in Section 3.1 of the Transfer and Servicing Agreement) and
(B) make cash payments out of the Trust Accounts as and to the extent
permitted or required by the Related Documents.
SECTION 11.02. Form of Documents Delivered to Trustee. In
any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Depositor or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the
Depositor or the Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions
or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
Whenever in this Indenture, in connection with any
application or certificate or report to the Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
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SECTION 11.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any
such instrument or writing may be proved in any manner that the Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the Holder
of every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 11.04. Notices, etc., to Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to or filed with:
(a) the Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to the Trustee at its Corporate Trust
Office, facsimile number: (212) 250-6439, or
(b) the Issuer by the Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to the Issuer addressed to: Capita
Equipment Receivables Trust 1997-1, in care of The Bank of New York, as
Owner Trustee, 101 Barclay Street, Floor 12 East, New York, New York
10286, Attention: Corporate Trust Administration--Asset Backed Unit,
facsimile number: (212) 815-5544, or at
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any other address previously furnished in writing to the Trustee by the
Issuer. The Issuer shall promptly transmit any notice received by it
from the Noteholders to the Trustee.
Notices required to be given to the Rating Agencies by the
Issuer, the Trustee or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested to (i) in the
case of Moody's, at the following address: Moody's Investors Service, Inc., ABS
Monitoring Department, 99 Church Street, New York, New York 10007, (ii) in the
case of Standard & Poor's, at the following address: Standard & Poor's Ratings
Services, 26 Broadway (10th Floor), New York, New York 10004, Attention of Asset
Backed Surveillance Department (iii) in the case of Fitch, at the following
address: Fitch Investors Services, L.P., One State Street Plaza, New York, New
York 10004 (and, in the case of any Servicer's Certificate, with an additional
copy to Fitch Investors Services, L.P., 1201 East 7th Street, Powell, Wyoming
82435) and (iv) in the case of Duff & Phelps, at the following address: Duff &
Phelps Credit Rating Co., 17 State Street, New York, New York 10004; or as to
each of the foregoing, at such other address as shall be designated by written
notice to the other parties.
SECTION 11.05. Notices to Noteholders; Waiver. Where this
Indenture provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid, to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner,
such notice may be waived in writing by any Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Noteholders shall be filed with
the Trustee but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail
service as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event of Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
reasonable manner of giving such notice as shall be satisfactory to the Trustee
shall be deemed to be a sufficient giving of such notice.
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Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute a
Default or Event of Default.
SECTION 11.06. Limitation of Liability. It is expressly
understood and agreed by the parties hereto that (a) this Agreement is executed
and delivered by The Bank of New York, not individually or personally but solely
as Owner Trustee of the Issuer under the Trust Agreement, in the exercise of the
powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by The Bank of New York but is made and intended for the purpose for
binding only the Issuer, (c) nothing herein contained shall be construed as
creating any liability on The Bank of New York, individually or personally, to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties to this Agreement and
by any person claiming by, through or under them and (d) under no circumstances
shall The Bank of New York be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Issuer under this Agreement or any related documents.
SECTION 11.07. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.
The provisions of TIA 'SS''SS' 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
herein unless expressly excluded by this Indenture) are a part of and govern
this Indenture, whether or not physically contained herein.
SECTION 11.08. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns. All covenants and
agreements in this Indenture and the Notes by the Issuer shall bind its
successors and assigns, whether so expressed or not.
All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 11.10. Severability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality, and
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enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this
Indenture or in the Notes, express or implied, shall give to any Person, other
than the parties hereto and their successors hereunder, and the Noteholders, and
any other party secured hereunder, and any other Person with an ownership
interest in any part of the Trust Estate, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 11.12. Legal Holidays. In any case where the date
on which any payment is due shall not be a Business Day, then (notwithstanding
any other provision of the Notes or this Indenture) payment need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date on which nominally due, and no interest
shall accrue for the period from and after any such nominal date.
SECTION 11.13. Governing Law. THIS INDENTURE SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 11.14. Counterparts. This Indenture may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is
subject to recording in any appropriate public recording offices, such recording
is to be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Trustee or any other counsel reasonably
acceptable to the Trustee) to the effect that such recording is necessary either
for the protection of the Noteholders or any other Person secured hereunder or
for the enforcement of any right or remedy granted to the Trustee under this
Indenture.
SECTION 11.16. No Petition. The Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Depositor or the
Issuer, or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, this
Indenture or any of the Related Documents; provided, however, that nothing
herein shall prohibit the Trustee from filing proofs of claim or otherwise
participating in any such proceedings instituted by any other Person.
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SECTION 11.17. Inspection. The Issuer agrees that, on
reasonable prior notice, it will permit any representative of the Trustee,
during the Issuer's normal business hours, to examine all the books of account,
records, reports, and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with the
Issuer's officers, employees, and independent certified public accountants, all
at such reasonable times and as often as may be reasonably requested. The
Trustee shall and shall cause its representatives to hold in confidence all such
information (including the identity of the Obligors on the Contracts) except to
the extent disclosure may be required by 'SS' 9-208 of the UCC or by any other
applicable law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Trustee may reasonably determine
that such disclosure is consistent with its obligations hereunder.
Notwithstanding anything herein to the contrary, the
foregoing shall not be construed to prohibit (i) disclosure of any and all
information that is or becomes publicly known, or information obtained by the
Trustee from sources other than the Issuer (unless the Trustee knows such
sources are precluded by contract or law from disclosing such information), (ii)
disclosure of any and all information (A) if required to do so by any applicable
statute, law, rule or regulation, (B) to any government agency or regulatory
body having or claiming authority to regulate or oversee any respects of the
Trustee's business or that of its Affiliates, (C) pursuant to any subpoena,
civil investigative demand or similar demand or request of any court, regulatory
authority, arbitrator or arbitration to which the Trustee or an affiliate or an
officer, director, employer or shareholder thereof is a party, (D) in any
preliminary or final offering circular, registration statement or contract or
other document pertaining to the transactions contemplated by this Agreement or
the Related Documents approved in advance by the Servicer or the Issuer or (E)
to any affiliate, independent or internal auditor, agent, employee or attorney
of the Trustee having a need to know the same, provided that the Trustee advises
such recipient of the confidential nature of the information being disclosed, or
(iii) any other disclosure authorized by the Servicer or the Issuer.
SECTION 11.18. Amendment of Cash Collateral Account
Agreement.
(a) The Trustee may consent to amendments to the Cash
Collateral Account Agreement without the consent of any of the Noteholders,
(i) to cure any ambiguity, (ii) to correct or supplement any provisions in the
Cash Collateral Account Agreement that may be inconsistent with any other
provision therein, or (iii) to make any other provisions with respect to matters
or questions arising under the Cash Collateral Account Agreement that are not
inconsistent with the provisions thereof; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of the Noteholders.
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(b) The Trustee may also consent to amendments to the Cash
Collateral Account Agreement with the consent of a Note Majority for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Cash Collateral Account Agreement; provided, however, that no
such amendment shall (a) reduce the amount available in the Cash Collateral
Account for the payment of interest or principal to Noteholders, or (b) reduce
the aforesaid percentage required to consent to any such amendment, without the
consent of the Holders of all Notes then Outstanding and affected thereby; and
provided, further, that no such amendment shall be effective unless and until
the Rating Agency Condition has been satisfied.
(c) Promptly after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such to each
Noteholder.
(d) It shall not be necessary for the consent of
Noteholders pursuant to Section 11.18(b) to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 11.19. Amendment of Class A-5 Swap Agreement.
(a) The Issuer and the Trustee may consent to amendments to
the Class A-5 Swap Agreement without the consent of any of the Class A-5
Noteholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions in the Class A-5 Swap Agreement that may be inconsistent with any
other provision therein, or (iii) to make any other provisions with respect to
matters or questions arising under the Class A-5 Swap Agreement that are not
inconsistent with the provisions thereof; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of the Class A-5 Noteholders.
(b) The Issuer and the Trustee may also consent to
amendments to the Class A-5 Swap Agreement with the consent of a Class A-5 Note
Majority for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Class A-5 Swap Agreement; provided,
however, that no such amendment shall (a) reduce the amount payable under the
Class A-5 Swap Agreement to be used to pay interest on Class A-5 Notes, or
(b) reduce the aforesaid percentage required to consent to any such amendment,
without the consent of the Holders of all Class A-5 Notes then Outstanding; and
provided, further, that no such amendment shall be effective unless and until
the Rating Agency Condition has been satisfied.
(c) Promptly after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such to each
Class A-5 Noteholder.
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(d) It shall not be necessary for the consent of Class A-5
Noteholders pursuant to Section 11.19(b) to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 11.20. Events of Default and Termination Events
Under Class A-5 Swap Agreement. If the Owner Trustee has actual knowledge of any
Event of Default or Termination Event specified in Section 5 of the Class A-5
Swap Agreement, the Owner Trustee shall provide prompt notice of such event to
the Trustee, together with a request for instructions as to the course of action
to be taken under Sections 5 and 6 of the Class A-5 Swap Agreement, including
any notices to be provided and whether (and, if so, when) an Early Termination
Date (as defined in the Class A-5 Swap Agreement) should be designated. The
Trustee (acting at the direction of a majority of the Principal Balance of the
Class A-5 Notes) shall give the Owner Trustee such instructions. Prior to
receiving such instructions from the Trustee, the Owner Trustee shall not
designate an Early Termination Date and shall not otherwise terminate the Class
A-5 Swap Agreement.
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IN WITNESS WHEREOF, the Issuer and the Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
CAPITA EQUIPMENT RECEIVABLES
TRUST 1997-1
By THE BANK OF NEW YORK,
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement
By /s/ Cheryl L. Laser
-----------------------------------
Name: Cheryl L. Laser
Title: Assistant Vice President
BANKERS TRUST COMPANY,
not in its individual capacity but solely
as Trustee
By /s/ Alfia Monastra
-----------------------------------
Name: Alfia Monastra
Title: Trust officer
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TRUST AGREEMENT
BETWEEN
ANTIGUA FUNDING CORPORATION
AND
THE BANK OF NEW YORK
OWNER TRUSTEE
-------------------------------------------------
DATED AS OF NOVEMBER 1, 1997
-------------------------------------------------
CAPITA EQUIPMENT RECEIVABLES TRUST 1997-1
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS ......................................................................... 1
Section 1.1. Definitions ...................................................................... 1
Section 1.2. Usage of Terms ................................................................... 3
Section 1.3. Calculations ..................................................................... 3
Section 1.4. Section References ............................................................... 3
Section 1.5. Action by or Consent of Equity Certificateholder ................................. 4
ARTICLE II CREATION OF TRUST ................................................................... 4
Section 2.1. Creation of Trust ................................................................ 4
Section 2.2. Office ........................................................................... 4
Section 2.3. Purposes and Powers .............................................................. 4
Section 2.4. Trust May Consolidate or Merge Only on Certain Terms ............................. 5
Section 2.5. Appointment of Owner Trustee ..................................................... 5
Section 2.6. Initial Capital Contribution of Trust Estate ..................................... 6
Section 2.7. Declaration of Trust ............................................................. 6
Section 2.8. Liability of the Depositor ....................................................... 6
Section 2.9. Representations and Warranties of the Depositor .................................. 6
Section 2.10. Covenants of the Depositor ....................................................... 8
Section 2.11. Covenants of the Equity Certificateholder ......................................... 11
ARTICLE III THE EQUITY CERTIFICATE ............................................................... 12
Section 3.1. Initial Ownership ................................................................. 12
Section 3.2. The Equity Certificate; Authorized Denomination ................................... 12
Section 3.3. Authentication of Equity Certificate .............................................. 12
Section 3.4. Registration of Transfer and Exchange of Equity Certificate ....................... 13
Section 3.5. Mutilated, Destroyed, Lost or Stolen Equity Certificate ........................... 14
Section 3.6. Persons Deemed Owners ............................................................. 15
Section 3.7. Access to List of Equity Certificateholder's Name
and Address ....................................................................... 15
Section 3.8. Maintenance of Office or Agency ................................................... 15
Section 3.9. Appointment of Paying Agent ....................................................... 15
ARTICLE IV ACTIONS BY OWNER TRUSTEE ............................................................. 16
Section 4.1. Restriction on Power of the Equity Certificateholder .............................. 16
Section 4.2. Prior Notice to the Equity Certificateholder with Respect to Certain Matters ...... 16
Section 4.3. Action by the Owner Trustee with Respect to Bankruptcy ............................ 17
Section 4.4. Restrictions on Equity Certificateholder's Power .................................. 17
Section 4.5. Authority of the Depositor ........................................................ 17
Section 4.6. Income Tax Characterization ....................................................... 17
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ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES ........................................... 18
Section 5.1. Trust Accounts .................................................................... 18
Section 5.2. Application of Funds in the Equity Certificate Distribution Account ............... 19
Section 5.3. Method of Payment ................................................................. 20
Section 5.4. No Segregation of Monies; No Interest ............................................. 21
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE ................................................ 21
Section 6.1. General Authority ................................................................. 21
Section 6.2. General Duties .................................................................... 21
Section 6.3. Action upon Instruction ........................................................... 21
Section 6.4. No Duties Except as Specified in this Agreement, in Related Documents or
in Instructions ................................................................... 23
Section 6.5. No Action Except under Specified Documents or Instructions ........................ 23
Section 6.6. Restrictions ...................................................................... 23
Section 6.7. Covenant of the Owner Trustee ..................................................... 23
ARTICLE VII CONCERNING THE OWNER TRUSTEE ......................................................... 24
Section 7.1. Acceptance of Trust and Duties .................................................... 24
Section 7.2. Furnishing of Documents ........................................................... 25
Section 7.3. Representations and Warranties .................................................... 25
Section 7.4. Reliance; Advice of Counsel ....................................................... 26
Section 7.5. Not Acting in Individual Capacity ................................................. 27
Section 7.6. Owner Trustee Not Liable for Equity Certificate, Notes or Contracts ............... 27
Section 7.7. Owner Trustee May Own Notes ....................................................... 27
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE ........................................................ 28
Section 8.1. Owner Trustee's Fees and Expenses ................................................. 28
Section 8.2. Indemnification ................................................................... 28
Section 8.3. Non-recourse Obligations .......................................................... 28
ARTICLE IX TERMINATION .......................................................................... 29
Section 9.1. Termination of the Trust .......................................................... 29
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES ............................... 31
Section 10.1. Eligibility Requirements for Owner Trustee ........................................ 31
Section 10.2. Resignation or Removal of Owner Trustee ........................................... 31
Section 10.3. Successor Owner Trustee ........................................................... 32
Section 10.4. Merger or Consolidation of Owner Trustee .......................................... 32
Section 10.5. Appointment of Co-Trustee or Separate Trustee ..................................... 33
ARTICLE XI MISCELLANEOUS PROVISIONS ............................................................. 34
Section 11.1. Amendment ......................................................................... 34
Section 11.2. GOVERNING LAW ..................................................................... 36
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Section 11.3. Severability of Provisions ........................................................ 36
Section 11.4. Equity Certificate Nonassessable and Fully Paid ................................... 36
Section 11.5. Third-Party Beneficiaries ......................................................... 36
Section 11.6. Counterparts ...................................................................... 36
Section 11.7. Notices ........................................................................... 36
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EXHIBITS
Exhibit A -- Form of Equity Certificate
Exhibit B -- Form of Representation Letter
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THIS TRUST AGREEMENT, dated as of November 1, 1997, is
made between Antigua Funding Corporation, a Delaware corporation (the
"Depositor"), and The Bank of New York, a New York banking corporation, as Owner
Trustee (in such capacity, the "Owner Trustee").
In consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. All terms defined in the
Indenture and the Transfer and Servicing Agreement (each as defined below) shall
have the same meaning in this Agreement. Whenever capitalized and used in this
Agreement, the following words and phrases, unless otherwise specified, shall
have the following meanings:
Act: The meaning assigned in Section 3.4(g).
Agreement or "this Agreement": This Trust Agreement, all
amendments and supplements thereto and all exhibits and schedules to any of the
foregoing.
Applicants: The meaning assigned in Section 3.7.
Authentication Agent: The Bank of New York, or its
successor in interest, and any successor authentication agent appointed as
provided in this Agreement.
Benefit Plan: The meaning assigned in Section 3.4(f).
Certificate Register and Certificate Registrar: The
register maintained and the registrar appointed pursuant to Section 3.4(a).
Code: The Internal Revenue Code of 1986, as amended.
Corporate Trust Office: The principal office of the Owner
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the Closing Date is located at 101 Barclay Street,
Floor 12 East, New York, New York 10286, Attention: Corporate Trust
Administration--Asset Backed Unit; the telecopy number for the Corporate Trust
Office on the date of the execution of this Agreement is (212) 815-5544.
Depositor: Antigua Funding Corporation, a Delaware
corporation, in its capacity as depositor hereunder.
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Equity Certificate Distribution Account: The account
designated as the Equity Certificate Distribution Account in, and which is
established and maintained pursuant to, Section 5.1.
Equity Certificate: The certificate executed by the Owner
Trustee evidencing the entire beneficial ownership interest in the Trust,
substantially in the form attached hereto as Exhibit A.
Equity Certificateholder: A Person in whose name the
Equity Certificate is registered in the Certificate Register.
ERISA: The meaning assigned to such term in Section
3.4(f).
Expenses: The meaning assigned to such term in Section
8.2.
Indemnified Parties: The meaning assigned to such term in
Section 8.2.
Indenture: The Indenture, dated as of November 1, 1997,
between the Trust and Bankers Trust Company, as Indenture Trustee, as the same
may be amended and supplemented from time to time.
N.Y. UCC: The UCC as in effect in the State of New York
from time to time.
Owner Trustee: The Bank of New York, or its successor in
interest, acting not individually but solely as trustee, and any successor
trustee appointed as provided in this Agreement.
Paying Agent: Any paying agent or co-paying agent
appointed pursuant to Section 3.9, which initially shall be the Owner Trustee.
Record Date: With respect to any Payment Date or
Redemption Date, the close of business on the last Business Day immediately
preceding such Payment Date or Redemption Date.
Related Documents: This Agreement, the Notes, the Equity
Certificate, the Transfer and Servicing Agreement, the Indenture, the Purchase
Agreements, the Cash Collateral Account Agreement, the Class A-5 Swap Agreement,
the Depository Agreements, and the underwriting agreements among the Depositor,
TCC and the underwriters of the Notes. The Related Documents executed by any
party are referred to herein as "such party's Related Documents," "its Related
Documents" or by a similar expression.
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Responsible Officer: When used with respect to the Owner
Trustee, the President, any Vice President or any Trust Officer, or any other
officer or employee having similar functions.
Transfer and Servicing Agreement: The Transfer and
Servicing Agreement, dated as of November 1, 1997, among the Trust, the
Depositor, TCC, in its individual capacity and as Servicer, and Bankers Trust
Company, as trustee under the Indenture, as the same may be amended and
supplemented from time to time.
Trust: The trust created by this Agreement, the estate of
which consists of the Trust Assets.
Trust Accounts: The Equity Certificate Distribution
Account, and such other accounts as may be established in the name of the Trust
pursuant to the Indenture or the Transfer and Servicing Agreement.
Trust Assets: The property and proceeds of every
description conveyed pursuant to Section 2.6 hereof and Section 2.1 of the
Transfer and Servicing Agreement, together with the Trust Accounts (including
all Eligible Investments therein and all proceeds therefrom) and the right to
withdraw funds from the Cash Collateral Account pursuant to Section 8.06 of the
Indenture.
Section 1.2. Usage of Terms. With respect to all terms
used in this Agreement, the singular includes the plural and the plural the
singular; words importing any gender include the other genders; references to
"writing" include printing, typing, lithography, and other means of reproducing
words in a visible form; references to agreements and other contractual
instruments include all subsequent amendments thereto or changes therein entered
into in accordance with their respective terms and not prohibited by this
Agreement; references to Persons include their permitted successors and assigns;
and the terms "include" or "including" mean "include without limitation" or
"including without limitation."
Section 1.3. Calculations. All calculations of the amount
of interest accrued on the Equity Certificate shall be made on the basis of a
360-day year consisting of twelve 30-day months.
Section 1.4. Section References. All references to
Articles, Sections, paragraphs, subsections, exhibits and schedules shall be to
such portions of this Agreement unless otherwise specified.
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Section 1.5. Action by or Consent of Equity
Certificateholder. Whenever any provision of this Agreement refers to action to
be taken, or consented to, by Equity Certificateholder, such provision shall be
deemed to refer to the Equity Certificateholder of record as of the Record Date
immediately preceding the date on which such action is to be taken, or consent
given, by the Equity Certificateholder.
Section 1.6. No Recourse. The Equity Certificateholder by
accepting the Equity Certificate acknowledges that the Certificateholder's
Equity Certificate represents beneficial interest in the Trust only and does not
represent an interest in or obligation of the Depositor, the Servicer, the Owner
Trustee, the Indenture Trustee or any Affiliate of any of the foregoing and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated in this Agreement, the Equity Certificate or
the Related Documents.
ARTICLE II
CREATION OF TRUST
Section 2.1. Creation of Trust. There is hereby formed a
trust to be known as "Capita Equipment Receivables Trust 1997-1."
Section 2.2. Office. The office of the Trust shall be in
care of the Owner Trustee at the Corporate Trust Office or at such other address
as the Owner Trustee may designate by written notice to the Equity
Certificateholder, the Depositor, and the Indenture Trustee.
Section 2.3. Purposes and Powers. The purpose of the Trust
is, and the Trust shall have the power and authority, to engage in the following
activities:
(i) to issue the Notes pursuant to the Indenture and to
sell the Notes in the manner directed by the Depositor;
(ii) to issue the Equity Certificate to or upon the order
of the Depositor, pursuant to this Agreement;
(iii) with the proceeds of the sale of the Notes, to pay
the organizational, start-up and transactional expenses of the Trust (if
and to the extent not paid by the Depositor pursuant to Section 2.6);
and to acquire the Contracts and the other items conveyed pursuant to
the Transfer and Servicing Agreement;
(v) to assign, grant, transfer, pledge, mortgage and
convey any or all of the Trust Assets to the Indenture Trustee pursuant
to the Indenture for the benefit of the Noteholders;
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(vi) to hold, manage and distribute to the Equity
Certificateholder any portion of the Trust Assets released from the Lien
of, and remitted to the Trust pursuant to, the Indenture and to
distribute to the Equity Certificateholder any other portion of the
Trust Assets in the manner prescribed by the Transfer and Servicing
Agreement, the Indenture and the Cash Collateral Account Agreement;
(vii) to enter into and perform its obligations under the
Transfer and Servicing Agreement and the other Related Documents to
which it is to be a party;
(viii) to engage in those activities, including entering
into agreements, that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected
therewith; and
(ix) subject to compliance with the Related Documents, to
engage in such other activities as may be required in connection with
conservation of the Trust Assets and the making of distributions to the
Equity Certificateholder and the Noteholders.
The Owner Trustee is hereby authorized to engage in the foregoing activities on
behalf of the Trust. The Depositor is hereby authorized to execute any
registration statements, applications or other documents on behalf of the Trust
that are necessary, suitable or convenient to accomplish the foregoing. The
Owner Trustee, on behalf of the Trust, shall not engage in any activity other
than in connection with the foregoing or other than as required or expressly
authorized by the terms of this Agreement or the Related Documents.
Section 2.4. Trust May Consolidate or Merge Only on
Certain Terms.
(a) The Trust shall not consolidate or merge with or into
any other Person, unless the conditions specified in Section 3.10(a) of the
Indenture have been satisfied.
(b) The Trust shall not convey or transfer all or
substantially all of its properties or assets, including those included in the
Trust Estate under the Indenture, to any Person (except as expressly permitted
by the Indenture or the Transfer and Servicing Agreement), unless the conditions
specified in Section 3.10(b) of the Indenture have been satisfied.
Section 2.5. Appointment of Owner Trustee. The Depositor
hereby appoints the Owner Trustee as trustee of the Trust effective as of the
date hereof, to have all the rights, powers and duties set forth herein, and the
Owner Trustee hereby accepts such appointment.
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Section 2.6. Initial Capital Contribution of Trust Estate.
The Depositor hereby sells, assigns, transfers, conveys and sets over to the
Owner Trustee, as of the date hereof, the sum of $10. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Trust Assets and
shall be deposited in the Equity Certificate Distribution Account. The Depositor
shall pay organizational expenses of the Trust as they may arise or shall, upon
the request of the Owner Trustee, promptly reimburse the Owner Trustee for any
such expenses paid by the Owner Trustee.
Section 2.7. Declaration of Trust. The Owner Trustee
hereby declares that it will hold the Trust Assets in trust upon and subject to
the conditions set forth herein for the use and benefit of the Equity
Certificateholder, subject to the interests and rights in the Trust Assets
granted to other Persons by the Related Documents.
