<PAGE> 1
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): November 26, 1996
FORD CREDIT AUTO LEASE TRUST 1996-1
(RCL Trust 1996-1 - Originator)
--------------------------------------------------------
(Exact name of Registrant as specified in charter)
Delaware 333-11167 Applied for
- -------- --------- -----------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
c/o First Union Bank of Delaware
One Rodney Square, 920 King Street
Wilmington, Delaware 19801
- ----------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 302-888-7530
<PAGE> 2
Item 5. Other Events
RCL Trust 1996-1 (the "Registrant" or "RCL Trust"), as originator of
Ford Credit Auto Lease Trust 1996-1 (the "Issuer"), Ford Motor Credit Company
("Ford Credit") and Ford Credit Leasing Company, Inc. ("Ford Credit Leasing"),
as originators of the Registrant, have registered with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), $150,000,000 initial principal balance of the
Issuer's 5.45125% Class A-1 Asset Backed Senior Notes and $660,843,000 initial
principal balance of the Issuer's 5.80% Class A-2 Asset Backed Senior Notes
(collectively, the "Senior Notes") pursuant to Registration Statement No.
333-11167 (the "Registration Statement"). In addition to the Senior Notes,
pursuant to the Registration Statement Ford Credit and Ford Credit Leasing, as
depositors to Ford Credit Titling Trust ("FCTT"), have registered with the
Commission under the Securities Act certain certificates of FCTT representing a
beneficial interest in certain designated leases and the related leased
vehicles (the "Series 1996-1 Certificates"). FCTT was formed pursuant to an
Amended and Restated Trust Agreement, dated as of January 31, 1994 (the "FCTT
Agreement"), among Ford Credit, Ford Credit Leasing and Comerica Bank.
On November 26, 1996, RCL Trust and PNC Bank, Delaware, as trustee on
behalf of the Issuer (the "Lease Trustee"), entered into a Transfer Agreement,
dated as of November 26, 1996 (the "Transfer Agreement"), conveying from RCL
Trust to the Issuer all of its right, title and interest in the Series 1996-1
Certificates. In the Transfer Agreement, RCL Trust also assigned to the Issuer
all its right, title and interest in and to the Asset Contribution Agreement,
dated as of November 26, 1996 (the "Asset Contribution Agreement"), among Ford
Credit, Ford Credit Leasing and RCL Trust, pursuant to which Ford Credit and
Ford Credit Leasing had previously contributed to RCL Trust the Series 1996-1
Certificates and their respective rights and obligations as beneficiaries of
FCTT under the Administrative Agency Agreement, dated as of January 31, 1994
(the "Administrative Agency Agreement") and the Series 1996-1 Supplement
thereto, dated as of November 26, 1996 (the "Series 1996-1 Supplement"), each
among Ford Credit, Ford Credit Leasing and Comerica Bank.
2
<PAGE> 3
On November 26, 1996, the Lease Trustee on behalf of the Issuer and
The Chase Manhattan Bank, as trustee (the "Indenture Trustee"), entered into an
Indenture, dated as of November 26, 1996 (the "Indenture") pursuant to which
the Issuer issued the Senior Notes and pledged and assigned to the Indenture
Trustee certain collateral (the "Collateral"), including the Series 1996-1
Certificates, to secure the payment of the Senior Notes. Concurrently with the
issuance of the Senior Notes, pursuant to the Lease Trust Agreement dated as of
November 26, 1996 (the "Lease Trust Agreement") between RCL Trust as depositor
and the Lease Trustee, the Issuer issued (i) $106,690,331.13 initial principal
balance of 6.00% Asset Backed Subordinated Notes, the entire initial principal
balance of which were retained by RCL Trust, and (ii) $30,821,533.09 initial
principal balance of 6.10% Asset Backed Lease Trust Certificates,
$30,510,000.00 initial principal balance of which were sold to investors in a
private placement exempt from the registration requirements under the
Securities Act and $311,533.09 initial principal balance of which were retained
by RCL Trust. Subject to the prior pledge and assignment of the Series 1996-1
Certificates to the Indenture Trustee, the Issuer then leased the Series 1996-1
Certificates to RCL Trust pursuant to the Agreement, dated as of November 26,
1996 (the "Program Operating Lease"), between RCL Trust and the Issuer.
Detailed information on the Series 1996-1 Certificates and the
underlying leases and leased vehicles is set forth in the Series 1996-1
Supplement and the Asset Contribution Agreement filed herewith as exhibits.
3
<PAGE> 4
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
<TABLE>
<CAPTION>
EXHIBITS
Method of
Designation Description Filing
----------- ----------- ---------
<S> <C> <C>
Exhibit 4.1 Trust Agreement of the Issuer dated as of November 26, Filed with this
1996, between RCL Trust and the Lease Trustee. Report.
Exhibit 4.2 Trust Indenture dated as of November 26, 1996, between the Filed with this
Issuer and the Indenture Trustee. Report.
Exhibit 4.3 Form of Class A-1 Asset Backed Senior Note (included as Filed with this
part of Exhibit 4.2). Report.
Exhibit 4.4 Form of Class A-2 Asset Backed Senior Note (included as Filed with this
part of Exhibit 4.2). Report.
Exhibit 4.5 Series 1996-1 Supplement dated as of November 26, 1996, to Filed with this
Administrative Agency Agreement, among Comerica Bank, Ford Report.
Credit and Ford Credit Leasing.
Exhibit 4.6 Amended and Restated Trust Agreement of RCL Trust dated as Filed with
of November 19, 1996, among Ford Credit, Ford Credit this Report.
Leasing and First Union Bank of Delaware, as RCL Trustee.
</TABLE>
4
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<TABLE>
<CAPTION>
Method of
Designation Description Filing
----------- ----------- ---------
<S> <C> <C>
Exhibit 4.7 Asset Contribution Agreement dated as of November 26, Filed with this
1996, among Ford Credit, Ford Credit Leasing and RCL Report.
Trust.
Exhibit 4.8 Transfer Agreement dated as of November 26, 1996, between Filed with this
RCL Trust and the Issuer. Report.
Exhibit 4.9 Program Operating Lease dated as of November 26, 1996, Filed with this
between RCL Trust and the Issuer. Report.
Exhibit 4.10 Lease Trust Paying Agent Agreement dated as of November Filed with this
26, 1996, between the Issuer and The Chase Manhattan Bank, Report.
as Lease Trust Paying Agent
Exhibit 4.11 Appendix A - Definitions. Filed with this
Report
</TABLE>
5
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SIGNATURES
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, thereunto duly authorized on the date indicated.
Date: December 5, 1996 RCL TRUST 1996-1
By: FORD MOTOR CREDIT
COMPANY,
Depositor and Beneficiary
of the Registrant
By /s/ Hurley D. Smith
----------------------------
(Hurley D. Smith,
Secretary of Ford Motor
Credit Company)
By: FORD CREDIT LEASING
COMPANY, INC.,
Depositor and Beneficiary
of the Registrant
By /s/ R.P. Conrad
-------------------------
(R.P. Conrad, Secretary of
Ford Credit Leasing Company,
Inc.)
6
<PAGE> 1
EXHIBIT 4.1
[LEASE TRUST AGREEMENT]
FORD CREDIT AUTO LEASE TRUST 1996-1
TRUST AGREEMENT
Dated as of November 26, 1996
between
RCL TRUST 1996-1,
as Depositor
and
PNC BANK, DELAWARE,
as Lease Trustee
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Capitalized Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.3 Purposes and Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.4 Appointment of Lease Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.5 Initial Capital Contributions of Trust Estate; Demand Notes . . . . . . . . . . . . . . . . . . . . 6
Section 2.6 Declaration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.7 Liability of the Depositor and Ford Credit Leasing . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.8 Title to Trust Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.9 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.10 Representations and Warranties of the Depositor . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.11 Tax Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
LEASE TRUST CERTIFICATES, SUBORDINATED NOTES
AND TRANSFER OF INTERESTS . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.1 Initial Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.2 The Lease Trust Certificates and the Subordinated Notes . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.3 Authentication of Lease Trust Certificates and Subordinated Notes . . . . . . . . . . . . . . . . . 12
Section 3.4 Registration of Transfer and Exchange of Lease Trust Certificates and Subordinated Notes . . . . . . 13
Section 3.5 Mutilated, Destroyed, Lost or Stolen Lease Trust Certificates or Subordinated Notes . . . . . . . . 20
Section 3.6 Persons Deemed Lease Trust Certificateholders or Subordinated Noteholders . . . . . . . . . . . . . 21
Section 3.7 Access to List of Lease Trust Certificateholders' and Subordinated Noteholders' Names and
Addresses . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
i
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<TABLE>
<S> <C>
Section 3.8 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.9 Appointment of Lease Trust Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.10 Ownership of Lease Trust Certificates and Subordinated Notes by Depositor and Ford
Credit Leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV
ACTIONS BY LEASE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.1 Prior Notice to Lease Trust Certificateholders with Respect to Certain Matters . . . . . . . . . . . 24
Section 4.2 Action by Lease Trust Certificateholders with Respect to Certain Matters . . . . . . . . . . . . . . 25
Section 4.3 Restrictions on Action by Lease Trustee with Respect to Bankruptcy . . . . . . . . . . . . . . . . . 25
Section 4.4 Restrictions on Lease Trust Certificateholders' Power . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.5 Majority Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE V
APPLICATION OF TRUST FUNDS, CERTAIN DUTIES
AND SUBORDINATED NOTE EVENTS OF DEFAULT . . . . . . . . . . . . . . . . 26
Section 5.1 Establishment of Certificate Distribution Account . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.2 Application of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.3 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.4 Accounting and Reports to the Senior Noteholders, Subordinated Noteholders, Lease
Trust Certificateholders, the Internal Revenue Service and Others . . . . . . . . . . . . . . . . . 31
Section 5.5 Subordinated Note Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.6 Acceleration of Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.7 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VI
AUTHORITY AND DUTIES OF LEASE TRUSTEE . . . . . . . . . . . . . . . . 34
Section 6.1 General Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 6.2 General Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.3 Action upon Instruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.4 No Duties Except as Specified in this Agreement or in Instructions . . . . . . . . . . . . . . . . . 36
Section 6.5 No Action Unless Specifically Authorized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 6.6 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VII
CONCERNING THE LEASE TRUSTEE . . . . . . . . . . . . . . . . . 37
</TABLE>
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<TABLE>
<S> <C>
Section 7.1 Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.2 Furnishing of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.3 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.4 Reliance; Advice of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.5 Not Acting in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.6 Lease Trustee Not Liable for Lease Trust Certificates or Subordinated Notes . . . . . . . . . . . . 41
Section 7.7 Lease Trustee May Own Lease Trust Certificates, Subordinated Notes and Senior Notes . . . . . . . . 42
ARTICLE VIII
COMPENSATION OF LEASE TRUSTEE . . . . . . . . . . . . . . . . . . 42
Section 8.1 Lease Trustee's Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE IX
TERMINATION OF TRUST AGREEMENT . . . . . . . . . . . . . . . . . 43
Section 9.1 Termination of Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 9.2 Dissolution upon Bankruptcy of the Depositor or Ford Credit Leasing . . . . . . . . . . . . . . . . 45
Section 9.3 Redemption of the Subordinated Notes; Prepayment of the Lease Trust Certificates . . . . . . . . . . 46
ARTICLE X
SUCCESSOR LEASE TRUSTEES AND ADDITIONAL LEASE TRUSTEES . . . . . . . . . . . . 48
Section 10.1 Eligibility Requirements for Lease Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.2 Resignation or Removal of Lease Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.3 Successor Lease Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.4 Merger or Consolidation of Lease Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 10.5 Appointment of Co-Trustee or Separate Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE XI
TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . 52
Section 11.1 Income Tax Characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 11.2 Annex A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE XII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 53
Section 12.1 Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
</TABLE>
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<TABLE>
<S> <C> <C>
Section 12.2 No Legal Title to Lease Trust Estate in Lease Trust Certificateholders or
Subordinated Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.3 Limitations on Rights of Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 12.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 12.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 12.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 12.7 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 12.8 No Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 12.9 No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 12.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 12.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
</TABLE>
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ANNEX
Annex A Partnership Matters
EXHIBITS
Exhibit A Form of Lease Trust Certificate
Exhibit B Form of Subordinated Note
Exhibit C Form of Rule 144A Transferor Certificate
Exhibit D Form of Investment Letter - Qualified
Institutional Buyer
Exhibit E Form of Investment Letter - Institutional
Accredited Investor
v
<PAGE> 7
TRUST AGREEMENT dated as of November 26, 1996 between (i) RCL
TRUST 1996-1, a Delaware business trust, as Depositor and (ii) PNC BANK,
DELAWARE, a Delaware banking corporation, not in its individual capacity but
solely as trustee under this Agreement (in such capacity, together with any
successor or permitted assign, "Lease Trustee").
