<PAGE>
<PAGE>
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 17, 1998
NEWCOURT EQUIPMENT TRUST SECURITIES 1998-2
(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.)
2 Gatehall Drive, Parsippany, NJ 07054
(Address of principal executive offices)
Registrant's telephone number, including area code: (973) 606-4879
(Former name or former address, if changed since last report)
<PAGE>
<PAGE>
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 17, 1998 the Registrant sold $1,342,869,266 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.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.1 Transfer and Servicing Agreement, dated as of
December 1, 1998, among Newcourt Equipment
Trust Securities 1998-2 (the "Trust"), Antigua
Funding Corporation, AT&T Capital Corporation and
Bank of New York, as Indenture Trustee, without
exhibits.
4.2 Indenture, dated as of December 1, 1998,
between the Trust and Bank of New York, as
Indenture Trustee, without exhibits.
4.3 Trust Agreement, dated as of December 1, 1998,
between Antigua Funding Corporation and
Citibank, N.A., as Owner Trustee, without exhibits.
4.4 Purchase and Sale Agreement, dated as of
December 1, 1998, among Antigua Funding
Corporation, AT&T Capital Leasing Services,
Inc., Newcourt Communications Finance
Corporation, Newcourt Commercial Finance
Corporation and AT&T Capital Corporation,
without exhibits.
8.1 Opinion and Consent of Dorsey & Whitney LLP with
respect to tax matters.
23.1 Consent of Dorsey & Whitney LLP (included as
part of Exhibit 8.1).
</TABLE>
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.
NEWCOURT EQUIPMENT TRUST SECURITIES 1998-2
Dated: January 12, 1999 By: ANTIGUA FUNDING CORPORATION
as depositor of Newcourt Equipment
Trust Securities 1998-2
By: /s/ Glenn A. Votek
______________________________________
Glenn A. Votek
Executive Vice President and
Treasurer
STATEMENT OF DIFFERENCES
------------------------
The section symbol shall be expressed as ............................. 'SS'
<PAGE>
<PAGE>
================================================================================
TRANSFER AND SERVICING AGREEMENT
among
NEWCOURT EQUIPMENT TRUST SECURITIES 1998-2
Issuer
ANTIGUA FUNDING CORPORATION
Depositor
AT&T CAPITAL CORPORATION
In its individual capacity and as Servicer
THE BANK OF NEW YORK
Indenture Trustee
-------------------------------
Dated as of December 1, 1998
-------------------------------
================================================================================
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INTRODUCTION.....................................................................................1
ARTICLE I DEFINITIONS.....................................................................1
SECTION 1.1. Definitions.............................................................1
SECTION 1.2. Usage of Terms.........................................................11
SECTION 1.3. Calculations...........................................................11
SECTION 1.4. Section References.....................................................11
SECTION 1.5. No Recourse............................................................11
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.....................................................14
SECTION 2.4. Representations and Warranties of Depositor............................15
SECTION 2.5. Nonpetition Covenant...................................................17
SECTION 2.6. Purchase of Contracts Upon Breach of Representations
and Warranties.........................................................18
SECTION 2.7. Depositor Option to Substitute for Prepaid Contracts
and Defaulted Contracts................................................19
SECTION 2.8. Reassignment of Purchased and Replaced Contracts.......................20
ARTICLE III ADMINISTRATION AND SERVICING OF CONTRACTS......................................21
SECTION 3.1. Duties of the Servicer.................................................21
SECTION 3.2. Collection of Contract Payments; Modifications of Contracts............22
SECTION 3.3. Realization Upon Contracts.............................................24
SECTION 3.4. Insurance, Maintenance and Taxes.......................................25
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...................29
SECTION 3.9. Servicer's Certificate.................................................30
SECTION 3.10 Annual Statement as to Compliance; Notice of Servicer
Termination Event......................................................30
SECTION 3.11 Annual Independent Accountants' Report.................................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.............................32
SECTION 3.15 Errors and Omissions Policy or Bond....................................33
ARTICLE IV COLLECTIONS AND DEPOSITS.......................................................34
SECTION 4.1. Initial Deposit........................................................34
</TABLE>
-i-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
SECTION 4.2. Collections............................................................34
SECTION 4.3. Application of Collections.............................................35
SECTION 4.4. Net Deposits...........................................................36
SECTION 4.5. Expiration of Lease Contracts..........................................36
ARTICLE V TERMINATION....................................................................37
SECTION 5.1. Optional Purchase of All Contracts; Liquidation of Trust Assets........37
ARTICLE VI THE DEPOSITOR..................................................................38
SECTION 6.1. Liability of Depositor.................................................38
SECTION 6.2. Merger or Consolidation of, or Assumption of the Obligations of,
Depositor; Amendment of Certificate of Incorporation...................38
SECTION 6.3. Limitation on Liability of Depositor and Others........................39
SECTION 6.4. Depositor May Own Notes................................................39
ARTICLE VII THE SERVICER...................................................................40
SECTION 7.1. Liability of Servicer; Indemnities.....................................40
SECTION 7.2. Merger or Consolidation of, or Assumption of the Obligations of,
the Servicer...........................................................41
SECTION 7.3. Limitation on Liability of Servicer and Others.........................42
SECTION 7.4. Servicer Not to Resign.................................................42
SECTION 7.5. Corporate Existence....................................................42
ARTICLE VIII SERVICER TERMINATION EVENTS....................................................43
SECTION 8.1. Servicer Termination Event.............................................43
SECTION 8.2. Consequences of a Servicer Termination Event...........................44
SECTION 8.3. Indenture Trustee to Act; Appointment of Successor.....................45
SECTION 8.4. Notification to Equity Certificateholder and Noteholders...............45
SECTION 8.5. Waiver of Past Defaults................................................45
ARTICLE IX MISCELLANEOUS PROVISIONS.......................................................47
SECTION 9.1. Amendment..............................................................47
SECTION 9.2. Protection of Title to Trust Assets....................................48
SECTION 9.3. Governing Law..........................................................50
SECTION 9.4. Severability of Provisions.............................................50
SECTION 9.5. Assignment.............................................................50
SECTION 9.6. Third-Party Beneficiaries..............................................50
SECTION 9.7. Counterparts...........................................................50
SECTION 9.8. Intention of Parties...................................................50
SECTION 9.9. Notices................................................................51
SECTION 9.10 Income Tax Characterization............................................51
SECTION 9.11 Limitation of Liability................................................51
</TABLE>
-ii-
<PAGE>
<PAGE>
EXHIBITS
<TABLE>
<S> <C>
Exhibit A-1 -- Schedule of Lease Contracts and Leased Equipment
Exhibit A-2 -- Schedule of Loan Contracts
Exhibit B -- Form of Servicer's Certificate
Exhibit C -- Form of Subsequent Transfer Instrument
Exhibit D -- Form of Servicer's Certificate Regarding Substitution
Exhibit E -- Form of Certificate Regarding Substitution for Warranty Contracts
Exhibit F -- Form of Certificate Regarding Substitution for Defaulted and Prepaid Contracts
Exhibit G -- Form of Servicer's Certificate Regarding Purchase of Warranty Contracts
</TABLE>
-iii-
<PAGE>
<PAGE>
THIS TRANSFER AND SERVICING AGREEMENT, dated as of December 1,
1998, is made among NEWCOURT EQUIPMENT TRUST SECURITIES 1998-2 (the "Issuer"),
ANTIGUA FUNDING CORPORATION, a Delaware corporation, as Depositor (the
"Depositor"), AT&T CAPITAL CORPORATION, a Delaware corporation, in its
individual capacity and as Servicer (in its individual capacity, "TCC"; in its
capacity as Servicer, the "Servicer"), and THE BANK OF NEW YORK, 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.
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,
-1-
<PAGE>
<PAGE>
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.
CFC: AT&T Commercial Finance Corporation, a Delaware corporation,
and its successors and assigns.
Closing Date: December 17, 1998.
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 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 6.843% per annum (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
-2-
<PAGE>
<PAGE>
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 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 amount specified in clause (i) above;
provided that, for purposes of computing the Total Principal Payment 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(a), 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(a).
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 111 Wall Street, 5th
Floor, New York, NY 10043, Attention: Corporate Agency Trust; the telecopy
number for the Corporate Agency Trust Office of the Owner Trustee on the date of
execution and delivery of this Agreement is (212) 657-3872; 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 located at 101 Barclay Street, Floor 12 East, New York, New York 10286,
Attention: Corporate Trust Administration--Asset Backed Finance Unit; the
telecopy number for the Corporate Trust Office of the Indenture Trustee on the
date of execution and delivery of this Agreement is (212) 815-5544.
Cut-Off Date: (i) With respect to the Contracts listed on
Exhibits A-1 and A-2 hereto as of the Closing Date, December 1, 1998, and (ii)
with respect to any Substitute Contract, the first day of the calendar month
during which such Substitute Contract was transferred to the Issuer in
accordance with the provisions of Section 2.6(b) or Section 2.7.
Defaulted Contract: With respect to any Collection Period, (i) a
Contract which, during such Collection Period, became a Liquidated Contract; or
(ii) a Contract as to which, during such Collection Period, the Obligor becomes
the subject of a bankruptcy, insolvency or receivership proceeding.
Deposit Date: With respect to any Collection Period, the Business
Day immediately preceding the related Determination Date.
-3-
<PAGE>
<PAGE>
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 Contract: As to (i) any Warranty Contract for which a
Contract is being substituted pursuant to Section 2.6(b), and (i) any Prepaid
Contract or Defaulted Contract for which a Contract is being substituted
pursuant to Section 2.7, a Contract that (a) as of the date of its substitution,
satisfies all of the representations and warranties (which, except when
expressly stated to be as of origination, shall be deemed to be made as of the
Cut-off Date or the Subsequent Transfer Date) in the related Purchase Agreement
and does not cause any of the representations and warranties in Section 2.4,
after giving effect to such substitution, to be incorrect, (b) after giving
effect to the scheduled payments due prior to the Cut-Off Date, has a Contract
Principal Balance that is at least equal to the Required Payoff Amount of such
Warranty Contract or Defaulted Contract or, but for such Prepayment in Full, the
Required Payoff Amount of such Prepaid Contract, as the case may be, (c) has
Scheduled Payments payable monthly which are at least equal to the Scheduled
Payments due on the Warranty Contract, Prepaid Contract or Defaulted Contract,
as the case may be, through the term of such Warranty Contract, Prepaid Contract
or Defaulted Contract, (d) has a final Scheduled Payment that is not in excess
of the final Scheduled Payment on the Warranty Contract, Prepaid Contract or
Defaulted Contract, as the case may be, unless, for purposes of satisfying the
requirement of clause (b), the amount of the final Scheduled Payment on such
Contract is assumed to be the same as that on the Warranty Contract, Prepaid
Contract or Defaulted Contract, as the case may be, (e) has a final Scheduled
Payment due on a date that is not later than the date on which the final
Scheduled Payment date of the Warranty Contract, Prepaid Contract or Defaulted
Contract, as the case may be, is due, (f) is of the same type (viz., Lease
Contract or Loan Contract) as the Warranty Contract, Prepaid Contract or
Defaulted Contract, as the case may be, (g) was originated and added to the
Trust Assets using the same credit criteria and eligibility standards as the
Contracts transferred on the Closing Date, and (h) was purchased by the
Depositor from an Originator pursuant to a Purchase Agreement having
substantially the same terms and conditions (including, without limitation,
representations and warranties as to the Eligible Contract) as the Purchase
Agreements pursuant to which the Depositor purchased the Contracts transferred
to the Issuer on the Closing Date; provided that, notwithstanding clause (a), a
contract will not fail to constitute an Eligible Contract solely by virtue of
not satisfying the Contract Representations and Warranties contained in clauses
(I) and (P) thereof if the Rating Agency Condition is satisfied with respect
thereto.
Eligible Servicer: TCC, the Indenture Trustee or another Person
which at 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.
-4-
<PAGE>
<PAGE>
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 December 1, 1998, 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).
Initial Contract Pool Principal Balance: $1,342,869,226.
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 benefitting the lessor or secured party under the Contract providing loss
or physical damage, theft or similar coverage with respect to the Equipment.
Issuer: Newcourt Equipment Trust Securities 1998-2.
Lease Contracts: The lease contracts listed on Exhibit A-1 hereto
(excluding any such lease contract which has become a Purchased Contract or a
Replaced Contract, but including any Substitute Contract substituted therefor
and added to such Exhibit A-1 in accordance with the provisions of Section
2.6(b) or Section 2.7) 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.
-5-
<PAGE>
<PAGE>
Leasing Services: AT&T Capital Leasing Services, Inc., a
Massachusetts corporation, and its successors and assigns.
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, 10% or more of a Scheduled Payment shall have
become 180 days delinquent.
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 or a Replaced Contract, but including any
Substitute Contract substituted therefor and added to such Exhibit A-2 in
accordance with the provisions of Section 2.6(b) or Section 2.7) 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
-6-
<PAGE>
<PAGE>
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.
NCFC: Newcourt Communications Finance Corporation (f/k/a AT&T
Credit Corporation), a Delaware corporation, and its successors and assigns.
Note Distribution Account: The account designated as such in, and
established and maintained pursuant to, Section 8.04 of the Indenture.
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: Leasing Services, NCFC and CFC.
Owner Trustee: Citibank, N.A., 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 January 15, 1999; provided that, in the event that the Principal
Balance of the Class A-1 Notes has not been reduced to zero on or prior to the
Payment Date occurring in December 1999, the Payment Date for the Class A-1
Notes in January 2000 will be January 10, 2000 (or, if such day is not a
Business Day, the next preceding Business Day).
-7-
<PAGE>
<PAGE>
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
(a) in the case of a Lease Contract, any portion thereof allocated to the
Depositor, or (b) in the case of a Prepaid Contract for which a substitution has
been made in accordance with Section 2.7, that portion thereof to which the
Depositor is entitled pursuant to Section 2.7); (iii) the Purchase Amount of any
Contracts purchased by TCC in accordance with Section 2.6(a) (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 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.
Prepaid Contract: A Contract as to which a Prepayment in Full has
been received by the Servicer.
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.