Section 2.8. Liability of the Depositor.
(a) The Depositor shall be liable directly to indemnify
each injured party for all losses, claims, damages, liabilities and expenses of
the Trust, to the extent not paid out of the Trust Assets, provided, however,
that the Depositor shall not be liable for any losses incurred by the Equity
Certificateholder in the capacity of an investor in the Equity Certificate or a
Note Owner in the capacity of an investor in the Notes; provided, further, that
the Depositor shall not be liable to indemnify any injured party if such party
has agreed that its recourse against the Trust for any obligation or liability
of the Trust to such party shall be limited to the assets of the Trust. In
addition, any third party creditors of the Trust (other than in connection with
the obligations described in the provisos to the preceding sentence for which
the Depositor shall not be liable) shall be deemed third party beneficiaries of
this paragraph.
(b) The Depositor, other than to the extent set forth in
paragraph (a), shall not have any personal liability for any liability or
obligation of the Trust or by reason of any action taken by the parties to this
Agreement pursuant to any provisions of this Agreement or any Related Document.
Section 2.9. Representations and Warranties of the
Depositor. By execution of this Agreement, the Depositor makes the following
representations and warranties on which the Owner Trustee relies in accepting
the Trust Assets in trust and issuing the Notes and the Equity Certificate.
Unless otherwise specified, such representations and warranties speak as of the
Closing Date.
(a) Organization and Good Standing. It has been duly organized
and is validly existing as a corporation in good standing under the laws
of the State of Delaware, with power and authority to own its properties
and to conduct its business as such properties are currently owned and
as such
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business is currently conducted and is proposed to be conducted pursuant
to this Agreement and the Related Documents.
(b) Due Qualification. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of its property, the conduct of its business and the performance
of its obligations under this Agreement and the Related Documents
requires such qualification.
(c) Power and Authority. It has the power and authority to
execute and deliver this Agreement and its Related Documents and to
perform its obligations pursuant thereto (including but not limited to
the transfer of the Contracts to the Trust); and the execution, delivery
and performance of this Agreement and its Related Documents have been
duly authorized by all necessary corporate action.
(d) No Consent Required. No consent, license, approval or
authorization of, or registration or declaration with, any Person or any
governmental authority, bureau or agency is required to be obtained by
the Depositor in connection with the execution, delivery or performance
of this Agreement and the Depositor's Related Documents, except for such
as have been obtained, effected or made.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and its Related Documents and the
fulfillment of its obligations under this Agreement and its Related
Documents will not conflict with, result in any breach of any of the
terms and provisions of or constitute (with or without notice, lapse of
time or both) a default under, its certificate of incorporation or
by-laws, or any indenture, agreement, mortgage, deed of trust or other
instrument to which it is a party or by which it is bound, or result in
the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed
of trust or other instrument, or violate any law, order, rule or
regulation applicable to it of any court or of any Federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over it or any of its properties.
(f) No Proceedings. There are no proceedings or investigations
pending or, to its knowledge, threatened against it before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over it or its properties
(A) asserting the invalidity of this Agreement or any of the Related
Documents, (B) seeking to prevent the issuance of the Equity Certificate
or the Notes or the consummation of any of the transactions contemplated
by this Agreement or any of the Related Documents, (C) seeking any
determination or ruling that might materially and adversely affect its
performance of its obligations under,
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or the validity or enforceability of, this Agreement or any of the
Related Documents, or (D) seeking to adversely affect the Federal income
tax or other Federal, state or local tax attributes of the Trust, the
Notes or the Equity Certificate.
(g) Place of Business. The principal executive offices of the
Depositor are in Morristown, New Jersey, and the offices where the
Depositor keeps its records concerning the Contracts and related
documents are in Morristown, New Jersey.
(h) Not an Investment Company. The Depositor is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, or is exempt from all provisions of such Act.
(i) Binding Obligations. This Agreement and each of the
Depositor's Related Documents constitutes the legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except (A) as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect, affecting the
enforcement of creditors' rights in general, and (B as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
Section 2.10. Covenants of the Depositor. The Depositor
agrees and covenants for the benefit of each Note Owner, each Equity
Certificateholder and the Owner Trustee, during the term of this Agreement, and
to the fullest extent permitted by applicable law, that:
(a) Other Indebtedness. It shall not create, incur or suffer to
exist any indebtedness or engage in any business, except, in each case,
as permitted by its certificate of incorporation and the Related
Documents. In no event will the Depositor create, incur or suffer to
exist any indebtedness if such indebtedness would cause any Rating
Agency to reduce or withdraw its ratings of any of the Notes.
(b) Non-petition. It shall not, for any reason, institute
proceedings for itself or the Trust to be adjudicated a bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against itself or the Trust, or file a petition seeking or
consenting to reorganization or relief under any applicable Federal or
state law relating to the bankruptcy of itself or the Trust, or consent
to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of itself or the Trust or a
substantial part of its assets or the property of the Trust or cause or
permit itself or the Trust to make any assignment for the benefit of
creditors, or admit in writing its inability or the inability of the
Trust to pay its debts
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generally as they become due, or declare or effect a moratorium on the
debt of itself or the Trust or take any action in furtherance of any
such action.
(c) Other Parties. It shall obtain from each counterparty to each
Related Document to which it or the Trust is a party and each other
agreement entered into on or after the date hereof to which it or the
Trust is a party, an agreement by each such counterparty that such
counterparty shall not institute against, or join any other Person in
instituting against, it or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar
proceedings under the laws of the United States or any state of the
United States.
(d) No Liens. Except for the conveyances as provided hereunder or
in the Related Documents, the Depositor will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer
to exist any Lien on, any Contract or any other Trust Assets or any
Equipment (except as created by the related Contract), whether now
existing or hereafter created, and the Depositor shall defend the right,
title and interest of the Trust in, to and under the Contracts and the
other Trust Assets, whether now existing or hereafter created, and such
rights, remedies, powers and privileges, against all claims of third
parties claiming through or under the Depositor; the Depositor will
immediately notify the Trustee of the existence of any Lien on any
Contract or Equipment (except as created by the related Contract); and
the Depositor shall defend the right, title and interest of the Trust
in, to and under the Contracts and the other Trust Assets, whether now
existing or hereafter created, against all claims of third parties
claiming through or under the Depositor.
(e) Enforcement of Purchase Agreements. The Depositor agrees to
take all action necessary and appropriate to enforce its rights and
claims under the Purchase Agreements.
(f) Separate Business. The Depositor:
(i) will (A) maintain and prepare financial
reports, financial statements, books and records and bank
accounts separate from those of its Affiliates and any other
person or entity and (B) not permit any Affiliate or any other
person or entity independent access to its bank accounts;
(ii) will not commingle its funds and other assets
with those of any Affiliate, any guarantor of any of the
obligations of the Depositor (each, a "Guarantor"), any Affiliate
of any Guarantor or any other person or entity;
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(iii) will conduct its own business in its own name
and will hold all of its assets in its own name;
(iv) will remain solvent and pay its debts and
liabilities (including employment and overhead expenses) from its
assets as the same become due;
(v) will do all things necessary to observe
corporate formalities, and preserve its existence as a
single-purpose, bankruptcy-remote entity in accordance with the
standards of the Rating Agencies providing ratings on the Notes,
as such standards are in effect on the date of issuance of the
Notes and the Equity Certificate;
(vi) will enter into transactions with Affiliates
only if each such transaction is commercially reasonable and on
substantially similar terms as a transaction that would be
entered into on an arm's length basis with a person or entity
other than an Affiliate of the Depositor;
(vii) will pay the salaries of its own employees
from its own funds and maintain a sufficient number of employees
in light of its contemplated business operations;
(viii) will compensate each of its consultants and
agents from its own funds for services provided to it and pay
from its own assets all obligations of any kind incurred;
(ix) will not guarantee, become obligated for, or
hold itself or its credit out to be responsible for, or available
to satisfy, the debts or obligations of any other person or
entity or the decisions or actions respecting the daily business
or affairs of any other person or entity (except as contemplated
by its certificate of incorporation and the Related Documents);
(x) will not (i) acquire obligations or securities
of any Affiliate or any of the stockholders of the Depositor or
(ii) buy or hold any evidence of indebtedness issued by any other
person or entity, other than cash, investment-grade securities,
the Contracts and other pools of receivables similar to the
Contracts;
(xi) will allocate fairly and reasonably and pay
from its own funds the cost of (i) any overhead expenses
(including paying for any office space) shared with any Affiliate
of the Depositor and (ii) any services (such as asset management,
legal and accounting) that are provided jointly to the Depositor
and one or more of its Affiliates;
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(xii) will maintain and utilize separate
stationery, invoices and checks bearing its own name and allocate
separate office space (which may be a separately identified area
in office space shared with one or more Affiliates of the
Depositor) and maintain a separate sign in the office directory
of the building in which the Depositor maintains its principal
place of business;
(xiii) will not make any loans or advances to, or
pledge its assets for the benefit of, any other person or entity,
including, without limitation, any Affiliate or Guarantor or any
Affiliate of any Guarantor (except as contemplated by its
certificate of incorporation and the Related Documents);
(xiv) will be, and at all times will hold itself
out to the public as, a legal entity separate and distinct from
any other person or entity;
(xv) will, in the event that any authorized officer
knows of any misunderstanding regarding the separate identity of
the Depositor, correct such misunderstanding;
(xvi) will not identify itself or any of its
Affiliates as a division or part of any other entity; and
(xvii) will maintain adequate capital for the
normal obligations reasonably foreseeable in a business of its
size and character and in light of its contemplated business
operations.
(g) Purchase Agreement Notices. The Depositor (i) shall promptly
give the Owner Trustee and the Indenture Trustee copies of any notices,
reports or certificates given or delivered to the Depositor under the
Purchase Agreements, (ii) shall not without the consents, approvals and
opinions, if any, required by Section 11.1, as if Section 11.1 related
to each Purchase Agreement rather than this Agreement, enter into any
amendment, supplement or other modification to, or waiver of any
provision of, any Purchase Agreement and (iii) shall not permit the
removal of a Contract from the operation of the related Purchase
Agreement unless there is a corresponding right or obligation of the
Depositor to remove such Contract from the Trust.
Section 2.11. Covenants of the Equity Certificateholder.
The Equity Certificateholder by becoming an Equity Certificateholder agrees:
(a) to be bound by the terms and conditions of the Equity
Certificate of which such Holder is the beneficial owner and of this
Agreement, including any supplements or amendments hereto and to perform
the obligations of a Holder as set forth therein or herein, in all
respects as if it
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were a signatory hereto. This undertaking is made for the benefit of
the Trust, the Owner Trustee and all future Equity Certificateholders.
(b) not to, for any reason, institute proceedings for the Trust
or the Depositor to be adjudicated a bankrupt or insolvent, or consent
to the institution of bankruptcy or insolvency proceedings against the
Trust or the Depositor, or file a petition seeking or consenting to
reorganization or relief under any applicable Federal or state law
relating to bankruptcy, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official)
of the Trust or the Depositor or a substantial part of its property, or
cause or permit the Trust or the Depositor to make any assignment for
the benefit of its creditors, or admit in writing its inability to pay
its debts generally as they become due, or declare or effect a
moratorium on its debt or take any action in furtherance of any such
action.
ARTICLE III
THE EQUITY CERTIFICATE
Section 3.1. Initial Ownership. Upon the formation of the
Trust by the contribution by the Depositor pursuant to Section 2.6 and until the
issuance of the Equity Certificate, the Depositor shall be the sole beneficiary
of the Trust.
Section 3.2. The Equity Certificate; Authorized
Denomination.
(a) The Equity Certificate shall be executed on behalf of
the Trust by the Owner Trustee by manual or facsimile signature of any
authorized signatory of the Owner Trustee having such authority. A Certificate
bearing the manual or facsimile signatures of individual(s) who were, at the
time when such signature(s) were affixed, authorized to sign on behalf of the
Owner Trustee shall be validly issued and entitled to the benefits of this
Agreement, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Equity
Certificate.
(b) On the Closing Date, one Equity Certificate shall be
issued to the Depositor. There shall at all times be a single Equity
Certificate.
Section 3.3. Authentication of Equity Certificate. The
Equity Certificate shall not entitle the holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Equity Certificate a certificate of authentication substantially in the form set
forth in Exhibit A, executed by the Owner Trustee or the Authentication Agent,
by manual or facsimile signature; such authentication shall constitute
conclusive evidence that such Certificate shall have been duly authenticated and
delivered hereunder. The Owner Trustee hereby initially appoints itself as
Authentication Agent. The Equity Certificate shall be dated the date of its
authentication.
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Section 3.4. Registration of Transfer and Exchange of
Equity Certificate.
(a) The Certificate Registrar shall maintain, or cause to be
maintained, at the office or agency maintained pursuant to Section 3.8,
a Certificate Register in which, subject to such reasonable regulations
as it may prescribe, the Owner Trustee shall provide for the
registration of the Equity Certificate and of transfers and exchanges of
the Equity Certificate as provided in this Agreement. The Owner Trustee
hereby initially appoints itself Certificate Registrar for the purpose
of registering the Equity Certificate and transfers and exchanges of the
Equity Certificate as provided in this Agreement.
(b) The Depositor may transfer the Equity Certificate only in
connection with the sale of all or substantially all of its assets, in a
manner permitted by its certificate of incorporation and its Related
Documents.
(c) If the registration of transfer of an Equity Certificate is
permitted by subsection (b), then, upon surrender for registration of
transfer of such Equity Certificate at the office or agency maintained
pursuant to Section 3.8, the Owner Trustee shall execute, authenticate
and deliver (or shall cause the Authentication Agent to authenticate and
deliver), in the name of the designated transferee or transferees, one
or more new Equity Certificates in authorized denominations and
aggregate proportion of the Equity Certificate Balance dated the date of
authentication by the Owner Trustee or any Authentication Agent. If the
registration of transfer of an Equity Certificate is permitted by
subsection (b), then at the option of the Holder, such Equity
Certificate may be exchanged for other Equity Certificates in authorized
denominations of a like aggregate amount upon surrender of the Equity
Certificates to be exchanged at the office or agency maintained pursuant
to Section 3.8.
(d) An Equity Certificate presented or surrendered for
registration of transfer or exchange must be accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by the Holder or his attorney duly
authorized in writing. Each Equity Certificate properly surrendered for
registration of transfer or exchange shall be canceled and subsequently
disposed of by the Owner Trustee in accordance with its customary
practice.
(e) No service charge shall be made for any registration of
transfer or exchange of the Equity Certificate, but the Owner Trustee or
the Certificate Registrar may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection
with any transfer or exchange of Equity Certificate.
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(f) No Equity Certificate may be acquired by or for the account
of (i) an employee benefit plan (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
that is subject to the provisions of Title 1 of ERISA, (ii) a plan
described in Section 4975(e)(1) of the Code, or (iii) any entity whose
underlying assets include plan assets by reason of a plan's investment
in the entity (each, a "Benefit Plan"). By accepting and holding an
Equity Certificate, the Holder thereof shall be deemed to have
represented and warranted that it is not a Benefit Plan.
(g) In addition to the restrictions of subsection (b) above, no
transfer of an Equity Certificate may be made by the Depositor or any
other Person unless such transfer is exempt from the registration
requirements of the Securities Act of 1933 (the "Act"), as amended, and
any applicable state securities laws or is made in accordance with the
Act and such state laws. In the event that any such transfer is to be
made, (A) the Depositor may require a written Opinion of Counsel
acceptable to and in form and substance satisfactory to the Depositor
that such transfer may be made pursuant to an exemption, describing the
applicable exemption and the basis therefor, from the Act and such state
laws or is being made pursuant to the Act and such state laws, which
Opinion of Counsel shall not be an expense of the Owner Trustee or the
Depositor, and (B) the Owner Trustee shall require the transferee to
execute a representation letter substantially in the form of Exhibit B
attached hereto, which representation letter shall not be an expense of
the Owner Trustee or the Depositor. The Equity Certificateholder
desiring to effect such transfer shall, and does hereby agree to,
indemnify the Owner Trustee, the Depositor and the Certificate Registrar
against any liability that may result if the transfer is not so exempt
or is not made in accordance with the Act and such state laws.
Section 3.5. Mutilated, Destroyed, Lost or Stolen Equity
Certificate. If (a) any mutilated Equity Certificate is surrendered to the
Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of an Equity Certificate, and
(b) there is delivered to the Certificate Registrar and the Owner Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Certificate Registrar or the Owner Trustee
that such Equity Certificate has been acquired by a bona fide purchaser, the
Owner Trustee on behalf of the Trust shall execute, authenticate and deliver (or
the Authentication Agent shall authenticate and deliver), in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Equity Certificate, a new
Equity Certificate. In connection with the issuance of any new Equity
Certificate under this Section 3.5, the Owner Trustee may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Owner Trustee and the Certificate Registrar) connected
therewith. Any duplicate Equity Certificate issued pursuant to this Section 3.5
shall constitute conclusive evidence of ownership of a beneficial interest in
the Trust, as if originally issued,
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whether or not the lost, stolen or destroyed Equity Certificate shall be found
at any time.
Section 3.6. Persons Deemed Owners. Prior to due
presentation of an Equity Certificate for registration of transfer, the Owner
Trustee, the Certificate Registrar and any agent of the Owner Trustee or the
Certificate Registrar may treat the person in whose name any Equity Certificate
is registered as the owner of such Equity Certificate for the purpose of
receiving distributions pursuant to Section 5.2, and for all other purposes
whatsoever, and neither the Owner Trustee, the Certificate Registrar nor any
agent of the Owner Trustee or the Certificate Registrar shall be affected by any
notice to the contrary.
Section 3.7. Access to List of Equity Certificateholder's
Name and Address. The Owner Trustee shall furnish or cause to be furnished to
the Servicer, within 15 days after receipt by the Owner Trustee of a written
request therefor, the name and address of the Equity Certificateholder as of the
most recent Record Date for payment of distributions to the Equity
Certificateholder. An Equity Certificateholder, by receiving and holding an
Equity Certificate, agrees that none of the Servicer or the Owner Trustee, nor
any agent thereof, shall be held accountable by reason of the disclosure of any
such information as to the name and address of the Equity Certificateholder
under this Agreement, regardless of the source from which such information was
derived.
Section 3.8. Maintenance of Office or Agency. The Owner
Trustee shall maintain in the Borough of Manhattan, The City of New York, an
office or offices or agency or agencies where the Equity Certificate may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Owner Trustee in respect of the Equity Certificate and
the Related Documents may be served. The Owner Trustee initially designates its
Corporate Trust Office as its principal corporate trust office for such
purposes. The Owner Trustee shall give prompt written notice to the Depositor
and to the Equity Certificateholder of any change in the location of the
Certificate Register or any such office of agency.
Section 3.9. Appointment of Paying Agent. The Paying Agent
shall make distributions to the Equity Certificateholder from the Equity
Certificate Distribution Account pursuant to Section 5.2, and shall report the
amounts of such distributions to the Owner Trustee. Any Paying Agent shall have
the revocable power to withdraw funds from the Equity Certificate Distribution
Account for the purpose of making the distributions referred to above. The Owner
Trustee may revoke such power and remove the Paying Agent if the Owner Trustee
determines in its sole discretion that the Paying Agent shall have failed to
perform its obligations under this Agreement in any material respect. The Paying
Agent shall initially be the Owner Trustee, and any co-paying agent (which shall
be a bank or trust company) chosen by the Owner Trustee. Any Paying Agent chosen
by the Owner Trustee shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Owner Trustee. The Owner Trustee shall cause each Paying
Agent
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appointed by the Owner Trustee to execute and deliver to the Owner Trustee
an instrument in which such Paying Agent shall agree with the Owner Trustee that
as Paying Agent, such successor Paying Agent or additional Paying Agent will
hold all sums, if any, held by it for payment to the Equity Certificateholder in
trust for the benefit of the Equity Certificateholder entitled thereto until
such sums shall be paid to such Equity Certificateholder. The Paying Agent shall
return all unclaimed funds to the Owner Trustee, and upon removal of a Paying
Agent, such Paying Agent shall also return all funds in its possession to the
Owner Trustee. The provisions of Sections 7.1, 7.3, 7.4 and 8.2 shall apply to
the Owner Trustee also in its role as Paying Agent for so long as the Owner
Trustee shall act as Paying Agent and, to the extent applicable, to any other
Paying Agent appointed hereunder. Any reference in this Agreement to the Paying
Agent shall include any co-paying agent unless the context requires otherwise.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
Section 4.1. Restriction on Power of the Equity
Certificateholder. No Equity Certificateholder shall have any right to vote or
in any manner otherwise control the operation and management of the Trust except
as expressly provided in this Agreement.
Section 4.2. Prior Notice to the Equity Certificateholder
with Respect to Certain Matters. The Owner Trustee shall not take any of the
following actions, unless at least 30 days before the taking of such action, the
Owner Trustee shall have notified the Equity Certificateholder in writing of the
proposed action and the Owner Trustee shall not have received written notice
prior to the 30th day after such notice is given that the Equity
Certificateholder has withheld consent or provided alternative direction:
(a) the amendment of this Agreement pursuant to Section 11.1,
unless such amendment would not, as evidenced by an Opinion of Counsel,
materially and adversely affect the interests of the Equity
Certificateholder;
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required, as
provided in Section 9.02 of the Indenture, unless such amendment would
not, as evidenced by an Opinion of Counsel, materially and adversely
affect the interests of the Equity Certificateholder;
(c) the amendment of any other Related Document pursuant to the
provisions thereof, unless such amendment would not, as evidenced by an
Opinion of Counsel, materially and adversely affect the interests of the
Equity Certificateholder; or
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(d) the initiation or settlement of any material claim,
proceeding or lawsuit affecting the Trust or the Trust Assets.
Section 4.3. Action by the Owner Trustee with Respect to
Bankruptcy. The Owner Trustee shall not have the power to commence a proceeding
in bankruptcy relating to the Depositor or the Trust without the prior approval
of the Indenture Trustee and the delivery to the Owner Trustee by the Indenture
Trustee of a certificate certifying that the Indenture Trustee reasonably
believes that the Depositor or the Trust, as appropriate, is insolvent.
Section 4.4. Restrictions on Equity Certificateholder's
Power. The Equity Certificateholder shall not have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action, or proceeding in equity or at law upon or under or with respect to this
Agreement or any Related Document, unless (i) the Equity Certificateholder has
provided instruction to the Owner Trustee pursuant to Section 6.3, (ii) the
Equity Certificateholder shall have given to the Owner Trustee a written notice
of default under or breach of this Agreement or any Related Document and of the
continuance thereof, as provided in this Agreement, and (iii) the Equity
Certificateholder shall have made written request upon the Owner Trustee to
institute such action, suit or proceeding in its own name as Owner Trustee under
this Agreement and shall have offered to the Owner Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Owner Trustee, for 30 days after its
receipt of such notice, request, and offer of indemnity, shall have neglected or
refused to institute any such action, suit, or proceeding, and during such
30-day period no request or waiver inconsistent with such written request has
been given to the Owner Trustee pursuant to and in compliance with this Section
or Section 6.3; it being understood and intended, and being expressly covenanted
by the Equity Certificateholder with the Owner Trustee, that the Equity
Certificateholder shall not have any right in any manner whatever by virtue or
by availing itself or themselves of any provisions of this Agreement to enforce
any right under this Agreement, except in the manner provided in this Agreement.
For the protection and enforcement of the provisions of this Section 4.4, the
Equity Certificateholder and the Owner Trustee shall be entitled to such relief
as can be given either at law or in equity.
Section 4.5. Authority of the Depositor. The Depositor
shall have the authority to sign, on behalf of the Owner Trust, all filings with
the Securities and Exchange Commission made by the Owner Trust.
Section 4.6. Income Tax Characterization. The Depositor
has structured this Agreement, the Indenture, the Cash Collateral Account
Agreement, the Class A-5 Swap Agreement and the Notes with the intention that
the Notes will qualify under applicable federal, state, local and foreign tax
law as indebtedness of the Depositor secured by the Contracts. The Depositor and
the Owner Trust agree to treat and to take no action inconsistent with the
treatment of the Notes as such
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indebtedness for purposes of federal, state, local and foreign income or
franchise taxes and any other tax imposed on or measured by income.
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.1. Trust Accounts.
(a) The Owner Trustee shall establish and maintain the
Equity Certificate Distribution Account in the name of the Trust for the benefit
of the Equity Certificateholder. The Equity Certificate Distribution Account
shall be an Eligible Account and initially shall be a segregated trust account
established with the Owner Trustee and maintained with the Owner Trustee.