ARTICLE I.
DEFINITIONS
Section 1.1 Capitalized Terms. Unless otherwise defined
herein, capitalized terms used in this Agreement shall have the respective
meanings assigned to them, or incorporated by reference, in Appendix A attached
hereto. References to "this Agreement" are to this Lease Trust Agreement, and
all references to Articles, Sections and subsections are to Articles, Sections
and subsections of this Agreement unless otherwise specified provided, that
references to Sections and subsections in Annex A attached hereto and
incorporated herein are to Sections and subsections of such Annex A unless
otherwise specified.
"Authenticating Agent" shall mean any Person authorized by the
Lease Trustee to act on behalf of the Lease Trustee to authenticate and deliver
the Lease Trust Certificates and the Subordinated Notes.
"Certificate Pool Factor" shall mean, with respect to the
Lease Trust Certificates on any Semiannual Payment Date, the seven digit
decimal equivalent of a fraction the numerator of which is the Aggregate
Certificate Balance on such Semiannual Payment Date (after giving effect to any
payment of principal on such Semiannual Payment Date) and the denominator of
which is the Aggregate Certificate Balance on the Closing Date.
"Certificate Purchase Agreement" shall mean the Purchase
Agreement dated as of November 19, 1996 among J.P. Morgan Securities Inc., Ford
Credit, Ford Credit Leasing and RCL Trust 1996-1.
"Corporate Trust Office" shall mean, with respect to the Lease
Trustee, the principal corporate trust office of the Lease Trustee located at
222 Delaware Avenue, Wilmington, Delaware 19801; or at such other address as
the Lease Trustee may designate by notice to the Lease Trust
Certificateholders, the Subordinated Noteholders and the
1
<PAGE> 8
Depositor, or the principal corporate trust office of any successor Lease
Trustee (the address of which the successor Lease Trustee will notify the Lease
Trust Certificateholders, the Subordinated Noteholders and the Depositor).
"Depositor" shall mean the RCL Trust 1996-1 in its capacities
as depositor, as holder of the Lease Trust Certificates issued to it pursuant
to Section 3.10(a) and as holder of the Subordinated Notes issued to it
pursuant to Section 3.10(b).
"Expenses" shall mean all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all costs, expenses and
disbursements (including legal fees and expenses) of any kind and nature
whatsoever.
"Indemnified Parties" shall have the meaning set forth in
Section 8.2.
"Initial Purchaser" shall mean J.P. Morgan Securities Inc. as
initial purchaser pursuant to the Certificate Purchase Agreement.
"Lease Trust" shall mean the Ford Credit Auto Lease Trust
1996-1 established pursuant to this Agreement.
"Lease Trust Distribution Statement" shall mean the statement
delivered pursuant to Section 5.2(b).
"Lease Trust Register" and "Lease Trust Registrar" shall mean
the register mentioned and the registrar appointed pursuant to Section 3.4(a).
"Opinion of Counsel" shall mean one or more written opinions
of legal counsel who may, except as otherwise expressly provided for herein, be
employees of or counsel to the Depositor, the Administrative Agent or an
Affiliate of either, and which opinion or opinions shall be satisfactory to the
Lease Trustee.
"Prepayment Price" shall mean an amount, equal to Aggregate
Certificate Balance plus accrued and unpaid interest thereon plus interest on
any overdue interest at the Certificate Interest Rate, to but excluding the
Redemption Date.
"Redemption Date" shall mean the Payment Date specified by the
Administrative Agent or the Lease Trustee pursuant to Section 9.3(a).
2
<PAGE> 9
"Redemption Price" shall mean an amount equal to the unpaid
principal amount of the Subordinated Notes redeemed plus accrued and unpaid
interest thereon plus interest on any overdue interest at the Subordinated Note
Interest Rate, to but excluding the Redemption Date.
"Responsible Officer" shall mean any officer of the Lease
Trustee, including any Vice President, Assistant Vice President, Assistant
Treasurer, Assistant Secretary or any other officer of the Lease 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 of
and familiarity with the particular subject.
"Revised Article 8" shall have the meaning set forth in
Section 5.1(c).
"Rule 144A" shall have the meaning set forth in Section 3.4(c).
"Rule 144A Information" shall have the meaning set forth in
Section 3.4(d).
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Subordinated Note Default" shall mean any occurrence that is,
or with notice or the lapse of time or both would become, a Subordinated Note
Event of Default.
"Subordinated Note Event of Default" shall have the meaning
set forth in Section 5.5.
"Subordinated Note Pool Factor" shall mean, with respect to
the Subordinated Notes on any Semiannual Payment Date, the seven digit decimal
equivalent of a fraction the numerator of which is the Outstanding Amount of
the Subordinated Notes on such Semiannual Payment Date (after giving effect to
any payment of principal on such Semiannual Payment Date) and the denominator
of which is the Outstanding Amount of the Subordinated Notes on the Closing
Date.
"Transfer" shall have the meaning set forth in Section 3.2(a).
"Treasury Regulations" shall mean regulations, including
proposed or temporary regulations, promulgated
3
<PAGE> 10
under the Code. References herein to specific provisions of proposed or
temporary regulations shall include analogous provisions of final Treasury
Regulations or other successor Treasury Regulations.
"Void Transfer" shall have the meaning set forth in Section
3.2(a).
Section 1.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
ARTICLE II.
ORGANIZATION
Section 2.1 Name. The trust created hereby shall be known as
"Ford Credit Auto Lease Trust 1996-1", in which name the Lease Trustee may
engage in activities as permitted by the Basic Documents on behalf of the Lease
Trust, make and execute contracts and other instruments on behalf of the Lease
Trust and sue and be sued, to the extent provided herein.
Section 2.2 Office. The office of the Lease Trust shall be in
care of the Lease Trustee at the Corporate Trust Office or at such other
address in Delaware as the Lease Trustee may designate by written notice to the
Lease Trust Certificateholders, the Subordinated Noteholders and the Depositor.
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Section 2.3 Purposes and Powers. 1. The purpose of the Lease
Trust is, and the Lease Trust shall have the power and authority, to engage
solely in the following:
(i) to issue the Senior Notes pursuant to the
Indenture, the Subordinated Notes and the Lease Trust Certificates
pursuant to this Agreement, and to sell or transfer the Senior Notes,
the Subordinated Notes and the Lease Trust Certificates upon the
written order of the Depositor;
(ii) to acquire the Series 1996-1 Certificates and
other assets from the Depositor pursuant to Section 2 of the Transfer
Agreement in exchange for the Senior Notes, the Subordinated Notes and
the Lease Trust Certificates;
(iii) to pay interest and principal on the Senior
Notes, the Subordinated Notes and the Lease Trust Certificates;
(iv) to assign, grant, transfer, pledge, mortgage and
convey the Lease Trust Estate pursuant to the Indenture as security
for the Senior Notes and to hold, and distribute to the Subordinated
Noteholders and the Lease Trust Certificateholders pursuant to the
terms of this Agreement any portion of the Lease Trust Estate released
from the Lien of, and remitted to the Lease Trust pursuant to, the
Indenture;
(v) to execute, deliver and perform its obligations
under the Basic Documents to which it is to be a party; and
(vi) to engage in other transactions, including
entering into agreements, that are necessary, suitable or convenient
to accomplish the foregoing or are incidental thereto or connected
therewith.
The Lease Trust is hereby authorized to engage in the
foregoing. The Lease Trust shall not engage in any activity other than in
connection with the foregoing or other than as required or authorized by the
terms of this Agreement or the other Basic Documents.
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Section 2.4 Appointment of Lease Trustee. The Depositor
hereby appoints the Lease Trustee as trustee of the Lease Trust effective as of
the date hereof, to have all the rights, powers and duties set forth herein.
Section 2.5 Initial Capital Contributions of Trust Estate;
Demand Notes. The Depositor hereby sells, assigns, transfers, conveys and sets
over to the Lease Trustee, as of the date hereof, the sum of $10, which the
Lease Trustee shall deposit into the Certificate Distribution Account. In
addition, the Depositor hereby sells, assigns, transfers, conveys and sets over
to the Lease Trustee, as of the date hereof, (i) a Demand Note dated November
26, 1996 in the amount of $19,600,000, between Ford Credit and the Depositor
and (ii) a Demand Note dated November 26, 1996 in the amount of $200,000,
between Ford Credit and Ford Credit Leasing, which Ford Credit Leasing had
assigned to the Depositor, and Ford Credit Leasing hereby sells, assigns,
transfers, conveys and sets over to the Lease Trustee, as of the date hereof, a
Demand Note dated November 26, 1996 in the amount of $200,000, between Ford
Credit and Ford Credit Leasing. The Lease Trustee hereby acknowledges receipt
in trust from the Depositor and Ford Credit Leasing, as of the date hereof, of
the foregoing contributions, which shall constitute the initial Lease Trust
Estate. The Lease Trust shall draw upon such Demand Notes only to the extent
the Depositor or Ford Credit Leasing fail to make payment of their obligations
pursuant to Section 2.7. Any funds drawn under such Demand Notes and not
applied to pay obligations owed under Section 2.7, together with the applicable
Demand Note, shall be returned to the Maker (as defined in the applicable
Demand Note) of such Demand Note upon termination of the Lease Trust.
Section 2.6 Declaration of Trust. PNC Bank, Delaware hereby
declares and agrees that it will, and in its capacity the Lease Trustee does,
hold the Lease Trust Estate in trust upon and subject to the conditions set
forth herein for the benefit of the Lease Trust Certificateholders and the
Depositor, subject, however, to the lien of the Indenture and to the
obligations of the Lease Trust under the Subordinated Notes and the Basic
Documents.
Section 2.7 Liability of the Depositor and Ford Credit
Leasing. 1. The holders of the Lease Trust Certificates and Subordinated Notes
issued to and required to be retained by the Depositor and Ford Credit Leasing
pursuant to Section 3.10 shall be liable directly to and will indemnify any
party entitled thereto for all Expenses of the
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Lease Trust incurred in connection with the Series 1996-1 Assets to the extent
that each such holder would be liable if the Lease Trust were a partnership
under the Delaware Revised Uniform Limited Partnership Act (or the Delaware
Uniform Partnership Law) in which each such holder were a general partner
(other than losses incurred by Senior Noteholders in their capacity as holders
of limited recourse debt secured by the Lease Trust Estate or incurred by the
Subordinated Noteholders or the Lease Trust Certificateholders if such losses
would nevertheless have been incurred if the Subordinated Noteholders and the
Lease Trust Certificateholders were holders of limited recourse debt secured by
the Lease Trust Estate). In addition, any third party creditors of the Lease
Trust (other than the Subordinated Noteholders and the Lease Trust
Certificateholders, to the extent that they are not indemnified for investment
losses, as set forth above) shall be deemed third party beneficiaries of this
Section 2.7(a). Such holders of the Lease Trust Certificates and Subordinated
Notes issued to the Depositor and Ford Credit Leasing shall make no claim upon
the Lease Trust Estate for the reimbursement of amounts paid pursuant to this
Section.