Prepayment in Full: With respect to any Collection Period for any
Contract, a Prepayment during such Collection Period of all amounts payable
under such Contract, including, without limitation, a Prepayment in whole under
Section 3.2(d).
Principal Balance: As of any date, 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.
Purchase Agreements: The Purchase and Sale Agreement, dated as of
February 1, 1998, among TCC, the Depositor, Leasing Services and NCFC; the
Purchase and Sale Agreement, dated as of April 1, 1998 among TCC, the Depositor,
Leasing Services and NCFC; the Purchase and Sale Agreement, dated as of June 1,
1998, among TCC, the Depositor and the Originators; the Purchase and Sale
Agreement, dated as of September 1, 1998, among TCC, the Depositor, Leasing
Services and NCFC; the Purchase and Sale Agreement, dated as of October 1, 1998,
among TCC, the Depositor and the Originators; the Purchase and Sale Agreement,
dated as of October 15, 1998, among TCC, the Depositor and NCFC; the Purchase
and Sale Agreement, dated as of December 1, 1998, among TCC, the Depositor and
the Originators; and any other
-8-
<PAGE>
<PAGE>
comparable purchase agreement entered into among TCC, the Depositor
and an Originator pursuant to which an Originator has sold to the Depositor a
Substitute Contract.
Purchase Amount: With respect to a Contract and related Equipment
required to be purchased by TCC in accordance with Section 2.6(a), 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(a), 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) (or, in
the case of a Substitute Contract, the comparable paragraph of the related
Subsequent Transfer Instrument).
Related Documents: The Trust Agreement, the Indenture, the Equity
Certificate, the Notes, the Purchase Agreements, any Subsequent Transfer
Instruments 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.
Replaced Contract: Any Warranty Contract, Prepaid Contract or
Defaulted Contract for which a Substitute Contract has been substituted in
accordance with Section 2.6(b) or Section 2.7, as applicable.
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,
-9-
<PAGE>
<PAGE>
as such Exhibits may be amended from time to time pursuant to Section 2.6(b) or
Section 2.7 to add Substitute Contracts and delete Replaced Contracts.
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 December 1, 1998, the Contract Pool Principal
Balance as of such date).
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.
Subsequent Transfer Date: With respect to each Subsequent
Transfer Instrument, the date on which the related Substitute Contracts are
transferred to the Issuer.
Subsequent Transfer Instrument: Each Subsequent Transfer
Instrument executed by the Depositor in accordance with the provisions of
Section 2.6(b) or Section 2.7, by which the Depositor transfers Substitute
Contracts to the Issuer.
Substitute Contract: A lease contract or a loan contract
transferred by the Depositor to the Issuer in substitution for a Lease Contract
or Loan Contract, as appropriate, in
-10-
<PAGE>
<PAGE>
accordance with the provisions of Section 2.6(b) or Section 2.7, such contract
being identified in a schedule to the applicable Subsequent Transfer Instrument.
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 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 December 1,
1998, 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.
Warranty Contract: As defined in Section 2.6(b).
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 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.
-11-
<PAGE>
<PAGE>
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 (or, in the case of
any Substitute Contracts, as of the Subsequent Transfer 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 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
-12-
<PAGE>
<PAGE>
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 (or, in the
case of a Substitute Contract, as of the Subsequent Transfer 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
(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
-13-
<PAGE>
<PAGE>
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 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 (or,
in the case of a Substitute Contract, following the Subsequent Transfer 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
-14-
<PAGE>
<PAGE>
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 (or, in the case of a Substitute Contract, as of
the Subsequent Transfer 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.
(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
(together with, in the case of a Substitute Contract, the related
Subsequent Transfer Instrument) effects, as of the Closing Date (or, in
the case of a Substitute Contract, as of the Subsequent Transfer 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
-15-
<PAGE>
<PAGE>
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 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 2
Gatehall Drive, Parsippany, New Jersey 07054.
(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.
-16-
<PAGE>
<PAGE>
(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) (or, in the case of a Substitute Contract, pursuant to
the comparable paragraph of the related Subsequent Transfer Instrument),
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) (or, in the case of a Substitute
Contract, pursuant to the comparable paragraph of the related Subsequent
Transfer Instrument), 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 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,
-17-
<PAGE>
<PAGE>
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. (a) Prior to or concurrently with (or, in the case of a
Substitute Contract, after) 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 (or, in the case of a
Substitute Contract, the Subsequent Transfer 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, subject to paragraph (b) of this Section 2.06, unless such 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 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.
(b) TCC may, at its option, cause the Depositor on its behalf to
substitute an Eligible Contract (such Contract being referred to as the
"Substitute Contract") for a Contract that TCC is obligated to repurchase
pursuant to paragraph (a) of this Section 2.06 (such Contract being referred to
as the "Warranty Contract") upon satisfaction of the following conditions:
(i) the Depositor shall have delivered to the Owner Trustee a
duly executed Subsequent Transfer Instrument substantially in the form
of Exhibit C, which shall include (A) a schedule identifying the
Substitute Contract and separately noting whether it will constitute a
Lease Contract or a Loan Contract, and (B) an exhibit identifying the
Warranty Contract;
(ii) the Owner Trustee shall have received a certificate of a
Responsible Officer of the Servicer, substantially in the form
attached hereto as Exhibit D;
-18-
<PAGE>
<PAGE>
(iii) the Substitute Contract is an Eligible Contract and the
Depositor shall have delivered a certificate of a Responsible Officer,
substantially in the form of Exhibit E hereto, to the Owner Trustee
and the Servicer certifying, among other things, that the Substitute
Contract is an Eligible Contract; and
(iv) the Depositor shall have delivered to the Servicer the
Contract File for the Substitute Contract and taken all other actions
required by the related Subsequent Transfer Instrument and this
Agreement in connection with the transfer of the Substitute Contract
to the Issuer.
Upon satisfaction of such conditions, the Owner Trustee shall add
the Substitute Contract to, and delete the Warranty Contract from, the Schedule
of Contracts attached hereto as Exhibit A-1 or Exhibit A-2, as applicable.
Any substitutions pursuant to this paragraph (b) may be
accomplished on a contract-by-contract basis or on an aggregate basis as to all
Warranty Contracts with respect to a given Collection Period.
(c) In addition to the foregoing and notwithstanding whether the
Contract and related Equipment shall have been purchased, or a Substitute
Contract substituted therefor, by TCC or the Depositor on its behalf, 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.
SECTION 2.7. Depositor Option to Substitute for Prepaid Contracts
and Defaulted Contracts. The Depositor may, at its option, substitute an
Eligible Contract ( such Contract being referred to as the "Substitute
Contract") for (a) a Defaulted Contract (provided that the aggregate of the
Required Payoff Amounts of Defaulted Contracts for which Substitute Contracts
have been received pursuant to this Section 2.7 shall not exceed 10% of the
Initial Contract Pool Principal Balance), or (b) a Prepaid Contract, upon
satisfaction of the following conditions:
(i) the Depositor shall have delivered to the Owner Trustee a
duly executed Subsequent Transfer Instrument substantially in the form
of Exhibit C, which shall include (A) a schedule identifying the
Substitute Contract and separately noting whether it will constitute a
Lease Contract or a Loan Contract, and (B) an exhibit identifying the
Defaulted Contract or Prepaid Contract, as the case may be;
(ii) the Owner Trustee shall have received a certificate of a
Responsible Officer of the Servicer, substantially in the form
attached hereto as Exhibit D;
(iii) the Substitute Contract is an Eligible Contract and the
Depositor shall have delivered a certificate of a Responsible Officer,
substantially in the form of Exhibit F
-19-
<PAGE>
<PAGE>
hereto, to the Owner Trustee and the Servicer certifying, among other
things, that the Substitute Contract is an Eligible Contract;
(iv) the Depositor shall have delivered to the Servicer the
Contract File for the Substitute Contract and taken all other actions
required by the related Subsequent Transfer Instrument and this
Agreement in connection with the transfer of the Substitute Contract
to the Issuer; and
(v) such substitution shall be accomplished (A) in the case of a
Defaulted Contract, prior to the Determination Date immediately
following the Collection Period during which such Contract became a
Defaulted Contract, and (B) in the case of a Prepaid Contract, prior
to the Determination Date immediately following the Collection Period
during which the Prepayment in Full was received by the Servicer.
Upon satisfaction of such conditions, the Owner Trustee shall add
the Substitute Contract to, and delete the Defaulted Contract or Prepaid
Contract, as the case may be, from, the Schedule of Contracts attached hereto as
Exhibit A-1 or Exhibit A-2, as applicable.
Any substitutions pursuant to this Section 2.7 may be
accomplished on a contract-by-contract basis or on an aggregate basis as to all
Defaulted Contracts or Prepaid Contracts with respect to a given Collection
Period.
Upon completion of any such substitution for a Prepaid Contract,
the Depositor shall be entitled to receive that portion of the Prepayment in
Full which is in excess of the Scheduled Payments due during or prior to the
Collection Period during which such Prepayment in Full was received by the
Servicer. Such portion shall be paid to the Depositor from amounts in the
Collection Account in accordance with Section 8.03 of the Indenture.
SECTION 2.8. Reassignment of Purchased and Replaced Contracts.
Upon deposit in the Collection Account of that portion of any Purchase Amount
required to be deposited therein pursuant to Section 4.2(b)(i), or upon receipt
by the Issuer of a Substitute Contract pursuant to Section 2.6(b) or Section
2.7, and upon receipt of a certificate of Servicer in the form attached hereto
as Exhibit G or Exhibit D, as applicable, the Issuer shall convey and assign to
TCC or the Depositor, as their interests may appear, all of the Issuer's right,
title and interest in the Purchased or Replaced Contract and related Equipment
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 the
Owner Trustee.
-20-
<PAGE>
<PAGE>
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 (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,
-21-
<PAGE>
<PAGE>
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:
(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
-22-
<PAGE>
<PAGE>
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.
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
-23-
<PAGE>
<PAGE>
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 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,
-24-
<PAGE>
<PAGE>
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 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
(or, in the case of a Substitute Contract, prior to the Subsequent Transfer
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
-25-
<PAGE>
<PAGE>
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 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.
-26-
<PAGE>
<PAGE>
(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 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.
-27-
<PAGE>
<PAGE>
(iv) Licenses and Approvals. The Servicer will maintain
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.
(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 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
-28-
<PAGE>
<PAGE>
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 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.
-29-
<PAGE>
<PAGE>
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 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,
and (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 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, 1999, a certificate signed by any Responsible
Officer of the Servicer, dated as of December 31 (or other applicable date) of
-30-
<PAGE>
<PAGE>
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, 1999, 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 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 (or, if the Servicer is a wholly owned subsidiary of another entity,
the financial statements of such parent entity) and issued its report thereon
and that such audit was made in accordance with generally accepted auditing
standards (as in effect in the jurisdiction of the Servicer or its parent
entity, as applicable), which require that the Independent Accountants plan and
perform the audit to obtain reasonable assurance as to whether the financial
statements of the Servicer (or its parent entity, as applicable) 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
-31-
<PAGE>
<PAGE>
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 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);
-32-
<PAGE>
<PAGE>
(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 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
-33-
<PAGE>
<PAGE>
Depositor as additional insured parties or loss payees thereunder as their
respective interests may appear.
-34-
<PAGE>
<PAGE>
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(a), and (ii) that portion of the amount paid by the Depositor to purchase
the Contracts 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
-35-
<PAGE>
<PAGE>
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(a).
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 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.
-36-
<PAGE>
<PAGE>
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.
-37-
<PAGE>
<PAGE>
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.
-38-
<PAGE>
<PAGE>
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.
(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
-39-
<PAGE>
<PAGE>
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.
-40-
<PAGE>
<PAGE>
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 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).
-41-
<PAGE>
<PAGE>
(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 benefitting 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 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
-42-
<PAGE>
<PAGE>
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 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.
-43-
<PAGE>
<PAGE>
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 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
-44-
<PAGE>
<PAGE>
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 after the
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 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.
-45-
<PAGE>
<PAGE>
SECTION 8.3. Indenture Trustee to Act; Appointment of Successor.
(a) On and after the 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 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
-46-
<PAGE>
<PAGE>
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.
-47-
<PAGE>
<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.
(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
-48-
<PAGE>
<PAGE>
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 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
-49-
<PAGE>
<PAGE>
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
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
-50-
<PAGE>
<PAGE>
(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, 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.
-51-
<PAGE>
<PAGE>
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 overnight delivery, 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:
2 Gatehall Drive, Parsippany, New Jersey 07054, 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 Citibank, N.A., 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 Citibank, N.A., 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 Citibank, N.A. 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.