(b) The Owner Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Equity Certificate
Distribution Account and in all proceeds thereof. If, at any time, the Equity
Certificate Distribution Account ceases to be an Eligible Account, the Owner
Trustee shall within 5 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency may consent) establish a new
Equity Certificate Distribution Account, as an Eligible Account and shall
transfer any cash and investments to such new Equity Certificate Distribution
Account.
(c) All amounts held in the Equity Certificate
Distribution Account shall, to the extent permitted by applicable laws, rules
and regulations, be invested by the Owner Trustee at the direction of the
Depositor in Eligible Investments that mature not later than one Business Day
prior to the immediately following Payment Date. Such investments shall not be
sold or disposed of prior to their maturity. All investments of funds in the
Equity Certificate Distribution Account shall be held by a financial institution
in accordance with the following requirements:
(i) all Eligible Investments shall be held in an
account with such financial institution in the name of the Owner
Trustee;
(ii) with respect to securities held in such account,
such securities must be:
(A) certificated securities (as such term is
used in N.Y. UCC 'SS' 8-102(a)(4)), securities deemed to
be certificated securities under applicable regulations
of the United States government, or uncertificated
securities issued by an issuer organized under the laws
of the State of New York or the State of Delaware;
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(B) either (I) in the possession of such
financial institution, (II) in the possession of a
clearing corporation (as such term is used in N.Y. UCC
'SS' 8-102(a)(5)), registered in the name of such
clearing corporation or its nominee, not endorsed for
collection or surrender or any other purpose not
involving transfer, not containing any evidence of a
right or interest inconsistent with the Owner Trustee's
security interest therein, and held by such clearing
corporation in an account of such financial institution,
(III) held in an account of a financial institution with
the Federal Reserve Bank of New York, or (IV) in the case
of uncertificated securities, issued in the name of such
financial institution; and
(C) identified, by book entry or otherwise,
as held for the account of, or pledged to, the Owner
Trustee on the records of such financial institution, and
such financial institution shall have sent the Owner
Trustee a confirmation thereof;
(iii) with respect to repurchase obligations held in a
Certificate Account, each such repurchase obligation must be identified
by such financial institution, by book entry or otherwise, as held for
the account of, or pledged to, the Owner Trustee on the records of such
financial institution, and the related securities must be held in
accordance with the requirements of clause (ii) above;
(iv) with respect to any Eligible Investments other than
securities and repurchase agreements, such Eligible Investments must be
held in a manner acceptable to the Owner Trustee.
Subject to the other provisions hereof, the Owner Trustee
shall have sole control over each such investment and the income thereon, and
any certificate or other instrument evidencing any such investment, if any,
shall be delivered directly to the Owner Trustee or its agent, together with
each document of transfer, if any, necessary to transfer title to such
investment to the Owner Trustee in a manner which complies with this Section
5.1. All interest, dividends, gains upon sale and other income from, or earnings
on investment of, funds in the Equity Certificate Distribution Account shall be
deposited in the Equity Certificate Distribution Account and distributed on the
next Payment Date pursuant to Section 5.2(d). The Depositor shall deposit in the
Equity Certificate Distribution Account an amount equal to any net loss on such
investments immediately as realized.
Section 5.2. Application of Funds in the Equity
Certificate Distribution Account.
(a) On each Payment Date the Paying Agent will, based on
the information contained in the Servicer's Certificate delivered on the related
Determination Date pursuant to Section 3.9 of the Transfer and Servicing
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Agreement, distribute to Equity Certificateholder, to the extent of the funds
available, amounts deposited in the Equity Certificate Distribution Account
pursuant to Section 8.03 of the Indenture or pursuant to Section 2.02 of the
Cash Collateral Account Agreement with respect to such Payment Date.
(b) On the Payment Date following the date on which
amounts received in respect of the Depositor's exercise of its option to
purchase the corpus of the Trust pursuant to Section 5.1(a) of the Transfer and
Servicing Agreement are deposited in the Equity Certificate Distribution Account
pursuant to Section 8.03 of the Indenture, the Paying Agent will distribute such
funds to the Equity Certificate.
(c) On the Payment Date following each date on which the
Indenture Trustee makes payments of money or property in respect of liquidation
of the Trust Assets pursuant to Section 5.06 of the Indenture and deposits funds
received in connection with such liquidation in the Equity Certificate
Distribution Account, the Paying Agent will distribute such funds.
(d) On each Payment Date, the Paying Agent shall send to
the Equity Certificateholder the statement required pursuant to Section 7.05(b)
of the Indenture.
(e) In the event that any withholding tax is imposed on
the Trust's payment to the Equity Certificateholder, such tax shall reduce the
amount otherwise distributable to such Equity Certificateholder in accordance
with this Section. The Paying Agent is hereby authorized and directed to retain
from amounts otherwise distributable to the Equity Certificateholder sufficient
funds for the payment of any tax that is legally owed by the Trust (but such
authorization shall not prevent the Owner Trustee from contesting any such tax
in appropriate proceedings, and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings). The amount of any withholding tax
imposed with respect to an Equity Certificateholder shall be treated as cash
distributed to such Equity Certificateholder at the time it is withheld by the
Trust and remitted to the appropriate taxing authority. If there is a
possibility that withholding tax is payable with respect to a distribution (such
as a distribution to a non-U.S. Certificateholder), the Owner Trustee may in its
sole discretion withhold such amounts in accordance with this paragraph (e). In
the event that the Equity Certificateholder wishes to apply for a refund of any
such withholding tax, the Owner Trustee shall reasonably cooperate with such
Equity Certificateholder in making such claim so long as such Equity
Certificateholder agrees to reimburse the Owner Trustee for any out-of-pocket
expenses incurred.
Section 5.3. Method of Payment. Subject to Section 9.1(d),
distributions of funds required to be made to the Equity Certificateholder on
any Payment Date shall be made to the Equity Certificateholder of record on the
preceding Record Date either (i) by wire transfer, in immediately available
funds, to the account of such Holder at a bank or other entity having
appropriate facilities therefor, provided that
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such Certificateholder shall have provided to the Certificate Registrar
appropriate written instructions at least five Business Days prior to such
Payment Date, or (ii) if not, by check mailed to such Certificateholder at the
address of such Holder appearing in the Certificate Register.
Section 5.4. No Segregation of Monies; No Interest.
Subject to Section 5.1, monies received by the Owner Trustee hereunder need not
be segregated in any manner except to the extent required by law or by the
Indenture and may be deposited under such general conditions as may be
prescribed by law, and the Owner Trustee shall not be liable for any interest
thereon.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.1. General Authority. The Owner Trustee is
authorized and directed to execute and deliver the Related Documents to which
the Trust is to be a party and each certificate or other document attached as an
exhibit to or contemplated by the Trust's Related Documents and any amendment
thereto, and on behalf of the Trust, to direct the Indenture Trustee to
authenticate and deliver to or upon the order of the Depositor the Class A-1
Notes in the aggregate principal amount of $272,500,000, the Class A-2 Notes in
the aggregate principal amount of $252,000,000, the Class A-3 Notes in the
aggregate principal amount of $153,000,000, the Class A-4 Notes in the aggregate
principal amount of $261,210,000, the Class A-5 Notes in the aggregate principal
amount of $105,000,000, the Class B Notes in the aggregate principal amount of
$68,820,000 and the Class C Notes in the aggregate principal amount of
$34,410,000. In addition to the foregoing, the Owner Trustee is authorized, but
shall not be obligated, to take all actions required of the Trust pursuant to
the Related Documents.
Section 6.2. General Duties. It shall be the duty of the
Owner Trustee to discharge (or cause to be discharged through such agents as
shall be appointed) all of its responsibilities pursuant to the terms of this
Agreement and the Related Documents and to administer the Trust in the interest
of the Equity Certificateholder, subject to the Related Documents and in
accordance with the provisions of this Agreement.
Section 6.3. Action upon Instruction.
(a) Subject to Article IV, the Equity Certificateholder
shall have the exclusive right to direct the actions of the Owner Trustee in the
management of the Trust, so long as such instructions are not inconsistent with
the express terms set forth herein or in any Related Document, and provided that
if the Indenture Trustee, the Noteholders or the Servicer are entitled, pursuant
to the Indenture or the Transfer and Servicing Agreement, to direct any actions
of the Owner Trustee, such directions shall control. The Equity
Certificateholder may not instruct the
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Owner Trustee in a manner inconsistent with this Agreement or the Related
Documents.
(b) The Owner Trustee shall not be required to take any
action hereunder or under any Related Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is contrary to the terms hereof or of any Related Document or is otherwise
contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Related Document, and the Owner Trustee has not received
instructions with respect to such matter from the Indenture Trustee, the
Noteholders or the Servicer pursuant to the terms of the Indenture or the
Transfer and Servicing Agreement, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the Equity
Certificateholder requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction received from the Equity Certificateholder, the
Owner Trustee shall not be liable on account of such action to any Person. If
the Owner Trustee shall not have received appropriate instruction within 15 days
of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Related Documents, as it shall deem to
be in the best interests of the Equity Certificateholder, and shall have no
liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to
the application of any provision of this Agreement or any Related Document or
any such provision is ambiguous as to its application, or is, or appears to be,
in conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Equity
Certificateholder requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 15 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Related
Documents, as it shall deem to be in the best interests of the Equity
Certificateholder, and shall have no liability to any Person for such action or
inaction.
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Section 6.4. No Duties Except as Specified in this
Agreement, in Related Documents or in Instructions. The Owner Trustee shall not
have any duty or obligation to manage, make any payment with respect to,
register, record, sell, dispose of, or otherwise deal with the Trust Assets, or
to otherwise take or refrain from taking any action under, or in connection
with, any document contemplated hereby to which the Trust is a party, except as
expressly provided by the terms of this Agreement (including as provided in
Section 6.2), in any Related Document or in any written instruction received by
the Owner Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any Related Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for preparing,
monitoring or filing any financing or continuation statements in any public
office at any time or otherwise to perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement or
any Related Document; however, the Owner Trustee will from time to time execute
and deliver such financing or continuation statements as are prepared by the
Servicer and delivered to the Owner Trustee for its execution on behalf of the
Trust for the purpose of perfecting or maintaining the perfection of such a
security interest or lien or effecting such a recording. The Owner Trustee
nevertheless agrees that it will, at its own cost and expense (and not at the
expense of the Trust), promptly take all action as may be necessary to discharge
any liens on any part of the Trust Assets that are attributable to claims
against the Owner Trustee in its individual capacity that are not related to the
ownership or the administration of the Trust Assets.
Section 6.5. No Action Except under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Trust Assets except (i) in accordance
with the powers granted to and the authority conferred upon the Owner Trustee
pursuant to this Agreement, (ii) in accordance with the Related Documents and
(iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 6.3.
Section 6.6. Restrictions. The Owner Trustee shall not
take any action (a) that is inconsistent with the purposes of the Trust set
forth in Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee,
would result in the Trust becoming taxable as a corporation for Federal income
tax purposes. The Equity Certificateholder may not direct the Owner Trustee to
take action that would violate the provisions of this Section.
Section 6.7. Covenant of the Owner Trustee. The Owner
Trustee agrees that it will not, for any reason, institute proceedings for the
Trust or the Depositor to be adjudicated a bankrupt or insolvent, or consent to
the institution of bankruptcy or insolvency proceedings against the Trust or the
Depositor, or file a petition seeking or consenting to reorganization or relief
under any applicable Federal or state law relating to bankruptcy, or consent to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the
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Trust or the Depositor or a substantial part of its property, or cause or permit
the Trust or the Depositor to make any assignment for the benefit of its
creditors, or admit in writing its inability to pay its debts generally as they
become due, or declare or effect a moratorium on its debt or take any action in
furtherance of any such action.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.1. Acceptance of Trust and Duties. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this Agreement.
The Owner Trustee also agrees to disburse all monies actually received by it
constituting part of the Trust Assets upon the terms of the Related Documents
and this Agreement. The Owner Trustee shall not be answerable or accountable
hereunder or under any Related Document under any circumstances, except (i) for
its own willful misconduct or gross negligence, (ii) in the case of the
inaccuracy of any representation or warranty contained in Section 7.3, (iii) for
liabilities arising from the failure of the Owner Trustee to perform obligations
expressly undertaken by it in the last sentence of Section 6.4, or (iv) for
taxes, fees or other charges on, based on or measured by, any fees, commissions
or compensation received by the Owner Trustee in connection with any of the
transactions contemplated by this Agreement or any Related Document. In
particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Owner
Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the instructions of the Equity Certificateholder pursuant to
Section 6.3;
(c) no provision of this Agreement or any Related Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers
hereunder or under any Related Document if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under this Agreement or any of the
Related Documents, including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect
of the validity or sufficiency of this Agreement (except as provided in
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Section 7.3) or for the due execution hereof by the Depositor or for the
form, character, genuineness, sufficiency, value or validity of any of
the Trust Assets or for or in respect of the validity or sufficiency of
the Related Documents, other than the certificate of authentication on
the Equity Certificate, and the Owner Trustee shall in no event assume
or incur any liability, duty, or obligation to the Indenture Trustee,
any Noteholder or to the Equity Certificateholder, other than as
expressly provided for herein and in the Related Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Indenture Trustee or the Servicer under any of the
Related Documents or otherwise and the Owner Trustee shall have no
obligation or liability to perform the obligations of the Trust under
this Agreement or the Related Documents that are required to be
performed by the Indenture Trustee under the Indenture or by the
Servicer under the Transfer and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any Related Document, at
the request, order or direction of the Equity Certificateholder, unless
the Equity Certificateholder has offered to the Owner Trustee security
or indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or
thereby. The right of the Owner Trustee to perform any discretionary act
enumerated in this Agreement or in any Related Document shall not be
construed as a duty, and the Owner Trustee shall not be answerable for
other than its gross negligence or willful misconduct in the performance
of any such act.
Section 7.2. Furnishing of Documents. The Owner Trustee
shall furnish to the Equity Certificateholder promptly upon receipt of a written
request therefor, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments furnished
to the Owner Trustee under the Related Documents unless the Equity
Certificateholder has previously received such items.
Section 7.3. Representations and Warranties. The Owner
Trustee hereby represents and warrants to the Depositor and the Equity
Certificateholder that:
(a) It is a banking corporation duly organized and validly
existing in good standing under the laws of the State of New York. It
has all requisite corporate power and authority and all franchises,
grants, authorizations, consents, orders and approvals from all
governmental authorities necessary
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to execute, deliver and perform its obligations under this Agreement and
each Related Document to which the Trust is a party.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement and each Related Document
to which the Trust is a party, and this Agreement and each such Related
Document will be executed and delivered by one of its officers who is
duly authorized to execute and deliver this Agreement and such Related
Document on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement and each Related Document to which the Trust is a party, nor
the consummation by it of the transactions contemplated hereby or
thereby nor compliance by it with any of the terms or provisions hereof
or thereof will contravene any Federal or New York law, governmental
rule or regulation governing the banking or trust powers of the Owner
Trustee or any judgment or order binding on it, or constitute any
default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by
which any of its properties may be bound or result in the creation or
imposition of any lien, charge or encumbrance on the Trust Assets
resulting from actions by or claims against the Owner Trustee
individually which are unrelated to this Agreement or the Related
Documents.
Section 7.4. Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone
in acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond, or other document or paper believed
by it to be genuine and believed by it to be signed by the proper party or
parties. The Owner Trustee may accept a certified copy of a resolution of the
board of directors or other governing body of any corporate party as conclusive
evidence that such resolution has been duly adopted by such body and that the
same is in full force and effect. As to any fact or matter the method of the
determination of which is not specifically prescribed herein, the Owner Trustee
may for all purposes hereof rely on a certificate, signed by the president or
any vice president or by the treasurer or other authorized officers of the
relevant party, as to such fact or matter, and such certificate shall constitute
full protection to the Owner Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts
hereunder and in the performance of its duties and obligations under this
Agreement or the Related Documents, the Owner Trustee (i) may act directly or
through its agents or attorneys pursuant to agreements entered into with any of
them, and the Owner Trustee shall not be liable for the conduct or misconduct of
such agents or attorneys if such agents or attorneys shall have been selected by
the Owner Trustee with reasonable care, and
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(ii) may consult with counsel, accountants and other skilled persons to be
selected with reasonable care and employed by it. The Owner Trustee shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the written opinion or advice of any such counsel, accountants or other
such persons and not contrary to this Agreement or any Related Document.
Section 7.5. Not Acting in Individual Capacity. Except as
provided in this Article VII, in accepting the trusts hereby created The Bank of
New York acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Related Document shall
look only to the Trust Assets for payment or satisfaction thereof.
Section 7.6. Owner Trustee Not Liable for Equity
Certificate, Notes or Contracts. The recitals contained herein, in the Equity
Certificate (other than the signature and counter-signature of the Owner Trustee
on the Equity Certificate) and in the Notes (other than the signature or
counter-signature of the Owner Trustee on the Notes) shall be taken as the
statements of the Depositor, and the Owner Trustee assumes no responsibility for
the correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Agreement, of any Related Document or of the
Equity Certificate (other than the signature and counter-signature of the Owner
Trustee on the Equity Certificate) or the Notes (other than the signature or
counter-signature of the Owner Trustee on the Notes), or of any Contract or
related documents. The Owner Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Contract, or the perfection and priority of any security interest created by
any Contract in any Equipment or the maintenance of any such perfection and
priority of any security interest created by any Contract in any Equipment, or
for or with respect to the sufficiency of the Trust Assets or its ability to
generate the payments to be distributed to the Equity Certificateholder under
this Agreement or the Noteholders under the Indenture, including, without
limitation: the existence, condition and ownership of any Equipment; the
existence and enforceability of any insurance thereon; the existence and
contents of any Contract or any computer or other record thereof; the validity
of the assignment of any Contract to the Trust or of any intervening assignment;
the completeness of any Contract; the performance or enforcement of any
Contract; the compliance by the Depositor or the Servicer with any warranty or
representation made under any Related Document or in any related document or the
accuracy of any such warranty or representation or any action of the Indenture
Trustee or the Servicer taken in the name of the Owner Trustee.
Section 7.7. Owner Trustee May Own Notes. The Owner
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may deal with the Depositor, the Indenture Trustee and the Servicer
in banking or other transactions with the same rights as it would have if it
were not Owner Trustee.
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ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
Section 8.1. Owner Trustee's Fees and Expenses. The
Servicer, pursuant to the Transfer and Servicing Agreement, has covenanted and
agreed to pay to the Owner Trustee, and the Owner Trustee shall be entitled to,
certain annual fees and to reimbursement for all ordinary and reasonable
out-of-pocket expenses incurred or made by it in the performance of its duties
under this Agreement, including the reasonable compensation, expenses and
disbursements of such agents, representatives, experts and counsel as the Owner
Trustee may employ in connection with the exercise and performance of its rights
and its duties hereunder; provided, however, that the Owner Trustee shall only
be entitled to reimbursement for expenses hereunder to the extent such expenses
(i) are fees of outside counsel engaged by the Owner Trustee in respect of the
performance of its obligations hereunder or (ii) relate to the performance of
its obligations pursuant to Section 5.3.
Section 8.2. Indemnification. The Depositor shall be
liable as primary obligor for, and shall indemnify the Owner Trustee in its
individual capacity and its successors, assigns, agents and servants, and any
co-trustee (collectively, the "Indemnified Parties") from and against, any and
all liabilities, obligations, losses, damages, taxes, claims, actions and suits,
and any and all reasonable costs, expenses and disbursements (including
reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the Related Documents, the Trust Assets,
the administration of the Trust Assets or the action or inaction of the Owner
Trustee hereunder, except only that the Depositor shall not be liable for or
required to indemnify the Owner Trustee from and against Expenses arising or
resulting from any of the matters described in the third sentence of Section
7.1. The indemnities contained in this Section shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement.
Section 8.3. Non-recourse Obligations. Notwithstanding
anything in this Agreement or any Related Document, the Owner Trustee agrees in
its individual capacity and in its capacity as Owner Trustee for the Trust that
all obligations of the Trust to the Owner Trustee individually or as Owner
Trustee for the Trust shall be recourse to the Trust Assets only and
specifically shall not be recourse to the assets of any Equity
Certificateholder.
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ARTICLE IX
TERMINATION
Section 9.1. Termination of the Trust.
(a) The respective obligations and responsibilities of the
Depositor and the Owner Trustee created by this Agreement and the Trust created
by this Agreement shall terminate upon the earliest of (i) the maturity or other
liquidation of the last Contract (including the purchase by the Depositor at its
option of the corpus of the Trust as described in Section 5.1 of the Transfer
and Servicing Agreement or the liquidation of the Trust Assets pursuant to
Section 5.06 of the Indenture) and the subsequent distribution of amounts in
respect of such Contracts as provided in the Related Documents, (ii) the
circumstances described in subsection (b) below, or (iii) the payment to
Noteholders of all amounts required to be paid to them pursuant to the
Indenture, the payment to the Equity Certificateholder of all amounts required
to be paid to them pursuant to this Agreement and the payment to the Cash
Collateral Account Lenders and the Depositor of all amounts due under the Cash
Collateral Account Agreement; provided, however, that in no event shall the
trust created by this Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living on the date of this
Agreement of Rose Kennedy of the Commonwealth of Massachusetts; and provided,
further, that the rights to compensation and indemnification under Sections 8.1
and 8.2, respectively, shall survive the termination of the Trust. In any case,
there shall be delivered to the Owner Trustee, the Indenture Trustee and the
Rating Agencies an Opinion of Counsel that all applicable preference periods
under Federal, state and local bankruptcy, insolvency and similar laws have
expired with respect to the payments pursuant to clause (iii). The Servicer
shall promptly notify the Owner Trustee of any prospective termination pursuant
to this Section 9.1. The bankruptcy, liquidation, dissolution, termination,
resignation, expulsion, withdrawal, death or incapacity of any Equity
Certificateholder shall not (x) operate to terminate this Agreement or the
Trust, nor (y) entitle such Equity Certificateholder's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of all or any part of the Trust or Trust Assets
nor (z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) In the event of
(i) the commencement of an involuntary case in respect of
the Depositor under the Federal bankruptcy laws, as now or hereinafter
in effect, or another present or future Federal or state bankruptcy,
insolvency or similar law and such case is not dismissed within 60 days;
(ii) the entry of a decree or order for relief by a court
or regulatory authority having jurisdiction in respect of the Depositor
in an involuntary case under the Federal bankruptcy laws, as now or
hereafter in
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effect, or another present or future Federal or state bankruptcy,
insolvency or similar law, or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of
the Depositor or of any substantial part of its property, or ordering
the winding up or liquidation of the affairs of the Depositor; or
(iii) the commencement by the Depositor of a voluntary
case under the Federal bankruptcy laws, as now or hereafter in effect,
or any other present or future Federal or state bankruptcy, insolvency
or similar law, or the consent by the Depositor to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Depositor or of
any substantial part of its property, or the making by the Depositor of
an assignment for the benefit of creditors, or the failure by the
Depositor generally to pay its debts as such debts become due, or the
taking of corporate action by the Depositor in furtherance of any of the
foregoing;
then, after the Indenture Trustee, as required by Section 5.04 of the Indenture,
has foreclosed upon its security interest in the Trust Estate granted pursuant
to the Indenture, the respective obligations and responsibilities of the
Depositor, the Equity Certificateholder and the Owner Trustee created by this
Agreement and the Trust created by this Agreement shall terminate. The Equity
Certificateholder on the date of such termination shall thereupon be entitled to
receive distributions directly from the Indenture Trustee in the manner and
order of priority specified in Section 5.06 of the Indenture.
(c) Except as provided in Section 9.1(a), neither the
Depositor nor the Equity Certificateholder shall be entitled to revoke or
terminate the Trust.
(d) Within five Business Days of receipt of notice of
termination of the Trust given by the Servicer pursuant to Section 9.1(a) hereof
or Section 5.1(b) of the Transfer and Servicing Agreement, the Owner Trustee
shall mail written notice to the Equity Certificateholder specifying (i) the
Payment Date upon which final payment of the Equity Certificate shall be made
upon presentation and surrender of the Equity Certificate at the office of the
Paying Agent therein specified, (ii) the amount of any such final payment, and
(iii) that the Record Date otherwise applicable to such Payment Date is not
applicable, payments being made only upon presentation and surrender of the
Equity Certificate at the office of the Paying Agent therein specified. The
Owner Trustee shall give such notice to the Certificate Registrar at the time
such notice is given to Equity Certificateholder. In the event such notice is
given, (i) the Indenture Trustee shall make deposits into the Equity Certificate
Distribution Account in accordance with Section 8.03 of the Indenture, or (ii)
in the case of an optional purchase of Contracts pursuant to Section 5.1 of the
Transfer and Servicing Agreement, the Indenture Trustee shall deposit the amount
specified in Section 5.1 of the Transfer and Servicing Agreement in the Equity
Certificate Distribution Account. Upon presentation and surrender of the Equity
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Certificate, the Paying Agent shall cause to be distributed to the Equity
Certificateholder amounts distributable on such Payment Date pursuant to Section
5.2.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.1. Eligibility Requirements for Owner Trustee.