(b) The holders of the Lease Trust Certificates and
Subordinated Notes issued to and required to be retained by the Depositor and
Ford Credit Leasing pursuant to Section 3.10 shall defend, indemnify, and hold
harmless the Lease Trust and the Lease Trustee from and against any and all
taxes that may at any time be asserted against the Lease Trust and the Lease
Trustee with respect to the transactions contemplated herein, including,
without limitation, any sales, use, gross receipts, general corporation,
tangible personal property, privilege, license or income taxes, taxes on or
measured by income, or any state or local taxes assessed on the Lease Trust,
the Lease Trustee and the Lease Trust Paying Agent resulting from the location
of assets of the Lease Trust or the presence of the Lease Trustee or the Lease
Trust Paying Agent and costs and expenses in defending against the same;
provided, however, that the foregoing indemnity shall not include income taxes
on any fees payable to the Lease Trustee or the Lease Trust Paying Agent.
(c) No Subordinated Noteholder or Lease Trust
Certificateholder, other than the holders of the Lease Trust Certificates and
Subordinated Notes issued to and required to be retained by the Depositor and
Ford Credit Leasing pursuant to Section 3.10 to the extent set forth in
Sections 2.7(a) and (b), shall have any personal liability for any liability or
obligation of the Lease Trust.
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Section 2.8 Title to Trust Property. Legal title to all the
Lease Trust Estate shall be vested at all times in the Lease Trust, except
where applicable law in any jurisdiction requires title to any part of the
Lease Trust Estate to be vested in a trustee or trustees, in which case title
shall be deemed to be vested in the Lease Trustee, a co-trustee and/or a
separate trustee, as the case may be.
Section 2.9 [Reserved].
Section 2.10 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Lease Trustee that:
(a) The Depositor is duly organized and validly existing as a
trust in good standing under the laws of the State of Delaware, with the power
and authority to own its properties and to conduct its activities as such
properties are currently owned and such activities are presently conducted.
(b) The Depositor is duly qualified, is in good standing, and
has obtained all necessary licenses and approvals in all jurisdictions in which
the failure to so qualify or to obtain such license or approval would (i)
render unenforceable any rights the Lease Trust may have under any of the Basic
Documents which would otherwise be enforceable by the Depositor, the
Administrative Agent or the Lease Trustee, or (ii) otherwise have a material
adverse effect on the Lease Trust.
(c) The Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Depositor has full power
and authority to transfer the Series 1996-1 Certificates to and deposit them
with the Lease Trust and the Depositor shall have duly authorized such transfer
and deposit to the Lease Trust by all necessary action; and the execution,
delivery and performance of this Agreement has been duly authorized by the
Depositor by all necessary action.
(d) This Agreement constitutes a legal, valid and binding
obligation of the Depositor enforceable in accordance with its terms.
(e) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, nor constitute (with or
without
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notice or lapse of time) a default under, the RCL Trust Agreement, or any
indenture, agreement or other instrument to which the Depositor is a party or
by which it is bound; nor result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Basic Documents); nor violate any
law or, to the best of the Depositor's knowledge, any 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 its properties.
(f) There are no proceedings or investigations pending, or to
the Depositor's best knowledge, threatened, before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties: (i) asserting the invalidity of this
Agreement, the Indenture or any of the other Basic Documents, the Senior Notes,
the Subordinated Notes or the Lease Trust Certificates, (ii) seeking to prevent
the issuance of the Senior Notes, the Subordinated Notes or the Lease Trust
Certificates or the consummation of any of the transactions contemplated by
this Agreement, the Indenture or any of the other Basic Documents, (iii)
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, the Indenture, any of the other Basic
Documents, the Senior Notes, the Subordinated Notes or the Lease Trust
Certificates or (iv) which might adversely affect the federal income tax or
State income or franchise tax attributes of the Senior Notes or the Lease Trust
Certificates.
Section 2.11 Tax Reporting. Consistent with the treatment of
the Lease Trust as a security device for income and franchise tax purposes,
unless otherwise required by appropriate tax authorities, the Lease Trust will
not file or cause to be filed annual or other income or franchise tax returns
and will not obtain any taxpayer identification numbers.
ARTICLE III.
LEASE TRUST CERTIFICATES, SUBORDINATED NOTES
AND TRANSFER OF INTERESTS
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Section 3.1 Initial Ownership. Upon the formation of the
Lease Trust by the contribution by the Depositor pursuant to Section 2.5 and
until the issuance of the Lease Trust Certificates, the Depositor shall be the
sole beneficiary of the Lease Trust.
Section 3.2 The Lease Trust Certificates and the Subordinated
Notes. 1. The Lease Trust Certificates shall be issued in one or more
registered, definitive, physical certificates, in the form set forth in Exhibit
A, in minimum denominations of at least $1,000,000 and multiples of $1,000 in
excess thereof; provided, however, that Lease Trust Certificates may be issued
to the Depositor and Ford Credit Leasing pursuant to Section 3.10(a) in such
denominations as to represent in the aggregate at least 1% of the Aggregate
Certificate Balance. The Subordinated Notes shall be issued in one or more
registered, definitive, physical certificates, in the form set forth in Exhibit
B, in minimum denominations of at least $1,000,000 and multiples of $1,000 in
excess thereof; provided, however, that Subordinated Notes may be issued to the
Depositor and Ford Credit Leasing pursuant to Section 3.10(b) in such
denominations as to represent in the aggregate at least 1% of the Outstanding
Amount of the Subordinated Notes. Except for (i) the transfer of Lease Trust
Certificates to the Initial Purchaser and the subsequent transfer to Lease
Trust Certificateholders as contemplated by the Certificate Purchase Agreement,
(ii) the transfer of Lease Trust Certificates to the Depositor and Ford Credit
Leasing pursuant to Section 3.10(a), (iii) the transfer of the Subordinated
Notes to the Depositor and Ford Credit Leasing pursuant to Section 3.10(b) and
(iv) the assignment and pledge of the Subordinated Notes to the Lease Trust and
the Indenture Trustee pursuant to the Program Operating Lease, no Lease Trust
Certificate or Subordinated Note may be sold, transferred, assigned,
participated, pledged, or otherwise disposed of (any such act, a "Transfer") to
any Person except in accordance with the provisions of Section 3.4 and any
attempted Transfer in violation of Section 3.4 shall be null and void (each, a
"Void Transfer").
Neither the Lease Trust Certificates issued to the Depositor
and Ford Credit Leasing pursuant to Section 3.10(a) nor any beneficial interest
therein may be Transferred to any Person, and any attempted Transfer thereof
shall be null and void; provided, that upon a dissolution of or termination of
the Depositor, any Lease Trust Certificates issued pursuant to Section 3.10(a)
and held by the Depositor may be distributed to the beneficiaries of the
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Depositor in accordance with their percentage beneficial interests therein.
Each Lease Trust Certificate (other than the Lease Trust Certificates issued to
the Depositor and Ford Credit Leasing pursuant to Section 3.10(a)) shall be
issued in the name of the Initial Purchaser, or upon delivery to the Initial
Purchaser, the Lease Trustee and the Lease Trust Registrar of a letter in the
form of Exhibit D or Exhibit E, shall be issued in the name and in the
denomination set forth in such letter.
Neither the Subordinated Notes issued to and required to be
retained by the Depositor and Ford Credit Leasing pursuant to Section 3.10(b)
nor any beneficial interest therein may be Transferred to any Person, and any
attempted Transfer thereof shall be a Void Transfer; provided, that upon a
dissolution of or termination of the Depositor, any such Subordinated Notes
held by the Depositor may be distributed to the beneficiaries of the Depositor
in accordance with their percentage beneficial interests therein. The
Subordinated Notes shall be issued in the name of the Depositor pursuant to
Section 3.10(b).
The Lease Trust Certificates and the Subordinated Notes may be
in printed or in typewritten form, and may be executed on behalf of the Lease
Trust by manual or facsimile signature of an Authenticating Agent. Lease Trust
Certificates and Subordinated Notes bearing the manual or facsimile signatures
of individuals who were, at the time when such signatures shall have been
affixed, authorized to sign on behalf of the Lease Trust, shall be validly
issued and entitled to the benefits of this Agreement, notwithstanding that
such individuals or any of them shall have ceased to be so authorized prior to
the authentication and delivery of such Lease Trust Certificates or
Subordinated Notes or did not hold such offices at the date of authentication
and delivery of such Lease Trust Certificates or Subordinated Notes.
If Transfer of the Lease Trust Certificates or the
Subordinated Notes is permitted pursuant to Section 3.4, a transferee of a
Lease Trust Certificate or a Subordinated Note shall become a Lease Trust
Certificateholder or Subordinated Noteholder, as the case may be, and shall be
entitled to the rights and subject to the obligations hereunder of a Lease
Trust Certificateholder or Subordinated Noteholder, as applicable, upon due
registration of such Lease Trust Certificate or Subordinated Note in such
transferee's name pursuant to Section 3.4.
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(b) Interest shall accrue on the Subordinated Notes at the
Subordinated Note Interest Rate during each Interest Accrual Period based on
the Outstanding Amount of the Subordinated Notes as of the close of business on
the Payment Date occurring in the calendar month in which such Interest Accrual
Period commences. Interest accrued during each Interest Accrual Period on the
Subordinated Notes shall be due and payable on each Payment Date. Interest
will be calculated on the basis of a 360-day year of twelve 30-day months. To
the extent that interest on the Subordinated Notes is accrued but not paid in
full on any Payment Date, such overdue interest will be due on the next Payment
Date together with interest on such amount (to the extent lawful) at the
Subordinated Note Interest Rate. Payments of interest and principal will be
payable to Subordinated Noteholders in accordance with Section 5.2.
(c) Interest shall accrue on the Lease Trust Certificates at
the Certificate Interest Rate during each Semiannual Interest Accrual Period
based on the Aggregate Certificate Balance of the Lease Trust Certificates as
of the close of business on the Semiannual Payment Date occurring in the
calendar month in which such Semiannual Interest Accrual Period commences.
Interest accrued during each Semiannual Interest Accrual Period on the Lease
Trust Certificates shall be due and payable on each Semiannual Payment Date.
Interest will be calculated on the basis of a 360-day year of twelve 30-day
months. To the extent that interest on the Lease Trust Certificates is accrued
but not paid in full on any Semiannual Payment Date, such overdue interest will
be due on the next Semiannual Payment Date together with interest on such
amount (to the extent lawful) at the Certificate Interest Rate. Payments of
interest and principal will be payable to Lease Trust Certificateholders in
accordance with Section 5.2.
Section 3.3 Authentication of Lease Trust Certificates and
Subordinated Notes. Concurrently with the transfer of the Series 1996-1
Certificates to the Lease Trust pursuant to the Transfer Agreement, the Lease
Trustee shall cause Lease Trust Certificates in an aggregate principal amount
equal to the initial Aggregate Certificate Balance and Subordinated Notes in an
aggregate principal amount equal to $106,690,331.13 to be executed on behalf of
the Lease Trust, authenticated and delivered to or upon the written order of
the Depositor, in authorized denominations. No Lease Trust Certificate or
Subordinated Note shall entitle its holder to any benefit under this Agreement,
or shall be valid for any purpose, unless there shall appear on such
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Lease Trust Certificate or Subordinated Note a certificate of authentication
substantially in the form set forth in Exhibit A or Exhibit B, as applicable,
executed by the Authenticating Agent, by manual signature; such authentication
shall constitute conclusive evidence that such Lease Trust Certificate or
Subordinated Note shall have been duly authenticated and delivered hereunder.