-52-
<PAGE>
<PAGE>
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:
NEWCOURT EQUIPMENT TRUST
SECURITIES 1998-2
By Citibank, N.A.,
not in its individual capacity but solely as Owner
Trustee
By /s/ F. Mills
-----------------------------------------------
Name: F. Mills
-----------------------------------------
Title: Senior Trust Officer
----------------------------------------
DEPOSITOR:
ANTIGUA FUNDING CORPORATION
By /s/ Glenn A. Votek
-----------------------------------------------
Name: Glenn A. Votek
-----------------------------------------
Title: Executive Vice President and Treasurer
----------------------------------------
AT&T CAPITAL CORPORATION
In its individual capacity and as Servicer
By /s/ Glenn A. Votek
-----------------------------------------------
Name: Glenn A. Votek
-----------------------------------------
Title: Executive Vice President and Treasurer
----------------------------------------
INDENTURE TRUSTEE:
THE BANK OF NEW YORK
not in its individual capacity but solely as Indenture
Trustee
By /s/ Cheryl L. Laser
-----------------------------------------------
Name: Cheryl L. Laser
-----------------------------------------
Title: Assistant Vice President
----------------------------------------
-53-
<PAGE>
<PAGE>
================================================================================
NEWCOURT EQUIPMENT TRUST SECURITIES 1998-2
5.195% Receivable-Backed Notes, Class A-1
5.29% Receivable-Backed Notes, Class A-2
5.45% Receivable-Backed Notes, Class A-3
5.45% Receivable-Backed Notes, Class A-4
5.50% Receivable-Backed Notes, Class A-5
5.66% Receivable-Backed Notes, Class B
6.19% Receivable-Backed Notes, Class C
7.21% Receivable-Backed Notes, Class D
INDENTURE
-----------------------------------
Dated as of December 1, 1998
-----------------------------------
THE BANK OF NEW YORK
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....................26
SECTION 1.03. Rules of Construction................................................27
ARTICLE II The Notes......................................................................28
SECTION 2.01. Form.................................................................28
SECTION 2.02. Execution, Authentication and Delivery...............................28
SECTION 2.03. Temporary Notes......................................................29
SECTION 2.04. Registration; Registration of Transfer and Exchange..................29
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes...........................30
SECTION 2.06. Person Deemed Owner..................................................31
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest................31
SECTION 2.08. Cancellation.........................................................32
SECTION 2.09. Book-Entry Notes.....................................................32
SECTION 2.10. Notices to Depository................................................33
SECTION 2.11. Definitive Notes.....................................................33
SECTION 2.12. Calculations.........................................................34
SECTION 2.13. Deposit of Note Proceeds.............................................34
ARTICLE III Covenants......................................................................35
SECTION 3.01. Payment of Principal and Interest....................................35
SECTION 3.02. Maintenance of Office or Agency......................................35
SECTION 3.03. Money for Payments To Be Held in Trust...............................35
SECTION 3.04. Existence............................................................36
SECTION 3.05. Protection of Trust Estate...........................................37
SECTION 3.06. Opinions as to Trust Estate..........................................37
SECTION 3.07. Performance of Obligations; Servicing of Contracts...................38
SECTION 3.08. Negative Covenants...................................................39
SECTION 3.09. Annual Statement as to Compliance....................................40
SECTION 3.10. Issuer May Consolidate or Merge Only on Certain Terms................40
SECTION 3.11. Successor or Transferee..............................................42
SECTION 3.12. No Other Business....................................................42
SECTION 3.13. No Borrowing.........................................................42
SECTION 3.14. Servicer's Obligations...............................................42
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities....................43
SECTION 3.16. Income Tax Characterization.........................................43
SECTION 3.17. Restricted Payments..................................................43
SECTION 3.18. Notice of Events of Default. ........................................43
SECTION 3.19. Further Instruments and Acts.........................................43
SECTION 3.20. Compliance with Laws.................................................43
</TABLE>
-i-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
SECTION 3.21. Amendments of Transfer and Servicing Agreement
and Trust Agreement..................................................44
SECTION 3.22. Trust Obligation.....................................................44
ARTICLE IV Satisfaction and Discharge.....................................................45
SECTION 4.01. Satisfaction and Discharge of Indenture..............................45
SECTION 4.02. Application of Trust Money...........................................46
SECTION 4.03. Repayment of Moneys Held by Paying Agent.............................46
SECTION 4.04. Release of Trust Estate..............................................46
ARTICLE V Remedies.......................................................................47
SECTION 5.01. Events of Default....................................................47
SECTION 5.02. Rights upon Event of Default.........................................48
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee;
Authority of Trustee...........................................................48
SECTION 5.04. Remedies.............................................................50
SECTION 5.05. Optional Preservation of the Contracts...............................50
SECTION 5.06. Priorities...........................................................51
SECTION 5.07. Limitation of Suits..................................................52
SECTION 5.08. Unconditional Rights of Noteholders To Receive Principal and Interest53
SECTION 5.09. Restoration of Rights and Remedies...................................53
SECTION 5.10. Rights and Remedies Cumulative.......................................53
SECTION 5.11. Delay or Omission Not a Waiver.......................................53
SECTION 5.12. Control by Noteholders...............................................53
SECTION 5.13. Waiver of Past Defaults..............................................54
SECTION 5.14. Undertaking for Costs................................................54
SECTION 5.15. Waiver of Stay or Extension Laws.....................................54
SECTION 5.16. Action on Notes......................................................54
SECTION 5.17. Performance and Enforcement of Certain Obligations...................55
ARTICLE VI The Trustee....................................................................56
SECTION 6.01. Duties of Trustee....................................................56
SECTION 6.02. Rights of Trustee....................................................58
SECTION 6.03. Individual Rights of Trustee.........................................59
SECTION 6.04. Trustee's Disclaimer.................................................59
SECTION 6.05. Notice of Defaults...................................................59
SECTION 6.06. Reports by Trustee to Holders........................................60
SECTION 6.07. Compensation and Indemnity...........................................60
SECTION 6.08. Replacement of Trustee...............................................61
SECTION 6.09. Successor Trustee by Merger..........................................62
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee........................62
SECTION 6.11. Eligibility; Disqualification........................................63
SECTION 6.12. Preferential Collection of Claims Against Issuer.....................64
SECTION 6.13. Representations and Warranties of the Trustee........................64
</TABLE>
-ii-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE VII Noteholders' Lists and Reports.................................................65
SECTION 7.01. Note Registrar To Furnish Trustee Names and
Addresses to Noteholders.............................................65
SECTION 7.02. Preservation of Information; Communications to Noteholders...........65
SECTION 7.03. Reports by Issuer....................................................65
SECTION 7.04. Reports by Trustee...................................................66
SECTION 7.05. Statements to Noteholders............................................66
ARTICLE VIII Trust Accounts, Disbursements and Releases.....................................67
SECTION 8.01. Collection of Money..................................................67
SECTION 8.02. Collection Account...................................................67
SECTION 8.03. Distributions........................................................67
SECTION 8.04. Note Distribution Account............................................68
SECTION 8.05. Servicing Account....................................................71
SECTION 8.06. Cash Collateral Account..............................................71
SECTION 8.07. General Provisions Regarding Servicing Account, Collection
Account, Note Distribution Account and Cash Collateral Account.......72
ARTICLE IX Supplemental Indentures........................................................76
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders...............76
SECTION 9.02. Supplemental Indentures With Consent of Noteholders..................77
SECTION 9.03. Execution of Supplemental Indentures.................................78
SECTION 9.04. Effect of Supplemental Indenture.....................................79
SECTION 9.05. Conformity With Trust Indenture Act..................................79
SECTION 9.06. Reference in Notes to Supplemental Indentures........................79
ARTICLE X Redemption and Purchase of Notes...............................................80
SECTION 10.01. Redemption...........................................................80
SECTION 10.02. Form of Redemption Notice............................................80
SECTION 10.03. Notes Payable on Redemption Date.....................................81
SECTION 10.04. Optional Purchase of Class A-5 Notes.................................81
SECTION 10.05. Form of Purchase Notice..............................................81
SECTION 10.06. Class A-5 Notes to be Purchased on Purchase Date.....................82
ARTICLE XI Miscellaneous..................................................................83
SECTION 11.01. Compliance Certificates and Opinions, etc............................83
SECTION 11.02. Form of Documents Delivered to Trustee...............................84
SECTION 11.03. Acts of Noteholders..................................................85
SECTION 11.04. Notices, etc., to Trustee, Issuer and Rating Agencies................86
SECTION 11.05. Notices to Noteholders; Waiver.......................................86
SECTION 11.06. Limitation of Liability..............................................87
SECTION 11.07. Conflict with Trust Indenture Act....................................87
SECTION 11.08. Effect of Headings and Table of Contents.............................88
SECTION 11.09. Successors and Assigns...............................................88
SECTION 11.10. Severability.........................................................88
SECTION 11.11. Benefits of Indenture................................................88
</TABLE>
-iii-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
SECTION 11.12. Legal Holidays.......................................................88
SECTION 11.13. Governing Law........................................................88
SECTION 11.14. Counterparts.........................................................88
SECTION 11.15. Recording of Indenture...............................................88
SECTION 11.16. No Petition..........................................................88
SECTION 11.17. Inspection...........................................................89
SECTION 11.18. Amendment of Cash Collateral Account Agreement.......................89
Testimonium, Signatures and Seals............................................................. 92
</TABLE>
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
Exhibit B-4 Form of Class D Note
-iv-
<PAGE>
<PAGE>
INDENTURE, dated as of December 1, 1998, between NEWCOURT
EQUIPMENT TRUST SECURITIES 1998-2, a trust formed pursuant to the laws of the
State of New York (the "Issuer"), and THE BANK OF NEW YORK, 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 5.195%
Receivable-Backed Notes, Class A-1 (the "Class A-1 Notes"), 5.29%
Receivable-Backed Notes, Class A-2 (the "Class A-2 Notes"), 5.45%
Receivable-Backed Notes, Class A-3 (the "Class A-3 Notes"), 5.45%
Receivable-Backed Notes, Class A-4 (the "Class A-4 Notes"), 5.50%
Receivable-Backed Notes, Class A-5 (the "Class A-5 Notes"), 5.66%
Receivable-Backed Notes, Class B (the "Class B Notes"), 6.19% Receivable-Backed
Notes, Class C (the "Class C Notes") and 7.21% Receivable-Backed Notes, Class D
(the "Class D 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, the Class
B Notes and the Class C 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 allocable portion of
Liquidation Proceeds to the Issuer and the
<PAGE>
<PAGE>
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 Subsequent Transfer Instrument;
(g) 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;
(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.
-2-
<PAGE>
<PAGE>
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).
"Additional Principal" means, with respect to any Payment Date,
the excess, if any, of (i) the Total Principal Payment Amount, over (ii) the sum
of the Class A Principal Payment Amount, the Class B Principal Payment Amount,
the Class C Principal Payment Amount and the Class D Principal Payment Amount.
"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, and (ii) that
portion of the balance in the Cash Collateral Account available for withdrawal
by the Trustee in accordance with Section 8.06(c).
"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 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.
-3-
<PAGE>
<PAGE>
"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 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 17, 1998, 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.
"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 Percentage" means 86.1842%.
"Class A Principal Payment Amount" means:
(A) (i) with respect to any Payment Date on or prior to the
later of (a) the Payment Date in May 1999 or (b) the
Payment Date on which the Class A-1 Principal Balance is
reduced to zero, the Total Principal
-4-
<PAGE>
<PAGE>
Payment Amount; provided that if, for any Payment Date after
the Payment Date in May 1999, the distribution of the Total
Principal Payment Amount in accordance with Section
8.04(b)(ii)(B) would result in the Class A-1 Principal
Balance equaling zero, the Class A Principal Payment Amount
with respect to such Payment Date will be an amount equal to
(x) the Class A-1 Principal Balance plus (y) the greater of
(1) 8.25% of the Total Principal Payment Amount or (2) the
remainder of (I) the sum of the Class A-2 Principal Balance,
the Class A-3 Principal Balance, the Class A-4 Principal
Balance and the Class A-5 Principal Balance minus (II) the
Class A Target Principal Amount; and
(ii) with respect to any Payment Date thereafter, the
remainder of (a) the sum of the Class A-2 Principal Balance,
the Class A-3 Principal Balance, the Class A-4 Principal
Balance and the Class A-5 Principal Balance minus (b) the
Class A Target Principal Amount; plus
(B) with respect to any Payment Date, any Class A Principal
Shortfall Amount;
provided, however, that in no event will the Class A Principal Payment Amount
exceed the Class A Principal Balance.
"Class A Principal Shortfall Amount" means, with respect to any
Payment Date that is the Stated Maturity Date for a Class of Class A Notes, and
any Payment Date thereafter, the amount, if any, by which (i) the sum of (a) the
Principal Balance of such Class, plus (ii) until the Class A-4 Principal Balance
has been reduced to zero, 8.25% of the Total Principal Payment Amount, exceeds
(ii) the Total Principal Payment Amount.
"Class A Target Principal Amount" means, with respect to any
Payment Date, the product of (i) the Class A Percentage and (ii) the Contract
Pool Principal Balance as of the related Accounting Date.
"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 5.195% per annum.
-5-
<PAGE>
<PAGE>
"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 5.195% Receivable-Backed Notes, Class
A-1, substantially in the form of Exhibit B-1.
"Class A-1 Stated Maturity Date" means January 10, 2000 (or, if
such day is not a Business Day, the next preceding Business Day).
"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.
"Class A-2 Interest Rate" means 5.29% 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 28
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 5.29% Receivable-Backed Notes, Class
A-2, substantially in the form of Exhibit B-1.
"Class A-2 Stated Maturity Date" means October 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
-6-
<PAGE>
<PAGE>
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 5.45% 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 28
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 5.45% Receivable-Backed Notes, Class
A-3, substantially in the form of Exhibit B-1.
"Class A-3 Stated Maturity Date" means October 15, 2002 (or, if
such day is not a Business Day, the next succeeding Business Day thereafter).
"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 5.45% 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 28
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.
-7-
<PAGE>
<PAGE>
"Class A-4 Notes" means the 5.45% Receivable-Backed Notes, Class
A-4, substantially in the form of Exhibit B-1.
"Class A-4 Stated Maturity Date" means October 15, 2003 (or, if
such day is not a Business Day, the next succeeding Business Day thereafter).
"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 one-twelfth.
"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 5.50%.
"Class A-5 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-5 Interest Rate, (ii) the Original
Principal Balance of the Class A-5 Notes, and (iii) a fraction equal to 28
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-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, and (iii) a fraction equal to one-twelfth.
"Class A-5 Notes" means the 5.50% Receivable-Backed Notes, Class
A-5, substantially in the form of Exhibit B-1.
"Class A-5 Stated Maturity Date" means December 15, 2003 (or, if
such day is not a Business Day, the next succeeding Business Day thereafter).
"Class B Floor" means, with respect to any Payment Date, (i)
4.375% of the Cut-Off Date Contract Pool Principal Balance, plus (ii) the
Principal Differential, if any, for such Payment Date, minus (iii) the sum of
the Class C Principal Balance and the Class D Principal Balance (prior to giving
effect to any payments of principal on the Class C or Class D Notes on such
Payment Date) and the amount on deposit in the Cash Collateral Account (after
giving effect to withdrawals to be made on such Payment Date); provided,
however, that in no event will the Class B Floor be greater than the Class B
Principal Balance immediately prior to such Payment Date nor less than zero.
"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
-8-
<PAGE>
<PAGE>
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 5.66% 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 28 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 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 5.66% Receivable-Backed Notes, Class B,
substantially in the form of Exhibit B-2.