The Owner Trustee shall at all times be a corporation (i) authorized to exercise
corporate trust powers; (ii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; and (iii) having (or having a parent which has) a long-term debt
rating of at least investment grade by Moody's, S&P, Fitch (if rated by Fitch)
and Duff & Phelps (if rated by Duff & Phelps). If such corporation shall publish
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Owner Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 10.2.
Section 10.2. Resignation or Removal of Owner Trustee. The
Owner Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor and the Servicer at
least 30 days before the date specified in such instrument. Upon receiving such
notice of resignation, the Depositor shall promptly appoint a successor Owner
Trustee meeting the qualifications set forth in Section 10.1 by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Owner Trustee and one copy to the successor Owner Trustee, provided
that the Depositor shall have received written confirmation from each of the
Rating Agencies that the proposed appointment will not result in a reduction,
qualification or withdrawal of the ratings then assigned to the Notes and the
Equity Certificate by such Rating Agency. If no successor Owner Trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Owner Trustee may petition
any court of competent jurisdiction for the appointment of a successor Owner
Trustee.
If at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of Section 10.1 and shall fail to
resign after written request therefor by the Depositor or if at any time the
Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the Owner Trustee. If
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the Depositor shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Depositor shall promptly appoint a successor
Owner Trustee meeting the qualification requirements of Section 10.1 by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
outgoing Owner Trustee so removed and one copy to the successor Owner Trustee
and payment of all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of
this Section shall not become effective until all fees and expenses, including
any indemnity payments, due to the outgoing Owner Trustee have been paid and
until acceptance of appointment by the successor Owner Trustee pursuant to
Section 10.3. The Depositor shall provide notice of such resignation or removal
of the Owner Trustee to each of the Rating Agencies.
Section 10.3. Successor Owner Trustee. Any successor Owner
Trustee appointed pursuant to Section 10.2 shall execute, acknowledge and
deliver to the Depositor and to its predecessor Owner Trustee an instrument
accepting such appointment under this Agreement, and thereupon the resignation
or removal of the predecessor Owner Trustee shall become effective and such
successor Owner Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties, and obligations of its
predecessor under this Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall deliver to the successor
Owner Trustee all documents and statements and monies held by it under this
Agreement; and the Depositor and the predecessor Owner Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor Owner Trustee
all such rights, powers, duties, and obligations.
No successor Owner Trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
Owner Trustee shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner
Trustee pursuant to this Section, the Depositor shall mail notice of the
successor of such Owner Trustee to the Equity Certificateholder, the Indenture
Trustee, the Noteholders and the Rating Agencies. If the Depositor shall fail to
mail such notice within 10 days after acceptance of appointment by the successor
Owner Trustee, the successor Owner Trustee shall cause such notice to be mailed
at the expense of the Depositor.
Section 10.4. Merger or Consolidation of Owner Trustee.
Any corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
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corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding,
and provided further that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
Section 10.5. Appointment of Co-Trustee or Separate
Trustee. Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Assets may at the time be located, the Owner Trustee shall
have the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Owner Trustee to act as co-trustee, jointly with
the Owner Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Assets, and to vest in such Person, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Owner
Trustee may consider necessary or desirable. No co-trustee or separate trustee
under this Agreement shall be required to meet the terms of eligibility as a
successor trustee pursuant to Section 10.1 and no notice of the appointment of
any co-trustee or separate trustee shall be required pursuant to Section 10.1.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties, and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner Trustee joining in
such act), except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed the Owner
Trustee shall be incompetent or unqualified to perform such act or acts,
in which event such rights, powers, duties, and obligations (including
the holding of title to the Trust Assets or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the Owner
Trustee;
(ii) no trustee under this Agreement shall be personally liable
by reason of any act or omission of any other trustee under this
Agreement; and
(iii) the Owner Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
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Any notice, request or other writing given to the Owner
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee.
Any separate trustee or co-trustee may at any time appoint
the Owner Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1. Amendment.
(a) This Agreement may be amended by the Depositor and the
Owner Trustee, without the consent of the Noteholders, but with prior notice to
the Rating Agencies and the Indenture Trustee, for any of the following
purposes:
(i) to correct or amplify the description of the Trust
Assets;
(ii) to cure any ambiguity;
(iii) to correct or supplement any provision herein which
may be inconsistent with any other provision herein;
(iv) to make any other provisions with respect to matters
or questions arising under this Agreement, provided that such amendment
shall not, as evidenced by an Opinion of Counsel, adversely affect in
any material respect the interests of any Noteholder; or
(v) to avoid a reduction, qualification or withdrawal of
any rating of the Notes.
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(b) This Agreement may also be amended from time to time
by the Depositor and the Owner Trustee and, unless such amendment does not, as
evidenced by an Opinion of Counsel, materially and adversely affect the
interests of Noteholders, the consent of a Note Majority (which consent of any
Holder of a Note given pursuant to this Section or pursuant to any other
provision of this Agreement shall be conclusive and binding on such Holder and
on all future Holders of such Note and of any Note issued upon the transfer
thereof or in exchange therefor or in lieu thereof whether or not notation of
such consent is made upon the Note) for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Agreement, or of modifying in any manner the rights of the Holders of the Notes;
provided, however, that no such amendment shall (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Contracts or distributions that shall be required to be made on any
Note, (ii) reduce the aforesaid percentage required to consent to any such
amendment or any waiver hereunder, without the consent of the Holders of the
Notes then outstanding, or (iii) result in a reduction, qualification or
withdrawal of the rating of the Notes.
(c) Prior to the execution of any such amendment or
consent, the Depositor shall furnish written notification of the substance of
such amendment or consent to each Rating Agency.
(d) Promptly after the execution of any such amendment or
consent, the Owner Trustee shall furnish written notification of the substance
of such amendment or consent to the Indenture Trustee unless the Indenture
Trustee has previously received such notification.
(e) It shall not be necessary for the consent of the
Noteholders pursuant to Section 11.1(b) to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of Noteholders provided for in this Agreement) and of evidencing
the authorization of the execution thereof by Noteholders shall be subject to
such reasonable requirements as the Owner Trustee may prescribe, including the
establishment of record dates.
(f) Prior to the execution of any amendment to this
Agreement or any Related Document, the Owner Trustee shall be entitled to
receive and rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent to the execution and delivery of such amendment have been satisfied.
The Owner Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Owner Trustee's own rights, duties or immunities
under this Agreement or any Related Document, or otherwise.
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SECTION 11.2. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.3. Severability of Provisions. If any one or
more of the covenants, agreements, provisions or terms of this Agreement shall
be for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement or of the
Equity Certificate or the rights of the Holder thereof.
Section 11.4. Equity Certificate Nonassessable and Fully
Paid. The Equity Certificateholder shall not, except as expressly provided for
herein with respect to the Depositor, be personally liable for obligations of
the Trust, the beneficial interests in the Trust represented by the Equity
Certificate shall be nonassessable for any losses or expenses of the Trust or
for any reason whatsoever, and the Equity Certificate upon authentication
thereof by or on behalf of the Owner Trustee pursuant to Section 3.3 are and
shall be deemed fully paid.
Section 11.5. Third-Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Except as otherwise provided in
this Agreement, no other Person shall have any right or obligation hereunder.
Section 11.6. Counterparts. For the purpose of
facilitating its execution and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
Section 11.7. Notices. All demands, notices and
communications under this Agreement shall be in writing, personally delivered or
mailed by certified mail-return receipt requested, or by facsimile, and shall be
deemed to have been duly given upon receipt (a) in the case of the Depositor, at
the following address:u Antigua Funding Corporation, c/o AT&T Capital
Corporation, 44 Whippany Road, Morristown, New Jersey 07962, Attention: General
Counsel, (b) in the case of the Owner Trustee, at the Corporate Trust Office,
and (c) in the case of each Rating Agency, Moody's Investors Service, Inc., 99
Church Street, New York, New York 10007; Standard & Poor's Ratings Services, 26
Broadway, New York, New York 10004 Attention: Asset-Backed Surveillance; Fitch
Investors Services, L.P., One State Street Plaza, New York, New York 10004;
Duff & Phelps Credit Rating Co., 17 State Street, New York, New York 10004; or
at such other address as shall be designated by
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any such party in a written notice to the other parties. Notwithstanding the
foregoing, any notice required or permitted to be mailed to an Equity
Certificate holder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register, and any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Equity Certificateholder
receives such notice.
Section 11.8. Tax Election. The Depositor may, in its sole
discretion, direct the Owner Trustee to execute and file with the Internal
Revenue Service on behalf of the Trust an election for the Trust either to be
disregarded for federal income tax purposes or to be treated as a partnership
for federal income tax purposes, and upon receipt of such direction from the
Depositor, the Owner Trustee shall cause such election to be executed and filed
on behalf of the Trust. In the event the Depositor directs the Owner Trustee to
execute and file such an election, it shall be the responsibility of the
Depositor to prepare, at the Depositor's cost and expense, all documents
required to make such an election, and to advise the Depositor of the
appropriate procedure to be followed in making the election.
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IN WITNESS WHEREOF, the Depositor and the Owner Trustee
have caused this Trust Agreement to be duly executed by their respective
officers as of the day and year first above written.
ANTIGUA FUNDING CORPORATION
By /s/Glenn A. Votek
------------------------------
Name: Glenn A. Votek
Title: Treasurer
THE BANK OF NEW YORK
By /s/Cheryl L. Laser
------------------------------
Name: Cheryl L. Laser
Title: Assistant Vice President
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</TABLE>
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PURCHASE AND SALE AGREEMENT
AMONG
ANTIGUA FUNDING CORPORATION
PURCHASER
AT&T CAPITAL CORPORATION
IN ITS INDIVIDUAL CAPACITY AND AS SERVICER
AND
AT&T CAPITAL LEASING SERVICES, INC.
AT&T CREDIT CORPORATION
NCR CREDIT CORP.
SELLERS
---------------
DATED AS OF NOVEMBER 1, 1997
---------------
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<PAGE>
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TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
ARTICLE I DEFINITIONS................................................. 2
Section 1.1. General ............................................. 2
Section 1.2. Specific Terms....................................... 2
Section 1.3. Usage of Terms ...................................... 3
Section 1.4. Certain References .................................. 3
Section 1.5. No Recourse ......................................... 3
Section 1.6. Action by or Consent of Noteholders or Equity
Certificateholder ................................... 3
ARTICLE II CONVEYANCE OF THE CONTRACTS ................................ 4
Section 2.1. Conveyance of Contracts and Related Assets .......... 4
Section 2.2. Intention of the Parties ............................ 5
ARTICLE III REPRESENTATIONS AND WARRANTIES ............................. 6
Section 3.1. Representations and Warranties of TCC ............... 6
Section 3.2. Representations and Warranties of Leasing Services .. 8
Section 3.3. Representations and Warranties of Credit Corp. ...... 10
Section 3.4. Representations and Warranties of NCR Credit ......... 12
Section 3.5. Representations and Warranties of Antigua ............ 14
ARTICLE IV COVENANTS OF THE SELLERS .................................... 7
Section 4.1. Protection of Title of Antigua and the Trust ......... 17
Section 4.2. Other Liens or Interests ............................. 19
Section 4.3. Costs and Expenses ................................... 19
Section 4.4. Indemnification ..................................... 20
Section 4.5. Negative Covenant ................................... 22
Section 4.6. Separate Identity ................................... 22
ARTICLE V REPURCHASES................................................... 23
Section 5.1. Repurchase of Contracts Upon Breach of Representation
or Warranty ......................................... 23
Section 5.2. Reassignment of Purchased Contracts and Leased
Equipment ........................................... 24
Section 5.3. Waivers.............................................. 24
ARTICLE VI MISCELLANEOUS............................................... 24
Section 6.1. Liability of the Sellers and TCC .................... 24
Section 6.2. Merger or Consolidation of a Seller, TCC or Antigua . 24
Section 6.3. Limitation on Liability of the Sellers, TCC
and Other ........................................... 25
Section 6.4. The Sellers and TCC May Own Notes or Equity
Certificate ......................................... 26
</TABLE>
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Section 6.5. Amendment............................................ 26
Section 6.6. Notices.............................................. 27
Section 6.7. Merger and Integration .............................. 28
Section 6.8. Severability of Provisions .......................... 28
Section 6.9. GOVERNING LAW ....................................... 28
Section 6.10. Counterparts ........................................ 28
Section 6.11. Conveyance of the Contracts to the Trust ............ 28
Section 6.12. Nonpetition Covenant ................................ 29
</TABLE>
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SCHEDULES
Schedule A-1 -- Schedule of Lease Contracts and Leased Equipment
Schedule A-2 -- Schedule of Loan Contracts
Schedule B -- Schedule of Representations and Warranties of the Sellers
and TCC
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT, dated as of November 1,
1997, executed between Antigua Funding Corporation, a Delaware corporation, as
purchaser ("Antigua"), AT&T Capital Corporation, a Delaware corporation, in its
individual capacity ("TCC"), and as servicer (the "Servicer"), AT&T Capital
Leasing Services, Inc., a Massachusetts corporation ("Leasing Services"), AT&T
Credit Corporation, a Delaware corporation ("Credit Corp."), and NCR Credit
Corp., a Delaware corporation ("NCR Credit"), as sellers (each a "Seller" and,
together, "the Sellers").
W I T N E S S E T H:
WHEREAS, pursuant to the terms of a Trust Agreement, dated
as of November 1, 1997 (the "Trust Agreement"), between Antigua and The Bank of
New York, as Owner Trustee, Antigua has formed Capita Equipment Receivables
Trust 1997-1 (the "Trust"), and the Trust has issued the Equity Certificate to
Antigua; and
WHEREAS, pursuant to the terms of an Indenture, dated as of
November 1, 1997 (the "Indenture"), between the Trust and Bankers Trust Company,
as Trustee (the "Indenture Trustee"), the Trust has, on the Closing Date, issued
the Notes (as defined in the Indenture); and
WHEREAS, the Sellers own certain Lease Contracts as are
more particularly described in Schedule A-1 attached hereto and have an
ownership or security interest in the items of Equipment subject thereto (the
"Leased Equipment"), as more particularly described in Schedule A-1 attached
hereto, and the Sellers own certain Loan Contracts as are more particularly
described in Schedule A-2 attached hereto, which create a security interest in
the items of equipment subject thereto (the "Loan Equipment"), (the Loan
Equipment and the Leased Equipment being collectively referred to herein as the
"Equipment"); and
WHEREAS, pursuant to the terms of a Transfer and Servicing
Agreement, dated as of November 1, 1997 (the "Transfer and Servicing
Agreement"), by and among the Trust, Antigua, as depositor, and TCC, in its
individual capacity and as Servicer, to be executed concurrently with the
execution of this Agreement, Antigua will convey the Contracts (together with
other similar lease contracts and loan contracts, which previously were conveyed
to Antigua pursuant to Purchase and Sale Agreements substantially similar to
this Agreement) to the Trust; and
WHEREAS, pursuant to a Loan Agreement, dated as of November
1, 1997, among the Owner Trustee, the Indenture Trustee, the Depositor, TCC, in
its individual capacity and as Servicer, the Lenders party thereto, and the
agent
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thereunder, there will be established a Cash Collateral Account for the benefit
of the Noteholders; and
WHEREAS, Antigua has agreed to acquire the Contracts and
the Leased Equipment from the Sellers and the Sellers have agreed to transfer
the Contracts and the Leased Equipment to Antigua; and
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, and for other good and valuable consideration, the receipt of
which is acknowledged, Antigua, TCC, the Servicer and the Sellers, intending to
be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. General. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision, and Article,
Section, Schedule and Exhibit references, unless otherwise specified, refer to
Articles and Sections of and Schedules and Exhibits to this Agreement. All
capitalized terms used herein without definition shall have the respective
meanings assigned to such terms in the Transfer and Servicing Agreement or, if
not defined in the Transfer and Servicing Agreement, in the Indenture.
Section 1.2. Specific Terms. Whenever used in this
Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
"Agreement" means this Purchase and Sale Agreement and all
amendments hereof and supplements hereto.
"Closing Date" means December 3, 1997.
"Related Documents" means the Trust Agreement, the
Indenture, the Transfer and Servicing Agreement, the Equity Certificate, the
Notes and the Cash Collateral Account Agreement. The Related Documents to be
executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.
"Repurchase Event" means, with respect to any Contract, the
occurrence of a breach of any of the representations and warranties set forth in
the Schedule of Representations that materially and adversely affects the value
of such Contract.
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"Schedule of Contracts" means, collectively, the schedules
of Lease Contracts and Loan Contracts attached hereto as Schedule A-1 and
Schedule A-2, respectively.
"Schedule of Representations" means the Schedule of
Representations and Warranties attached hereto as Schedule B.
"Trust" means the trust created by the Trust Agreement, the
estate of which consists of the Trust Assets.
"Trust Assets" means the property and proceeds of every
description conveyed pursuant to Section 2.6 of the Trust Agreement and Section
2.1 of the Transfer and Servicing Agreement, together with the Trust Accounts
(including all Eligible Investments therein and all proceeds therefrom), and the
right to withdraw funds from the Cash Collateral Account pursuant to Section
8.06 of the Indenture.
Section 1.3. Usage of Terms. With respect to all terms used
in this Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other gender; references to "writing"
include printing, typing, lithography, and other means of reproducing words in a
visible form; references to agreements and other contractual instruments include
all subsequent amendments thereto or changes therein entered into in accordance
with their respective terms and not prohibited by this Agreement or the Transfer
and Servicing Agreement; references to Persons include their permitted
successors and assigns; and the terms "include" or "including" mean "include
without limitation" or "including without limitation."
Section 1.4. Certain References. All references to the
Contract Principal Balance of a Contract as of an Accounting Date shall refer to
the close of business on such day, or as of the first day of a Monthly Period
shall refer to the opening of business on such day. All references to the last
day of a Monthly Period shall refer to the close of business on such day.
Section 1.5. No Recourse. Without limiting the obligations
of the Sellers or TCC hereunder, no recourse may be taken, directly or
indirectly, under this Agreement or any certificate or other writing delivered
in connection herewith or therewith, against any stockholder, officer or
director, as such, of any of Antigua, the Sellers, TCC, the Servicer, the
Indenture Trustee or the Owner Trustee, or of any predecessor or successor of
any of Antigua, the Sellers, TCC, the Servicer, the Indenture Trustee or the
Owner Trustee.
Section 1.6. Action by or Consent of Noteholders or Equity
Certificateholder. Whenever any provision of this Agreement refers to action to
be taken, or consented to, by Noteholders or the Equity Certificateholder, such
provision shall be deemed to refer to Noteholders or the Equity
Certificateholder, as the case may be, of record as of the Record Date
immediately preceding the date on
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which such action is to be taken, or consent given, by such Noteholders or the
Equity Certificateholder, as the case may be. Solely for the purposes of any
action to be taken, or consented to, by Noteholders, any Note registered in the
name of any of Antigua, a Seller or TCC, or any Affiliate thereof, shall be
deemed not to be outstanding, and the related Principal Balance, as applicable,
evidenced thereby shall not be taken into account in determining whether the
requisite Principal Balance necessary to effect any such action or consent has
been obtained; provided, however, that, solely for the purpose of determining
whether the Indenture Trustee or Owner Trustee is entitled to rely upon any such
action or consent, only Notes which the Indenture Trustee or Owner Trustee knows
to be so owned shall be so disregarded.
ARTICLE II
CONVEYANCE OF THE CONTRACTS
Section 2.1. Conveyance of Contracts and Related Assets.
(a) Each of the Sellers hereby subscribes to purchase one
share of common stock of Antigua, of the Class specified below, in consideration
for the amount of capital to be contributed by such Seller, all as specified
below:
Leasing Services: $146,937,856 Class 1997-1-A
Credit Corp.: $274,460,716 Class 1997-1-B
NCR Credit: $ 1,452,279 Class 1997-1-C
Antigua agrees that the capital to be contributed by any Seller may take the
form of assets.
(b) In satisfaction of its subscription agreement in
Section 2.1(a) plus additional cash to be received from Antigua, each of the
Sellers hereby sells, transfers, assigns, and otherwise conveys to Antigua,
without recourse (but without limitation of its obligations in this Agreement),
and Antigua hereby acquires, all right, title and interest, including security
interests, whether now owned or hereafter acquired, of each of the Sellers in
and to the following:
(i) the Contracts, including, without limitation, (A) all monies
at any time paid or payable thereon or in respect thereof from and after
the Cut-Off Date, including but not limited to (1) Scheduled Payments
(including those Scheduled Payments due prior to, but not received as of,
the Cut-Off Date, but excluding those Scheduled Payments due on or after,
but received prior to, the Cut-Off Date), (2) Prepayments, (3)
Liquidation Proceeds, (4) Extension Fees, (5) payments to be applied by
the Servicer to the payment of insurance charges, maintenance, taxes or
other similar obligations, and (6) payments to be retained by the
Servicer in payment of Administrative Fees,
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(B) all security interests of the lessor or secured party, as the
case may be, in the related Equipment and all present or future leases
and other contracts relating to the Equipment and all revenues, payments,
rights to payment, profits, accounts, chattel paper, products and
contract rights arising from or related to the Equipment or any use
thereof or from any such lease or other contract, (C) all rights of the
lessor or secured party, as the case may be, in all Insurance Policies
and all other security for the payment of amounts due under the Contracts
(including all rights, if any, the lessor or the secured party may have
against vendors and other third parties for payments of such amounts),
(D) all items contained in the related Contract Files and any and all
other documents that are kept on file in accordance with the applicable
Seller's customary procedures relating to the Contracts, and (E) any and
all proceeds of any and all of the foregoing; and
(ii) the Leased Equipment and all proceeds thereof,
including in any event and without limitation, all present and future
leases and other contracts relating to the Leased Equipment and all
revenues, payments, rights to payment, profits, accounts, chattel paper,
products and contract rights arising from or related to the Leased
Equipment or any use thereof or from any such lease or other contract,
and any and all proceeds of any and all of the foregoing.
(C) ANTIGUA ACKNOWLEDGES THAT THE SELLERS ARE TRANSFERRING
THE LEASED EQUIPMENT "AS-IS, WHERE-IS," AND THAT THE SELLERS MAKE NO
REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED EQUIPMENT,
INCLUDING WITHOUT LIMITATION ITS MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
Section 2.2. Intention of the Parties. The execution and
delivery of this Agreement shall constitute an acknowledgment by each of the
Sellers, TCC and Antigua that they intend that each assignment and transfer
herein contemplated constitute a sale and assignment outright, and not for
security, of the property described in Section 2.1(b), conveying good title
thereto free and clear of any Liens, from the Sellers to Antigua, and that all
such property shall not be a part of the estate of any Seller or TCC in the
event of the bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law, or the occurrence of another similar event, of, or with respect to, any
Seller or TCC. In the event that such conveyance is determined to be made as
security for a loan made by Antigua, the Trust, the Equity Certificateholder or
the Noteholders to the Sellers or TCC, the Sellers and TCC hereby grant to
Antigua a security interest in all of the Sellers' and TCC's right, title and
interest in and to the property described in Section 2.1(b) to secure the loan
determined to have been made to the Sellers or TCC and the payment and
performance of the other obligations of the Sellers and TCC under this
Agreement, and agree that in such event this Agreement shall constitute a
security agreement under applicable law.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of TCC. TCC
makes the following representations and warranties, on which Antigua relies in
purchasing the Contracts and in transferring the Contracts to the Trust under
the Transfer and Servicing Agreement. Such representations are made as of the
Closing Date, but shall survive the sale, transfer and assignment of the
Contracts hereunder and the transfer of the Contracts by Antigua to the Trust
under the Transfer and Servicing Agreement. TCC and Antigua agree that Antigua
will assign to the Trust all of Antigua's rights under this Agreement at the
Closing Date and that the Trust will thereafter be entitled to enforce this
Agreement against TCC in the Trust's own name.
(a) Schedule of Representations. With respect to each
Contract, the representations and warranties set forth on the Schedule of
Representations are true and correct as of the date specified therein.
(b) Organization and Good Standing. TCC has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is currently conducted, and had at all relevant
times, and now has, power, authority and legal right to acquire, own and
sell the Contracts transferred to Antigua.
(c) Due Qualification. TCC is duly qualified to do business
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in each jurisdiction in which the ownership or
lease of its property or the conduct of its business requires such
qualification and in which the failure to so qualify would have a
material adverse impact on its business or financial condition.