All Lease Trust Certificates and Subordinated Notes shall be dated the date of
their authentication.
Section 3.4 Registration of Transfer and Exchange of Lease
Trust Certificates and Subordinated Notes. 1. The Lease Trust Registrar shall
keep or cause to be kept at the office or agency maintained pursuant to Section
3.8, a Lease Trust Register in which, subject to such reasonable regulations as
it may prescribe, the Lease Trustee shall provide for the registration of Lease
Trust Certificates and Subordinated Notes and of Transfers and exchanges of
Lease Trust Certificates and Subordinated Notes as herein provided. The Lease
Trustee shall be the initial Lease Trust Registrar and shall maintain such
register as agent for the Depositor and Ford Credit Leasing. No Transfer of a
Lease Trust Certificate or Subordinated Note shall be recognized except upon
registration of such Transfer.
(b) The Subordinated Notes may not be Transferred unless an
Opinion of Counsel in form and content acceptable to the Lease Trustee and, if
any Senior Notes are then Outstanding, to the Indenture Trustee is delivered to
the Lease Trustee and, if any Senior Notes are then Outstanding, to the
Indenture Trustee and prior notice is given to each Rating Agency. Among other
things, such Opinion of Counsel shall state that such Transfer shall not (i)
affect the treatment of the Senior Notes and the Lease Trust Certificates as
debt for federal income tax purposes and (ii) cause either the Lease Trust or
FCTT to be classified as an association (or publicly traded partnership)
taxable as a corporation for federal income tax purposes; provided, however,
that the Subordinated Notes issued to and required to be retained by the
Depositor and Ford Credit Leasing pursuant to Section 3.10(b) may not be
Transferred except upon a dissolution of or termination of the Depositor as
provided in Section 3.2(a) above.
(c) Each Lease Trust Certificate (other than the Lease Trust
Certificates issued to the Depositor and Ford Credit Leasing pursuant to
Section 3.10(a)) shall bear a legend to the following effect unless determined
otherwise by the Administrative Agent (as certified to the Lease Trust
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Registrar in an Officer's Certificate) consistent with applicable law:
"THIS LEASE TRUST CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES OR BLUE SKY LAW OF ANY STATE OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING THIS LEASE TRUST CERTIFICATE, AGREES
FOR THE BENEFIT OF THE LEASE TRUST AND THE DEPOSITOR THAT THIS LEASE TRUST
CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
A DENOMINATION OF AT LEAST $1,000,000, ONLY IN COMPLIANCE WITH THE SECURITIES
ACT AND OTHER APPLICABLE LAWS, AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A (A "QIB"),
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS
INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, SUBJECT TO (A) THE RECEIPT BY THE LEASE
TRUST AND THE LEASE TRUST REGISTRAR OF A CERTIFICATE SUBSTANTIALLY IN THE FORM
ATTACHED AS EXHIBIT C TO THE LEASE TRUST AGREEMENT AND (B) THE RECEIPT BY THE
LEASE TRUST AND THE LEASE TRUST REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM
ATTACHED AS EXHIBIT D TO THE LEASE TRUST AGREEMENT, (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), SUBJECT TO THE RECEIPT BY THE LEASE TRUST, THE INITIAL PURCHASER
AND THE LEASE TRUST REGISTRAR OF SUCH EVIDENCE ACCEPTABLE TO THE LEASE TRUST
AND THE INITIAL PURCHASER THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE LEASE TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER
APPLICABLE LAWS, (3) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT PURSUANT TO ANY OTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE LEASE
TRUST AND THE LEASE TRUST REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM
ATTACHED AS EXHIBIT E TO THE LEASE TRUST AGREEMENT OR (B) THE RECEIPT BY THE
LEASE TRUST, THE INITIAL PURCHASER AND THE LEASE TRUST REGISTRAR OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE LEASE TRUST AND THE INITIAL PURCHASER THAT SUCH
REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE LEASE TRUST
AGREEMENT AND THE SECURITIES ACT AND OTHER APPLICABLE LAWS, OR (4) TO THE
DEPOSITOR OR ITS AFFILIATES, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE UNITED STATES AND SECURITIES AND BLUE SKY LAWS OF THE
STATES OF THE UNITED STATES."
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As a condition to the registration of any Transfer of a Lease
Trust Certificate, the prospective transferee of such a Lease Trust Certificate
shall be required to represent in writing to the Lease Trustee and the Lease
Trust Registrar the following:
(i) It has neither acquired nor will it Transfer any
Lease Trust Certificate it purchases (or any interest therein) or
cause any such Lease Trust Certificates (or any interest therein) to
be marketed on or through an "established securities market" within
the meaning of Section 7704(b)(1) of the Code, including, without
limitation, an over-the-counter-market or an interdealer quotation
system that regularly disseminates firm buy or sell quotations.
(ii) It either (A) is not, and will not become, a
partnership, Subchapter S corporation, or grantor trust for U.S.
federal income tax purposes, or (B) is such an entity, but none of the
direct or indirect beneficial owners of any of the interests in such
transferee have allowed or caused, or will allow or cause, 80% or more
(or such other percentage as the Depositor may establish prior to the
time of such proposed Transfer) of the value of such interests to be
attributable to such transferee's ownership of Lease Trust
Certificates.
(iii) It understands that no subsequent Transfer of
the Lease Trust Certificates is permitted unless (A) such Transfer is
of a Lease Trust Certificate with a denomination of at least
$1,000,000, (B) it causes its proposed transferee to provide to the
Lease Trust, the Lease Trust Registrar and the Initial Purchaser a
letter substantially in the form of Exhibit D or Exhibit E hereto, as
applicable, or such other written statement as the Depositor shall
prescribe, and (C) the Depositor consents in writing to the proposed
Transfer, which consent shall be granted unless the Depositor
determines that such Transfer would create a risk that the Lease Trust
or FCTT would be classified for federal or any applicable State tax
purposes as an association or publicly traded partnership taxable as a
corporation; provided, however, that any attempted Transfer that would
either cause (i) the number of holders of Lease Trust Certificates and
Subordinated Notes to exceed twelve or (ii) the number of holders of
direct or indirect interests in FCTT to exceed ninety, shall be a Void
Transfer.
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(iv) It understands that the Opinion of Counsel that
the Lease Trust is not a publicly traded partnership taxable as a
corporation is dependent in part on the accuracy of the
representations in paragraphs (i), (ii) and (iii) above.
(v) It is not (A) an employee benefit plan, as
defined in Section 3(3) of ERISA, that is subject to Title I of ERISA,
(B) a plan described in Section 4975(e)(1) of the Code, (C) a
governmental plan, as defined in Section 3(32) of ERISA, subject to
any federal, State or local law which is, to a material extent,
similar to the provisions of Section 406 of ERISA or Section 4975 of
the Code, (D) an entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (within the meaning of
Department of Labor Regulation 29 C.F.R. Section 2510.3-101) or (E) a
person investing "plan assets" of any such plan (including without
limitation, for purposes of this clause (E), any insurance company
general account but excluding any entity registered under the
Investment Company Act of 1940, as amended).
(vi) It is a Person who is either (A)(1) a citizen or
resident of the United States, (2) a corporation, partnership or other
entity organized in or under the laws of the United States or any
political subdivision thereof or (3) a Person not described in (A)(1)
or (2) whose ownership of the Lease Trust Certificates is effectively
connected with such Person's conduct of a trade or business within the
United States (within the meaning of the Code) and its ownership of
any interest in a Lease Trust Certificate will not result in any
withholding obligation with respect to any payments with respect to
the Lease Trust Certificates by any Person (other than withholding, if
any, under Section 1446 of the Code) or (B) an estate or trust the
income of which is includible in gross income for United States
federal income tax purposes, regardless of source. It agrees that it
will provide a certification of non-foreign status signed under
penalties of perjury and, alternatively, that if it is a person
described in clause (A)(3) above, it will furnish to the Depositor and
the Lease Trustee a properly executed IRS Form 4224 and a new IRS Form
4224 upon the expiration or obsolescence of any previously delivered
form (and such other certifications, representations or opinions of
counsel as may be requested by the Depositor and the Lease Trustee).
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(vii) It understands that any purported Transfer of
any Lease Trust Certificate (or any interest therein) in contravention
of any of the restrictions and conditions in this Section 3.4 shall
be a Void Transfer, and the purported transferee in a Void Transfer
shall not be recognized by the Lease Trust or any other Person as a
Lease Trust Certificateholder for any purpose.
(d) By acceptance of any Lease Trust Certificate, the Lease
Trust Certificateholder thereof specifically agrees with and represents to the
Depositor, the Lease Trust and Lease Trust Registrar, that no Transfer of such
Lease Trust Certificate shall be made unless the registration requirements of
the Securities Act and any applicable State securities laws are complied with,
or such Transfer is exempt from the registration requirements under the
Securities Act because the Transfer satisfies one of the following:
(i) such Transfer is in compliance with Rule 144A
under the Securities Act ("Rule 144A"), to a transferee who the
transferor reasonably believes is a Qualified Institutional Buyer that
is purchasing for its own account or for the account of a Qualified
Institutional Buyer and to whom notice is given that such Transfer is
being made in reliance upon Rule 144A under the Securities Act and (x)
the transferor executes and delivers to the Lease Trust and the Lease
Trust Registrar, a Rule 144A transferor certificate substantially in
the form attached as Exhibit C and (y) the transferee executes and
delivers to the Lease Trust and the Lease Trust Registrar an
investment letter substantially in the form attached as Exhibit D.
(ii) after the appropriate holding period, such
Transfer is pursuant to an exemption from registration under the
Securities Act provided by Rule 144 under the Securities Act and the
transferee, if requested by the Lease Trust, the Lease Trust Registrar
or the Initial Purchaser, delivers an Opinion of Counsel in form and
substance satisfactory to the Lease Trust and the Initial Purchaser;
and
(iii) such Transfer is to an institutional accredited
investor as defined in rule 501(a)(1), (2), (3) or (7) of Regulation D
promulgated under the Securities Act in a transaction exempt from the
registration requirements of the Securities Act, such Transfer
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is in accordance with any applicable securities laws of any State of
the United States or any other jurisdiction, and such investor
executes and delivers to the Lease Trust and the Lease Trust Registrar
an investment letter substantially in the form attached as Exhibit E.
(e) The Lease Trustee shall make available to the prospective
transferor and transferee of a Lease Trust Certificate information requested to
satisfy the requirements of paragraph (d)(4) of Rule 144A (the "Rule 144A
Information"). The Rule 144A Information shall include any or all of the
following items requested by the prospective transferee:
(i) the offering circular relating to the Lease Trust
Certificates dated November 19, 1996, and any amendments or
supplements thereto;
(ii) each Lease Trust Distribution Statement delivered
to Lease Trust Certificateholders on each Semiannual Payment Date
preceding such request; and
(iii) such other information as is reasonably
available to the Lease Trustee in order to comply with requests for
information pursuant to Rule 144A under the Securities Act.
None of the Depositor, the Lease Trust Registrar or the Lease
Trustee is under an obligation to register any Lease Trust Certificate under
the Securities Act or any other securities law.
(f) Upon surrender for registration of Transfer of any Lease
Trust Certificate or Subordinated Note at the office or agency maintained
pursuant to Section 3.8 and upon compliance with any provisions of this
Agreement relating to such Transfer, the Lease Trustee shall, or shall cause
the Authenticating Agent to, execute, authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Lease Trust
Certificates or Subordinated Notes, as the case may be, in authorized
denominations of a like class and aggregate face amount dated the date of such
authentication.