"Class B Percentage" means 1.5132%.
"Class B Principal Payment Amount" means (i) zero with respect to
any Payment Date prior to the later of (a) the Payment Date in June 1999 or (b)
the Payment Date on which the Class A-1 Principal Balance is reduced to zero,
and (ii) with respect to any Payment Date thereafter, the excess, if any, of (a)
the Class B Principal Balance over (b) the greater of (1) the Class B Target
Principal Amount and (2) the Class B Floor, if any; provided, however, that in
no event will the Class B Principal Payment Amount exceed the Class B Principal
Balance.
"Class B Stated Maturity Date" means July 15, 2004 (or, if such
day is not a Business Day, the next succeeding Business Day thereafter).
"Class B Target Principal Amount" means, with respect to any
Payment Date, the product of (i) the Class B Percentage and (ii) the Contract
Pool Principal Balance as of the related Accounting Date.
"Class C Floor" means, with respect to any Payment Date, (i)
3.270% of the Cut-Off Date Contract Pool Principal Balance, plus (ii) the
Principal Differential, if any, for such Payment Date, minus (iii) the sum of
the Class D Principal Balance (prior to giving effect to any payments of
principal on the Class D Notes on such Payment Date) and the amount on deposit
in the Cash Collateral Account (after giving effect to withdrawals to be made on
such Payment Date); provided, however, that in no event will the Class C Floor
be greater than the Class C Principal Balance immediately prior to such Payment
Date nor less than zero. Furthermore, if the Class B Principal Balance
immediately prior to any Payment Date is less than or equal to the
-9-
<PAGE>
<PAGE>
Class B Floor for such Payment Date, the Class C Floor with respect to such
Payment Date will equal the Class C Principal Balance immediately prior to such
Payment Date.
"Class C Interest Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any, of the Class C Interest Distributable Amount
for the preceding Payment Date over the amount that was actually distributed in
respect of interest on the Class C Notes on such preceding 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-twelfth.
"Class C Interest Distributable Amount" means, with respect to
any Payment Date, the sum of the Class C Monthly Interest Distributable Amount
and the Class C Interest Carryover Shortfall for such Payment Date.
"Class C Interest Rate" means 6.19% per annum.
"Class C 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 C Interest Rate, (ii) the Original
Principal Balance of the Class C Notes, and (iii) a fraction equal to 28 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 C Interest Rate,
(ii) the Principal Balance of the Class C Notes on the immediately preceding
Payment Date, after giving effect to all payments of principal to Class C
Noteholders on or prior to such immediately preceding Payment Date, and (iii) a
fraction equal to one-twelfth.
"Class C Notes" means the 6.19% Receivable-Backed Notes, Class C,
substantially in the form of Exhibit B-3.
"Class C Percentage" means 5.0000%.
"Class C Principal Payment Amount" means (i) zero with respect to
any Payment Date prior to the later of (a) the Payment Date in June 1999 or (b)
the Payment Date on which the Class A-1 Principal Balance is reduced to zero,
and (ii) with respect to any Payment Date thereafter, the excess, if any, of (a)
the Class C Principal Balance over (b) the greater of (1) the Class C Target
Principal Amount and (2) the Class C Floor, if any; provided, however, that in
no event will the Class C Principal Payment Amount exceed the Class C Principal
Balance.
"Class C Stated Maturity Date" means September 15, 2004 (or, if
such day is not a Business Day, the next succeeding Business Day thereafter).
"Class C Target Principal Amount" means, with respect to any
Payment Date, the product of (i) the Class C Percentage and (ii) the Contract
Pool Principal Balance as of the related Accounting Date.
"Class D Floor" means, with respect to any Payment Date, (i)
2.510% of the Cut-Off Date Contract Pool Principal Balance, plus (ii) the
Principal Differential, if any, for such Payment Date, minus (iii) the amount on
deposit in the Cash Collateral Account (after giving
-10-
<PAGE>
<PAGE>
effect to withdrawals to be made on such Payment Date); provided, however, that
in no event will the Class D Floor be greater than the Class D Principal Balance
immediately prior to such Payment Date nor less than zero. Furthermore, if the
Class C Principal Balance immediately prior to any Payment Date is less than or
equal to the Class C Floor for such Payment Date, the Class D Floor with respect
to such Payment Date will equal the Class D Principal Balance immediately prior
to such Payment Date.
"Class D Interest Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any, of the Class D Interest Distributable Amount
for the preceding Payment Date over the amount that was actually distributed in
respect of interest on the Class D Notes on such preceding Payment Date, plus,
to the extent permitted by law, an amount equal to the product of (i) the Class
D Interest Rate, (ii) such excess, and (iii) a fraction equal to one-twelfth.
"Class D Interest Distributable Amount" means, with respect to
any Payment Date, the sum of the Class D Monthly Interest Distributable Amount
and the Class D Interest Carryover Shortfall for such Payment Date.
"Class D Interest Rate" means 7.21% per annum.
"Class D 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 D Interest Rate, (ii) the Original
Principal Balance of the Class D Notes, and (iii) a fraction equal to 28 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 D
Interest Rate, (ii) the Principal Balance of the Class D Notes on the
immediately preceding Payment Date, after giving effect to all payments of
principal to Class D Noteholders on or prior to such immediately preceding
Payment Date, and (iii) a fraction equal to one-twelfth.
"Class D Notes" means the 7.21% Receivable-Backed Notes, Class D,
substantially in the form of Exhibit B-4.
"Class D Percentage" means 7.3026%.
"Class D Principal Payment Amount" means (i) zero with respect to
any Payment Date prior to the later of (a) the Payment Date in June 1999 or (b)
the Payment Date on which the Class A-1 Principal Balance is reduced to zero,
and (ii) with respect to any Payment Date thereafter, the excess, if any, of (a)
the Class D Principal Balance over (b) the greater of (1) the Class D Target
Principal Amount and (2) the Class D Floor, if any; provided, however, that in
no event will the Class D Principal Payment Amount exceed the Class D Principal
Balance.
"Class D Stated Maturity Date" means September 15, 2007 (or, if
such day is not a Business Day, the next succeeding Business Day thereafter).
"Class D Target Principal Amount" means, with respect to any
Payment Date, the product of (i) the Class D Percentage and (ii) the Contract
Pool Principal Balance as of the related Accounting Date.
-11-
<PAGE>
<PAGE>
"Closing Date" means December 17, 1998.
"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:
(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 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
such Accounting Date and received on or prior thereto), after giving
effect to any Prepayments received on or prior to such Accounting Date,
discounted monthly at the rate of 6.843% 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 Accounting Date, whether or not
received, as well as any Prepayments, and any Scheduled Payments due
after such Accounting Date, received on or prior to such Accounting
Date, and (b) the amount specified in clause (i) above;
provided that, for purposes of computing the Total Principal Payment 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
-12-
<PAGE>
<PAGE>
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 101 Barclay Street, Floor 12 East, New York, New York 10286, Attention:
Corporate Trust Administration--Asset Backed Finance Unit; 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).
"CPR" means the "Constant Prepayment Rate" prepayment model.
"Current Collection Period Pledged Revenues" means, with respect
to any Payment Date, the amount of Pledged Revenues in the Collection Account as
of the immediately preceding Deposit Date which were received by the Servicer
after the end of 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 (i) with respect to the Contracts listed on
Exhibits A-1 and A-2 of the Transfer and Servicing Agreement as of the Closing
Date, December 1, 1998, and (ii) with respect to any Substitute Contract, the
first day of the calendar month during which such Substitute Contract was
transferred to the Issuer in accordance with the provisions of Section 2.6(b) or
Section 2.7 of the Transfer and Servicing Agreement.
"Cut-Off Date Contract Pool Principal Balance" is $1,342,869,226.
"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
-13-
<PAGE>
<PAGE>
Notes, the Class C Notes and the Class D 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.
"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 or the Savings Association
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 and F1 by Fitch (if rated by Fitch) 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
-14-
<PAGE>
<PAGE>
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
such depository institution or trust company are rated at least P-1 by
Moody's, A-1+ by S&P and F1+ by Fitch (if rated by Fitch); 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 and
AAA from Fitch (if rated by Fitch);
(vi) commercial paper having a rating of at least P-1 by Moody's,
A-1+ by S&P and F1+ by Fitch (if rated by Fitch) 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 and Fitch (if rated by Fitch),
including funds for which the Trustee or any of its Affiliates is
investment manager or advisor;
(viii) interest-bearing demand cash accounts of the Trustee,
deposits in which are insured by the Bank Insurance Fund of the FDIC;
and
(ix) 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.
-15-
<PAGE>
<PAGE>
"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 Certificate" means the certificate issued under the Trust
Agreement evidencing the entire beneficial ownership interest in the Issuer.
"Equity Certificateholder" means the holder of an Equity
Certificate, as reflected in the certificate register maintained by the Owner
Trustee.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"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 IBCA, Inc., 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
-16-
<PAGE>
<PAGE>
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; 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, for each Class of Notes, the initial
period from and including the Closing Date to but excluding January 15, 1999,
and thereafter each successive period (i) for the Class A-2, Class A-3, Class
A-4, Class A-5, Class B, Class C and Class D 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 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. The Payment Date with
respect to each Interest Period will be the 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, the Class C Interest Rate
and the Class D Interest Rate, as applicable.
"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.
-17-
<PAGE>
<PAGE>
"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 or a Replaced Contract, but including any
Substitute Contract substituted therefor and added to such Exhibit A-1 in
accordance with the provisions of Section 2.6(b) or Section 2.7 of the Transfer
and Servicing Agreement) 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.
"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) 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
-18-
<PAGE>
<PAGE>
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 or a Replaced Contract, but including any Substitute Contract
substituted therefor and added to such Exhibit A-2 in accordance with the
provisions of Section 2.6(b) or Section 2.7 of the Transfer and Servicing
Agreement), 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.
"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, Class C Note or Class D 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, the Class C
Interest Distributable Amount and the Class D Interest Distributable Amount.
"Note Majority" means Holders representing a majority of the
Principal Balance of each Class of the Notes then Outstanding.
-19-
<PAGE>
<PAGE>
"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.
"Note Principal Distributable Amount" means, with respect to any
Payment Date, the sum of (i) the Total Principal Payment Amount, plus (ii) any
Class A Principal Shortfall Amount. In no event may the Note Principal
Distributable Amount with respect to 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, the Class C
Notes and the Class D 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.
"Original Principal Balance" means (i) with respect to the Class
A-1 Notes, $322,288,614, (ii) with respect to the Class A-2 Notes, $85,272,196,
(iii) with respect to the Class A-3 Notes, $470,004,229, (iv) with respect to
the Class A-4 Notes, $201,430,384, (v) with respect to the Class A-5 Notes,
$122,872,534, (vi) with respect to the Class B Notes, $15,442,996, (vii) with
respect to the Class C Notes, $51,029,031 and (viii) with respect to the Class D
Notes, $74,529,242.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
-20-
<PAGE>
<PAGE>
(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 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 Citibank, N.A., 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 the fifteenth day of each calendar month
(or, if such fifteenth day is not a Business Day, the next succeeding Business
Day), commencing January 15, 1999; provided that, in the event that the
Principal Balance of the Class A-1 Notes has not been reduced to zero on or
prior to the Payment Date occurring in December 1999, the Payment Date for the
Class A-1 Notes in January 2000 will be January 10, 2000 (or, if such day is not
a Business Day, the next preceding Business Day). The Payment Date with respect
to each Interest Period will be the Payment Date next succeeding the end of such
Interest Period.
-21-
<PAGE>
<PAGE>
"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 (a) in the case of a Lease Contract, any portion thereof
allocated to the Depositor, or (b) in the case of a Prepaid Contract for which
a substitution has been made in accordance with Section 2.7 of the Transfer and
Servicing Agreement, that portion thereof to which the Depositor is entitled
pursuant to Section 2.7 of the Transfer and Servicing Agreement); (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 and the
Note Distribution Account.
"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.
"Prepayment" means, 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" 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 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 (after giving effect to all distributions of principal from Available
Pledged Revenues on such Payment Date), over (ii) the aggregate of the Required
Payoff Amounts for all Contracts as of the last day of the related Collection
Period.
"Principal Differential" means, with respect to any Payment Date,
the excess, if any, of (i) the remainder, if any, of (a) the Aggregate Principal
Balance of the Notes (prior to giving effect to the payment of principal on the
Notes on such Payment Date) minus (b) the lesser
-22-
<PAGE>
<PAGE>
of (1) the Contract Pool Principal Balance as of the related Accounting Date for
the preceding Payment Date, minus the Contract Pool Principal Balance as of the
related Accounting Date for such Payment Date, or (2) the Related Collection
Period Pledged Revenues remaining after the payment of amounts owing to the
Servicer and the payment of all interest due on the Notes on such Payment Date,
over (ii) the aggregate of the Required Payoff Amounts for all Contracts as of
the Related Accounting Date.
"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 February 1, 1998, among TCC, the Depositor, Leasing Services and
NCFC; the Purchase and Sale Agreement, dated as of April 1, 1998 among TCC, the
Depositor, Leasing Services and NCFC; the Purchase and Sale Agreement, dated as
of June 1, 1998, among TCC, the Depositor and the Originators; the Purchase and
Sale Agreement, dated as of September 1, 1998, among TCC, the Depositor, Leasing
Services and NCFC; the Purchase and Sale Agreement, dated as of October 1, 1998,
among TCC, the Depositor and the Originators; the Purchase and Sale Agreement,
dated as of November 1, 1998, among TCC, the Depositor and NCFC; and any other
comparable purchase agreement entered into among TCC, the Depositor and an
Originator pursuant to which an Originator has sold to the Depositor a
Substitute Contract.
"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).
"Purchase Date" means, in the case of a purchase by the Depositor
of the Class A-5 Notes pursuant to Section 10.04, the 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.
"Rating Agency" means each of Moody's, S&P and Fitch, so long as
such Persons maintain a rating on the Notes; and, if none of Moody's, S&P or
Fitch 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
-23-
<PAGE>
<PAGE>
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 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.