(d) Power and Authority. TCC has the power and authority to
execute and deliver this Agreement and its Related Documents and to carry
out its terms and their terms, respectively, and the execution, delivery
and performance of this Agreement and all of TCC's Related Documents have
been duly authorized by TCC by all necessary corporate action.
(e) No Consents. TCC holds all necessary licenses,
certificates and permits from all government authorities necessary for
conducting its business as it is presently conducted, and is not required
to obtain the consent of any other party or any consent, license,
approval or authorization from, or registration or declaration with, any
governmental authority, bureau or
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<PAGE>
agency in connection with the execution, delivery, performance,
validity or enforceability of this Agreement, except for such consents,
licenses, approvals or authorizations, or registrations or declarations,
as shall have been obtained or filed, as the case may be, prior to the
Closing Date.
(f) Valid Sale; Binding Obligations. This Agreement and
each of TCC's Related Documents have been duly executed and delivered,
and effect a valid sale, transfer and assignment of the Contracts and the
Originator's interest in the related Equipment, enforceable against TCC,
and creditors of and purchasers from TCC; and this Agreement and each of
TCC's Related Documents constitute legal, valid and binding obligations
of TCC, enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(g) No Violation. The execution and delivery of this
Agreement, the consummation of the transactions contemplated by this
Agreement and the Related Documents and the fulfillment of the terms of
this Agreement and the Related Documents shall not conflict with, result
in any breach of any of the terms and provisions of or constitute (with
or without notice or lapse of time, or both) a default under, the
certificate of incorporation or bylaws of TCC, or any indenture,
agreement, mortgage, deed of trust or other instrument to which TCC is a
party or by which it is bound, or result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument, other
than this Agreement, the Transfer and Servicing Agreement and the
Indenture, or violate any law, order, rule or regulation applicable to
TCC of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over TCC or any of its properties.
(h) No Proceedings. There are no proceedings or
investigations pending or, to the knowledge of TCC, threatened against
TCC, before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction over TCC or
any properties of TCC (i) asserting the invalidity of this Agreement or
any of the Related Documents, (ii) seeking to prevent the issuance of the
Notes or the Equity Certificate or the consummation of any of the
transactions contemplated by this Agreement or any of the Related
Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by TCC of its obligations
under, or the validity or enforceability of, this Agreement or any of the
Related Documents or (iv) seeking to affect adversely the federal income
tax or other federal, state or local tax attributes of, or seeking to
impose any excise, franchise, transfer or
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<PAGE>
similar tax upon, the transfer and acquisition of the Contracts hereunder
or under the Transfer and Servicing Agreement.
(i) Chief Executive Offices. The chief executive office of
TCC is located at 44 Whippany Road, Morristown, New Jersey, and the
offices where TCC keeps its records concerning the Contracts and related
documents are in Morristown, New Jersey.
Section 3.2. Representations and Warranties of Leasing
Services. Leasing Services makes the following representations and warranties,
on which Antigua relies in purchasing the Contracts and in transferring the
Contracts to the Trust under the Transfer and Servicing Agreement. Such
representations are made as of the Closing Date, but shall survive the sale,
transfer and assignment of the Contracts hereunder and the transfer thereof by
Antigua to the Trust under the Transfer and Servicing Agreement. Leasing
Services and Antigua agree that Antigua will assign to the Trust all of
Antigua's rights under this Agreement and that the Trust will thereafter be
entitled to enforce this Agreement against Leasing Services in the Trust's own
name.
(a) Schedule of Representations. With respect to each
Contract sold by Leasing Services to Antigua hereunder, the
representations and warranties set forth on the Schedule of
Representations are true and correct as of the date specified therein.
(b) Organization and Good Standing. Leasing Services has
been duly organized and is validly existing as a corporation in good
standing under the laws of the Commonwealth of Massachusetts, with power
and authority to own its properties and to conduct its business as such
properties are currently owned and such business is currently conducted,
and had at all relevant times, and now has, power, authority and legal
right to acquire, own and sell the Contracts sold by Leasing Services to
Antigua hereunder.
(c) Due Qualification. Leasing Services is duly qualified
to do business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in each jurisdiction in
which the ownership or lease of its property or the conduct of its
business requires such qualification and in which the failure to so
comply would have a material adverse impact on its business or financial
condition.
(d) Power and Authority. Leasing Services has the power and
authority to execute and deliver this Agreement and its Related Documents
and to carry out its terms and their terms, respectively; Leasing
Services has full power and authority to sell and assign the Contracts to
be sold and assigned to and deposited with Antigua hereunder and has duly
authorized such sale and assignment to Antigua by all necessary corporate
action; and the execution, delivery and performance of this Agreement and
all of Leasing
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Services's Related Documents have been duly authorized by Leasing
Services by all necessary corporate action.
(e) No Consents. Leasing Services holds all necessary
licenses, certificates and permits from all government authorities
necessary for conducting its business as it is presently conducted, and
is not required to obtain the consent of any other party or any consent,
license, approval or authorization from, or registration or declaration
with, any governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or
authorizations, or registrations or declarations, as shall have been
obtained or filed, as the case may be, prior to the Closing Date.
(f) Valid Sale; Binding Obligations. This Agreement and
each of Leasing Services's Related Documents have been duly executed and
delivered, and effect a valid sale, transfer and assignment of the
Contracts and Leasing Services' interest in the related Equipment,
enforceable against Leasing Services, and creditors of and purchasers
from Leasing Services; and this Agreement and each of Leasing Services's
Related Documents constitute legal, valid and binding obligations of
Leasing Services, enforceable in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(g) No Violation. The execution and delivery of this
Agreement, the consummation of the transactions contemplated by this
Agreement and the Related Documents and the fulfillment of the terms of
this Agreement and the Related Documents shall not conflict with, result
in any breach of any of the terms and provisions of or constitute (with
or without notice or lapse of time, or both) a default under, the
articles of incorporation or bylaws of Leasing Services, or any
indenture, agreement, mortgage, deed of trust or other instrument to
which Leasing Services is a party or by which it is bound, or result in
the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument, other than this Agreement, the Transfer and
Servicing Agreement and the Indenture, or violate any law, order, rule or
regulation applicable to Leasing Services of any court or of any federal
or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over Leasing Services or any of its
properties.
(h) No Proceedings. There are no proceedings or
investigations pending or, to the knowledge of Leasing Services,
threatened against Leasing
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<PAGE>
Services, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having
jurisdiction over Leasing Services or any properties of Leasing Services
(i) asserting the invalidity of this Agreement or any of the Related
Documents, (ii) seeking to prevent the issuance of the Notes or the
Equity Certificate or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by Leasing Services of its obligations under, or
the validity or enforceability of, this Agreement or any of the Related
Documents or (iv) seeking to affect adversely the federal income tax or
other federal, state or local tax attributes of, or seeking to impose any
excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the Contracts hereunder or under the Transfer and
Servicing Agreement.
(i) Chief Executive Offices. The chief executive office of
Leasing Services is located at 550 Cochituate Road, Framingham,
Massachusetts, and the offices where Leasing Services keeps its records
concerning the Contracts and related documents are in Framingham,
Massachusetts.
Section 3.3. Representations and Warranties of Credit Corp.
Credit Corp. makes the following representations and warranties, on which
Antigua relies in purchasing the Contracts and in transferring the Contracts to
the Trust under the Transfer and Servicing Agreement. Such representations are
made as of the Closing Date but shall survive the sale, transfer and assignment
of the Contracts hereunder and the transfer thereof by Antigua to the Trust
under the Transfer and Servicing Agreement. Credit Corp. and Antigua agree that
Antigua will assign to the Trust all of Antigua's rights under this Agreement
and that the Trust will thereafter be entitled to enforce this Agreement against
Credit Corp. in the Trust's own name.
(a) Schedule of Representations. With respect to each
Contract sold by Credit Corp. to Antigua hereunder, the representations
and warranties set forth on the Schedule of Representations are true and
correct as of the date specified therein.
(b) Organization and Good Standing. Credit Corp. has been
duly organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with power and authority to own
its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and now has, power, authority and legal right to acquire,
own and sell the Contracts sold by Credit Corp. to Antigua hereunder.
(c) Due Qualification. Credit Corp. is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in each jurisdiction in which the
ownership or lease
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of its property or the conduct of its business requires such
qualification and in which the failure to so qualify would have a
material adverse impact on its business or financial condition.
(d) Power and Authority. Credit Corp. has the power and
authority to execute and deliver this Agreement and its Related Documents
and to carry out its terms and their terms, respectively; Credit Corp.
has full power and authority to sell and assign the Contracts to be sold
and assigned to and deposited with Antigua hereunder and has duly
authorized such sale and assignment to Antigua by all necessary corporate
action; and the execution, delivery and performance of this Agreement and
all of Credit Corp.'s Related Documents have been duly authorized by
Credit Corp. by all necessary corporate action.
(e) No Consents. Credit Corp. holds all necessary licenses,
certificates and permits from all government authorities necessary for
conducting its business as it is presently conducted, and is not required
to obtain the consent of any other party or any consent, license,
approval or authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or
authorizations, or registrations or declarations, as shall have been
obtained or filed, as the case may be, prior to the Closing Date.
(f) Valid Sale; Binding Obligations. This Agreement and
each of Credit Corp.'s Related Documents have been duly executed and
delivered, and effect a valid sale, transfer and assignment of the
Contracts and Credit Corp.'s interest in the related Equipment,
enforceable against Credit Corp., and creditors of and purchasers from
Credit Corp.; and this Agreement and each of Credit Corp.'s Related
Documents constitute legal, valid and binding obligations of Credit
Corp., enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(g) No Violation. The execution and delivery of this
Agreement, the consummation of the transactions contemplated by this
Agreement and the Related Documents and the fulfillment of the terms of
this Agreement and the Related Documents shall not conflict with, result
in any breach of any of the terms and provisions of or constitute (with
or without notice or lapse of time, or both) a default under, the
certificate of incorporation or bylaws of Credit Corp., or any indenture,
agreement, mortgage, deed of trust or other instrument to which Credit
Corp. is a party or by which it is bound, or result
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<PAGE>
in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument, other than this Agreement, the Transfer and
Servicing Agreement and the Indenture, or violate any law, order, rule or
regulation applicable to Credit Corp. of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over Credit Corp. or any of its
properties.
(h) No Proceedings. There are no proceedings or
investigations pending or, to the knowledge of Credit Corp., threatened
against Credit Corp., before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having
jurisdiction over Credit Corp. or any properties of Credit Corp. (i)
asserting the invalidity of this Agreement or any of the Related
Documents, (ii) seeking to prevent the issuance of the Notes or the
Equity Certificate or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by Credit Corp. of its obligations under, or the
validity or enforceability of, this Agreement or any of the Related
Documents or (iv) seeking to affect adversely the federal income tax or
other federal, state or local tax attributes of, or seeking to impose any
excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the Contracts hereunder or under the Transfer and
Servicing Agreement.
(i) Chief Executive Offices. The chief executive office of
Credit Corp. is located at 2 Gatehall Drive, Parsippany, New Jersey and
the offices where Credit Corp. keeps its records concerning the Contracts
and related documents are in Parsippany, New Jersey.
Section 3.4. Representations and Warranties of NCR Credit.
NCR Credit makes the following representations and warranties, on which Antigua
relies in purchasing the Contracts and in transferring the Contracts to the
Trust under the Transfer and Servicing Agreement. Such representations are made
as of the Closing Date but shall survive the sale, transfer and assignment of
the Contracts hereunder and the transfer thereof by Antigua to the Trust under
the Transfer and Servicing Agreement. NCR Credit and Antigua agree that Antigua
will assign to the Trust all of Antigua's rights under this Agreement and that
the Trust will thereafter be entitled to enforce this Agreement against NCR
Credit in the Trust's own name.
(a) Schedule of Representations. With respect to each
Contract sold by NCR Credit to Antigua hereunder, the representations and
warranties set forth on the Schedule of Representations are true and
correct as of the date specified therein.
(b) Organization and Good Standing. NCR Credit has been
duly organized and is validly existing as a corporation in good standing
under the
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laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is currently conducted, and had at all relevant
times, and now has, power, authority and legal right to acquire, own and
sell the Contracts sold by NCR Credit to Antigua hereunder.
(c) Due Qualification. NCR Credit is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in each jurisdiction in which the
ownership or lease of its property or the conduct of its business
requires such qualification and in which the failure to so qualify would
have a material adverse impact on its business or financial condition.
(d) Power and Authority. NCR Credit has the power and
authority to execute and deliver this Agreement and its Related Documents
and to carry out its terms and their terms, respectively; NCR Credit has
full power and authority to sell and assign the Contracts to be sold and
assigned to and deposited with Antigua hereunder and has duly authorized
such sale and assignment to Antigua by all necessary corporate action;
and the execution, delivery and performance of this Agreement and all of
NCR Credit's Related Documents have been duly authorized by NCR Credit by
all necessary corporate action.
(e) No Consents. NCR Credit holds all necessary licenses,
certificates and permits from all government authorities necessary for
conducting its business as it is presently conducted, and is not required
to obtain the consent of any other party or any consent, license,
approval or authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or
authorizations, or registrations or declarations, as shall have been
obtained or filed, as the case may be, prior to the Closing Date.
(f) Valid Sale; Binding Obligations. This Agreement and
each of NCR Credit's Related Documents have been duly executed and
delivered, and effect a valid sale, transfer and assignment of the
Contracts and NCR Credit's interest in the related Equipment, enforceable
against NCR Credit, and creditors of and purchasers from NCR Credit; and
this Agreement and each of NCR Credit's Related Documents constitute
legal, valid and binding obligations of NCR Credit, enforceable in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or at
law.
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(g) No Violation. The execution and delivery of this
Agreement, the consummation of the transactions contemplated by this
Agreement and the Related Documents and the fulfillment of the terms of
this Agreement and the Related Documents shall not conflict with, result
in any breach of any of the terms and provisions of or constitute (with
or without notice or lapse of time, or both) a default under, the
certificate of incorporation or bylaws of NCR Credit, or any indenture,
agreement, mortgage, deed of trust or other instrument to which NCR
Credit is a party or by which it is bound, or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms
of any such indenture, agreement, mortgage, deed of trust or other
instrument, other than this Agreement, the Transfer and Servicing
Agreement and the Indenture, or violate any law, order, rule or
regulation applicable to NCR Credit of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over NCR Credit or any of its
properties.
(h) No Proceedings. There are no proceedings or
investigations pending or, to the knowledge of NCR Credit, threatened
against NCR Credit, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having
jurisdiction over NCR Credit or any properties of NCR Credit (i)
asserting the invalidity of this Agreement or any of the Related
Documents, (ii) seeking to prevent the issuance of the Notes or the
Equity Certificate or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by NCR Credit of its obligations under, or the
validity or enforceability of, this Agreement or any of the Related
Documents or (iv) seeking to affect adversely the federal income tax or
other federal, state or local tax attributes of, or seeking to impose any
excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the Contracts hereunder or under the Transfer and
Servicing Agreement.
(i) Chief Executive Offices. The chief executive office of
NCR Credit is located at 2 Gatehall Drive, Parsippany, New Jersey, and
the offices where NCR Credit keeps its records concerning the Contracts
and related documents are in Parsippany, New Jersey.
Section 3.5. Representations and Warranties of Antigua.
Antigua makes the following representations and warranties, on which each of the
Sellers and TCC relies in selling, assigning, transferring and conveying the
Contracts to Antigua hereunder. Such representations are made as of the Closing
Date but shall survive the sale, transfer and assignment of the Contracts
hereunder and the transfer thereof by Antigua to the Trust under the Transfer
and Servicing Agreement.
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(a) Organization and Good Standing. Antigua has been duly
organized and is validly existing and in good standing as a corporation
under the laws of the State of Delaware, with the power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and has, full power, authority and legal right to acquire
and own the Contracts and to transfer the Contracts to the Trust pursuant
to the Transfer and Servicing Agreement.
(b) Due Qualification. Antigua is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in each jurisdiction where the failure
to do so would materially and adversely affect (i) Antigua's ability to
acquire the Contracts, (ii) the validity or enforceability of the
Contracts or (iii) Antigua's ability to perform its obligations hereunder
and under the Related Documents.
(c) Power and Authority. Antigua has the power and
authority to execute and deliver this Agreement and its Related Documents
and to carry out its terms and their terms, respectively, and to acquire
the Contracts and the Equipment; and the execution, delivery and
performance of this Agreement and its Related Documents and all of the
documents required pursuant hereto or thereto have been duly authorized
by Antigua by all necessary action.
(d) No Consents. Antigua holds all necessary licenses,
certificates and permits from all government authorities necessary for
conducting its business as it is presently conducted, and is not required
to obtain the consent of any other party or any consent, license,
approval or authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or
authorizations, or registrations or declarations, as shall have been
obtained or filed, as the case may be, prior to the Closing Date.
(e) Binding Obligation. This Agreement and each of
Antigua's Related Documents constitutes a legal, valid and binding
obligation of Antigua, enforceable against Antigua in accordance with its
terms; and this Agreement and each of Antigua's Related Documents
constitute legal, valid and binding obligations of Antigua, enforceable
in accordance with their respective terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a proceeding
in equity or at law.
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(f) No Violation. The execution, delivery and performance
by Antigua of this Agreement, the consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents do
not and will not conflict with, result in any breach of any of the terms
and provisions of or constitute (with or without notice or lapse of time,
or both) a default under the certificate of incorporation or bylaws of
Antigua, or any indenture, agreement, mortgage, deed of trust or other
instrument to which Antigua is a party or by which Antigua is bound or to
which any of its properties are subject, or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms
of any such indenture, agreement, mortgage, deed of trust or other
instrument (other than the Transfer and Servicing Agreement and the
Indenture), or violate any law, order, rule or regulation, applicable to
Antigua or its properties, of any federal or state regulatory body or any
court, administrative agency, or other governmental instrumentality
having jurisdiction over Antigua or any of its properties.
(g) No Proceedings. There are no proceedings or
investigations pending, or, to the knowledge of Antigua, threatened
against Antigua, before any court, regulatory body, administrative
agency, or other tribunal or governmental instrumentality having
jurisdiction over Antigua or its properties: (i) asserting the invalidity
of this Agreement or any of the Related Documents, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or any of the Related Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by Antigua of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents or (iv)
that may adversely affect the federal or state income tax attributes of,
or seeking to impose any excise, franchise, transfer or similar tax upon,
the transfer and acquisition of the Contracts hereunder or the transfer
of the Contracts to the Trust pursuant to the Transfer and Servicing
Agreement.
(h) Chief Executive Offices. The chief executive office of
Antigua is located at 44 Whippany Road, Morristown, New Jersey, and the
offices where Antigua keeps its records concerning the Contracts and
related documents are in Morristown, New Jersey.
In the event of any breach of a representation and warranty made by Antigua
hereunder, each of the Sellers and TCC covenants and agrees that (i)it will not
take any action or pursue any remedy that it may have hereunder, in law, in
equity or otherwise, until a year and a day have passed since the date on which
all Notes and Certificates issued by the Trust, or a trust or similar vehicle
formed by Antigua, have been paid in full, and (ii)any remedy it may have
hereunder is subject to Section 6.12. Each of the Sellers, TCC and Antigua agree
that damages will not be an
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adequate remedy for breach of the foregoing covenant and that this covenant may
be specifically enforced by Antigua or by the Owner Trustee on behalf of the
Trust.
ARTICLE IV
COVENANTS OF THE SELLERS
Section 4.1. Protection of Title of Antigua and the Trust.
(a) At or prior to the Closing Date, Leasing Services shall
have filed or caused to be filed UCC-1 financing statements, executed by Leasing
Services, as seller or debtor, naming Antigua as secured party and the Trust as
assignee and (i) describing the Contracts and other property described in
Section 2.1 as collateral, filed with the office of the Secretary of State of
the Commonwealth of Massachusetts and in the appropriate filing office in
Middlesex County, and (ii) describing the Leased Equipment as collateral, filed
with the appropriate filing office in each jurisdiction where Leased Equipment
is located (other than Tennessee and Maryland). Leasing Services shall deliver
(or cause to be delivered) to Antigua, the Owner Trustee and the Indenture
Trustee file-stamped copies of, or filing receipts for, any document filed as
provided above, as soon as available following such filing. In the event that
Leasing Services fails to perform its obligations under this subsection, Antigua
or the Owner Trustee may do so at the expense of TCC.
(b) At or prior to the Closing Date, Credit Corp. shall
have filed or caused to be filed UCC-1 financing statements, executed by Credit
Corp., as seller or debtor, naming Antigua as secured party and the Trust as
assignee and (i) describing the Contracts and other property described in
Section 2.1 as collateral, with the office of the Secretary of State of the
State of New Jersey, and (ii) describing the Leased Equipment as collateral,
filed with the appropriate filing office in each jurisdiction where Leased
Equipment is located (other than Tennessee and Maryland). Credit Corp. shall
deliver (or cause to be delivered) to Antigua, the Owner Trustee and the
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing. In the
event that Credit Corp. fails to perform its obligations under this subsection,
Antigua or the Owner Trustee may do so at the expense of TCC.
(c) At or prior to the Closing Date, NCR Credit shall have
filed or caused to be filed UCC-1 financing statements, executed by NCR Credit,
as seller or debtor, naming Antigua as secured party and the Trust as assignee
and (i) describing the Contracts and other property described in Section 2.1 as
collateral, with the office of the Secretary of State of the State of New
Jersey, and (ii) describing the Leased Equipment as collateral, filed with the
appropriate filing office in each jurisdiction where Leased Equipment is located
(other than Tennessee and Maryland). NCR Credit shall deliver (or cause to be
delivered) to Antigua, the Owner Trustee and the Indenture Trustee file-stamped
copies of, or filing receipts for, any document filed as provided above, as soon
as available following such filing. In the event that NCR
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Credit fails to perform its obligations under this subsection, Antigua or the
Owner Trustee may do so at the expense of TCC.
(d) If any of the Sellers or TCC change its name, identity,
or corporate structure in any manner that would, could or might make any
financing statement or continuation statement filed by such Seller or TCC (or by
Antigua or the Owner Trustee on behalf of such Seller or TCC) in accordance with
paragraphs (a)- (d) above seriously misleading within the meaning of
'SS'9-402(7) of the UCC, it shall give Antigua and the Owner Trustee written
notice thereof no later than 10 days following the occurrence of such change,
and shall file appropriate amendments to all such previously filed financing
statements and continuation statements within the time period required by the
UCC.
(e) If any of the Sellers or TCC relocate its principal
executive office and, as a result of such relocation, the applicable provisions
of the UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement, it shall
give Antigua, the Indenture Trustee and the Owner Trustee written notice
thereof; and shall promptly file such appropriate amendments or financing
statements within the time period required by the UCC.
(f) Each of the Sellers and TCC shall at all times maintain
its principal executive office, and any office from which it services Contracts,
within the United States of America.
(g) Each of the Sellers shall maintain its computer systems
so that, from and after the time of sale under this Agreement of the Contracts,
the Leased Equipment and the other items described in Section 2.1(b) to Antigua,
and the conveyance of the Contracts by Antigua to the Trust, the master computer
records (including archives) of each of the Sellers that shall refer to a
Contract, any Leased Equipment or any of the other items described in Section
2.1(b) indicate clearly that such Contract, Leased Equipment or other item
described in Section 2.1(b) has been sold to Antigua and that such Contract has
been conveyed by Antigua to the Trust. Indication of the Trust's ownership of a
Contract shall be deleted from or modified on any of the Sellers' computer
systems when, and only when, the Contract has been paid in full, liquidated
(including receipt of all recoveries reasonably expected to be collected) or
purchased by the Depositor or TCC.
(h) If at any time any of the Sellers shall propose to
sell, grant a security interest in, or otherwise transfer any interest in lease
contracts or loan contracts of a character similar to the Contracts to any
prospective purchaser, lender or other transferee, such Seller shall give to
such prospective purchaser, lender, or other transferee computer tapes, records,
or print-outs (including any restored from archives) that, if they shall refer
in any manner whatsoever to any Contract, shall indicate clearly that such
Contract has been sold to Antigua and is owned by the Trust. Each Seller, TCC
and Antigua agree that, if any one of them receives an
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inquiry from a bona fide potential creditor regarding whether any lease
contract, loan contract or item of equipment is identified on the Schedule of
Contracts, they will instruct the Indenture Trustee to disclose the contents of
the Schedule of Contracts to such potential creditor in accordance with the
provisions of Section 11.17 of the Indenture.
(i) If any Seller receives payments in respect of
Contracts, any Leased Equipment or any of the other items described in Section
2.1(b), such Seller agrees to pay or cause to be paid to the Servicer all such
payments as soon as practicable after identification thereof, but in no event
later than two Business Days after receipt thereof by such Seller.