Subject to Section 3.4(b), at the option of a Subordinated
Noteholder, Subordinated Notes (other than the Subordinated Notes issued to and
required to be retained by the Depositor and Ford Credit Leasing pursuant to
Section
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3.10(b)) may be exchanged for other Subordinated Notes in authorized
denominations of a like aggregate amount upon surrender of the Subordinated
Notes to be exchanged at the office or agency maintained pursuant to Section
3.8. Subject to Section 3.4(c), at the option of a Lease Trust
Certificateholder, Lease Trust Certificates (other than the Lease Trust
Certificates issued to the Depositor and Ford Credit Leasing pursuant to
Section 3.10(a)) may be exchanged for other Lease Trust Certificates in
authorized denominations of a like aggregate amount upon surrender of the Lease
Trust Certificates to be exchanged at the office or agency maintained pursuant
to Section 3.8.
Whenever any Lease Trust Certificates or Subordinated Notes
are so surrendered for exchange, the Authenticating Agent shall execute and
authenticate and the Lease Trust Registrar shall deliver the Lease Trust
Certificates or Subordinated Notes, as the case may be, which the Lease Trust
Certificateholder or Subordinated Noteholder making the exchange is entitled to
receive.
The Lease Trust Registrar shall require that every Lease Trust
Certificate or Subordinated Note presented or surrendered for registration of
Transfer or exchange shall be accompanied by a written instrument of transfer
and accompanied by IRS Form 4224 or W-9 in form satisfactory to the Lease Trust
Registrar duly executed by the Lease Trust Certificateholder or Subordinated
Noteholder, as the case may be, or such Person's attorney duly authorized in
writing.
No service charge shall be made to a Lease Trust
Certificateholder or Subordinated Noteholder for any registration of Transfer
or exchange of Lease Trust Certificates or Subordinated Notes, as the case may
be, but the Lease Trustee or the Lease Trust Registrar may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of Transfer or exchange of Lease Trust
Certificates or Subordinated Notes.
The Lease Trust Registrar shall cancel and retain or destroy,
in accordance with the Lease Trust Registrar's retention policy then in effect,
all Lease Trust Certificates and Subordinated Notes surrendered for
registration of Transfer or exchange and shall upon written request certify to
the Depositor as to such retention or destruction.
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(g) The provisions of this Section 3.4 and of this
Agreement generally are intended to prevent the Lease Trust from being
characterized as a "publicly traded partnership" within the meaning of Section
7704 of the Code, in reliance on Treas. Reg. Section Section 1.7704-1(e) and
(h), and the Depositor shall take such intent into account in determining
whether or not to consent to any proposed Transfer of any Lease Trust
Certificate or Subordinated Note.
The preceding provisions of this Section 3.4 notwithstanding,
the Lease Trustee shall not make and the Lease Trust Registrar shall not
register any Transfer or exchange of Lease Trust Certificates or Subordinated
Notes for a period of fifteen (15) days preceding the due date for any pa1yment
with respect to the Lease Trust Certificates or Subordinated Notes, as the case
may be.
Section 3.5 Mutilated, Destroyed, Lost or Stolen Lease Trust
Certificates or Subordinated Notes. If 1. any mutilated Lease Trust
Certificate or Subordinated Note is surrendered to the Lease Trust Registrar,
or if the Lease Trust Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Lease Trust Certificate or Subordinated Note
and (b) there is delivered to the Lease Trust Registrar and the Lease Trustee
such security or indemnity as may be required by them to save each of them
harmless, then in the absence of notice that such Lease Trust Certificate or
Subordinated Note has been transferred to or is in the possession of a third
party purchaser, the Lease Trustee on behalf of the Lease Trust shall execute
and the Authenticating Agent shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Lease Trust
Certificate or Subordinated Note, a new Lease Trust Certificate or Subordinated
Note, as the case may be, of like class, tenor and denomination. In connection
with the issuance of any new Lease Trust Certificate or Subordinated Note under
this Section 3.5, the Lease Trustee or the Lease Trust Registrar may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Lease Trust
Certificate issued pursuant to this Section 3.5 shall constitute conclusive
evidence of an ownership interest in the Lease Trust, and any duplicate
Subordinated Note issued pursuant to this Section 3.5 shall constitute
conclusive evidence of an additional contractual obligation of the Lease Trust,
in each case as if originally issued, whether or not the lost, stolen or
destroyed Lease Trust Certificate or Subordinated Note shall be found at any
time.
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Section 3.6 Persons Deemed Lease Trust Certificateholders or
Subordinated Noteholders. Prior to due presentation of a Lease Trust
Certificate or Subordinated Note for registration of Transfer, the Lease
Trustee or the Lease Trust Registrar may treat the Person in whose name any
Lease Trust Certificate or Subordinated Note shall be registered in the Lease
Trust Register as the owner of such Lease Trust Certificate or Subordinated
Note for the purpose of receiving distributions pursuant to Section 5.2 and for
all other purposes whatsoever, and neither the Lease Trustee nor the Lease
Trust Registrar shall be bound by any notice to the contrary.
Section 3.7 Access to List of Lease Trust Certificateholders'
and Subordinated Noteholders' Names and Addresses. The Lease Trustee shall
furnish or cause to be furnished to the Administrative Agent and the Depositor,
or to the Indenture Trustee, as the case may be, within 15 days after receipt
by the Lease Trustee of a request therefor from the Administrative Agent or the
Depositor or the Indenture Trustee in writing, a list, in such form as the
requesting party may reasonably require, of the names and addresses of the
Lease Trust Certificateholders and/or the Subordinated Noteholders as of the
most recent Record Date. If (i) two or more Lease Trust Certificateholders or
(ii) one or more Lease Trust Certificateholders of Lease Trust Certificates
evidencing not less than 25% of the Aggregate Certificate Balance apply in
writing to the Lease Trustee, and such application states that the applicants
desire to communicate with other Lease Trust Certificateholders with respect to
their rights under this Agreement or under the Lease Trust Certificates and
such application is accompanied by a copy of the communication that such
applicants propose to transmit, then the Lease Trustee shall, within five
Business Days after the receipt of such application, afford such applicants
access during normal business hours to the current list of Lease Trust
Certificateholders. If (x) two or more Subordinated Noteholders or (y) one or
more Subordinated Noteholders of Subordinated Notes evidencing not less than
25% of the Outstanding Amount of the Subordinated Notes apply in writing to the
Lease Trustee, and such application states that the applicants desire to
communicate with other Subordinated Noteholders with respect to their rights
under this Agreement or under the Subordinated Notes and such application is
accompanied by a copy of the communication that such applicants propose to
transmit, then the Lease Trustee shall, within five Business Days after the
receipt of such application, afford such applicants access during normal
business hours to the current list of Subordinated
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Noteholders. Each Lease Trust Certificateholder, by receiving and holding a
Lease Trust Certificate, and each Subordinated Noteholder, by receiving and
holding a Subordinated Note, shall be deemed to have agreed not to hold either
the Depositor or the Lease Trustee, or the Indenture Trustee, as the case may
be accountable by reason of the disclosure of its name and address, regardless
of the source from which such information was derived.
Section 3.8 Maintenance of Office or Agency. The Lease
Trustee shall maintain in the State of Delaware, an office or offices or agency
or agencies where Lease Trust Certificates may be surrendered for registration
of Transfer or exchange and where notices and demands to or upon the Lease
Trustee in respect of the Lease Trust Certificates, the Subordinated Notes and
the Basic Documents to which the Lease Trustee is a party may be served. The
Lease Trustee initially designates PNC Bank, Delaware, 222 Delaware Avenue,
Wilmington, Delaware 19801, Attention: Michael B. McCarthy as its principal
corporate trust office for such purposes. The Lease Trustee shall give prompt
written notice to the Depositor, the Lease Trust Certificateholders and the
Subordinated Noteholders of any change in the location of the Lease Trust
Register or any such office or agency.
Section 3.9 Appointment of Lease Trust Paying Agent. The
Lease Trust Paying Agent shall make distributions to Subordinated Noteholders
and Lease Trust Certificateholders pursuant to Section 5.2 and shall report the
amounts of such distributions to the Lease Trustee. Any Lease Trust Paying
Agent shall have the revocable power to withdraw funds from the Certificate
Distribution Account for the purpose of making the distributions referred to
above. The Lease Trustee may revoke such power and remove the Lease Trust
Paying Agent if the Lease Trustee determines in its sole discretion that the
Lease Trust Paying Agent has failed to perform its obligations under this
Agreement in any material respect. The Lease Trust Paying Agent shall
initially be The Chase Manhattan Bank. Any co-paying agent chosen by the
Depositor, and acceptable to the Lease Trustee shall also be a Lease Trust
Paying Agent. The Chase Manhattan Bank may resign as Lease Trust Paying Agent
upon 30 days' written notice to the Lease Trustee. In the event that The Chase
Manhattan Bank shall no longer be the Lease Trust Paying Agent, the Lease
Trustee shall appoint a successor to act as Lease Trust Paying Agent (which
shall be a bank or trust company). The Lease Trustee shall cause such
successor Lease Trust Paying Agent or any additional Lease
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Trust Paying Agent appointed by the Lease Trustee to execute and deliver to the
Lease Trustee an instrument in which such successor Lease Trust Paying Agent or
additional Lease Trust Paying Agent shall agree with the Lease Trustee that as
Lease Trust Paying Agent, such successor Lease Trust Paying Agent or additional
Lease Trust Paying Agent will hold all sums, if any, held by it for payment to
the Subordinated Noteholders or Lease Trust Certificateholders, as applicable,
in trust for the benefit of the Subordinated Noteholders or Lease Trust
Certificateholders, as applicable, entitled thereto until such sums are paid to
such Subordinated Noteholders or Lease Trust Certificateholders. The Lease
Trust Paying Agent shall return all unclaimed funds to the Lease Trustee and
upon removal of a Lease Trust Paying Agent such Lease Trust Paying Agent shall
also return all funds in its possession to the Lease Trustee. The provisions
of Sections 7.1, 7.3, 7.4 and 8.2 shall apply to the Lease Trustee also in its
role as Lease Trust Paying Agent (if it is so appointed), for so long as the
Lease Trustee shall act as Lease Trust Paying Agent and, to the extent
applicable, to any other paying agent appointed hereunder.
Section 3.10 Ownership of Lease Trust Certificates and
Subordinated Notes by Depositor and Ford Credit Leasing. (a) On and after the
Closing Date, the Depositor shall acquire and retain beneficial and record
ownership of Lease Trust Certificates evidencing at least 1% of the Aggregate
Certificate Balance; provided, that the Depositor shall Transfer a Lease Trust
Certificate evidencing 1/100 of its Lease Trust Certificates to Ford Credit
Leasing. Any other attempted Transfer of such Lease Trust Certificates
initially held by the Depositor or Ford Credit Leasing shall be a Void
Transfer. Notwithstanding the foregoing, upon a dissolution or termination of
the Depositor, the Lease Trust Certificates held by it shall be distributed to
the beneficiaries of the Depositor without regard to the provisions of Section
3.2. The Lease Trustee shall cause the Lease Trust Certificates held by the
Depositor and Ford Credit Leasing pursuant to this Section 3.10(a) to bear a
legend stating "THIS LEASE TRUST CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN THE
EVENT OF THE DISSOLUTION OR TERMINATION OF RCL TRUST 1996-1 WHEN IT IS THE
HOLDER HEREOF, AND ANY TRANSFER IN VIOLATION OF THIS PROVISION SHALL BE NULL
AND VOID."