"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 as
of the Deposit Date 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 Cash Collateral
Account Agreement, any Subsequent Transfer Instruments, the Depository Agreement
and the Underwriting 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.
"Replaced Contract" means any Contract for which a Substitute
Contract has been substituted in accordance with Section 2.6(b) or Section 2.7
of the Transfer and Servicing Agreement.
"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
Payment Date on or prior to the Payment Date occurring in December, 1999, an
amount equal to $94,000,846,
-24-
<PAGE>
<PAGE>
and (ii) with respect to any Payment Date thereafter, an amount equal to the
greater of (a) the sum of (1) 8.25% 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 (after giving effect to all distributions of principal on
such Payment Date), over (B) the Contract Pool Principal Balance for such
Payment Date, and (b) $16,785,865; provided that in no event will the Requisite
Cash Collateral Amount exceed the Aggregate Principal Balance of the Notes.
"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.
"Subsequent Transfer Instrument" means each Subsequent Transfer
Instrument executed by the Depositor in accordance with the provisions of
Section 2.6(b) or Section 2.7 of the Transfer and Servicing Agreement, by which
the Depositor transfers Substitute Contracts to the Issuer.
"Substitute Contract" means a lease contract or a loan contract
transferred by the Depositor to the Issuer in substitution for a Lease Contract
or Loan Contract, as appropriate, in accordance with the provisions of Section
2.6(b) or Section 2.7 of the Transfer and Servicing
-25-
<PAGE>
<PAGE>
Agreement, such contract being identified in a schedule to the applicable
Subsequent Transfer Instrument.
"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, the Class C
Stated Maturity Date and the Class D Stated Maturity Date, as appropriate.
"TCC" means AT&T Capital Corporation, a Delaware corporation.
"Termination Date" means the date on which the Trustee shall have
received payment and performance of all Secured Obligations, the obligations of
the Trustee to the Cash Collateral Account Lenders and the Depositor under the
Cash Collateral Account Agreement, or such earlier date on which the Issuer is
terminated in accordance with the Trust Agreement.
"Total Principal Payment 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.
"Transfer and Servicing Agreement" means the Transfer and
Servicing Agreement, dated as of December 1, 1998, among the Depositor, the
Servicer, the Trustee and the Issuer.
"Trust Accounts" means the Servicing Account, the Collection
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 December
1, 1998, 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 The Bank of New York, a New York banking
corporation, as Trustee under this Indenture, or any successor Trustee under
this Indenture.
-26-
<PAGE>
<PAGE>
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
"Underwriting Agreement" shall mean the Underwriting Agreement,
dated as of December 10, 1998, among the Depositor, TCC and the underwriters
named therein relating to the Notes.
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.
"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.
-27-
<PAGE>
<PAGE>
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.
-28-
<PAGE>
<PAGE>
ARTICLE II
The Notes
SECTION 2.01. Form. Each Class of Class A Notes, the Class B
Notes, the Class C Notes and the Class D 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, B-3 and B-4, 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, B-3 and
B-4 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 $322,288,614, Class A-2 Notes for original issue in an aggregate principal
amount of $85,272,196, Class A-3 Notes for original issue in an aggregate
principal amount of $470,004,229, Class A-4 Notes for original issue in an
aggregate principal amount of $201,430,384, Class A-5 Notes for original issue
in an aggregate principal amount of $122,872,534, Class B Notes for original
issue in an aggregate principal amount of $15,442,996, Class C Notes for
original issue in an aggregate principal amount of $51,029,031 and Class D Notes
for original issue in an aggregate principal amount of $74,529,242. 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, Class C Notes and Class D Notes
outstanding at any time may not exceed such respective amounts except as
provided in Section 2.05.
Each Note shall be dated the date of its authentication. The
Notes shall be issuable as registered Notes in the minimum denomination of
$1,000 and in integral multiples thereof.
-29-
<PAGE>
<PAGE>
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.
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.
-30-
<PAGE>
<PAGE>
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 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
-31-
<PAGE>
<PAGE>
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.
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, the Class C Notes and the Class D Notes
set forth in Exhibits B-1, B-2, B-3 and B-4, 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
-32-
<PAGE>
<PAGE>
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, the Class C Notes and the Class D Notes set forth in Exhibits B-1, B-2,
B-3 and B-4, 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 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 Cede & 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;
-33-
<PAGE>
<PAGE>
(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
(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
-34-
<PAGE>
<PAGE>
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 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.
SECTION 2.13. Deposit of 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 $55,729,070.
The balance of the proceeds of the Notes shall be paid to or upon the order of
the Depositor.
-35-
<PAGE>
<PAGE>
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 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;
-36-
<PAGE>
<PAGE>
(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 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
-38-
<PAGE>
<PAGE>
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.
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,
-38-
<PAGE>
<PAGE>
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
2000, 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, rerecording 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.
(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.
-39-
<PAGE>
<PAGE>
(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.
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
-40-
<PAGE>
<PAGE>
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, 1998), an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that
(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;
-41-
<PAGE>
<PAGE>
(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 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;
-42-
<PAGE>
<PAGE>
(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;
(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), Newcourt Equipment Trust
Securities 1998-2 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 Newcourt Equipment Trust Securities 1998-2 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.
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
-43-
<PAGE>
<PAGE>
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 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.
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
-44-
<PAGE>
<PAGE>
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.
-45-
<PAGE>
<PAGE>
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 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; and
-46-
<PAGE>
<PAGE>
(C) 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 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.
-47-
<PAGE>
<PAGE>
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; 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 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.
-48-
<PAGE>
<PAGE>
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 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:
-49-
<PAGE>
<PAGE>
(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 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
-50-
<PAGE>
<PAGE>
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
(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.
-51-
<PAGE>
<PAGE>
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;
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, 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;
-52-
<PAGE>
<PAGE>
NINTH: to Class D Noteholders for amounts due and unpaid on the
Class D Notes for interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class D
Notes for interest;
TENTH: to Class D Noteholders for amounts due and unpaid on the
Class D Notes for principal, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Class D
Notes for principal;
ELEVENTH: to the parties entitled thereto in accordance with the
Cash Collateral Agreement for amounts due and unpaid thereunder; and
TWELFTH: the remainder, if any, to the Owner Trustee for
distribution to the Equity Certificateholder.
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.
-53-
<PAGE>
<PAGE>
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 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
(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
-54-
<PAGE>
<PAGE>
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 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
-55-
<PAGE>
<PAGE>
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.
-56-
<PAGE>
<PAGE>
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, in the case of any such certificate or
opinion which, by any provision hereof, is specifically required to be
furnished to the Trustee, the Trustee shall examine such certificate
or opinion to determine whether or not it conforms to the requirements
of this Indenture and, if applicable, the Trustee's other Related
Documents, provided that the Trustee need not confirm or investigate
the accuracy of any mathematical calculations or other facts stated
therein.
(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.
(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.
-57-
<PAGE>
<PAGE>
(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.
(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 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
-58-
<PAGE>
<PAGE>
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 Default or Event of Default (other than an
Event of Default pursuant to Section 5.01(i) or (ii)) unless a Responsible
Officer of the Trustee (i) shall have received written notice of any event which
is such a Default or Event of Default and such notice refers to the Notes and
this Indenture, or (ii) otherwise has actual knowledge thereof. In the absence
of receipt of such notice or knowledge, the Trustee may conclusively assume that
there is no Default or 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,
attorneys or independent contractors 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,
independent contractor, 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 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
-59-
<PAGE>
<PAGE>
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.
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 a Responsible Officer of the Trustee has written notice or
actual knowledge thereof, 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.
-60-
<PAGE>
<PAGE>
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 and disbursements 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 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;
-61-
<PAGE>
<PAGE>
(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 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.
-62-
<PAGE>
<PAGE>
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 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:
-63-
<PAGE>
<PAGE>
(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
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.
-64-
<PAGE>
<PAGE>
SECTION 6.13. Representations and Warranties of the Trustee. The
Trustee represents and warrants as of the Closing Date that:
(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).
-65-
<PAGE>
<PAGE>
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 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
-66-
<PAGE>
<PAGE>
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 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).
-67-
<PAGE>
<PAGE>
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 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 the Note Interest Distributable Amount for such Payment Date;
(iii) third, from the Amount Available then remaining on deposit
in the Collection Account, to the Note Distribution Account, an amount
equal to the Note Principal Distributable Amount for such Payment Date;
-68-
<PAGE>
<PAGE>
(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; and
(vi) sixth, any remaining Amount Available to the Owner Trustee
for distribution to the Equity Certificateholder.
In the event the Servicer's Certificate shows that, as of any
Determination Date, there are amounts on deposit in the Collection Account which
do not constitute Pledged Revenues due to clause (ii)(b) of the definition
thereof and to which the Depositor is entitled pursuant to Section 2.7 of the
Transfer and Servicing Agreement, the Trustee shall forthwith pay such amounts
to or upon the order of the Depositor.
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 and the
Cash Collateral Account.
(b) On each 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
Distribution Account in the following amounts and in the following order of
priority (except as otherwise provided in paragraph (c) below or in Section
5.06):
(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 to
the Class A-5 Noteholders, the Class A-5 Interest Distributable
Amount, 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;
-69-
<PAGE>
<PAGE>
(C) to the Class C Noteholders, the Class C Interest
Distributable Amount; and
(D) to the Class D Noteholders, the Class D Interest
Distributable Amount; and
(ii) principal on the Notes in the following order of priority:
(A) prior to the Payment Date on which the Class A-1
Principal Balance has been reduced to zero, to the Class A-1 and
Class A-5 Noteholders, the Class A Principal Payment Amount,
91.75% of which shall be distributed to the Class A-1 Noteholders
and 8.25% of which shall be distributed to the Class A-5
Noteholders; provided that if the amount available to make such
distributions is not sufficient to pay the full Class A Principal
Payment Amount, such amount available shall be allocated (1) if
such Payment Date is the Class A-1 Stated Maturity Date (or any
Payment Date thereafter until the Class A-1 Principal Balance has
been reduced to zero), first, to the Class A-1 Noteholders to the
extent necessary to reduce the Class A-1 Principal Balance to
zero, and, thereafter, to the Class A-5 Noteholders, and (2) for
any other Payment Date, between the Class A-1 Noteholders and the
Class A-5 Noteholders in the respective percentages specified
above in this clause;
(B) on the Payment Date on which the Class A-1 Principal
Balance shall be reduced to zero, to the Class A Noteholders, the
Class A Principal Payment Amount, allocated as follows:
(1) to the Class A-1 Noteholders, the remaining Class
A-1 Principal Balance;
(2) to the Class A-5 Noteholders, an amount equal to
8.25% of the Total Principal Payment Amount; and
(3) the remaining Class A Principal Payment Amount, if
any, to the Class A-2 Noteholders until the Class A-2
Principal Balance has been reduced to zero, then to the
Class A-3 Noteholders until the Class A-3 Principal Balance
has been reduced to zero, then to the Class A-4 Noteholders
until the Class A-4 Principal Balance has been reduced to
zero and then to the Class A-5 Noteholders until the Class
A-5 Principal Balance has been reduced to zero;
provided that if the amount available to make such distributions
is not sufficient to pay the full Class A Principal Payment
Amount, such amount available shall be allocated, first, to the
Class A-1 Notes and the Class A-5 Notes as provided in clauses
(1) and (2) above (and, if such amount available is not
sufficient to pay the full amounts so provided for, such amount
available shall be allocated (I) if such Payment Date is the
Class A-1 Stated Maturity Date (or any Payment Date
-70-
<PAGE>
<PAGE>
thereafter until the Class A-1 Principal Balance has been reduced
to zero), first, to the Class A-1 Noteholders to the extent
necessary to reduce the Class A-1 Principal Balance to zero, and,
thereafter, to the Class A-5 Noteholders, and (II) for any other
Payment Date, between the to the Class A-1 Notes and the
Class A-5 Notes pro rata based upon the amounts otherwise payable
pursuant to such clauses (1) and (2)), and, thereafter, to the
Class A-2, Class A-3, Class A-4 and Class A-5 Notes as provided
in clause (3) above;
(C) after the Payment Date on which the Class A-1 Principal
Balance has been reduced to zero, to the Class A Noteholders, the
Class A Principal Payment Amount, allocated as follows:
(1) on and prior to the Payment Date on which the Class
A-4 Principal Balance has been reduced to zero:
(I) to the Class A-5 Noteholders, an amount equal
to 8.25% of the Total Principal Payment Amount; and
(II) the remaining Class A Principal Payment
Amount to the Class A-2 Noteholders until the Class A-2
Principal Balance has been reduced to zero, then to the
Class A-3 Noteholders until the Class A-3 Principal
Balance has been reduced to zero, then to the Class A-4
Noteholders until the Class A-4 Principal Balance has
been reduced to zero and then to the Class A-5
Noteholders until the Class A-5 Principal Balance has
been reduced to zero;
provided that if the amount available to make such
distributions is not sufficient to pay the full Class A
Principal Payment Amount, such amount available shall be
allocated (x) if such Payment Date is the Stated Maturity
Date of the Class A-2, A-3 or A-4 Notes (or any Payment Date
thereafter until the Principal Balance of such Class has
been reduced to zero), first, to the Noteholders of such
Class to the extent necessary to reduce the Principal
Balance of such Class to zero, and, thereafter, to the Class
A-5 Noteholders, and (y) for any other Payment Date, between
the Class A-5 Notes, on the one hand, and the Class A-2,
Class A-3 and Class A-4 Notes, on the other, pro rata based
upon the amounts otherwise payable pursuant to clauses (I)
and (II) above; and
(2) after the Payment Date on which the Class A-4
Principal Balance has been reduced to zero, to the Class A-5
Notes until the Class A-5 Principal Balance has been reduced
to zero;
(D) to the Class B Noteholders, the Class B Principal
Payment Amount;
-71-
<PAGE>
<PAGE>
(E) to the Class C Noteholders, the Class C Principal
Payment Amount;
(F) to the Class D Noteholders, the Class D Principal
Payment Amount; and
(G) the Additional Principal, if any, sequentially to the
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class B,
Class C, and Class D Noteholders.