(j) Each Seller shall notify Antigua and the Indenture
Trustee within three Business Days after becoming aware of any Lien on any
Contract, Leased Equipment or other item described in Section 2.1(b), other than
the conveyances hereunder or under the Transfer and Servicing Agreement.
(k) Each Seller will promptly pay and discharge all taxes,
assessments, levies and other governmental charges imposed on it which may
materially and adversely affect any of the Contracts, Leased Equipment or other
items described in Section 2.1(b), or Antigua's rights with respect thereto.
(l) Each Seller hereby agrees that it will perform its
obligations under the agreements relating to the Contracts in conformity with
its customary and usual policies and procedures relating to the Contracts.
(m) No later than 10 days after the Closing Date, the
Sellers and TCC shall deliver to Antigua, the Owner Trustee and the Indenture
Trustee a written certification that all notifications and consents required by
paragraph (J) in the Schedule of Representations hereto have been given or
obtained, as applicable.
Section 4.2. Other Liens or Interests. Except for the
conveyances hereunder, with respect to any Contract, the Seller will not sell,
pledge, assign or transfer to any other Person, or grant, create, incur, assume
or suffer to exist any Lien on such Contract or any interest therein, and such
Seller shall defend the right, title, and interest of Antigua and the Trust in
and to such Contract against all claims of third parties claiming through or
under such Seller.
Section 4.3. Costs and Expenses. Each Seller and TCC shall
pay all reasonable costs and disbursements in connection with the performance of
its obligations hereunder and its Related Documents.
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Section 4.4. Indemnification.
Each of the Sellers, acting severally and not jointly, and
TCC, as applicable, shall defend, indemnify and hold harmless Antigua, the
Trust, the Owner Trustee, the Indenture Trustee, the Noteholders and the Equity
Certificateholder from and against:
(a) any and all costs, expenses, losses, damages, claims,
and liabilities, arising out of or resulting from any breach of any
representations and warranties of such Seller or TCC, as applicable, contained
herein (other than those set forth in the Schedule of Representations, the
exclusive remedies for which are specified in Section 5.1);
(b) any and all costs, expenses, losses, damages, claims,
and liabilities, arising out of or resulting from the use, ownership or
operation of any item of Equipment (notwithstanding the disclaimer of Section
2.1(c)); and, in addition, each of the Sellers and TCC shall cause Antigua and
the Trust to be named as an additional insured under its liability insurance
policies;
(c) any and all costs, expenses, losses, damages, claims
and liabilities arising out of or resulting from any action taken, or failed to
be taken, by it in respect of any portion of the Trust Assets other than any
action taken in accordance with this Agreement or any Related Document;
(d) any taxes that may at any time be asserted against
Antigua, the Trust, the Owner Trustee, the Indenture Trustee, the Noteholders
and the Equity Certificateholder with respect to the transactions contemplated
in this Agreement, including, without limitation, any sales, gross receipts,
general corporation, tangible or intangible personal property, privilege, or
license taxes (but not including any taxes asserted with respect to, and as of
the date of, the sale, transfer and assignment of the Contracts to Antigua and
of the Trust Assets to the Trust or the issuance and original sale of the Notes
or the Equity Certificate, or asserted with respect to ownership of the
Contracts or the Trust Assets, which shall be indemnified by the Sellers and TCC
pursuant to clause (e) below), or federal, state or other income taxes, arising
out of distributions on the Notes or the Equity Certificate or transfer taxes
arising in connection with the transfer of the Notes or the Equity Certificate)
and costs and expenses in defending against the same, arising or imposed against
such Persons by reason of the acts to be performed by such Seller or TCC, as
applicable, under this Agreement;
(e) any taxes which may at any time be asserted against
such Persons with respect to, and as of the date of, the conveyance or ownership
of the Contracts and the conveyance or ownership of the Trust Assets under the
Purchase Agreement or the Transfer and Servicing Agreement or the issuance and
original sale of the Notes and the Equity Certificate, including, without
limitation, any sales, gross receipts, personal property, tangible or intangible
personal property, privilege
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or license taxes (but not including any federal or other income taxes, including
franchise taxes, arising out of the transactions contemplated hereby or transfer
taxes arising in connection with the transfer of Notes or Equity Certificate)
and costs and expenses in defending against the same, arising or imposed against
such Persons;
(f) any and all costs, expenses, losses, claims, damages,
and liabilities to the extent that such cost, expense, loss, claim, damage, or
liability arose out of, or was imposed upon Antigua, the Owner Trustee, the
Trust, the Indenture Trustee, the Noteholders and the Equity Certificateholder
through the negligence, willful misfeasance, or bad faith of such Seller or TCC,
as applicable, in the performance of its duties under this Agreement or by
reason of reckless disregard of the obligations and duties of such Seller or
TCC, as applicable, under this Agreement;
(g) any loss, liability or expense incurred by reason of
the violation by such Seller or TCC, as applicable, of federal or state
securities laws in connection with the registration or the sale of the Notes and
the Equity Certificate; and
(h) any loss, liability or expense imposed upon, or
incurred by, Antigua, the Owner Trustee, the Indenture Trustee, the Trust, the
Noteholders or the Equity Certificateholder as a result of the failure of any
Contract, or the sale of the related Equipment, to comply with all requirements
of applicable law, but only to the extent such loss, liability or expense is not
covered by the repurchase of such Contract and Equipment as required by Section
5.1.
Indemnification under this Section 4.4 shall include
reasonable fees and expenses of counsel and expenses of litigation and shall
survive termination of the Trust. The indemnity obligations hereunder shall be
in addition to any obligation that any Seller or TCC, as applicable, may
otherwise have.
Promptly after receipt by an indemnified party under this
Section 4.4 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other
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than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
Section 4.5. Negative Covenant. TCC and the Sellers (a)
shall not engage in any transaction or series of transactions or otherwise take
any action or omit to take any action which could result in a determination that
any Seller shall have received less than reasonably equivalent value for the
transfer and conveyance of the Contracts and the other property described in
Section 2.1(b) to Antigua either on the Closing Date or thereafter and (b) in
any event, shall not use the proceeds received from the transfer and conveyance
of the Contracts and the other property described in Section 2.1(b) either on
the Closing Date or thereafter (i) to pay any dividend or make any distribution
on or in respect of its capital stock or (ii) to purchase, redeem or otherwise
acquire or retire for value any of its capital stock or the capital stock of any
of its affiliates (other than any of its wholly owned subsidiaries or a
corporation which by virtue thereof would become a wholly owned subsidiary of
the Seller), if, in the case of either (i) or (ii), at the time of any such
action and after giving effect thereto (x) the present fair saleable value of
the assets of such Seller or TCC is less than the amount that would be required
to be paid on or in respect of such Seller's or TCC's total liabilities
(including a reasonable estimate of its contingent liabilities (net of tax
benefits to the extent reasonably likely to be realized)), (y) the assets of
such Seller or TCC constitute an unreasonably small capital to carry out such
Seller's or TCC's business as it is then conducted or as such Seller or TCC then
intends to conduct its business or (z) such Seller or TCC has incurred, intends
to incur, or believes that it will incur, debts that would be beyond such
Seller's or TCC's ability to pay as they mature.
Section 4.6. Separate Identity.
(a) TCC shall take all actions required to maintain
Antigua's status as a separate legal entity, including, without limitation,
(i) not holding Antigua out to third parties as other than an entity with assets
and liabilities distinct from TCC and the Sellers; (ii) not holding itself out
to be responsible for the debts of Antigua or, other than by reason of owning
capital stock of Antigua, for any decisions or actions relating to Antigua;
(iii) taking such other actions as are necessary on its part to ensure that all
corporate procedures required by its and Antigua's respective certificates of
incorporation and by-laws are duly and validly taken; (iv) keeping correct and
complete records and books of account and corporate minutes; and (vi) not acting
in any other manner that could foreseeably mislead others with respect to
Antigua's separate identity.
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(b) Each of the Sellers shall take all actions required to
maintain Antigua's status as a separate legal entity, including, without
limitation, (i) not holding Antigua out to third parties as other than an entity
with assets and liabilities distinct from such Seller and such Seller's other
Subsidiaries; (ii) not holding itself out to be responsible for the debts of
Antigua or, other than by reason of owning capital stock of Antigua, for any
decisions or actions relating to Antigua; (iii) cause any financial statements
consolidated with those of Antigua to state that Antigua is a separate corporate
entity with its own separate creditors who, in any liquidation of Antigua, will
be entitled to be satisfied out of Antigua's assets prior to any value in
Antigua becoming available to Antigua's equity holders; (iv) taking such other
actions as are necessary on its part to ensure that all corporate procedures
required by its and Antigua's respective certificates of incorporation and
by-laws are duly and validly taken; (v) keeping correct and complete records and
books of account and corporate minutes; and (vi) not acting in any other manner
that could foreseeably mislead others with respect to Antigua's separate
identity.
ARTICLE V
REPURCHASES
Section 5.1. Repurchase of Contracts Upon Breach of
Representation or Warranty. Upon the occurrence of a Repurchase Event, TCC
shall, unless such breach shall have been cured in all material respects,
repurchase such Contract from the Trust and the related Leased Equipment (in the
case of a Lease Contract) from Antigua and, on or before the related Deposit
Date, TCC shall pay the Purchase Amount to the Servicer on behalf of the Owner
Trustee and Antigua pursuant to Section 2.6 of the Transfer and Servicing
Agreement. It is understood and agreed that, except as set forth in the
following paragraph, the obligation of TCC to repurchase any Contract and the
related Leased Equipment (if applicable) as to which a breach has occurred and
is continuing shall, if such obligation is fulfilled, constitute the sole remedy
against TCC and the applicable Seller for such breach available to Antigua, the
Noteholders, the Equity Certificateholder, the Owner Trustee on behalf of the
Equity Certificateholder or the Indenture Trustee on behalf of the Noteholders.
The provisions of this Section 5.1 are intended to grant the Owner Trustee and
the Indenture Trustee a direct right against TCC to demand performance
hereunder, and in connection therewith, TCC waives any requirement of prior
demand against Antigua or the Sellers with respect to such repurchase
obligation. Notwithstanding any other provision of this Agreement or the
Transfer and Servicing Agreement to the contrary, the obligation of TCC under
this Section shall not terminate upon a termination of TCC as Servicer under the
Transfer and Servicing Agreement and shall be performed by TCC in accordance
with the terms hereof notwithstanding the failure of the Servicer or Antigua to
perform any of their respective obligations with respect to such Contract under
the Transfer and Servicing Agreement.
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In addition to the foregoing and notwithstanding whether
the related Contract and the related Leased Equipment (if applicable) shall have
been purchased by TCC, TCC shall indemnify Antigua, the Owner Trustee, the
Indenture Trustee, the Trust, the Noteholders and the Equity Certificateholder
against all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel, which may be asserted against or
incurred by any of them as a result of third party claims arising out of the
events or facts giving rise to such Repurchase Events.
Section 5.2. Reassignment of Purchased Contracts and Leased
Equipment. Upon deposit in the Collection Account of the Purchase Amount of any
Contract and the related Leased Equipment (if applicable) repurchased by TCC
under Section 5.1, Antigua and the Owner Trustee shall take such steps as may be
reasonably requested by TCC in order to assign to TCC all of Antigua's and the
Trust's right, title and interest in and to such Contract and the related Leased
Equipment (if applicable) and all security and documents conveyed to Antigua and
the Trust directly relating thereto, without recourse, representation or
warranty, except as to the absence of liens, charges or encumbrances created by
or arising as a result of actions of Antigua or the Owner Trustee. Such
assignment shall be a sale and assignment outright, and not for security. If,
following the reassignment of a Purchased Contract and the related Leased
Equipment (if applicable), in any enforcement suit or legal proceeding, it is
held that TCC may not enforce any such Contract on the ground that it shall not
be a real party in interest or a holder entitled to enforce the Contract,
Antigua and the Owner Trustee shall, at the expense of TCC, take such steps as
TCC deems reasonably necessary to enforce the Contract, including bringing suit
in Antigua's or the Owner Trustee's name or the name of the Indenture Trustee on
behalf of the Noteholders or Equity Certificateholder, as applicable.
Section 5.3. Waivers. No failure or delay on the part of
Antigua, the Trust or the Owner Trustee as assignee of Antigua, in exercising
any power, right or remedy under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
remedy preclude any other or future exercise thereof or the exercise of any
other power, right or remedy.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Liability of the Sellers and TCC. Each of the
Sellers and TCC shall be liable in accordance herewith only to the extent of the
obligations in this Agreement specifically undertaken, individually and not
jointly, by each Seller and TCC, and the representations and warranties of each
Seller and TCC.
Section 6.2. Merger or Consolidation of a Seller, TCC or
Antigua. Any corporation or other entity (i) into which any Seller, TCC or
Antigua may be merged
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or consolidated, (ii) resulting from any merger or consolidation to which any
Seller, TCC or Antigua is a party or (iii) succeeding to the business of any
Seller, TCC or Antigua, shall be the successor to such Seller, TCC or Antigua,
as the case may be (without relieving such Seller, TCC or Antigua of its
responsibilities hereunder, if it survives such merger or consolidation) without
the execution or filing of any document or any further act by any of the parties
to this Agreement. Such Seller, TCC or Antigua shall promptly inform the other
parties, the Owner Trustee and the Indenture Trustee of such merger,
consolidation or purchase and assumption. Notwithstanding the foregoing, as a
condition to the consummation of the transactions referred to in clauses (i),
(ii) and (iii) above, (x) immediately after giving effect to such transaction,
no representation or warranty made pursuant to Sections 3.1 (other than
subsections (a) and (i)), 3.2 (other than subsections (a) and (i)), 3.3 (other
than subsections (a) and (i)), 3.4 (other than subsections (a) and (i)), and 3.5
(other than subsection (h)) of this Agreement shall have been breached (for
purposes hereof, such representations and warranties shall speak as of the date
of the consummation of such transaction), (y) such Seller, TCC or Antigua, as
applicable, shall have delivered written notice of such consolidation, merger or
purchase and assumption to the Rating Agencies prior to the consummation of such
transaction and shall have delivered to the Owner Trustee and the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section 6.2 and that all conditions precedent, if any, provided for in
this Agreement, relating to such transaction have been complied with, and (z)
such Seller, TCC or Antigua, as applicable, shall have delivered to the Owner
Trustee and the Indenture Trustee an Opinion of Counsel, stating that, in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary to preserve and protect the interest of the Owner Trustee in the Trust
Assets and reciting the details of the filings or (B) no such action shall be
necessary to preserve and protect such interest.
Section 6.3. Limitation on Liability of the Sellers, TCC
and Others.
(a) Except with respect to the Representations and
Warranties herein and in the Schedule of Representations, and the
indemnification obligations set forth in Section 4.4 herein, each Seller and TCC
may rely in good faith on the advice of counsel or on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising under this Agreement. Each Seller and TCC shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its obligations under this Agreement or its Related Documents and
that in its reasonable judgment may involve it in any expense or liability.
(b) Any officer, director, employee or agent of TCC or any
Seller may rely in good faith on the advice of counsel or on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising
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under this Agreement. Neither any Seller nor TCC shall be under any obligation
to appear in, prosecute or defend any legal action that is not incidental to its
obligations under this Agreement or its Related Documents and that in its
reasonable judgment may involve it in any expense or liability.
Section 6.4. The Sellers and TCC May Own Notes or Equity
Certificate. Subject to the provisions of the Transfer and Servicing Agreement,
each of the Sellers and TCC, and any Affiliate of any Seller or TCC, may in its
individual or any other capacity become the owner or pledgee of Notes or Equity
Certificate with the same rights as it would have if it were not a Seller, TCC
or an Affiliate thereof (except as provided in Section 1.6).
Section 6.5. Amendment.
(a) This Agreement may be amended by the Sellers, TCC and
Antigua without the consent of the Owner Trustee, the Indenture Trustee, the
Equity Certificateholder or the Noteholders (i) to cure any ambiguity; (ii) to
correct or supplement any provisions in this Agreement that may be inconsistent
with any other provisions herein; or (iii) to make any other provisions with
respect to matters or questions arising under this Agreement that are not
inconsistent with the provisions hereof, provided, however, that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Owner Trustee
and the Indenture Trustee, adversely affect in any material respect the
interests of the Noteholders or Equity Certificateholder.
(b) This Agreement may also be amended from time to time by
the Sellers, TCC and Antigua, with the prior written consent of a Note Majority
(which consent of any Holder of a Note given pursuant to this Section or
pursuant to any other provision of this Agreement shall be conclusive and
binding on such Holder and on all future Holders of such Note and of any Note
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Note), for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, or of modifying in any manner the rights of the
Equity Certificateholder or the Noteholders; provided, however, that no such
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Contracts,
distributions that shall be required to be made on any Note or the applicable
rate of interest payable thereon, (ii) amend any provisions of Section 5.06 or
8.03 of the Indenture in such a manner as to affect the priority of payment of
interest or principal to Noteholders, or (iii) reduce the aforesaid percentage
required to consent to any such amendment or any waiver hereunder, without the
consent of the Holders of all Notes then Outstanding and affected thereby; and
provided, further, that no such amendment shall be effective unless and until
the Rating Agency Condition has been satisfied.
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(c) Promptly after the execution of any such amendment or
consent, the Owner Trustee or the Indenture Trustee, as applicable, shall
furnish written notification of the substance of such amendment or consent to
each Noteholder.
(d) It shall not be necessary for the consent of
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of the Noteholders provided for in this Agreement) and of
evidencing the authorization of the execution thereof by the Noteholders shall
be subject to such reasonable requirements as the Indenture Trustee may
prescribe, including the establishment of record dates. The consent of any
Holder of a Note given pursuant to this Section or pursuant to any other
provision of this Agreement shall be conclusive and binding on such Holder and
on all future Holders of such Note and of any Note issued upon the transfer
thereof or in exchange thereof or in lieu thereof whether or not notation of
such consent is made upon the Note.
Section 6.6. Notices. All demands, notices and
communications to the Sellers, TCC or Antigua hereunder shall be in writing,
personally delivered, or sent by telecopier (subsequently confirmed in writing),
reputable overnight courier or mailed by certified mail, return receipt
requested, and shall be deemed to have been given upon receipt:
(a) in the case of TCC, to AT&T Capital Corporation, 44
Whippany Road, Morristown, New Jersey 07962-1983, Attention: General Counsel, or
such other address as shall be designated by TCC in a written notice delivered
to the other parties and to the Owner Trustee and the Indenture Trustee;
(b) in the case of Leasing Services, to AT&T Capital
Corporation, 44 Whippany Road, Morristown, New Jersey 07962-1983, Attention:
General Counsel, or such other address as Leasing Services shall be designated
by a written notice delivered to the other parties and to the Owner Trustee and
the Indenture Trustee;
(c) in the case of Credit Corp., to AT&T Capital
Corporation, 44 Whippany Road, Morristown, New Jersey 07962-1983, Attention:
General Counsel, or such other address as shall be designated by Credit Corp. in
a written notice delivered to the other parties and to the Owner Trustee and the
Indenture Trustee;
(d) in the case of NCR Credit, to AT&T Capital Corporation,
44 Whippany Road, Morristown, New Jersey 07962-1983, Attention: General Counsel,
or such other address as shall be designated by NCR Credit in a written notice
delivered to the other parties and to the Owner Trustee and the Indenture
Trustee;
(e) in the case of Antigua, to AT&T Capital Corporation, 44
Whippany Road, Morristown, New Jersey 07962-1983, Attention: General Counsel.
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Section 6.7. Merger and Integration. Except as specifically
stated otherwise herein, this Agreement and the Related Documents set forth the
entire understanding of the parties relating to the subject matter hereof, and
all prior understandings, written or oral, are superseded by this Agreement and
the Related Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.
Section 6.8. Severability of Provisions. If any one or more
of the covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
SECTION 6.9. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 6.10. Counterparts. For the purpose of facilitating
the execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
Section 6.11. Conveyance of the Contracts to the Trust. The
Sellers and TCC acknowledge that Antigua intends, pursuant to the Transfer and
Servicing Agreement, to convey the Contracts, the Leased Equipment and the other
items described in Section 2.1(b), together with its rights under this
Agreement, to the Trust on the Closing Date. The Sellers and TCC acknowledge and
consent to such conveyance and waive any further notice thereof and covenant and
agree that the representations and warranties of the Sellers and TCC contained
in this Agreement and the rights of Antigua hereunder are intended to benefit
the Owner Trustee, the Indenture Trustee, the Trust, the Noteholders and the
Equity Certificateholder. In furtherance of the foregoing, the Sellers and TCC
covenant and agree to perform their duties and obligations hereunder, in
accordance with the terms hereof, for the benefit of the Owner Trustee, the
Indenture Trustee, the Trust, the Equity Certificateholder and the Noteholders
and that, notwithstanding anything to the contrary in this Agreement, the
Sellers and TCC shall be directly liable to the Owner Trustee, the Indenture
Trustee and the Trust (notwithstanding any failure by the Servicer or Antigua to
perform its duties and obligations hereunder or under the Transfer and Servicing
Agreement) and that the Owner Trustee and the Indenture Trustee may enforce the
duties and obligations of the Sellers or TCC under this
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Agreement against the Sellers or TCC for the benefit of the Trust, the Equity
Certificateholder and the Noteholders.
Section 6.12. Nonpetition Covenant. Neither the Sellers,
TCC nor Antigua shall petition or otherwise invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Trust (or, in the case of the Sellers or TCC, against Antigua) under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Trust (or Antigua) or any substantial part of its property, or ordering
the winding up or liquidation of the affairs of the Trust (or Antigua).
-29-
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IN WITNESS WHEREOF, the parties have caused this Purchase
and Sale Agreement to be duly executed by their respective officers as of the
day and year first above written.
ANTIGUA FUNDING CORPORATION
By: /s/ Glenn A. Votek
-------------------------------------
Title: Glenn A. Votek
Name: Treasurer
AT&T CAPITAL CORPORATION
By: /s/ Glenn A. Votek
-------------------------------------
Title: Glenn A. Votek
Name: Vice President and Treasurer
AT&T CAPITAL LEASING SERVICES, INC.
By: /s/ Glenn A. Votek
-------------------------------------
Title: Glenn A. Votek
Name: Treasurer
AT&T CREDIT CORPORATION
By: /s/ Glenn A. Votek
-------------------------------------
Title: Glenn A. Votek
Name: Treasurer
NCR CREDIT CORP.
By: /s/ Glenn A. Votek
--------------------------------------
Title: Glenn A. Votek
Name: Treasurer
-30-
<PAGE>
<PAGE>
(Multicurrency--Cross Border)
ISDA'r'
International Swap Dealers Association Inc.
MASTER AGREEMENT
dated as of December 3, 1997
Goldman Sachs Mitsui Marine Derivative Products, L.P. and Capital Equipment
Receivables Trust 1997-1 have entered and /or anticipate entering into one or
more transactions (each a "Transaction") that are or will be governed by this
Master Agreement, which includes the schedule (the "Schedule"), and the
documents and other confirming evidence (each a "Confirmation") exchanged
between the parties confirming those Transactions.
Accordingly, the parties agree as follows:--
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations from a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value on
that date in the place of the account specified in the relevant Confirmation
or otherwise pursuant to this Agreement, in freely transferable funds and in
the manner customary for payments in the required currency. Where settlement
is by delivery (that is, other than by payment), such delivery will be made
for receipt on the due date in the manner customary for the relevant
obligation unless otherwise specified in the relevant Confirmation or
elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to (1)
the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing, (2)
the condition precedent that no Early Termination Date in respect of the
relevant Transaction has occurred or been effectively designated and (3)
each other applicable condition precedent specified in this Agreement.
Copyright 'c' 1992 by International Swap Dealers Association, Inc.
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(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction.
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will
not, or will cease to, apply to such Transactions from such date). This election
may be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and
receive payments or deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such deduction
or withholding is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, then in effect. If
a party is so required to deduct or withhold, then that party ("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be deducted
or withheld from any additional amount paid by X to Y under this Section
2(d)) promptly upon the earlier of determining that such deduction or
withholding is required or receiving notice that such amount has been
assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy), or
other documentation reasonably acceptable to Y, evidencing such payment
to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the
payment to which Y is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount actually
received by Y (free and clear of Indemnifiable Taxes, whether assessed
against X or Y) will equal the full amount Y would have received had
not such deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that it would
not be required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to Section
3(f) to be accurate and true unless such failure would not have
occurred but for (I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to this
Agreement) or (II) a Change in Tax Law.
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(ii) LIABILITY. If:--
(1) X is required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, to make any deduction or
withholding in respect of which X would not be required to pay an
additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against X.