(b) On the Closing Date, the Depositor shall acquire
beneficial and record ownership of the entire initial principal amount of the
Subordinated Notes; provided, that the Depositor shall Transfer a Subordinated
Note evi-
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dencing 1/100th of its Subordinated Notes to Ford Credit Leasing. On and after
the Closing Date, the Depositor shall be required to retain beneficial and
record ownership of Subordinated Notes evidencing at least 1% of the
Outstanding Amount of the Subordinated Notes; provided, that Ford Credit
Leasing may hold 1/100th of the Subordinated Notes that would otherwise be
required to be retained by the Depositor. Any attempted Transfer of the
Subordinated Notes required to be retained by the Depositor or Ford Credit
Leasing shall be a Void Transfer. Notwithstanding the foregoing, upon a
dissolution or termination of the Depositor, the Subordinated Notes required to
be retained by it shall be distributed to the beneficiaries of the Depositor
without regard to the provisions of Section 3.2.
ARTICLE IV.
ACTIONS BY LEASE TRUSTEE
Section 4.1 Prior Notice to Lease Trust Certificateholders
with Respect to Certain Matters. With respect to the following matters, the
Lease Trustee shall not take action unless a. the Lease Trustee has notified
the Lease Trust Certificateholders and the Rating Agencies in writing of the
proposed action at least 30 days before the taking of such action, and b. Lease
Trust Certificateholders representing at least 25% of the Aggregate Certificate
Balance have not notified the Lease Trustee in writing prior to the 30th day
after such notice is given that such Lease Trust Certificateholders have
withheld consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Lease Trust
and the compromise of any action, claim or lawsuit brought by or against the
Lease Trust (other than an action brought by the Administrative Agent on behalf
of FCTT and Persons having interests in the Series 1996-1 Certificates to
collect amounts owed under a Series 1996-1 Lease);
(b) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Senior Noteholder is required;
(c) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Senior Noteholder is not required and
such amendment materially adversely affects the interests of the Lease Trust
Certificateholders; or
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(d) the amendment of any other Basic Document if such
amendment materially adversely affects the interests of the Lease Trust
Certificateholders.
Section 4.2 Action by Lease Trust Certificateholders with
Respect to Certain Matters. To the extent that the Lease Trustee is deemed to
be the "Holder" of the Series 1996-1 Certificates pursuant to Section 8.6 of
the Series 1996-1 Supplement, the Lease Trustee shall take such actions as
directed (in writing) by Lease Trust Certificateholders holding Lease Trust
Certificates evidencing at least 66 2/3% of the Aggregate Certificate Balance;
provided, however, that so long as the lien of the Indenture is outstanding,
such direction shall be subject to the consent of the Indenture Trustee.
Section 4.3 Restrictions on Action by Lease Trustee with
Respect to Bankruptcy. The Lease Trustee shall not have the power to commence
a voluntary proceeding in bankruptcy relating to the Lease Trust without the
unanimous prior approval of all Lease Trust Certificateholders, Subordinated
Noteholders and Senior Noteholders and the delivery to the Lease Trustee by
each such Lease Trust Certificateholder, Subordinated Noteholder and Senior
Noteholder of a certificate certifying that such Lease Trust Certificateholder,
Subordinated Noteholder or Senior Noteholder reasonably believes that the Lease
Trust is insolvent.
Section 4.4 Restrictions on Lease Trust Certificateholders'
Power. The Lease Trust Certificateholders shall not direct the Lease Trustee
to take or refrain from taking any action if such action or inaction would be
contrary to any obligation of the Lease Trust or the Lease Trustee under this
Agreement or any of the other Basic Documents nor shall the Lease Trustee be
obligated to follow any such direction, if given.
Section 4.5 Majority Control. 1. Except as expressly provided
herein, any action that may be taken by the Lease Trust Certificateholders
under this Agreement may be taken by the Lease Trust Certificateholders holding
not less than a majority of the Aggregate Certificate Balance. Except as
expressly provided herein, any written notice of the Lease Trust
Certificateholders delivered pursuant to this Agreement shall be effective if
signed by Lease Trust Certificateholders holding not less than a majority of
the Aggregate Certificate Balance at the time of the delivery of such notice.
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(b) Except as expressly provided herein, any action that may be
taken by the Subordinated Noteholders under this Agreement may be taken by the
Subordinated Noteholders holding not less than a majority of the Outstanding
Amount of the Subordinated Notes. Except as expressly provided herein, any
written notice of the Subordinated Noteholders delivered pursuant to this
Agreement shall be effective if signed by Subordinated Noteholders holding not
less than a majority of the Outstanding Amount of the Subordinated Notes at the
time of the delivery of such notice.
ARTICLE V.
APPLICATION OF TRUST FUNDS, CERTAIN DUTIES
AND SUBORDINATED NOTE EVENTS OF DEFAULT
Section A. Establishment of Certificate Distribution Account.
(a) Subject to Section 5.1(c), the Lease Trustee shall establish and maintain
an Eligible Account in the name of the Indenture Trustee until the Outstanding
Amount of the Senior Notes has been reduced to zero, and thereafter in the name
of the Lease Trustee, initially at The Chase Manhattan Bank which is designated
as the "Certificate Distribution Account". The Certificate Distribution
Account shall be under the sole dominion and control of the Indenture Trustee
until the Outstanding Amount of the Senior Notes has been reduced to zero, and
thereafter under the sole dominion and control of the Lease Trustee; provided,
that while the Senior Notes are Outstanding the Lease Trustee may make
withdrawals from the Certificate Distribution Account pursuant to Section 3(c)
of the Lease Trust Paying Agent Agreement and the Administrative Agent may make
withdrawals from the Certificate Distribution Account in accordance with
Section 5.2(e) of the Series 1996-1 Supplement. All deposits to and
withdrawals from the Certificate Distribution Account shall be made only upon
the terms and conditions of the Basic Documents.
(b) Any amounts on deposit in the Certificate Distribution
Account shall be invested by the Indenture Trustee until the Outstanding Amount
of the Senior Notes has been reduced to zero, and thereafter by the Lease
Trustee, in Permitted Investments which mature on the Business Day preceding
the next succeeding Payment Date. No such investment shall be sold prior to
maturity. All investment earnings on amounts deposited to the Certificate
Distribution Account, including any proceeds thereof, shall be credited to the
Cash Collateral Account, and losses, if any, and
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investment expenses resulting from Permitted Investments in the Certificate
Distribution Account shall be charged to the Cash Collateral Account. All such
investment income shall be reported for federal income tax purposes as earned
(i) 99% by RCL Trust 1996-1 and (ii) 1% by Ford Credit Leasing; the 99%
accruing to RCL Trust 1996-1 shall be reported by Ford Credit and Ford Credit
Leasing in accordance with their respective Percentage Interests in RCL Trust
1996-1. If the Certificate Distribution Account ceases to be an Eligible
Account, then the Certificate Distribution Account shall be moved to an
institution at which the Certificate Distribution Account shall be an Eligible
Account within 10 Business Days (or such longer period not to exceed 30
calendar days as to which each Rating Agency may consent).
(c) Notwithstanding anything else contained herein, the
Certificate Distribution Account shall only be established at an institution
that agrees in writing that (i) all investments of amounts on deposit in the
Certificate Distribution Account shall be promptly credited to the Certificate
Distribution Account, (ii) all securities, cash or other property credited to
the Certificate Distribution Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the 1994 Official Text of Article
8 of the Uniform Commercial Code ("Revised Article 8"), (iii)(x) at all times
prior to being notified in writing by the Indenture Trustee that the
Outstanding Amount of the Senior Notes has been reduced to zero, it will comply
with entitlement orders (as defined in Section 8-102(a)(8) of Revised Article
8) originated by the Indenture Trustee without further consent of the Program
Lessee or any other person and (y) after being notified in writing by the
Indenture Trustee that the Outstanding Amount of the Senior Notes has been
reduced to zero, it will comply with entitlement orders (as defined in Section
8-102(a)(8) of Revised Article 8) originated by the Lease Trustee without
further consent of RCL Trust 1996-1 or any other person and (iv) the
Certificate Distribution Account shall be governed by the law of the State of
New York as the same may be amended from time to time.
Section 5.2 Application of Funds.
(a) Payments and Deposits with respect to Subordinated Notes
and Lease Trust Certificates. The Lease Trustee shall make payments and
deposits with respect to the Subordinated Notes and the Lease Trust
Certificates at the times and in the amounts and priorities set forth in the
Lease Trust Paying Agent Agreement.
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(b) Lease Trust Distribution Statements. The Lease Trustee
shall send to each Subordinated Noteholder on each Payment Date and to each
Lease Trust Certificateholder on each Semiannual Payment Date a report (a
"Lease Trust Distribution Statement") based on information supplied by the
Administrative Agent. Such Lease Trust Distribution Statement shall include
the following information as to the Subordinated Notes and the Lease Trust
Certificates to the extent applicable:
(i) the Outstanding Amount of the Subordinated Notes
on the immediately preceding Semiannual Payment Date, or if the first
Semiannual Payment Date has not yet occurred, on the Closing Date;
(ii) the Aggregate Certificate Balance of the Lease
Trust Certificates on the immediately preceding Semiannual Payment
Date, or if the current Semiannual Payment Date is the first
Semiannual Payment Date, on the Closing Date;
(iii) the aggregate amount of interest accrued and
paid on the Subordinated Notes and the Lease Trust Certificates during
the preceding Accrual Period (separately stated);
(iv) the aggregate amount of principal paid with
respect to the Subordinated Notes and the Lease Trust Certificates on
such Semiannual Payment Date (separately stated);
(v) the Outstanding Amount of the Subordinated
Notes and the Aggregate Certificate Balance of the Lease Trust
Certificates after giving effect to any payments of principal on such
Semiannual Payment Date;
(vi) the Subordinated Note Pool Factor and the
Certificate Pool Factor (after giving effect to payments made on such
Semiannual Payment Date);
(vii) the aggregate amount of Series 1996-1
Collections deposited in the Series 1996-1 Collection Account;
(viii) the Aggregate Net Sale Proceeds Advances
deposited in the Series 1996-1 Collection Account;
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(ix) the Aggregate Net Monthly Payment Advances
deposited in the Series 1996-1 Collection Account;
(x) the amount of Available Sale Proceeds;
(xi) the Cash Collateral Required Draw Amount and the
Cash Collateral Additional Draw Amount (separately stated);
(xii) the amount of Available Funds;
(xiii) the Series 1996-1 Administrative Fee for the
preceding Accrual Period;
(xiv) the Outstanding Amount of each Class of Senior
Notes and the Pool Balance (separately stated);
(xv) the Cash Collateral Amount (after giving effect
to any withdrawals and deposits to the Cash Collateral Account for
such Payment Date);
(xvi) the aggregate of the Series 1996-1 Credit
Losses for each of the six preceding Collection Periods;
(xvii) the aggregate of the Series 1996-1 Residual
Losses for each of the six preceding Collection Periods; and
(xviii) the amounts invested in Permitted Investments
of each of the banks listed in the definition thereof (separately
stated) as of the last day of each of the six preceding Collection
Periods.
The information required to be reported in such Lease Trust
Distribution Statement may be included with such other information or reports
delivered by the Administrative Agent to the Lease Trustee in connection with
the making of payments pursuant to the Basic Documents.
(c) Withholding Taxes. In the event that any withholding tax
is imposed on the Lease Trust's payment (or, if the Lease Trust is treated as a
partnership for federal income tax purposes, allocations of income) to a Lease
Trust Certificateholder or a Subordinated Noteholder, such tax shall reduce the
amount otherwise distributable to such Lease Trust Certificateholder or
Subordinated Noteholder in
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accordance with this Section 5.2. The Lease Trustee is hereby authorized and
directed to retain from amounts otherwise distributable to such Lease Trust
Certificateholder or Subordinated Noteholder sufficient funds for the payment
of any withholding tax that is legally owed by the Lease Trust (but such
authorization shall not prevent the Lease 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 a Lease Trust Certificateholder or a
Subordinated Noteholder shall be treated as cash distributed to such Lease
Trust Certificateholder or Subordinated Noteholder, as the case may be, at the
time it is withheld by the Lease Trust for remittance to the appropriate taxing
authority. If the Lease Trustee determines that there is a possibility that
withholding tax is payable with respect to a distribution, the Lease Trustee
may in its sole discretion withhold such amounts in accordance with this
Section 5.2(c). In the event that a Lease Trust Certificateholder or
Subordinated Noteholder wishes to apply for a refund of any such withholding
tax, the Lease Trustee shall reasonably cooperate with such Lease Trust
Certificateholder or Subordinated Noteholder in making such claim so long as
such Lease Trust Certificateholder or Subordinated Noteholder agrees to
reimburse the Lease Trustee for any out-of-pocket expenses incurred.