(c) 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
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
$38,271,776, 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 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 8.07(a)) is greater than the Requisite
Cash Collateral Amount for such 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
-72-
<PAGE>
<PAGE>
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 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 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 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 Payment
Date; plus
(iii) with respect to the Stated Maturity Date for any Class of
Notes or on the first Payment Date on which the Contract Pool
Principal 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 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 Payment Date is
less than the total amount, if any, specified above for such 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 Payment Date, of the amounts, if any, specified in clauses (i)
through (iii) above for such Payment Date.
SECTION 8.07. General Provisions Regarding Servicing Account,
Collection Account, Note Distribution 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 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, 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
-73-
<PAGE>
<PAGE>
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 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:
(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
-74-
<PAGE>
<PAGE>
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
(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
-75-
<PAGE>
<PAGE>
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 8.07. All interest, dividends, gains upon transfer and
other income from, or earnings on, investments of funds in the Collection
Account and the Note Distribution 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, 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 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 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.
-76-
<PAGE>
<PAGE>
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
(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.
-77-
<PAGE>
<PAGE>
(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;
(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;
-78-
<PAGE>
<PAGE>
(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 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.
-79-
<PAGE>
<PAGE>
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.
-80-
<PAGE>
<PAGE>
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 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
(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).
-81-
<PAGE>
<PAGE>
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, on any Payment Date, all, but
not less than all, of the Class A-5 Notes, at a price equal to the Principal
Balance thereof plus a premium equal to the excess, discounted as described
below, of (i) the amount of interest that would have accrued on the Class A-5
Notes at the Class A-5 Interest Rate during the period commencing on and
including the Payment Date on which the Class A-5 Notes are to be so purchased
to but excluding Class A-5 Stated Maturity Date, over (ii) the amount of
interest that would have accrued on the Class A-5 Notes over the same period at
a per annum rate of interest equal to the bond equivalent yield to maturity on
the fifth Business Day preceding such Payment Date of a United States Treasury
security, which is trading in the public securities market, maturing on a date
closest to the date equal to the remaining weighted average life of the Class
A-5 Notes. Such excess shall be discounted to present value to such Payment Date
at the yield described in clause (ii) above. For purposes of the preceding two
sentences only, (i) the Class A-5 Principal Balance upon which interest will be
deemed to accrue, and (ii) the weighted average remaining life of the Class A-5
Notes, shall be determined based upon the amortization of the Contract Pool
Principal Balance remaining at such Payment Date at a rate equal to 6% CPR.
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.
-82-
<PAGE>
<PAGE>
All notices of purchase shall state:
(i) the Purchase Date;
(ii) the purchase price;
(iii) 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
(iv) 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
-83-
<PAGE>
<PAGE>
indebtedness represented thereby otherwise extinguished, it being the intention
of the Issuer and the Depositor that such Class A-5 Notes remain outstanding and
represent a continuing indebtedness of the Issuer, whether such Class A-5 Notes
are held by the Depositor or any other purchaser.
-84-
<PAGE>
<PAGE>
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
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
-85-
<PAGE>
<PAGE>
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.
(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
-86-
<PAGE>
<PAGE>
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.
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.
-87-
<PAGE>
<PAGE>
(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) 815-5544, or
(b) the Issuer by the Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and (i) mailed,
first-class, postage prepaid, or by overnight delivery, to the Issuer
addressed to: Newcourt Equipment Trust Securities 1998-2, in care of
Citibank, N.A., as Owner Trustee, 111 Wall Street, 5th Floor, New York,
New York 10043, Attention: Corporate Agency Trust, facsimile number:
(212) 657-3872, or at any other address previously furnished in writing
to the Trustee by the Issuer, or (ii) sent by facsimile transmission,.
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, and (iii) in the case of Fitch, at the following
address: Fitch IBCA, Inc., One State Street Plaza, New York, New York 10004
Attention: ABS Surveillance; 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
-88-
<PAGE>
<PAGE>
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.
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 Citibank, N.A., 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 Citibank, N.A. 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 Citibank, N.A., 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
Citibank, N.A. 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.
-89-
<PAGE>
<PAGE>
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 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
-90-
<PAGE>
<PAGE>
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.
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.
-91-
<PAGE>
<PAGE>
(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.
-92-
<PAGE>
<PAGE>
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.
NEWCOURT EQUIPMENT TRUST SECURITIES 1998-2
By CITIBANK, N.A.,
not in its individual capacity but solely as Owner
Trustee under the Trust Agreement
By /s/ F. Mills
---------------------------------------------
Name: F. Mills
----------------------------------------
Title: Senior Trust Officer
---------------------------------------
THE BANK OF NEW YORK,
not in its individual capacity but solely as Trustee
By /s/ Cheryl L. Laser
---------------------------------------------
Name: Cheryl L. Laser
----------------------------------------
Title: Assistant Vice President
---------------------------------------
-93-
<PAGE>
<PAGE>
================================================================================
TRUST AGREEMENT
between
ANTIGUA FUNDING CORPORATION
and
CITIBANK, N.A.
Owner Trustee
----------------------------------
Dated as of December 1, 1998
----------------------------------
NEWCOURT EQUIPMENT TRUST SECURITIES 1998-2
================================================================================
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
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.....................................3
Section 1.6. No Recourse..........................................................................3
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.........................................5
Section 2.7. Declaration of Trust.................................................................5
Section 2.8. Liability of the Depositor...........................................................5
Section 2.9. Representations and Warranties of the Depositor......................................6
Section 2.10. Covenants of the Depositor...........................................................7
Section 2.11. Covenants of the Equity Certificateholder...........................................10
ARTICLE III THE EQUITY CERTIFICATE....................................................................11
Section 3.1. Initial Ownership...................................................................11
Section 3.2. The Equity Certificate; Authorized Denomination.....................................11
Section 3.3. Authentication of Equity Certificate................................................11
Section 3.4. Registration of Transfer and Exchange of Equity Certificate.........................11
Section 3.5. Mutilated, Destroyed, Lost or Stolen Equity Certificate.............................13
Section 3.6. Persons Deemed Owners...............................................................13
Section 3.7. Access to List of Equity Certificateholder's Name and Address.......................13
Section 3.8. Maintenance of Office or Agency.....................................................13
Section 3.9. Appointment of Paying Agent.........................................................13
ARTICLE IV ACTIONS BY OWNER TRUSTEE...................................................................14
Section 4.1. Restriction on Power of the Equity Certificateholder................................14
Section 4.2. Prior Notice to the Equity Certificateholder with Respect
to Certain Matters..................................................................14
Section 4.3. Action by the Owner Trustee with Respect to Bankruptcy..............................15
Section 4.4. Restrictions on Equity Certificateholder's Power....................................15
Section 4.5. Authority of the Depositor..........................................................15
Section 4.6. Income Tax Characterization.........................................................15
</TABLE>
-i-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES..................................................16
Section 5.1. Trust Accounts......................................................................16
Section 5.2. Application of Funds in the Equity Certificate Distribution Account.................17
Section 5.3. Method of Payment...................................................................18
Section 5.4. No Segregation of Monies; No Interest...............................................18
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE......................................................18
Section 6.1. General Authority...................................................................18
Section 6.2. General Duties......................................................................19
Section 6.3. Action upon Instruction.............................................................19
Section 6.4. No Duties Except as Specified in this Agreement, in
Related Documents or in Instructions................................................20
Section 6.5. No Action Except under Specified Documents or Instructions..........................20
Section 6.6. Restrictions........................................................................20
Section 6.7. Covenant of the Owner Trustee.......................................................20
ARTICLE VII CONCERNING THE OWNER TRUSTEE...............................................................21
Section 7.1. Acceptance of Trust and Duties......................................................21
Section 7.2. Furnishing of Documents.............................................................22
Section 7.3. Representations and Warranties......................................................22
Section 7.4. Reliance; Advice of Counsel.........................................................23
Section 7.5. Not Acting in Individual Capacity...................................................23
Section 7.6. Owner Trustee Not Liable for Equity Certificate, Notes or Contracts.................23
Section 7.7. Owner Trustee May Own Notes.........................................................24
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE..............................................................24
Section 8.1. Owner Trustee's Fees and Expenses...................................................24
Section 8.2. Indemnification.....................................................................24
Section 8.3. Non-recourse Obligations............................................................25
ARTICLE IX TERMINATION................................................................................25
Section 9.1. Termination of the Trust............................................................25
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL
OWNER TRUSTEES............................................................................27
Section 10.1. Eligibility Requirements for Owner Trustee..........................................27
Section 10.2. Resignation or Removal of Owner Trustee.............................................27
Section 10.3. Successor Owner Trustee.............................................................28
Section 10.4. Merger or Consolidation of Owner Trustee............................................28
Section 10.5. Appointment of Co-Trustee or Separate Trustee.......................................28
ARTICLE XI MISCELLANEOUS PROVISIONS..................................................................30
Section 11.1. Amendment...........................................................................30
Section 11.2. GOVERNING LAW.......................................................................31
Section 11.3. Severability of Provisions..........................................................31
Section 11.4. Equity Certificate Nonassessable and Fully Paid.....................................31
</TABLE>
-ii-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
Section 11.5. Third-Party Beneficiaries...........................................................31
Section 11.6. Counterparts........................................................................31
Section 11.7. Notices.............................................................................32
Section 11.8. Tax Election........................................................................32
</TABLE>
EXHIBITS
Exhibit A -- Form of Equity Certificate
Exhibit B -- Form of Representation Letter
-iii-
<PAGE>
<PAGE>
THIS TRUST AGREEMENT, dated as of December 1, 1998, is made
between Antigua Funding Corporation, a Delaware corporation (the "Depositor"),
and Citibank, N.A., a national banking association, 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.
Authentication Agent: Citibank, N.A., 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
principally administered, which office at the Closing Date is located at 111
Wall Street, 5th Floor, New York, New York 10043, Attention: Corporate Agency
Trust; the telecopy number for the Corporate Trust Office on the date of the
execution of this Agreement is (212) 657-3872.
Depositor: Antigua Funding Corporation, a Delaware
corporation, in its capacity as depositor hereunder.
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.
<PAGE>
<PAGE>
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 December 1, 1998,
between the Trust and The Bank of New York, 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: Citibank, N.A., or its successor in interest,
acting not individually but solely as trustee on behalf of the Trust, 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 Depository Agreements and
the Underwriting 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.
Responsible Officer: When used with respect to the Owner
Trustee, any Vice President, Assistant Vice President, Senior Trust Officer,
Assistant Trust Officer, Trust Officer or other officer associated with the
corporate trust department of the Owner Trustee customarily performing functions
similar to those performed by any of the above designated officers, and also,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such officer's knowledge and familiarity with
the particular subject.
Transfer and Servicing Agreement: The Transfer and Servicing
Agreement, dated as of December 1, 1998, among the Trust, the Depositor, TCC, in
its individual capacity and as
-2-
<PAGE>
<PAGE>
Servicer, and The Bank of New York, 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.
Underwriting Agreement: The Underwriting Agreement, dated as
of December 10, 1998, among the Depositor, TCC and the underwriters named
therein relating to the Notes.
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.
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
-3-
<PAGE>
<PAGE>
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 "Newcourt Equipment Trust Securities 1998-2."
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 written
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;
(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
-4-
<PAGE>
<PAGE>
(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 at the written direction of the Equity Certificateholder,
the Depositor or the Indenture Trustee, as appropriate. 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.
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
and all 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 Depositor, until the
issuance of the Equity Certificate, and thereafter 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 fully 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
-5-
<PAGE>
<PAGE>
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 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,
-6-
<PAGE>
<PAGE>
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 or
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, 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
-7-
<PAGE>
<PAGE>
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 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;
(iii) will conduct its own business in its own name
and will hold all of its assets in its own name;
-8-
<PAGE>
<PAGE>
(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 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;
(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
-9-
<PAGE>
<PAGE>
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 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.
-10-
<PAGE>
<PAGE>
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.
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
-11-
<PAGE>
<PAGE>
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 substantially the form of assignment
included in Exhibit A hereto, 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, fee, assessment or governmental charge that may be
imposed in connection with any transfer or exchange of Equity
Certificate.
(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, fully 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.
-12-
<PAGE>
<PAGE>
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 free and
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 and their agents
and counsel) 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, 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 a Responsible Officer of 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
-13-
<PAGE>
<PAGE>
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 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 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 a Responsible Officer of 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
provided to the Owner Trustee, 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 provided to the Owner
Trustee, materially and adversely affect the interests of the Equity
Certificateholder;
-14-
<PAGE>
<PAGE>
(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 provided to the Owner Trustee, materially and
adversely affect the interests of the Equity Certificateholder; or
(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 written
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
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
indebtedness for purposes of
-15-
<PAGE>
<PAGE>
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 written 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 on behalf
of the Trust;
(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;
(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
-16-
<PAGE>
<PAGE>
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 written
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
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.
-17-
<PAGE>
<PAGE>
(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 (including the fees and expenses of its agents and counsel).
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 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 $322,288,614, the Class A-2 Notes in
the aggregate principal amount of $85,272,196, the Class A-3 Notes in the
aggregate principal amount of $470,004,229, the Class A-4 Notes in the aggregate
principal amount of $201,430,384, the Class A-5 Notes in the aggregate principal
amount
-18-
<PAGE>
<PAGE>
of $122,872,534, the Class B Notes in the aggregate principal amount of
$15,442,996, the Class C Notes in the aggregate principal amount of $51,029,031
and the Class D Notes in the aggregate principal amount of $74,529,242. 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 written 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 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
written 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,
-19-
<PAGE>
<PAGE>
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 of any
kind to any Person for such action or inaction.
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 a Responsible Officer of 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 a Responsible
Officer of 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,
-20-
<PAGE>
<PAGE>
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 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 Section 7.3) or for the due execution
-21-
<PAGE>
<PAGE>
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,
negligence 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 national banking association duly organized and
validly existing in good standing under the laws of the United States.
It has all requisite corporate power and authority and all franchises,
grants, authorizations, consents, orders and approvals from all
governmental authorities necessary 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.
-22-
<PAGE>
<PAGE>
(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 (whether
in its original or facsimile form) 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 conclusively
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 (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 Citibank,
N.A. 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-
-23-
<PAGE>
<PAGE>
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.