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment obligation
will, to the extent permitted by law and subject to Section 6(c), be required to
pay interest (before as well as after judgment) on the overdue amount to the
other party on demand in the same currency as such overdue amount, for the
period from (and including) the original due date for payment to (but excluding)
the date of actual payment, at the Default Rate. Such interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. If, prior to the occurrence or effective designation of an Early
Termination Date in respect of the relevant Transaction, a party defaults in the
performance of any obligation required to be settled by delivery, it will
compensate the other party on demand if and to the extent provided for in the
relevant Confirmation or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organised and validly existing under the laws of the
jurisdiction of its organisation or incorporation and, if relevant under
such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to deliver
this Agreement and any other documentation relating to this Agreement that
it is required by this Agreement to deliver and to perform its obligations
under this Agreement and any obligations it has under any Credit Support
Document to which it is a party and has taken all necessary action to
authorise such execution, delivery and performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and performance do
not violate or conflict with any law applicable to it, any provision of its
constitutional documents, any order or judgment of any court or other agency
of government applicable to it or any of its assets or any contractual
restriction binding on or affecting it or any of its assets;
(iv) CONSENTS. All governmental and other consents that are required to have
been obtained by it with respect to this Agreement or any Credit Support
Document to which it is a party have been obtained and are in full force and
effect and all conditions of any such consents have been complied with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and any Credit
Support Document to which it is a party constitute its legal, valid and
binding obligations, enforceable in accordance with their respective terms
(subject to applicable bankruptcy, reorganisation, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application (regardless
of whether enforcement is sought in a proceeding in equity or at law)).
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(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of
Default, or, to its knowledge. Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party: --
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs: --
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation; and
(iii) upon reasonable demand by such other party, any form or document that
may be required or reasonably requested in writing in order to allow such
other party or its Credit Support Provider to make a payment under this
Agreement or any applicable Credit Support Document without any deduction or
withholding for or on account of any Tax or with such deduction or
withholding at a reduced rate (so long as the completion, execution or
submission of such form or document would not materially prejudice the legal
or commercial position of the party in receipt of such demand), with any
such form or document to be accurate and completed in a manner reasonably
satisfactory to such other party and to be executed and to be delivered with
any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORISATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,
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organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party: --
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or perform any
agreement or obligation (other than an obligation to make any payment under
this Agreement or delivery under Section 2(a)(i) or 2(e) or to give notice
of a Termination Event or any agreement or obligation under Section 4(a)(i),
4(a)(iii) or 4(d)) to be complied with or performed by the party in
accordance with this Agreement if such failure is not remedied on or before
the thirtieth day after notice of such failure is given to the party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider of such party to
comply with or perform any agreement or obligation to be complied with
or performed by it in accordance with any Credit Support Document if
such failure is continuing after any applicable grace period has
elapsed;
(2) the expiration or termination of such Credit Support Document or the
failing or ceasing of such Credit Support Document to be in full force
and effect for the purpose of this Agreement (in either case other than
in accordance with its terms) prior to the satisfaction of all
obligations of such party under each Transaction to which such Credit
Support Document relates without the written consent of the other party;
or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the validity
of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a representation under
Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party (1)
defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due on
the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice requirement
or grade period) or (3) disaffirms, disclaims, repudiates or rejects, in
whole or in part, a Specified Transaction (or such action is taken by any
person or entity appointed or empowered to operate it or act on its behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however
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described) in respect of such party, any Credit Support Provides of such
party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has
resulted in such Specified Indebtedness becoming, or becoming capable at
such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified Entity
(individually or collectively) in making one or more payments on the due
date thereof in an aggregate amount of not less than the applicable
Threshold Amount under such agreements or instruments (after giving effect
to any applicable notice requirement or grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation, amalgamation
or merger); (2) becomes insolvent or is unable to pay its debts or fails
or admits in writing its inability generally to pay its debts as they
become due; (3) makes a general assignment, arrangement or composition
with or for the benefit of its creditors; (4) institutes or has
instituted against it a preceding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency law or
other similar law affecting creditors' rights, or a petition is
presented for its winding-up or liquidation, and, in the case of any
such proceeding or petition instituted or presented against it, such
proceeding or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an order
for its winding-up or liquidation or (B) is not dismissed, discharged,
stayed or restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its winding-up,
official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes subject to
the appointment of an administrator, provisional liquidator, conservator
receiver, trustee, custodian or other similar official for it or for all
or substantially all its assets; (7) has a secured party take possession
of all or substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied, enforced or
sued on or against all or substantially all its assets and such secured
party maintains possession, or any such process is not dismissed,
discharged, stayed or restrained, in each case within w 30 days
thereafter; (8) causes or is subject to any event with respect to it
which, under the applicable laws of any jurisdiction, has an analogous
effect to any of the events specified in clauses (1) to (7) (inclusive);
or (9) takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) MERGE WITHOUT ASSUMPTION. The party or any Credit Support Provider of
such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at the
time of such consolidation, amalgamation, merger or transfer:--
(1) the resulting, surviving or transferee entity fails to assume all
the obligations of such party or such Credit Support Provider under this
Agreement or any Credit Support Document to which it or its predecessor
was a party by operation of law or pursuant to an agreement reasonably
satisfactory to this Agreement; or
(2) the benefits of any Credit Support Document fail to extend (without
the consent of the other party) to the performance by such resulting,
surviving or transferee entity of its obligations under this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event
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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) ILLEGALITY. Due to the adoption of, or any change in, any applicable law
after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court, tribunal
or regulatory authority with competent jurisdiction or any applicable law
after such date, it becomes unlawful (other than as a result of a breach by
the party of Section 4(b)) for such party (which will be the Affected
Party):--
(1) to perform any absolute or contingent obligation to make a payment
or delivery or to receive a payment or delivery in respect of such
Transaction or to comply with any other material provision of this
Agreement relating to such Transaction,; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document relating
to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on which
a Transaction is entered into (regardless of whether such action is taken or
brought with respect to a party to this Agreement) or (y) a Change in Tax
Law, the party (which will be Affected Party) will, or there is a
substantial likelihood that it will, on the next succeeding Scheduled
Payment Date (1) be required to pay to the other party an additional amount
in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in
respect of interest under Section 2(e), 6(d)(ii) or (2) receive a payment
from which an amount is required to be deducted or withheld for or on
account of a Tax (except in respect of interest under Section 2(e), 6(d)(ii)
or 6(e)) and no additional amount is required to be paid in respect of such
Tax under Section 2(d)(i)(4) (other than by reason of Section 2
(d)(i)(4)(A)(B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount of in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which the
other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is specified in
the Schedule as applying to the party, such party ("X"), any Credit Support
Provider of X or any applicable Specified Entity of X consolidates or
amalgamates with, or merges with or into, or transfers all or substantially
all its assets to, another entity and such action does not constitute an
event described in Section 5(a)(viii) but the creditworthiness of the
resulting, surviving or transferee entity is materially weaker that that of
X, such Credit Support Provider or such Specified Entity, as the case may
be, immediately prior to such action (and, in such event, X or its successor
or transferee, as appropriate, will be the Affected Party); or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence of
such event (and, in such event, the Affected Party or Affected Parties shall
be as specified for such Additional Termination Event in the Schedule or
such Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
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6. EARLY TERMINATION
(a) RIGHT OF TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier that the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4), or, to the extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party will, promptly
upon becoming aware of it, notify the other party, specifying the nature of
that Termination Event and each Affected Transaction and will also give such
other information about that Termination Event as the other party may
reasonably require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either and Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after
it gives notice under Section 6(b)(i) all its rights and obligations under
this Agreement in respect of the Affected Transactions to another of its
Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject to
and conditional upon the prior written consent of the other party, which
consent will not be withheld if such other party's policies in effect at
such time would permit it to enter into transactions with the transferee on
the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(1) or a
Tax Event occurs and there are two Affected Parties, each party will use all
reasonable efforts to reach agreement within 30 days after notice thereof is
given under Section 6(b)(i) on action to avoid that Termination Event.
(iv) RIGHTS TO TERMINATE. If:--
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to all
Affected Transactions within 30 days after an Affected Party gives
notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger
or an Additional Termination Event occurs, or a Tax Event Upon Merger
occurs and the Burdened Party is not the Affected Party.
either party in the case of an Illegality, the Burdened Party in the case of
a Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an
Additional Termination Event if there is more than one Affected Party, or
the party which is not the Affected Party in the case of a Credit Event Upon
Merger or an Additional Termination Event if there is only one Affected
Party may, by not more than 20 days notice to the other party and provided
that the relevant Termination Event is then
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continuing, designate a day not earlier than the day such notice if
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transaction will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount, if
any, payable in respect of an Early Termination Date shall be determined
pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e) and (2) giving details of the relevant
account to which any amount payable to it it to be paid. In the absence of
written confirmation from the source of a quotation obtained in determining
a Market Quotation, the records of the party obtaining such quotation will
be conclusive evidence of the existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of any Early
Termination Date under Section 6(e) will be payable on the day that notice
of the amount payable is effective (in the case of an Early Termination Date
which is designated or occurs as a result of an Event of Default) and on the
day which is two Local Business Days after the day on which notice of this
amount payable is effective (in the case of an Early Termination Date which
is designated as a result of a Termination Event). Such amount will be paid
together with (to the extent permitted under applicable law) interest
thereon (before as well as after judgment) in the Termination Currency, from
(and including) the relevant Early Termination Date to (but excluding) the
date such amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from an Event
of Default:--
(1) First Method and Market Quotation. If the First Method and Market
Quotation apply, the Defaulting Party will pay to the Non-defaulting
Party the excess, if a positive number, of (A) the sum of the Settlement
Amount (determined by the Non-defaulting Party) in respect of the
Terminated Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second Method and Market
Quotation apply, an amount will be payable equal to (A) the sum of the
Settlement Amount (determined by the
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Non-defaulting Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent of the
Unpaid Amounts owing to the Defaulting Party. If that amount is a
positive number, the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute value of
that amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results from a
Termination Event:--
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except
that, in either case, references to the Defaulting Party and to the
Non-defaulting Party will be deemed to be references to the Affected
Party and the party which is not the Affected Party, respectively, and,
if Loss applies and fewer than all the Transactions are being
terminated, Loss shall be calculated in respect of all Terminated
Transactions.
(2) Two Affected Parties. If there are two Affected Parties:--
(A) if Market Quotations applies, each party will determine a
Settlement Amount in respect of Terminated Transactions, and an
amount will be payable equal to (I) the sum of (a) one-half of the
difference between the Settlement Amount of the party with the
higher Settlement Amount ("X") and the Settlement Amount of the
party with the lower Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X less (II) the
Termination Currency Equivalent of the Unpaid Amounts owing to Y;
and
(B) if Loss applies, each party will determine its Loss in respect
of this Agreement (or, if fewer than all the Transactions are being
terminated, in respect of all Terminated Transactions) and an amount
will be payable equal to one-half of the difference between the Loss
of the party with the higher Loss ("X") and the Loss of the party
with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if it is
a negative number, X will pay the absolute value of that amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early Termination
Date occurs because "Automatic Early Termination" applies in respect of a
party, the amount determined under this Section 6(e) will be subject to such
adjustments as are appropriate and permitted by law to reflect any payments
or deliveries made by one party to the other under this Agreement (and
retained by such other party) during the period from the relevant Early
Termination Date to the date for payment determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise provided
in this Agreement neither party will be entitled to recover any additional
damages as a consequence of such losses.
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7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with or merger with or into, or transfer of all or
substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) JUDGEMENTS. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
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9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by facsimile
transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable and
may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to this
Agreement. The parties will specify therein or through another effective
means that any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
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to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. NOTICES
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received.
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Date, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number of electronic messaging system details at
which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) JURISDICTION. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement is
expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdicition and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
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reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to the
service of process given in the manner provided for notices in Section 12.
Nothing in this Agreement will affect the right of either party to serve process
in any other manner permitted by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:--
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
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"DEFAULTING PARTY" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having had a permanent establishment or fixed place of
business in such jurisdiction, but excluding a connection arising solely from
such recipient or related person having executed, delivered, performed its
obligations or received a payment under, or enforced, this Agreement or a Credit
Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"LAWFUL" and "UNLAWFUL" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, it not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss incudes losses and costs (or gains) in respect of any payment
or delivery required to have been made (assuming satisfaction of each applicable
condition precedent) on or before the relevant Early Termination Date and not
made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or
6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have
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been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so oblige, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
'NON-DEFAULT RATE' means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
'NON-DEFAULTING PARTY' has the meaning specified in Section 6(a).
'OFFICE' means a branch or office of a party, which may be such party's head or
home office.
'POTENTIAL EVENT OF DEFAULT' means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
'REFERENCE MARKET-MAKERS' means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
'RELEVANT JURISDICTION' means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such
payment is made.
'SCHEDULED PAYMENT DATE' means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
'SET-OFF' means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
'SETTLEMENT AMOUNT' means, with respect to a party and an Early Termination
date, the sum of: --
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
'SPECIFIED ENTITY' has the meaning specified in the Schedule.
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'SPECIFIED INDEBTEDNESS' means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
'SPECIFIED TRANSACTION' means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into [between one party to this Agreement (or any Credit Support Provider of
such party or any applicable Specified Entity of such party) and the other party
to this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party)] which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
'STAMP TAX' means any stamp, registration, documentation or similar tax.
'TAX' means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
'TAX EVENT' has the meaning specified in Section 5(b).
'TAX EVENT UPON MERGER' has the meaning specified in Section 5(b).
'TERMINATED TRANSACTIONS' means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if 'Automatic Early Termination' applies, immediately
before that Early Termination Date).
'TERMINATION CURRENCY' has the meaning specified in the Schedule.
'TERMINATION CURRENCY EQUIVALENT' means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
'Other Currency'), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
'TERMINATION EVENT' means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
'TERMINATION RATE' means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
'UNPAID AMOUNTS' owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount
equal to the fair market
17
<PAGE>
<PAGE>
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
<TABLE>
<S> <C>
Goldman Sachs Mitsui Marine Capita Equipment Receivables
Derivative Products, L.P. Trust 1997-1
..................................... ......................................
(Name of Party) (Name of Party)
By: /s/ David Vinia By: /s/ Cheryl L. Laser
................................. ..................................
Name: David Vinia Name: Cheryl L. Laser
Title: Treasurer-GSMMDPGP, Inc. Title: Assistant Vice President
Date: December 3, 1997 Date:
</TABLE>
18
<PAGE>
<PAGE>
SCHEDULE
to the
ISDA MASTER AGREEMENT
dated as of December 3, 1997
between
GOLDMAN SACHS MITSUI MARINE
DERIVATIVE PRODUCTS, L.P.,
a limited partnership organized
under the laws of the State of Delaware
("Party A"),
and
CAPITA EQUIPMENT RECEIVABLES TRUST
1997-1,
a trust organized under the laws of the State of New York
("Party B" or the "Owner Trust")
The transaction ("Transaction") to be outstanding hereunder shall be
evidenced by a confirmation of even date herewith, as it may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof (as so amended, supplemented or modified, the
"Confirmation"). The Master Agreement to which this Schedule is attached, this
Schedule and the Confirmation, each as amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof (as
so amended, supplemented or modified, collectively, the "Agreement"), shall
constitute the "Class A-5 Swap Agreement", and Party A shall constitute the
Class A-5 Swap Counterparty, in each case as referred to in the Indenture, dated
as of November 1, 1997, as it may be amended, supplemented or otherwise modified
from time to time (the "Indenture"), between the Owner Trust, as issuer, and
Bankers Trust Company (the "Indenture Trustee"). Terms defined or referenced in
the Indenture and not otherwise defined or referenced in the Agreement are used
in the Agreement as defined or referenced in the Indenture. The Agreement and
the Transactions are also subject to the ISDA Definitions referred to (and to
the extent set forth in) Part 5(b) of this Schedule.
PART 1. TERMINATION PROVISIONS.
(a) "SPECIFIED ENTITY" means in relation to Party A for the
purpose of:
Section 5(a)(v), Not Applicable
Section 5(a)(vi), Not Applicable
<PAGE>
<PAGE>
2
Section 5(a)(vii), Not Applicable
Section 5(b)(iv), Not Applicable
and in relation to Party B for the purpose of:
Section 5(a)(v), Not Applicable
Section 5(a)(vi), Not Applicable
Section 5(a)(vii), Not Applicable
Section 5(b)(iv), Not Applicable
(b) "EVENTS OF DEFAULT". The following Events of Default will not
apply to Party A or Party B, and the definition of "Event of
Default" in Section 14 is deemed to be modified accordingly:
Section 5(a)(ii), (Breach of Agreement)
Section 5(a)(iii), (Credit Support Default)
Section 5(a)(iv), (Misrepresentation)
Section 5(a)(v), (Default under Specified Transaction)
Section 5(a)(vi), (Cross Default)
Section 5(a)(viii), (Merger Without Assumption)
(c) The following Termination Events will not apply to Party A or
Party B, and the definition of "Termination Event" in Section
14 is deemed to be modified accordingly:
Section 5(b)(ii), (Tax Event)
Section 5(b)(iii), (Tax Event Upon Merger)
Section 5(b)(iv), (Credit Event Upon Merger)
Section 5(b)(v), (Additional Termination Event)
(d) Section 5(a)(vii) (Bankruptcy) is hereby amended by: (i)
adding in Clause (1) thereof (first line) after the word
"merger" and before the closing parenthetical the words "or,
in the case of Party A, reconstitution, incorporation, or
admission or withdrawal of a partner"; and (ii) adding in
Clause (5) (twelfth line) thereof after the word "merger" and
before the closing parenthetical the words "or, in the case of
Party A, reconstitution or incorporation."
(e) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a)
will not apply to Party A or Party B.
<PAGE>
<PAGE>
3
(f) PAYMENTS ON EARLY TERMINATION. Notwithstanding any provision
to the contrary in the Agreement, upon the occurrence of an
Early Termination Date in respect of the Transaction:
(i) the provisions of Sections 6(d)(i) (to the extent
they relate to obtaining Market Quotations) and
Sections 6(e)(i) and (ii) shall not apply to the
Transaction, and, as a result, there will be no early
termination payment based on Market Quotation, Loss
or the replacement cost or value of such Transaction;
(ii) each reference in the Agreement to an amount
calculated as being due in respect of any Early
Termination Date under Section 6(e) shall be deemed
to refer to an amount calculated in accordance with
Part 1(f)(iii) of this Schedule;
(iii) the amount payable in respect of any Early
Termination Date will be the amount (determined by
the Calculation Agent and netted in accordance with
Section 2(c), as amended in Part 4(i) of this
Schedule) that is the Termination Currency Equivalent
of the result of (A) the sum of (1) all Unpaid
Amounts owing to the Owner Trust in respect of the
Transaction plus (2) all amounts that would be
payable to the Owner Trust if such Early Termination
Date were the next Payment Date in respect of the
Transaction, less (B) the sum of (1) all Unpaid
Amounts owing to Party A in respect of the
Transaction plus (2) all amounts that would be
payable to Party A if such Early Termination Date
were the next Payment Date in respect of the
Transaction; and
(iv) if the amount determined pursuant to clause (iii)
above is a positive number, Party A will pay it to
the Owner Trust on the Business Day immediately
following the Early Termination Date; if it is a
negative number, the Owner Trust will pay the
absolute value of that amount to Party A on the
Business Day immediately following the Early
Termination Date.
(g) "TERMINATION CURRENCY" means United States Dollars.
(h) "TRANSFER TO AVOID TERMINATION EVENT". Section 6(b)(ii) is
hereby amended by adding at the end thereof before the period
in the third paragraph the following condition:
<PAGE>
<PAGE>
4
, and the prior written confirmation from each Rating Agency
that the then current rating of the Class A-5 Notes will not
be withdrawn or reduced as a result of such transfer
PART 2. TAX REPRESENTATIONS.
(a) PAYER REPRESENTATIONS. For purposes of Section 3(e), each of
Party A and Party B represents as follows:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of
any Relevant Jurisdiction, to make any deduction or
withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e)) to
be made by it to the other party under the Agreement. In
making this representation, it may rely on (i) the accuracy of
any representations, if any, made by the other party pursuant
to Section 3(f), (ii) the satisfaction of the agreement
contained in Section 4(a)(i) or 4(a)(iii) and the accuracy and
effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii), and (iii) the
satisfaction of the agreement of the other party contained in
Section 4(d), provided that it shall not be a breach of this
representation where reliance is placed on Clause (ii) above
and the other party does not deliver a form, document or
certificate under Section 4(a)(iii) by reason of material
prejudice to its legal or commercial position.
(b) PAYEE REPRESENTATIONS. For the purpose of Section 3(f),
neither Party A nor Party B makes any representation.
PART 3. AGREEMENT TO DELIVER DOCUMENTS.
For the purpose of Sections 4(a)(i) and (ii), each of Party A
and Party B agrees to deliver the following documents, as
applicable:
(a) Tax forms, documents, or certificates to be delivered are:
Each of Party A and Party B agrees, promptly upon reasonable
demand by such other party, to complete, accurately and in a
manner reasonably satisfactory to the other party, and to
execute, arrange for any required certification of, and
deliver to the other party (or to such government or taxing
authority as the other party reasonably directs), any form or
document that may be required or reasonably requested in order
to allow the other party to make a payment under the Agreement
without any deduction or withholding
<PAGE>
<PAGE>
5
for or on account of any Tax or with such deduction or
withholding at a reduced rate.
(b) Other documents to be delivered are:
<TABLE>
<CAPTION>
======================================================================================================================
Party required Covered by
to deliver Form/Document/ Date by which to Section 3(d)
document Certificate be delivered Representation
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Party A Power of Attorney with At execution of the Yes
respect to the corporate Agreement
general partner of Party A
- ----------------------------------------------------------------------------------------------------------------------
Party A Support Agreement dated At execution of the No
as of October 8, 1993 Agreement
among Party A, Mitsui
Marine and Fire
Insurance Co., Ltd., and
The Goldman Sachs
Group, L.P. (the
"Support Agreement")
- ----------------------------------------------------------------------------------------------------------------------
Party B Certified incumbency At execution of the Yes
certificate or other Agreement
evidence of authority and
specimen signatures with
respect to Party B and its
signatories
- ----------------------------------------------------------------------------------------------------------------------
Party B Servicer's Certificate Monthly, on the fifth No
delivered to the Owner Business Day prior to
Trustee pursuant to the 15th day of each
Section 3.9 of the month, subject to
Transfer and Servicing adjustment in
Agreement. accordance with the
Following Business
Day Convention
- ----------------------------------------------------------------------------------------------------------------------
Party B Trust Agreement and At execution of the No
Indenture Agreement
- ----------------------------------------------------------------------------------------------------------------------
Party B Amendments, if any, to Upon execution thereof No
Trust Agreement and
Indenture
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
6
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Party A and Opinions of counsel in At execution of the No
Party B form and substance Agreement
satisfactory to the other
party
- ----------------------------------------------------------------------------------------------------------------------
Party B Prospectus and At execution of the Yes
Supplement thereto Agreement
- ----------------------------------------------------------------------------------------------------------------------
Party B Rating Agency letters At execution of the No
Agreement
======================================================================================================================
</TABLE>
PART 4. MISCELLANEOUS.
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a):
Address for notices or communications to Party A:
Address: 85 Broad Street
New York, New York 10004
Attention: Swap Administration
Telex: 421344 Answerback: GOLSAX
Facsimile No.: 212-902-0996
Telephone No.: 212-902-1000
Electronic Messaging System Details: None
With a copy to:
Address: 85 Broad Street
New York, New York 10004
Attention: Treasury Administration
Telex: 421344 Answerback: GOLSAX
Facsimile No.: 212-902-3325
Telephone No.: 212-902-1000
Electronic Messaging System Details: None
Address for notices or communications to Party B:
<PAGE>
<PAGE>
7
Address: The Bank of New York, as Owner Trustee
101 Barclay Street
Floor: 12 East
New York, New York 10286
Facsimile: 212-815-5999
Telephone No: 212-815-7156
Electronic Messaging System: None
With a copy to:
Address: Bankers Trust Company, as Indenture Trustee
Four Albany Street, 10th Floor
New York, New York 10006
Attention: Corporate Trust & Agency Group
Structured Finance
Facsimile: (212) 250-6439
Telephone No.: (212) 250-6717
Electronic Messaging System Details: None
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent:
Address: Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Legal Department
Telex: 421344 Answerback: GOLSAX
Facsimile No.: 212-902-4140/3876
Telephone No.: 212-902-1000
Electronic Messaging System Details: None
Party B appoints as its Process Agent:
Name: Bankers Trust Company
<PAGE>
<PAGE>
8
Address: Bankers Trust Company, as Indenture Trustee
Four Albany Street, 10th Floor
New York, New York 10006
Attention: Corporate Trust & Agency Group
Structured Finance
Facsimile: (212) 250-6439
Telephone No.: (212) 250-6717
Electronic Messaging System Details: None
(c) OFFICES. The provisions of Section 10(a) will not apply to
Party A or Party B.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c):
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support
Document, each of which is incorporated by reference in,
constitutes part of, and is in connection with, the Agreement
and each Confirmation (unless provided otherwise in a
Confirmation) as if set forth in full in the Agreement or such
Confirmation:
(i) Support Agreement referenced in Part 3(b) of this
Schedule.