(d) Lease Trustee Not Liable for Losses on Investments.
Subject to Section 7.1, the Lease Trustee shall not in any way be held liable
by reason of any insufficiency in the Series 1996-1 Payments Account, the
Series 1996-1 Collection Account, the Series 1996-1 Payahead Account, the
Certificate Distribution Account or the Cash Collateral Account resulting from
any loss on any Permitted Investment or Cash Collateral Account Investment, as
applicable, included therein except for losses attributable to the Lease
Trustee's failure to make payments on any such Permitted Investments or Cash
Collateral Account Investments issued by the Lease Trustee, in its commercial
capacity as principal obligor and not as trustee, in accordance with their
terms.
(e) Indenture Trustee's Duties and Obligations. The
Indenture Trustee, in such capacity, shall have no duties or obligations to the
Subordinated Noteholders or Lease Trust Certificateholders except as set forth
in Sections 3(a)(ii), (b), (c) and (f) of the Lease Trust Paying Agent
Agreement.
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Section 5.3 Method of Payment. 1. Subject to Section 9.1(c),
distributions required to be made to Lease Trust Certificateholders on any
Semiannual Payment Date shall be made to each Lease Trust Certificateholder of
record on the preceding Record Date either by wire transfer, in immediately
available funds, to the account of such Lease Trust Certificateholder at a bank
or other entity having appropriate facilities therefor, if such Lease Trust
Certificateholder shall have provided to the Lease Trust Registrar appropriate
written instructions at least five Business Days prior to such Semiannual
Payment Date (or if such Lease Trust Certificateholder is the Depositor or an
Affiliate thereof), or, if not, by check mailed to such Lease Trust
Certificateholder at the address of such Lease Trust Certificateholder
appearing in the Lease Trust Register.
(b) Subject to Section 9.1(c), distributions required to be
made to Subordinated Noteholders on any Payment Date or Semiannual Payment Date
shall be made to each Subordinated Noteholder of record on the preceding Record
Date either by wire transfer, in immediately available funds, to the account of
such Subordinated Noteholder at a bank or other entity having appropriate
facilities therefor, if such Subordinated Noteholder shall have provided to the
Lease Trust Registrar appropriate written instructions at least five Business
Days prior to such Payment Date or Semiannual Payment Date or, if not, by check
mailed to such Subordinated Noteholder at the address of such Subordinated
Noteholder appearing in the Lease Trust Register.
Section 5.4 Accounting and Reports to the Senior Noteholders,
Subordinated Noteholders, Lease Trust Certificateholders, the Internal Revenue
Service and Others. (a) The Lease Trustee shall, based on information provided
by the Depositor, (i) maintain (or cause to be maintained) the books of the
Lease Trust on a calendar year basis on the accrual method of accounting
(except as required by Annex A), (ii) deliver to each Lease Trust
Certificateholder and Subordinated Noteholder such information as may be
required by the Code and applicable Treasury Regulations with respect to
instruments such as the Lease Trust Certificates or Subordinated Notes, as the
case may be, that is consistent with the position that the Lease Trust
Certificates (other than the Lease Trust Certificates issued to the Depositor
and Ford Credit Leasing pursuant to Section 3.10(a)) will be treated as debt
for federal income tax and state income and franchise tax purposes, and (iii)
in addition to the Lease Trustee's rights under Section 5.2(c), take such
action as instructed jointly by the holders of the Lease Trust Certif-
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icates issued to the Depositor and Ford Credit Leasing pursuant to Section
3.10(a) to collect or cause to be collected and paid over to applicable
authorities any withholding tax as described in and in accordance with Section
5.2(c) or Annex A with respect to income or distributions to Lease Trust
Certificateholders or Subordinated Noteholders. The Lease Trustee shall make
all elections pursuant to Annex A as directed by the Depositor.
(b) The Depositor shall maintain such books and records, and
shall prepare and file such reports and returns, as are required pursuant to
Sections 2.11, 5.2 and 11.2.
Section 5.5 Subordinated Note Events of Default. The
following events constitute "Subordinated Note Events of Default" (whatever the
reason for such Subordinated Note 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
Subordinated Note when the same becomes due and payable on each
Payment Date, and such default shall continue for a period of five
days;
(ii) default in the payment of the principal of any
Subordinated Note at Stated Maturity;
(iii) the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of the Lease
Trust or any substantial part of the Lease Trust Estate in an
involuntary case under any applicable federal or State bankruptcy,
insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Lease Trust or for any
substantial part of the Lease Trust Estate, or the winding-up or
liquidation of the Lease Trust's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive
days; or
(iv) the commencement by the Lease Trust of a
voluntary case under any applicable federal or State bankruptcy,
insolvency or other similar law now or hereafter in effect, or the
consent by the Lease Trust to the entry of an order for relief in an
involuntary
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case under any such law, or the consent by the Lease Trust to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Lease
Trust or for any substantial part of the Lease Trust Estate, or the
making by the Lease Trust of any general assignment for the benefit of
creditors, or the failure by the Lease Trust generally to pay its
debts as such debts become due, or the taking of action by the Lease
Trust in furtherance of any of the foregoing.
Section 5.6 Acceleration of Maturity. If a Subordinated Note
Event of Default should occur and be continuing, then and in each such case the
Subordinated Noteholders holding not less than a majority of the Outstanding
Amount of the Subordinated Notes may declare all the Subordinated Notes to be
immediately due and payable, by a notice in writing to the Lease Trustee, and
upon any such declaration the unpaid principal amount of such Subordinated
Notes, together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable; provided, however, that
so long as any Senior Notes are Outstanding, no such declaration of
acceleration of the Subordinated Notes is permitted to be made.
At any time after a declaration of acceleration of maturity of
the Subordinated Notes has been made and before a judgment or decree for
payment of the money due has been obtained by the Subordinated Noteholders, the
Subordinated Noteholders holding not less than a majority of the Outstanding
Amount of the Subordinated Notes, by written notice to the Lease Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Lease Trust has paid all payments of
principal of and interest on all Subordinated Notes and all other
amounts that would then be due upon such Subordinated Notes if the
Subordinated Note Event of Default giving rise to such acceleration
had not occurred; and
(ii) all Subordinated Note Events of Default, other
than the nonpayment of the principal of the Subordinated Notes that
has become due solely by such acceleration, have been cured or waived.
No such rescission shall affect any subsequent default or
impair any right consequent thereto.
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Section 5.7 Waiver of Past Defaults. Prior to the declaration
of the acceleration of the maturity of the Senior Notes as provided above,
Subordinated Noteholders holding not less than a majority of the Outstanding
Amount of the Subordinated Notes may waive any past Subordinated Note Default
or Subordinated Note Event of Default and its consequences except a
Subordinated Note Default in payment of principal of or interest on any of the
Subordinated Notes. In the case of any such waiver, the Lease Trust and the
Subordinated Noteholders shall be restored to their former positions and rights
under the Subordinated Notes and under this Agreement; but no such waiver shall
extend to any subsequent or other Subordinated Note Default or impair any right
consequent thereto.
Upon any such waiver, such Subordinated Note Default shall
cease to exist and be deemed to have been cured and not to have occurred, and
any Subordinated Note Event of Default arising therefrom shall be deemed to
have been cured and not to have occurred, for every purpose of the Subordinated
Notes and this Agreement; but no such waiver shall extend to any subsequent or
other Subordinated Note Default or Subordinated Note Event of Default or impair
any right consequent thereto.
ARTICLE VI
AUTHORITY AND DUTIES OF LEASE TRUSTEE
Section 6.1 General Authority. To the extent permitted by
Section 2.3, the Lease Trustee is authorized and directed to execute and
deliver the Basic Documents to which the Lease Trust is to be a party and each
certificate or other document attached as an exhibit to or contemplated by the
Basic Documents to which the Lease Trust is to be a party, in each case, in
such form as the Depositor shall approve as evidenced conclusively by the Lease
Trustee's execution thereof and the Depositor's execution of this Agreement,
and to direct the Indenture Trustee to authenticate and deliver Senior Notes in
the aggregate principal amount not to exceed $810,843,000. In addition to the
foregoing, the Lease Trustee is authorized to take all actions required of the
Lease Trust pursuant to the Basic Documents. The Lease Trustee is further
authorized from time to time to take such action on behalf of the Lease Trust
as is permitted by the Basic Documents and which the Administrative Agent
recommends with respect to the Basic Documents, except to the extent that this
Agreement expressly requires the
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consent of Lease Trust Certificateholders or Subordinated Noteholders for such
action.
Section 6.2 General Duties. It shall be the duty of the Lease
Trustee to discharge (or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement and the other Basic Documents to which
it is to be a party and to administer the Lease Trust in the interest of the
Lease Trust Certificateholders, subject to the lien of the Indenture and to the
obligations of the Lease Trust under the Subordinated Notes, and in accordance
with provisions of this Agreement and the other Basic Documents.
Section 6.3 Action upon Instruction. (a) Subject to Article
IV, the holders of the Lease Trust Certificates issued to the Depositor and
Ford Credit Leasing pursuant to Section 3.10(a) may by written instruction,
direct the Lease Trustee in the administration of the Lease Trust, subject to,
and in accordance with the terms of this Agreement; provided, that no such
instruction shall, as evidenced by an Opinion of Counsel, materially adversely
affect the Senior Noteholders, Subordinated Noteholder or Lease Trust
Certificateholders.
(b) The Lease Trustee shall not be required to take any action
hereunder or under any Basic Document if the Lease Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Lease Trustee or is
contrary to the terms hereof or of any Basic Document or is otherwise contrary
to law.
(c) Whenever the Lease Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, the Lease Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the Lease
Trust Certificateholders requesting instruction as to the course of action to
be adopted, and to the extent the Lease Trustee acts in good faith in
accordance with any written instruction of the Lease Trust Certificateholders
holding not less than a majority of the Aggregate Certificate Balance, the
Lease Trustee shall not be liable on account of such action to any Person. If
the Lease Trustee shall not have received appropriate instruction within ten
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
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under no duty to, take or refrain from taking such action, not inconsistent
with this Agreement or the other Basic Documents, as it shall deem to be in the
best interests of the Lease Trust Certificateholders, and shall have no
liability to any Person for such action or inaction.
(d) In the event that the Lease Trustee is unsure as to the
application of any provision of this Agreement or any other Basic 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 or any other Basic Document permits any determination by the Lease
Trustee or is silent or is incomplete as to the course of action that the Lease
Trustee is required to take with respect to a particular set of facts, the
Lease Trustee may give notice (in such form as shall be appropriate under the
circumstances) to the Lease Trust Certificateholders requesting instruction
and, to the extent that the Lease Trustee acts or refrains from acting in good
faith in accordance with any such instruction received from Lease Trust
Certificateholders holding not less than a majority of the Aggregate
Certificate Balance and in accordance with Sections 6.4 and 6.5, the Lease
Trustee shall not be liable, on account of such action or inaction, to any
Person. If the Lease Trustee shall not have received appropriate instruction
within 10 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 other Basic
Documents, as it shall deem to be in the best interests of the Lease Trust
Certificateholders, and shall have no liability to any Person for such action
or inaction.