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, such
annual fees as shall be agreed upon from time to time in writing 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 fully 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
-24-
<PAGE>
<PAGE>
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.
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
-25-
<PAGE>
<PAGE>
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 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
-26-
<PAGE>
<PAGE>
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 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 at least $1,000,000,000 in assets and a
combined capital and surplus of at least $50,000,000; (iii) having (or having a
parent which has) a long-term debt rating of at least investment grade by
Moody's, S&P and Fitch (if rated by Fitch); and (iv) subject to supervision or
examination by Federal or State authorities. 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,
at the expense of the Depositor, 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 the Depositor
shall remove the Owner Trustee under the authority of the immediately preceding
-27-
<PAGE>
<PAGE>
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 and expenses owed to the outgoing Owner Trustee and its agents and
counsel.
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
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.
-28-
<PAGE>
<PAGE>
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.
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,
-29-
<PAGE>
<PAGE>
ARTICLE XI
MISCELLANEOUS PROVISIONS
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.
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.
(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.
-30-
<PAGE>
<PAGE>
(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.
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.
-31-
<PAGE>
<PAGE>
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 overnight delivery, 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: Antigua Funding Corporation,
c/o AT&T Capital Corporation, 2 Gatehall Drive, Parsippany, New Jersey 07054,
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; and Fitch IBCA, Inc., One State Street Plaza, New
York, New York 10004 Attention: ABS Surveillance; or at such other address as
shall be designated by 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 Certificateholder 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.
-32-
<PAGE>
<PAGE>
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: Executive Vice President and Treasurer
CITIBANK, N.A.
By /s/ F. Mills
---------------------------------------------
Name: F. Mills
Title: Senior Trust Officer
-33-
<PAGE>
<PAGE>
================================================================================
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.
NEWCOURT COMMUNICATIONS FINANCE CORPORATION
(F/K/A AT&T CREDIT CORPORATION)
AND
AT&T COMMERCIAL FINANCE CORPORATION
SELLERS
--------------------------------
DATED AS OF DECEMBER 1, 1998
--------------------------------
================================================================================
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <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 CFC..................................12
Section 3.5. Representations and Warranties of Antigua..............................14
ARTICLE IV COVENANTS OF THE SELLERS.......................................................16
Section 4.1. Protection of Title of Antigua and the Trust...........................16
Section 4.2. Other Liens or Interests...............................................18
Section 4.3. Costs and Expenses.....................................................18
Section 4.4. Indemnification........................................................18
Section 4.5. Negative Covenant......................................................21
Section 4.6. Separate Identity......................................................21
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...............23
Section 5.3. Waivers................................................................24
ARTICLE VI MISCELLANEOUS..................................................................25
Section 6.1. Liability of the Sellers and TCC.......................................25
Section 6.2. Merger or Consolidation of a Seller, TCC or Antigua....................25
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
Section 6.5. Amendment..............................................................26
</TABLE>
-i-
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C>
Section 6.6. Notices................................................................27
Section 6.7. Merger and Integration.................................................27
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...................................................28
Section 6.13. Purchase of Common Stock of Antigua....................................29
</TABLE>
SCHEDULES
<TABLE>
<S> <C>
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
</TABLE>
-ii-
<PAGE>
<PAGE>
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT, dated as of December 1, 1998,
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"),
Newcourt Communications Finance Corporation (f/k/a AT&T Credit Corporation), a
Delaware corporation ("Credit Corp."), and AT&T Commercial Finance Corporation,
a Delaware corporation ("CFC"), 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
December 1, 1998 (the "Trust Agreement"), between Antigua and Citibank, N.A., as
Owner Trustee, Antigua has formed Newcourt Equipment Trust Securities 1998-2
(the "Trust"), and the Trust has issued the Equity Certificate to Antigua; and
WHEREAS, pursuant to the terms of an Indenture, dated as of
December 1, 1998 (the "Indenture"), between the Trust and The Bank of New York,
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, and have
previously conveyed to Antigua certain Lease Contracts pursuant to Purchase and
Sale Agreements substantially similar to this Agreement, all as are more
particularly described in Schedule A-1 attached hereto (all subsequent
references herein to "Lease Contracts" being to those so described), and have or
(in the case of those Lease Contracts previously conveyed to Antigua) at the
time of conveyance had 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, and have previously conveyed to Antigua certain Loan Contracts
pursuant to Purchase and Sale Agreements substantially similar to this
Agreement, all as are more particularly described in Schedule A-2 attached
hereto (all subsequent references herein to "Loan Contracts" being to those so
described), 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 December 1, 1998 (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 to the Trust; and
WHEREAS, pursuant to a Loan Agreement, dated as of December 1,
1998, among the Owner Trustee, the Indenture Trustee, the Depositor, TCC, in its
individual capacity and as Servicer, the Lenders party thereto, and the agent
thereunder, there will be established a Cash Collateral Account for the benefit
of the Noteholders; and
<PAGE>
<PAGE>
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 17, 1998.
"Contracts" means the Lease Contracts and the Loan Contracts.
"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.
"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.
-2-
<PAGE>
<PAGE>
"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 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.
-3-
<PAGE>
<PAGE>
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:
<TABLE>
<S> <C> <C>
Leasing Services: $415,250,177.24 Class 1998-2-A
Credit Corp.: $787,466,762.23 Class 1998-2-B
CFC: $140,152,286.24 Class 1998-2-C
</TABLE>
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, (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
-4-
<PAGE>
<PAGE>
Equipment and all revenues, payments, rights to payment, profits,
accounts, chattel paper, products and contract rights arising from or
related to the Lesed 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.
-5-
<PAGE>
<PAGE>
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
and the related Equipment, 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 and interests in the related Equipment 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 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.
-6-
<PAGE>
<PAGE>
(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
Seller'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 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 2 Gatehall Drive, Parsippany, New Jersey, and the offices
where TCC keeps its records concerning the Contracts and related
documents are in Parsippany, New Jersey.
-7-
<PAGE>
<PAGE>
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
and its interest in the related Equipment 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 and its interest in the
related Equipment 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 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,
-8-
<PAGE>
<PAGE>
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 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
-9-
<PAGE>
<PAGE>
Leasing Services keeps its records concerning the Contracts and related
documents are in Framingham, Massachusetts. Leasing Services also has an
office at 1 Research Drive, 4th Floor, Westborough, 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
and its interest in the related Equipment 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 and its interest in the related
Equipment 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 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,
-10-
<PAGE>
<PAGE>
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 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.
-11-
<PAGE>
<PAGE>
keeps its records concerning the Contracts and related documents are in
Parsippany, New Jersey.
Section 3.4. Representations and Warranties of CFC. CFC 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. CFC 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 CFC in the Trust's own name.
(a) Schedule of Representations. With respect to each Contract
and its interest in the related Equipment sold by CFC 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. CFC 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 and its interest in the related Equipment sold by CFC to
Antigua hereunder.
(c) Due Qualification. CFC 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. CFC 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; CFC 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
CFC's Related Documents have been duly authorized by CFC by all
necessary corporate action.
(e) No Consents. CFC 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,
-12-
<PAGE>
<PAGE>
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
CFC's Related Documents have been duly executed and delivered, and
effect a valid sale, transfer and assignment of the Contracts and CFC's
interest in the related Equipment, enforceable against CFC, and
creditors of and purchasers from CFC; and this Agreement and each of
CFC's Related Documents constitute legal, valid and binding obligations
of CFC, 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 CFC, or any indenture, agreement, mortgage,
deed of trust or other instrument to which CFC 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 CFC of any
court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over CFC or
any of its properties.
(h) No Proceedings. There are no proceedings or investigations
pending or, to the knowledge of CFC, threatened against CFC, before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over CFC or any
properties of CFC (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 CFC 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 CFC is
located at 2 Gatehall Drive, Parsippany, New Jersey, and the offices
where CFC keeps its records concerning the Contracts and related
documents are in Parsippany, New Jersey.
-13-
<PAGE>
<PAGE>
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.
(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
-14-
<PAGE>
<PAGE>
of specific remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(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 2 Gatehall Drive, Parsippany, New Jersey, and the
offices where Antigua keeps its records concerning the Contracts and
related documents are in Parsippany, 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 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.
-15-
<PAGE>
<PAGE>
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, and Leasing Services
hereby grants to Antigua and the Owner Trustee its power of attorney to sign, in
the name of Leasing Services, any such financing statements.
(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, and Credit Corp.
hereby grants to Antigua and the Owner Trustee its power of attorney to sign, in
the name of Credit Corp., any such financing statements.
(c) At or prior to the Closing Date, CFC shall have filed or
caused to be filed UCC-1 financing statements, executed by CFC, 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). CFC shall deliver (or cause to be
delivered) to Antigua, the Owner Trustee and the Indenture Trustee filestamped
copies of, or filing receipts for, any document filed as provided above, as soon
as available following such filing. In the event that CFC fails to perform its
obligations under this subsection, Antigua or the Owner Trustee may do so at the
expense of TCC, and CFC hereby grants to Antigua and the Owner Trustee its power
of attorney to sign, in the name of CFC, any such financing statements.
-16-
<PAGE>
<PAGE>
(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)-(c) 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. In the
event that any of the Sellers or TCC fails to perform its obligations under this
paragraph, Antigua or the Owner Trustee may do so at the expense of TCC, and
each of the Sellers and TCC each hereby grant to Antigua and the Owner Trustee
its power of attorney to sign, in the name of such Seller or TCC, as applicable,
any such amendments.
(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. In the event that any of the Sellers or TCC
fails to perform its obligations under this paragraph, Antigua or the Owner
Trustee may do so at the expense of TCC, and each of the Sellers and TCC each
hereby grant to Antigua and the Owner Trustee its power of attorney to sign, in
the name of such Seller or TCC, as applicable, any such amendments or financing
statements.
(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 printouts (including any restored from archives) that, if they shall refer in
any manner whatsoever to
-17-
<PAGE>
<PAGE>
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 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 Sellers 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 the
Sellers 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 any of the Sellers.
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.
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:
-18-
<PAGE>
<PAGE>
(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, as
their interests may appear, to be named as additional insureds 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 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
-19-
<PAGE>
<PAGE>
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 than reasonable costs of
investigation. In the event an indemnifying party allows the indemnified party
to assume the defense of any action brought against such indemnified party, the
indemnifying party will pay or reimburse the expenses of such indemnified party
in such defense in a timely fashion. 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.
-20-
<PAGE>
<PAGE>
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)
causing 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; 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.
(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) causing 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
-21-
<PAGE>
<PAGE>
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.
-22-
<PAGE>
<PAGE>
ARTICLE V
REPURCHASES
Section 5.1. Repurchase of Contracts Upon Breach of
Representation or Warranty. Upon the occurrence of a Repurchase Event, TCC
shall, subject to the following paragraph, 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(a)
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.
TCC may, at its option, cause Antigua on its behalf to substitute
an Eligible Contract for a Contract that TCC is obligated to repurchase pursuant
to the preceding paragraph upon satisfaction of the conditions set forth in
Section 2.6(b) of the Transfer and Servicing Agreement.
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
-23-
<PAGE>
<PAGE>
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.
-24-
<PAGE>
<PAGE>
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 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
-25-
<PAGE>
<PAGE>
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 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.
-26-
<PAGE>
<PAGE>
(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, 2 Gatehall
Drive, Parsippany, New Jersey 07054, 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,
2 Gatehall Drive, Parsippany, New Jersey 07054, 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, 2
Gatehall Drive, Parsippany, New Jersey 07054, 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 CFC, to AT&T Capital Corporation, 2 Gatehall
Drive, Parsippany, New Jersey 07054, Attention: General Counsel, or such other
address as shall be designated by CFC 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, 2
Gatehall Drive, Parsippany, New Jersey 07054, Attention: General Counsel.
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
-27-
<PAGE>
<PAGE>
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 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
-28-
<PAGE>
<PAGE>
(or Antigua) or any substantial part of its property, or ordering the winding up
or liquidation of the affairs of the Trust (or Antigua).
Section 6.13. Purchase of Common Stock of Antigua. All references
in this Agreement to the purchase of shares of common stock of Antigua by the
Sellers are intended to refer to the transfer of assets of the Sellers to
Antigua in exchange for stock of Antigua in a transaction or series of
transactions intended to be governed by Section 351 of the Internal Revenue Code
of 1986, as amended.
-29-
<PAGE>
<PAGE>
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,
as Purchaser
By: /s/ Glenn A. Votek
-----------------------------------------
Name: Glenn A. Votek
Title: Executive Vice President and Treasurer
AT&T CAPITAL CORPORATION,
In its individual capacity and as Servicer
By: /s/ Glenn A. Votek
-----------------------------------------
Name: Glenn A. Votek
Title: Executive Vice President and Treasurer
AT&T CAPITAL LEASING SERVICES, INC.,
as Seller
By: /s/ Glenn A. Votek
-----------------------------------------
Name: Glenn A. Votek
Title: Executive Vice President and Treasurer
NEWCOURT COMMUNICATIONS FINANCE CORPORATION,
as Seller
By: /s/ Glenn A. Votek
-----------------------------------------
Name: Glenn A. Votek
Title: Executive Vice President and Treasurer
-30-
<PAGE>
<PAGE>
AT&T COMMERCIAL FINANCE CORPORATION,
as Seller
By: /s/ Glenn A. Votek
-----------------------------------------
Name: Glenn A. Votek
Title: Executive Vice President and Treasurer
-31-
<PAGE>
<PAGE>
EXHIBIT 8.1
[DORSEY & WHITNEY LLP LETTERHEAD]
Antigua Funding Corporation
c/o CT Corporation
1209 Orange Street
Wilmington, Delaware 19801
Re: Newcourt Equipment Trust Securities 1998-2
Registration Statement on Form S-3
Registration No. 333-34793
Ladies and Gentlemen:
We have acted as counsel for Antigua Funding Corporation, a
Delaware corporation (the "Depositor"), in connection with the establishment by
the Depositor of Newcourt Equipment Trust Securities 1998-2 (the "Owner Trust"),
pursuant to a Trust Agreement dated as of December 1, 1998 (the "Trust
Agreement"), between the Depositor and Citibank, N.A., as Owner Trustee (the
"Owner Trustee"), and the upcoming issuance by the Owner Trust of an aggregate
of up to $1,342,869,226 of Receivable-Backed Notes, in eight classes (the
"Notes"), pursuant to the Indenture dated as of December 1, 1998 (the
"Indenture"), between the Owner Trust and The Bank of New York, as Indenture
Trustee (the "Indenture Trustee").