(g) CREDIT SUPPORT PROVIDER. Not applicable either to Party A or
to Party B.
(h) GOVERNING LAW. The Agreement (including the Schedule and the
Confirmation) will be governed by, and construed in accordance with, the law of
the State of New York (without reference to choice of law doctrine).
(i) NETTING OF PAYMENTS. Section 2(c) is hereby amended by adding
in the first line thereof after the word "date" the words "(including any
Payment Date or any Early Termination Date)". Subparagraph (ii) of Section 2(c)
will apply.
(j) "AFFILIATE" will have the meaning specified in Section 14;
provided, however, that, for purposes of Section 3(c), such term shall only
refer to any Credit Support Provider of the party and/or any party that is a
Specified Entity of the party for Bankruptcy.
<PAGE>
<PAGE>
9
PART 5. OTHER PROVISIONS.
(a) BASIC REPRESENTATIONS: POWERS. Section 3(a)(ii) is hereby
amended by: (i) deleting in the fifth line thereof after the word "party" the
word "and" and replacing it with ", it"; and (ii) adding in the fifth line
thereof after the word "performance" and before the semicolon the words ", the
individuals executing and delivering this Agreement and any other documentation
relating to this Agreement to which it is a party or that it is required to
deliver are duly empowered and authorized to do so, and it has duly executed and
delivered this Agreement and any other such documentation."
(b) ISDA DEFINITIONS. Unless otherwise specified in the first
paragraph of this Schedule or in the Confirmation, the Agreement and the
Transactions are subject to the 1991 ISDA Definitions as published by the
International Swaps and Derivatives Association, Inc. (the "ISDA Definitions"),
and will be governed in all relevant respects by the provisions set forth in the
ISDA Definitions, without regard to any amendment to the ISDA Definitions
subsequent to the date hereof. The provisions of the ISDA Definitions are
incorporated by reference in, and shall be deemed part of, the Agreement.
Subject to Section 1(b), in the event of any inconsistency between such first
paragraph or the provisions of the Agreement (on the one hand) and the ISDA
Definitions (on the other hand), such first paragraph and the Agreement will
govern.
(c) CHANGE OF ACCOUNT. Section 2(b) is hereby amended, except with
respect to transfers permitted by the Agreement, by the addition of the
following after the word "delivery" in the first line thereof:
to another account in the same legal, currency, and tax
jurisdiction as the original account.
(d) ABSENCE OF LITIGATION. Section 3(c) is hereby amended by: (i)
deleting in the first and second lines thereof the words "or any of its
Affiliates"; and (ii) adding in the second line thereof after the word
"governmental" the words "or regulatory."
(e) TRANSFER. Section 7 is hereby amended by: (i) adding in the
third line thereof after the word "party," the words "and provided that any
transfer of an obligation of Party A or Party B shall otherwise only be
effective if each Rating Agency provides written confirmation that its then
current rating of the Class A-5 Notes will not be reduced or withdrawn as a
result of such transfer"; (ii) adding in the second line of Subparagraph (a)
thereof after the words "assets to," the words "or reorganization,
incorporation, reincorporation, or reconstitution into or as,"; (iii) deleting
at the end of Subparagraph (a) thereof the word "and"; (iv) deleting in the
second line of Subparagraph (b) thereof the period and replacing it with ";
and"; (v) adding after Subparagraph (b) thereof the following Subparagraph (c):
<PAGE>
<PAGE>
10
(c) in addition to, and not in lieu of, the transfer
rights set forth in the other provisions of this Section 7,
Party A may, without recourse by Party B or Party A's
transferee against Party A, transfer this Agreement, all or
any part of its interests (including without limitation all or
any part of its interest in any amount payable to it by Party
B) or obligations in or under this Agreement, or one or more
Transactions to any of Party A's Affiliates or any of the
Affiliates of The Goldman Sachs Group, L.P., provided that:
(i) if any such transfer is of any obligations of Party A,
either (A) such transferee must have a long-term, unsecured,
unsubordinated debt obligation rating or financial program
rating (or other similar rating) by at least one U.S.
nationally recognized rating agency which is equal to or
greater than the comparable long-term, unsecured,
unsubordinated debt obligation rating or financial program
rating (or other similar rating) of Party A immediately prior
to such transfer, or (B) the obligations transferred to such
transferee must be guaranteed by Party A pursuant to a
guaranty or other agreement or instrument mutually agreed upon
by both parties acting reasonably; (ii) Party B will not, as a
result of such transfer, be required to pay to the transferee
on the next succeeding Scheduled Payment Date an amount in
respect of an Indemnifiable Tax under Section 2(d)(i)(4)
(except in respect of interest under Section 2(e), 6(d)(ii),
or 6(e)) greater than the amount in respect of which Party B
would have been required to pay to Party A in the absence of
such transfer; (iii) the transferee will not, as a result of
such transfer, be required to withhold or deduct on account of
a Tax under Section 2(d)(i) (except in respect of interest
under Section 2(e), 6(d)(ii), or 6(e)) on the next succeeding
Schedule Payment Date an amount in excess of that which Party
A would have been required to so withhold or deduct on the
next Scheduled Payment Date in the absence of such transfer,
unless the transferee would be required to make additional
payments pursuant to Section 2(d)(i)(4) corresponding to such
excess; and (iv) an Event of Default or a Termination Event
does not occur as a result of such transfer. With respect to
the results described in Clauses (ii) and (iii) above, Party A
will cause the transferee to make, and Party B will make, such
reasonable Payer Tax Representations and Payee Tax
Representations as may be mutually agreed upon by the
transferee and Party B in order to permit such parties to
determine that such results will not occur upon or after the
transfer;
and (vi) adding at the end thereof the following sentence:
Any transfer of all or part of the obligations of either party
made in compliance with, and which meets all of the
requirements of, this Section will constitute an acceptance
and assumption of such obligations by the transferee, a
novation of the transferee in place of the transferor with
respect to such obligations (and any related interests so
transferred), and a release and
<PAGE>
<PAGE>
11
discharge by the non-transferring party of the transferor
from, and an agreement by the non-transferring party not to
make any claim for payment, liability, or otherwise against
the transferor with respect to, such obligations from and
after the effective date of the transfer.
(f) LOCAL BUSINESS DAY. Notwithstanding any definition set forth
in Section 14: (i) "Local Business Day" shall mean any day (other than a
Saturday, a Sunday or legal holiday) on which commercial banking institutions in
New York, New York, or any other location of any successor Servicer or successor
Indenture Trustee, are open for regular business; and (ii) "Business Day" shall
have the same meaning as Local Business Day.
(g) SEVERABILITY. If any term, provision, covenant, or condition
of the Agreement, or the application thereof to any party or circumstance, shall
be held to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue in
full force and effect as if the Agreement had been executed with the invalid or
unenforceable portion eliminated, so long as the Agreement as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter of the Agreement and the deletion of such
portion of the Agreement will not substantially impair the respective benefits
or expectations of the parties to the Agreement; provided, however, that this
severability provision shall not be applicable if any provision of Section 2, 5,
6, or 13 (or any definition or provision in Section 14 to the extent it relates
to, or is used in or in connection with, any such Section) shall be so held to
be invalid or unenforceable.
(h) AGREEMENTS: FURNISH SPECIFIED INFORMATION. Section 4(a) is
hereby amended by adding at the end thereof the following paragraph:
Notwithstanding the foregoing provisions of this Section 4(a),
the parties agree that, pursuant to the terms of the Power of
Attorney of the corporate general partner of Party A referred
to in Part 3 hereof, any one or more of the attorneys-in-fact
of such corporate general partner under such Power of Attorney
(each a "Duly Authorized Representative") will deliver to
Party B or such governmental or taxing authority such forms,
documents, or certificates; provided, however, that (i) such
Duly Authorized Representative will not be required to provide
financial information not otherwise required under this
Agreement or any other information concerning the assets or
operations of Party A or any of its Affiliates which Party A,
in its reasonable judgment, views as proprietary in nature
other than the identity, residence, and the tax status of
Party A or any of its Affiliates, and (ii) in the event the
requested form, document, or certificate as delivered in the
manner set forth in this paragraph fails to satisfy the
requirements of law at any time, such failure will
<PAGE>
<PAGE>
12
not be deemed a breach or violation of this Section 4(a) or
any other provision of this Agreement.
(i) SETTLEMENT AMOUNT. The definition of "SETTLEMENT AMOUNT" in
Section 14 is hereby amended by deleting in the third and fourth lines of
Subparagraph (b) thereof the words "or would not (in the reasonable belief of
the party making the determination) produce a commercially reasonable result".
(j) RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner Trustee
agrees to give written notice to Party A 60 days prior to the Owner Trustee's
resignation from the Owner Trust. In no event shall the Owner Trustee resign or
be removed prior to appointment by the Depositor (in accordance with the Trust
Agreement) of a successor Owner Trustee or the liquidation of the Trust Assets.
Upon acceptance of appointment by a successor Owner Trustee,
Party B shall cause such successor Owner Trustee to give prompt notice to Party
A of such acceptance.
(k) RECEIPT OF REPORTS. Party B shall deliver to Party A, within
five Business Days of an event of noncompliance by the Owner Trust or the Owner
Trustee with the Trust Agreement or the Indenture or by the Indenture Trustee
with the Indenture known to Party B, a report setting forth a description of
such event of noncompliance.
(l) RESTRICTION ON AMENDMENTS TO THE TRUST AGREEMENT, THE
INDENTURE OR ANY RELATED DOCUMENT. The Owner Trustee agrees not to enter into
any amendment to the Trust Agreement, the Indenture or any other Related
Document that would impair the ability of Party B to perform its obligations
under the Agreement or would have a material adverse impact on Party A.
(m) AGREEMENT NOT TO PETITION. Party A agrees for the benefit of
the Class A-5 Noteholders that, until at least one year and one day after the
Owner Trust has been terminated in accordance with Article VII of the Trust
Agreement, it shall not file, or join in the filing of, a petition against the
Owner Trust under any bankruptcy, reorganization, arrangement, insolvency,
liquidation or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Owner Trust under any Bankruptcy
Law. In the event Party A takes action in violation of this paragraph (m),
Party B agrees, for the benefit of the Noteholders, that it shall file an
answer with the bankruptcy court or otherwise properly contest the filing of
such petition by Party A against the Owner Trust or the commencement of such
action and raise the defense that Party A has agreed in writing not to take
such action and should be stopped and precluded therefrom and such other
defenses, if any, as counsel for the Owner Trustee or the Owner Trust may
assert. The provisions of this paragraph (m) shall survive the termination of
this Agreement and the Trust Agreement.
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13
(n) NO RECOURSE. Class A-5 Notes represent obligations of the
Owner Trust only, and do not represent interests in or obligations of Party A,
and no recourse may be had by the Class A-5 Noteholders against Party A or its
assets with respect to the Class A-5 Notes or the Agreement (provided that
this provision shall not affect Party B's rights under the Agreement). The
obligations, expenses and liabilities of Party B under the Agreement shall be
paid from, and are limited to, the assets of the Owner Trust (to the extent such
assets are allocated to such obligations, expenses and liabilities in accordance
with the terms of the Indenture or the Related Documents), and no recourse may,
in connection with the Agreement, be had by Party A against any other assets of
the Owner Trust or the assets of the Owner Trustee or of the Class A-5
Noteholders in their individual capacities.
Party A agrees that the representations and warranties
contained in the Agreement shall not be deemed to be made by the Owner Trustee
(except to the extent expressly provided for herein), and no recourse shall be
made against the Owner Trustee as a result of any breach or misrepresentation of
such representations and warranties, or for any reason relating to the Owner
Trustee's execution of the Agreement.
(o) REGARDING THE PARTIES. Party A acknowledges and agrees that
neither the Indenture Trustee nor the Owner Trustee had any involvement in, and
accordingly neither such person accepts any responsibility for, (i) the
establishment, selection, or structure of the Trust Assets, (ii) the selection
of Party A as the Class A-5 Swap Counterparty, (iii) the establishment of the
terms of the Agreement or the Class A-5 Notes or (iv) except for any information
relating to the Indenture Trustee and the Owner Trustee that is based on
information provided by the Indenture Trustee or the Owner Trustee,
respectively, the preparation of or passing on the disclosure contained in the
Prospectus and Prospectus Supplement distributed with respect to the Class A-5
Notes.
Party B and the Owner Trustee acknowledge and agree that Party
A had no involvement in, and accordingly accepts no responsibility for, (i) the
establishment, structure, or choice of the Trust Assets or any series of notes,
(ii) the selection of any person performing services for or acting on behalf of
the Owner Trust, (iii) the selection of Party A as a swap provider, (iv) the
terms of the any series of notes or the economic terms of any Transaction
entered into with the Owner Trust pursuant to the Agreement, (v) the preparation
of or passing on the disclosure and other information contained in the offering
circular, prospectus, series supplement, trust deed, or any other agreements or
documents used by the Owner Trust or any other party in connection with the
marketing and sale of any series of notes, (vi) the ongoing operations and
administration of the Owner Trust, including the furnishing of any information
to the Owner Trust which is not specifically required under the Agreement, or
(vii) any other aspect of the Owner Trust's existence except for those matters
specifically identified in the Agreement
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14
(p) NOTICES ON TRUST ASSETS. Within five Business Days of receipt
or delivery of any reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to the Owner Trustee with respect to
the Trust Assets, Party B shall deliver a copy of same to Party A.
(q) REPRESENTATIONS AND WARRANTIES OF OWNER TRUSTEE. The Owner
Trustee hereby represents and warrants, for the benefit of Party A, to each of
the representations and warranties set forth in Section 6.6 of the Trust
Agreement. Party B shall cause any successor Owner Trustee likewise to represent
and warrant as set forth in Section 6.6 of the Trust Agreement.
(r) ASSIGNMENT BY OWNER TRUSTEE. Except as provided in the Trust
Agreement, the Owner Trustee may not assign any of its duties or obligations
under the Trust Agreement without the prior written consent of Party A.
(s) Section 9(b) is hereby amended by: (i) adding "(i)" after the
word "unless" in the second line thereof; and (ii) the words ", and (ii) each
Rating Agency provides written confirmation that its then current rating of the
Class A-5 Notes will not be reduced or withdrawn as a result of such amendment,
modification or waiver" after the word "system" and before the period at end of
such Section.
(t) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by
adding the following additional Subsections:
(g) ELIGIBLE SWAP PARTICIPANT. It is an "eligible swap
participant" as defined in the Part 35 Regulations of the U.S.
Commodity Futures Trading Commission.
(h) NO RELIANCE. In connection with the negotiation of,
the entering into, and the confirming of the execution of, the
Agreement and each Transaction: (1) the other party is not acting as a
fiduciary or financial or investment advisor for or to it; (2) it is
not relying upon any representations (whether written or oral) of the
other party other than the representations expressly set forth in the
Agreement; and (3) it has consulted with its own legal, regulatory,
tax, business, investment, financial, and accounting advisors to the
extent it has deemed necessary, and it has made its own investment,
hedging, and trading decisions based upon its own judgment and upon any
advice from such advisors as it has deemed necessary and not upon any
view expressed by the other party.
(i) NO AGENCY. It is entering into this Agreement and
each Transaction as principal (and not as agent or in any other
capacity, fiduciary or otherwise).
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15
(j) LINE OF BUSINESS. It has entered into this Agreement
(including each Transaction evidenced hereby) in conjunction with its
line of business (including financial intermediation services) or the
financing of its business.
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16
IN WITNESS WHEREOF, the parties have executed this document on
the respective dates specified below with effect from the date specified on the
first page of this document.
Very truly yours,
GOLDMAN SACHS MITSUI MARINE
DERIVATIVE PRODUCTS, L.P.
By: GSMMDPGP, Inc.
General Partner
By: /s/ Charles E. Davies
--------------------------------
Name: Charles E. Davies
Title: Authorized Officer
Date: December 3, 1997
CAPITA EQUIPMENT RECEIVABLES
TRUST 1997-1
By: The Bank of New York, not in its
individual capacity but solely as
Owner Trustee
By: /s/ Cheryl L. Laser
--------------------------------
Name: Cheryl L. Laser
Title: Authorized Officer
Date: December 3, 1997
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<PAGE>
CAPITA EQUIPMENT RECEIVABLES TRUST 1997-1
CONFIRMATION
UNDER
CLASS A-5 SWAP AGREEMENT
DATE: December 3, 1997
To: Capita Equipment Receivables Trust 1997-1 (the "Owner Trust"
or "Party B"), represented by The Bank of New York, not in its
individual capacity, but solely as Owner Trustee (the "Owner
Trustee")
Telephone No.: (212) 815-5286
Facsimile No.: (212) 815-5544
Attention: Corporate Trust Administration - Asset-
Backed Unit
FROM: Goldman Sachs Mitsui Marine Derivative Products, L.P.
("GSMMDP" or "Party A")
CC: Goldman, Sachs & Co.
Swap Administration
SUBJECT: Interest Rate Swap Transaction under the Class A-5 Swap
Agreement Referred to below
REF. NO.: NUUS711720 (080000A00)
- --------------------------------------------------------------------------------
Ladies and Gentlemen:
The purpose of this communication is to set forth the terms
and conditions of the above-referenced transaction entered into on the Trade
Date specified below (this "Transaction") between GSMMDP and the Owner Trust.
This communication constitutes the "Confirmation" with respect to the
Transaction as referred to in the Class A-5 Swap Agreement.
1. DEFINITIONS, ETC. (a) Terms defined or referenced
elsewhere in the Class A-5 Swap Agreement and not otherwise defined or
referenced in this Confirmation are used in this Confirmation as therein defined
or referenced. Further, this Confirmation is subject to, and incorporates, the
1991 ISDA Definitions (the "ISDA Definitions") published by the International
Swaps and Derivatives Association, Inc. ("ISDA"), except as otherwise provided
in the preceding sentence and except that, for purposes of this Confirmation,
all
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2
references to "Swap Transactions" in the ISDA Definitions will be deemed to be
references to "Transactions".
(b) This Confirmation supplements, forms part of, and is
subject to, the ISDA Master Agreement, dated as of December 3, 1997, including
the Schedule thereto, as such ISDA Master Agreement and Schedule may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof (as so amended, supplemented or modified, the "Class A-5 Swap
Agreement"), between Party A and Party B. All provisions contained in, or
incorporated by reference to, the Class A-5 Swap Agreement shall govern this
Confirmation; provided, however, that, except as otherwise provided in paragraph
1(a) hereof, and subject to Section 1(b) of the ISDA Master Agreement, in the
event of any inconsistency between this Confirmation (on the one hand) and the
remainder of the Class A-5 Swap Agreement or the ISDA Definitions (on the other
hand), this Confirmation will govern.
(c) Party A and Party B will make each payment specified in
this Confirmation as being payable by it, no later than the due date for value
on that date in the place of the account specified below or otherwise specified
in writing, in freely transferable funds and in the manner customary for
payments in the required currency. If on any date amounts which would otherwise
be payable in the same currency by each party to the other in respect of this
Transaction are equal, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged, and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, the parties' obligations will be automatically satisfied and discharged
and replaced by an obligation upon the party by whom the larger aggregate amount
would have been payable to pay to the other party the excess of the larger
aggregate amount over the smaller aggregate amount.
2. TERMS. The terms of this Transaction are as follows:
Trade Date: December 3, 1997.
Effective Date: December 3, 1997.
Termination Date: The first to occur of
(a) February 15, 2002, or
(b) the date on which the Notional Amount
equals zero.
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3
Reference Securities: Capita Equipment Receivables Trust 1997-1,
Floating Rate Receivable-Backed Notes,
Class A-5 due February 15, 2002 (CUSIP:
13970LAL6).
Original Notional Amount: USD 105,000,000.
Notional Amount for initial
Calculation Period: USD 105,000,000 (which is equal to the
Original Notional Amount multiplied by a
Remaining Balance Factor of 1.00000000).
Notional Amount for all
Calculation Periods subsequent
to initial Calculation Period: The product of (a) the Original Notional
Amount, and (b) the Remaining Balance
Factor, determined as of the last day of
the applicable Calculation Period.
Remaining Balance Factor: A fraction with (i) the numerator equal to
the weighted average outstanding unpaid
principal amount of the Reference
Securities during the applicable
Calculation Period, and (ii) the
denominator equal to the original unpaid
principal amount of the Reference
Securities on the Effective Date, rounded
upward to eight decimal places. The
Remaining Balance Factor as of the
Effective Date and for the initial
Calculation Period is 1.00000000.
Settlement Amount; Early
Termination Payment;
Breakage Costs: No reduction in the Notional Amount in
accordance with the provisions of, or
incorporated into, this Confirmation
(including, without limitation, such as is
the result of the application of the
Remaining Balance Factor as set forth in
"Remaining Balance Factor" above) shall
give rise to a payment by either the Owner
Trust or GSMMDP of any settlement amount,
early termination payment, breakage costs
or other amounts representing the future
value of, or of
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4
future payments in respect of, the portion
of the Notional Amount so reduced.
Calculation Agent: GSMMDP.
3. FIXED AMOUNTS.
Fixed Rate Payer: The Owner Trust.
Fixed Rate Payer Payment Dates: Monthly, on the 15th day of each month,
commencing on December 15, 1997 and ending
on the Termination Date, subject to
adjustment in accordance with the
Following Business Day Convention.
Fixed Rate: 6.25%.
Fixed Rate Day Count Fraction: 30/360.
Fixed Rate Period End Dates: Not adjusted.
4. FLOATING AMOUNTS.
Floating Rate Payer: GSMMDP.
Floating Rate Payer Payment Dates: Monthly, on the 15th day of each month,
commencing on December 15, 1997 and ending
on the Termination Date, subject to
adjustment in accordance with the
Following Business Day Convention.
Floating Rate for initial
Calculation Period: 6.09375% (inclusive of Floating Rate
Spread)
Floating Rate Option: USD-LIBOR-BBA.
Floating Rate Designated Maturity: One month.
Floating Rate Spread: Plus 0.125%.
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5
Floating Rate Day Count Fraction: Actual/360.
Floating Rate Reset Dates: The first day of each Calculation Period
Floating Rate Period End Dates: Adjusted in accordance with the Following
Business Day Convention.
5. ACCOUNT DETAILS:
Payments to GSMMDP:
For the Account of: Goldman Sachs Mitsui Marine Derivative
Products, L.P.
Name of Bank: The Chase Manhattan Bank, New York
Account No.: 930-1-034733
Account Name: Goldman Sachs Mitsui Marine Derivative
Products, L.P.
Fed. ABA No.: 021000021
GSMMDP Inquiries: Nicole Levy, Swap Operations
Goldman, Sachs & Co.
Telephone No: 212-902-2686
Facsimile No: 212-902-5692
Payments to Owner In accordance with the Owner Trust's
Trust: written instructions as set forth
below or otherwise delivered to
GSMMDP. GSMMDP shall make no payments
without having received (i) such
written instructions and (ii) a fully
executed facsimile copy of this
Confirmation or other written
acceptance of the terms hereof.
Name of Bank: Bankers Trust Company
Corporate Trust and Agency Group
Account No.: #014 19 647
Attention: Raymond Delli Colli
REF: Capita Equipment Receivables
Trust 1997-1
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6
ABA No.: #021 001 033
6. OFFICES:
(a) The Office of GSMMDP for the Transaction is 85
Broad Street, New York, NY 10004.
(b) The Office of the Owner Trust for the Transaction
is c/o The Bank of New York, as Owner Trustee, 101
Barclay Street, Floor: 12 East, New York, NY
10286, Attention: Corporate Trust Department.
With a copy to: Bankers Trust Company
as Indenture Trustee
4 Albany Street, 10th floor
New York, New York 10006
Attn: Corporate Trust and
Agency Group Structured
Finance
GSMMDP is very pleased to have executed this Transaction with
the Owner Trust.
Very truly yours,
GOLDMAN SACHS MITSUI MARINE
DERIVATIVE PRODUCTS, L.P.
By: GSMMDPGP, Inc.
General Partner
By: /s/ Charles E. Davies
------------------------------------------
Authorized Officer
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7
Agreed and Accepted By:
CAPITA EQUIPMENT RECEIVABLES TRUST 1997-1
By: The Bank of New York,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Cheryl L. Laser
-------------------------------
Name: Cheryl L. Laser
Title: Authorized Officer
<PAGE>