Pursuant to the Trust Agreement, the Equity Certificate has
been issued by the Owner Trust to the Depositor. Pursuant to seven substantially
similar Purchase and Sale Agreements, entered into between February and October
1998 (the "Purchase Agreements"), among the Depositor, AT&T Capital Corporation
("TCC") and three wholly owned subsidiaries of TCC (AT&T Capital Leasing
Services, Inc., Newcourt Communications Finance Corporation and AT&T Commercial
Finance Corporation, collectively the "Originators"), the Originators have
assigned to the Depositor all of their right, title and interest in and to all
of the Contracts and the related Equipment, described below. Pursuant to a
Transfer and Servicing Agreement dated as of December 1, 1998 (the "Transfer and
Servicing Agreement"), among the Depositor, TCC, in its individual capacity and
as Servicer, and the Indenture Trustee, the Depositor will transfer such
Contracts and a right to a portion of the Liquidation Proceeds with respect to
Leased Equipment to the Owner Trust and the Owner Trust will issue to the
Depositor the Notes, which will be offered and sold by the Depositor.
<PAGE>
<PAGE>
Antigua Funding Corporation
December 17, 1998
Page 2
You have requested our opinion with respect to the federal
income tax characterization of the Notes and the Owner Trust. For purposes of
rendering our opinion we have examined the Prospectus, the Trust Agreement, the
Purchase Agreement, the Cash Collateral Account Agreement, the Transfer and
Servicing Agreement, the Indenture and the related documents and agreements
contemplated therein (collectively, the "Transaction Documents") and we have
reviewed such questions of law as we have considered necessary and appropriate.
All capitalized terms used herein and not defined herein have the meanings set
forth in the Indenture or the Transfer and Servicing Agreement.
Our opinion is based upon the existing provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), currently applicable
Treasury Department regulations issued thereunder, current published
administrative positions of the Internal Revenue Service (the "Service")
contained in revenue rulings and revenue procedures, and judicial decisions, all
of which are subject to change, either prospectively or retroactively, and to
possibly differing interpretations. Any change in such authorities may affect
the opinions rendered herein.
Our opinion is also based on the projections, representations,
warranties, covenants and agreements set forth in the Transaction Documents and
the assumption that the Depositor, TCC, the Cash Collateral Account Lenders, the
Owner Trustee, the Indenture Trustee, the Noteholders and the holder of the
Equity Certificate will at all times comply with the requirements of the
Transaction Documents. We have also relied in part on various factual
representations made to us by the Depositor and TCC. Although we have not
undertaken an independent investigation of any factual matters, nothing contrary
to any of these representations has come to our attention in the course of our
consideration of these matters. Any alteration of such factual representations
may adversely affect our opinion.
An opinion of counsel is predicated on all the facts and
conditions set forth in the opinion and is based upon counsel's analysis of the
statutes, regulatory interpretations and case law in effect as of the date of
the opinion. It should not be accepted as a guarantee that a court of law or an
administrative agency will concur in the opinion.
Federal Income Tax Characterization of the Notes
In general, for federal income tax purposes, the
characterization of the issuance and sale of notes as the issuance and sale of
debt, the issuance and sale of an equity or beneficial interest in the issuer or
the sale of an ownership interest in property of the issuer is a question of
fact, the resolution of which is based upon a variety of factors, principal
among which is a determination of who will receive the benefits of, and bear the
burdens relating to, the property. Thus, the determination of whether an
instrument issued in connection with such a transaction will be treated as debt
for federal income tax purposes, or instead will be treated as an equity or
beneficial interest in the issuer or as an ownership interest in the assets of
the issuer, depends on all the facts and
<PAGE>
<PAGE>
Antigua Funding Corporation
December 17, 1998
Page 3
circumstances in each case. See generally, Plumb, The Federal Income Tax
Significance of Corporate Debt: A Critical Analysis and a Proposal, 26 Tax L.
Rev. 369 (1971).
In any such determination, several factors must be considered,
and debt characterization may be indicated by, among other things, the
independence of the debt holders and equity holders, the intention of the
parties to create a debt, the issuance of a formal debt instrument, the
provision of a fixed maturity date, the likelihood and expectation that the
principal amount will be repaid, the debt to equity ratio of the issuer, the
nature of the assets serving as security for the obligation, and various other
factors. In the context of this transaction, the most important considerations
are: (i) whether the Noteholders bear the burdens of ownership (i.e., the risk
of loss from the Contracts) and (ii) whether the Noteholders have acquired the
benefits of ownership (i.e., the potential for gain from the Contracts). In view
of all of the relevant facts and circumstances, the likelihood of the
Noteholders bearing any actual loss in respect of the Contracts is considered to
be remote. Accordingly, the Noteholders should not be regarded as bearing a
significant risk of loss associated with ownership of the Contracts. In
addition, because the Noteholders are entitled to receive a fixed principal
amount and a fixed rate of interest the economic return to the Noteholders will
not be affected by any change in the value of the Contracts. Accordingly, the
Noteholders will not receive any benefit from any increase in the value of the
Contracts.
A number of other factors are consistent with the treatment of
the Notes as debt. The most important of these factors are as follows: the form
of the Notes as debt, the fact that interest rates for the Notes have been
determined in a separate, identifiable market from the one in which interest
rates on the Contracts were set, the payment features of the Notes, the
Servicer's ability to permit prepayments on the Lease Contracts, and under
certain circumstances, the right and option of the Servicer, TCC or the
Depositor to substitute into the Trust Assets one or more Contracts having
similar characteristics for Defaulted Contracts, Prepaid Contracts or Warranty
Contracts, the ultimate retention of reinvestment risk by the Depositor or TCC,
the fact that delinquencies on the Contracts and the negative carry resulting
therefrom are not borne by the Noteholders, the existence of a clean-up call
option in favor of the Depositor, the Depositor's right to purchase the Class
A-5 Notes on any Payment Date and the limited rights of Noteholders in the
proceeds of any liquidation of Equipment upon a default under the related Lease
Contract. We are also aware that, although they may intend to dispose of such
interests, as of the Closing Date, the entire Cash Collateral Account will be
funded by the Depositor, TCC or its affiliates without any binding contract for
a resale or transfer of its interests therein.
Based upon the foregoing, we are of the opinion that the Notes
will be treated as debt for federal income tax purposes.
Federal Income Tax Characterization of the Owner Trust
The Owner Trust is similar in many respects to trusts
established to hold collateral pledged as security in connection with lending
transactions. If all classes of Notes and Certificates
<PAGE>
<PAGE>
Antigua Funding Corporation
December 17, 1998
Page 4
issued by the Owner Trust were debt for federal income tax purposes, the
Owner Trust would be disregarded for federal income tax purposes and would be
characterized as a mere security arrangement. Treas. Reg. 'SS' 1.61-13(b); Rev.
Rul. 76-265, 1976-2 C.B. 448; see also Rev. Rul. 73-100, 1973-1 C.B. 613
(domestic corporations's transfer of securities to Canadian security holder, to
secure liabilities to policyholders in Canada, does not create a trust where
discretionary powers retained by corporation); Rev. Rul. 71-119, 1971 C.B. 163
(settlement fund administered by "trustee" not a trust).
The Owner Trust, however, has issued the Equity Certificate to
the Depositor and the Equity Certificate (i) will not take the form of debt,
(ii) is intended not to be treated as debt for federal income tax purposes, and
(iii) is intended to be treated instead as evidencing the ownership interests of
the Depositor in property transferred by the Depositor to the Owner Trust,
subject to the security interests of the Noteholders and the rights of the Cash
Collateral Account Lenders. As long as, for federal income tax purposes, the
Notes are treated as debt and the Depositor is viewed to hold all interests in
the Owner Trust other than the Notes, the Owner Trust should be treated as a
mere security arrangement and disregarded for federal income tax purposes.
Alternatively, if the Owner Trust were not characterized as a mere security
arrangement, then under the circumstances set forth above it should be viewed as
a grantor trust, with the Depositor being treated as the grantor, for federal
income tax purposes. Treas. Reg. 'SS' 301.7701-4.
If the Trust is recognized as an entity for federal tax
purposes and is not treated as a grantor trust, the Trust would be viewed as a
business entity whose federal tax characterization would be determined under
Treasury Regulations 'SS''SS' 301.7701-2 and 301.7701-3. Treasury Regulations
'SS' 301.7701-2 provides that "a business entity is any entity recognized for
federal tax purposes . . . that is not properly classified as a trust under
'SS' 301.7701-4 or otherwise subject to special treatment under the Internal
Revenue Code."
Treasury Regulations 'SS' 301.7701-2 also provides that
certain types of entities are treated as corporations for federal tax purposes,
including entities formed under a state statute which refers to the entity as
"incorporated or as a corporation, body corporate or body politic," or as a
"joint-stock company or joint-stock association". The definition of corporation
also includes insurance companies, certain banking entities, foreign entities
and other entities specified in 'SS' 301.7701-2. The Trust is not an entity
which is treated as a corporation under 'SS' 301.7701-2.
Treasury Regulations 'SS' 301.7701-3 refers to a business
entity that is not classified as a corporation as an "eligible entity." That
section provides that an eligible entity with a single owner can elect to be
classified as an association (which is taxed as a corporation) or to be
disregarded as an entity separate from its owner. An eligible entity with at
least two members can elect to be classified as either an association or a
partnership. Treasury Regulations 'SS' 301.7701-3 further provides certain
default rules pursuant to which, unless the entity affirmatively elects to be
classified as an association, an eligible entity is disregarded as an entity
separate from its owner if it has a single owner, and is treated as a
partnership if it has two or more members.
<PAGE>
<PAGE>
Antigua Funding Corporation
December 17, 1998
Page 5
If the Trust is recognized as an entity for federal tax
purposes and all classes of Notes are treated as debt for federal tax purposes,
then the Trust would be an eligible entity with a single owner, the Depositor,
as the holder of the Equity Certificate. Under the default rules of Treasury
Regulations 'SS' 301.7701-3 described above, the Trust would be disregarded as
an entity separate from the Depositor for federal tax purposes.
If any interest in the Trust other than the Equity Certificate
were treated as an equity interest in the Trust, the Trust would be an eligible
entity with two or more members. In such a case, under the default rules of
Treasury Regulations 'SS' 301.7701-3 described above, the Trust would be treated
as a partnership for federal tax purposes.
Under Section 11.8 of the Trust Agreement, the Depositor has
the power to direct the Owner Trustee to file an election for the Trust to be
either disregarded or treated as a partnership for federal income tax purposes.
Neither the Depositor nor the Owner Trustee has the authority to file an
election to treat the Trust as an association taxable as a corporation.
Based on the foregoing, it is our opinion that the Trust will
not be treated as an association taxable as a corporation for federal income tax
purposes.
Publicly Traded Partnership
Section 7704 of the Code provides that, subject to certain
exceptions, a partnership the interests in which are (i) traded on an
established securities market or (ii) readily tradable on a secondary market (or
the substantial equivalent thereof) will be treated as a corporation for federal
income tax purposes.
Treasury Regulations Section 1.7704-1, issued on November 29,
1995 (the "PTP Regulations"), provide further explanation of the rules governing
publicly traded partnerships. The PTP Regulations provide that an "established
securities market" includes a national, foreign, regional or local exchange, as
well as an interdealer quotation system which regularly disseminates firm buy or
sell quotations by identified brokers or dealers, by electronic means or
otherwise. The PTP Regulations also provide that interests in a partnership are
readily tradable on a secondary market or the substantial equivalent thereof if
the partners are readily able to buy, sell or exchange their partnership
interests in a manner that is economically comparable to trading on an
established securities market.
Interests in the Owner Trust or in the Trust Assets which
might be viewed to constitute interests in a partnership will not be traded on
an established securities market within the meaning of the PTP Regulations. The
PTP Regulations provide a safe harbor pursuant to which interests in a
partnership will not be considered readily tradable on a secondary market or the
substantial equivalent thereof if (i) all interests in such partnership were
issued in a transaction (or transactions) that was not required to be registered
under the Securities Act of 1933 (the "Securities
<PAGE>
<PAGE>
Antigua Funding Corporation
December 17, 1998
Page 6
Act") and (ii) the partnership does not have more than 100 partners at any time
during the taxable year of the partnership.
As discussed above, it is our opinion that the Notes will be
treated as debt and will not be viewed to constitute interests in a partnership
for federal income tax purposes. The Equity Certificate will be issued to the
Depositor and the Depositor will be required to retain the Equity Certificate,
except that the Equity Certificate may be transferred in connection with a sale
of all or substantially all of the assets of the Depositor, provided that such
transfer is exempt from registration under the Securities Act. The interests of
the Cash Collateral Lenders, even if they were considered to be an equity
interest in the Owner Trust, will not be issued in a transaction required to be
registered under the Securities Act. Thus, no interests in the Owner Trust will
be issued in a transaction that is required to be registered under the
Securities Act of 1933.
Based upon the foregoing and on our opinion that the Notes
will be treated as debt for federal income tax purposes, it is our opinion that
the Owner Trust will not be characterized as a "publicly traded partnership"
taxable as a corporation for federal income tax purposes.
We express no opinions other than those expressly set forth
above.
Except as provided below, the foregoing opinions are being
furnished to you solely for your benefit and may not be relied upon by, nor may
copies be delivered to, any other person without our prior written consent.
We hereby consent to the inclusion of this opinion as an
exhibit to the Registration Statement and to the use of our name under the
heading "United States Taxation" in the Prospectus, and we hereby confirm that
the discussion under such heading accurately sets forth our advice as to the
likely outcome of material issues under the federal income tax laws.
Dated: December 17, 1998
Very truly yours,
/s/ Dorsey & Whitney LLP
CFS
<PAGE>