Section 6.4 No Duties Except as Specified in this Agreement or
in Instructions. The Lease Trustee shall not have any right, duty, or
obligation to manage, make any payment with respect to, register, record, sell,
dispose of or otherwise deal with the Lease Trust Estate, or to otherwise take
or refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Lease Trustee is a party, except as expressly
provided by the terms of this Agreement or in any document or written
instruction received by the Lease Trustee pursuant to Section 6.3; and no
implied duties or obligations shall be read into this Agreement or any other
Basic Document against the Lease Trustee. The Lease Trustee shall have no
responsibility for filing any financing or continuation statement in
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any public office at any time or to otherwise perfect or maintain the
perfection of any ownership or security interest in the Lease Trust Estate or
to prepare or file any Securities and Exchange Commission filing, if any, for
the Lease Trust or to record this Agreement or any other Basic Document. The
Lease Trustee nevertheless agrees that it will, at its own cost and expense,
promptly take all action as may be necessary to discharge any liens (other than
the lien of the Indenture) on any part of the Lease Trust Estate that result
from actions by, or claims against, the Lease Trustee that are not related to
the ownership or the administration of the Lease Trust Estate.
Section 6.5 No Action Unless Specifically Authorized. The
Lease Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any part of the Lease Trust Estate except (a) in accordance with the
powers granted to and the authority conferred upon the Lease Trustee pursuant
to this Agreement, (b) in accordance with the other Basic Documents to which the
Lease Trust or the Lease Trustee is a party and (c) in accordance with any
document or instruction delivered to the Lease Trustee pursuant to Section 6.3.
In particular, the Lease Trustee shall not transfer, sell, pledge, assign or
convey the Series 1996-1 Certificates except as specifically required or
permitted by the Basic Documents.
Section 6.6 Restrictions. The Lease Trustee shall not take
any action (a) that is contrary to the purposes of the Lease Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Lease Trustee, would
(i) affect the treatment of the Senior Notes as debt for federal income tax
purposes, (ii) be deemed to cause a taxable exchange of the Senior Notes for
federal income tax purposes or (iii) cause the Lease Trust, the Depositor or
FCTT or any portion thereof to be taxable as an association or publicly traded
partnership taxable as a corporation for federal or Delaware income tax
purposes. The Lease Trust Certificateholders and Subordinated Noteholders
shall not direct the Lease Trustee to take action that would violate the
provisions of this Section 6.6.
ARTICLE VII
CONCERNING THE LEASE TRUSTEE
Section 7.1 Acceptance of Trusts and Duties. The Lease
Trustee accepts the trusts hereby created and agrees
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to perform its duties hereunder with respect to such trusts but only upon the
terms of this Agreement. The Lease Trustee also agrees to disburse all moneys
actually received by it constituting part of the Lease Trust Estate upon the
terms of this Agreement and the other Basic Documents to which the Lease Trust
or the Lease Trustee is a party. The Lease Trustee shall not be answerable or
accountable hereunder or under any other Basic Document under any circumstances,
except (i) for its own willful misconduct, bad faith or negligence or (ii) in
the case of the inaccuracy of any representation or warranty contained in
Section 7.3 expressly made by the Lease Trustee. In particular, but not by way
of limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) the Lease Trustee shall not be liable for any error of
judgment made by a Responsible Officer of the Lease Trustee;
(b) the Lease Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in accordance with the
instructions of any Lease Trust Certificateholder or Subordinated Noteholder,
the Indenture Trustee, the Depositor or the Administrative Agent;
(c) no provision of this Agreement or any other Basic Document
shall require the Lease 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 other Basic Document if the Lease 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 Lease Trustee be liable
for indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Senior Notes, the Subordinated
Notes or the Lease Trust Certificates;
(e) the Lease Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor or for the form, character, genuineness,
sufficiency, value or validity of any of the Lease Trust Estate or for or in
respect of the validity or sufficiency of the other Basic Documents, other than
the certificates of authentication on the Lease Trust Certificates and the
Subordinated Notes, and the Lease Trustee shall in no event be deemed to have
as-
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sumed or incurred any liability, duty or obligation to any Senior Noteholder,
Subordinated Noteholder or Lease Trust Certificateholder or any third party
dealing with the Lease Trust or the Lease Trust Estate, other than as expressly
provided for herein and in the other Basic Documents;
(f) the Lease Trustee shall not be liable for the misfeasance,
malfeasance or nonfeasance of the Administrative Agent, the Depositor or the
Indenture Trustee, under any of the Basic Documents or otherwise, and the Lease
Trustee shall have no obligation or liability to perform the obligations of the
Lease Trust under this Agreement or the Basic Documents that are required to be
performed by the Administrative Agent under the Administrative Agency Agreement
or the Series 1996-1 Supplement, the Depositor under the Transfer Agreement or
the Program Operating Lease, or the Indenture Trustee under the Indenture; and
(g) the Lease 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 other Basic Document, at the request, order
or direction of any of the Lease Trust Certificateholders or Subordinated
Noteholders, unless such Lease Trust Certificateholders or Subordinated
Noteholders, as the case may be, have offered to the Lease Trustee security or
indemnity satisfactory to it against the Expenses that may be incurred by the
Lease Trustee therein or thereby. The right of the Lease Trustee to perform
any discretionary act enumerated in this Agreement or in any other Basic
Document shall not be construed as a duty, and the Lease Trustee shall not be
answerable for other than its bad faith, negligence or willful misconduct in
the performance of any such act.
Section 7.2 Furnishing of Documents. The Lease Trustee shall
furnish to any Lease Trust Certificateholder or Subordinated Noteholder
promptly upon receipt of a written request by such Lease Trust Certificateholder
or Subordinated Noteholder (at the expense of the requesting Lease Trust
Certificateholder or Subordinated Noteholder) therefor, duplicates or copies
of all reports, notices, requests, demands, certificates, financial statements
and any other instruments furnished to the Lease Trustee under the Basic
Documents.
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Section 7.3 Representations and Warranties. The Lease Trustee
hereby represents and warrants to the Depositor, for the benefit of the Lease
Trust Certificateholders and Subordinated Noteholders, that:
(a) It is a banking corporation duly organized and validly
existing in good standing under the laws of the State of Delaware. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware law, governmental rule or regulation governing the
banking or trust powers of the Lease 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.
(d) This Agreement has been duly executed and delivered by it
and constitutes the legal, valid and binding agreement of it, enforceable
against the Lease Trustee 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 in general
and by general principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law.
Section 7.4 Reliance; Advice of Counsel. 1. The Lease
Trustee may rely upon, and shall be protected in relying upon, and shall incur
no liability to anyone in acting or refraining from acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. The Lease 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
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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 Lease Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter,
and such certificate shall constitute full protection to the Lease 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 other Basic Documents, the Lease Trustee (i) may act directly or through
its agents or attorneys pursuant to agreements entered into with any of them,
and the Lease 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
Lease 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 Lease Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the opinion or
advice of any such counsel, accountants or other such persons and not contrary
to this Agreement or any other Basic Document.
Section 7.5 Not Acting in Individual Capacity. Except as
provided in this Article VII, in accepting the trusts hereby created PNC Bank,
Delaware acts solely as Lease Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Lease Trustee by reason
of the transactions contemplated by this Agreement or any Basic Document shall
look only to the Lease Trust Estate for payment or satisfaction thereof.
Section 7.6 Lease Trustee Not Liable for Lease Trust
Certificates or Subordinated Notes. The recitals contained herein and in the
Lease Trust Certificates and the Subordinated Notes (other than the signature
and countersignature of the Lease Trustee on the Lease Trust Certificates and
the Subordinated Notes and its representations and warranties in Section 7.3)
shall be taken as the statements of the Depositor and the Lease Trustee assumes
no responsibility for the correctness thereof. The Lease Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
other Basic Document or of the Lease Trust Certificates or Subordinated Notes
(other than the signature
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and countersignature of the Lease Trustee on the Lease Trust Certificates and
Subordinated Notes) or the Senior Notes or any offering document relating to
any of them. The Lease Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity or enforceability of
any Basic Document to which the Lease Trustee is to be a party (except for
enforceability against the Lease Trustee), or the perfection and priority of
any security interest created by or under any Basic Document, or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Lease Trust Estate or its ability to generate the payments
to be distributed to Subordinated Noteholders or Lease Trust Certificateholders
under this Agreement or the Senior Noteholders under the Indenture, or for the
validity of the transfer of the Series 1996-1 Certificates to the Lease Trust
pursuant to the Transfer Agreement, or for the lease of the Series 1996-1
Certificates to RCL Trust 1996-1 pursuant to the Program Operating Lease, or
for the compliance by the Depositor or the Administrative Agent with any
warranty or representation made under any Basic Document or for the accuracy of
any such warranty or representation or for any action of the Administrative
Agent or the Indenture Trustee taken in the name of the Lease Trustee.
Section 7.7 Lease Trustee May Own Lease Trust Certificates,
Subordinated Notes and Senior Notes. The Lease Trustee in its individual or
any other capacity may become the owner or pledgee of Lease Trust Certificates,
Subordinated Notes or Senior Notes and may deal with the Depositor, the
Administrative Agent and the Indenture Trustee, and their respective
Affiliates, in banking transactions with the same rights as it would have if it
were not Lease Trustee.
ARTICLE VIII.
COMPENSATION OF LEASE TRUSTEE
Section 8.1 Lease Trustee's Fees and Expenses. The Lease
Trustee shall receive as compensation for its services hereunder such fees as
have been separately agreed upon before the date hereof between the Depositor
and the Lease Trustee. The Administrative Agent (in exchange for receipt of
the Series 1996-1 Administrative Fee) has agreed pursuant to the Series 1996-1
Supplement to pay such fees of the Lease Trustee as are agreed upon by the
Depositor and the Lease Trustee, and shall reimburse the Lease Trustee for
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its other reasonable expenses hereunder, including the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and counsel
as the Lease Trustee may employ in connection with the exercise and performance
of its rights and its duties hereunder. The Administrative Agent shall make no
claim upon the Lease Trust Estate for the payment or reimbursement of such fees
and expenses.
Section 8.2 Indemnification. The holders of the Lease Trust
Certificates and Subordinated Notes issued to and required to be retained by
the Depositor and Ford Credit Leasing pursuant to Section 3.10 shall be liable
as primary obligor for, and shall indemnify the Lease Trustee and its
successors, assigns, agents, servants, officers and employees (collectively,
the "Indemnified Parties") from and against any Expenses which may at any time
be imposed on, incurred by, or asserted against the Lease Trustee or any
Indemnified Party in any way relating to or arising out of this Agreement, the
other Basic Documents, the Lease Trust Estate, the administration of the Lease
Trust Estate or the action or inaction of the Lease Trustee hereunder, except
only that the holders of such Lease Trust Certificates shall not be liable for
or required to indemnify the Lease Trustee from and against Expenses arising or
resulting from any of the matters described in the second clause of the third
sentence of Section 7.1. The indemnities contained in this Section 8.2 shall
survive the resignation or termination of the Lease Trustee or the termination
of this Agreement. In any event of any claim, action or proceeding for which
indemnity will be sought pursuant to this Section 8.2, the Lease Trustee's
choice of legal counsel shall be subject to the approval of the Depositor,
which approval shall not be unreasonably withheld. The holders of the Lease
Trust Certificates and Subordinated Notes issued to and required to be retained
by the Depositor and Ford Credit Leasing pursuant to Section 3.10 shall make no
claim upon the Lease Trust Estate for the payment of such Expenses.
ARTICLE IX.
TERMINATION OF TRUST AGREEMENT
Section 9.1 Termination of Trust Agreement. (a) This
Agreement (other than Article VIII) and the Lease Trust shall terminate and be
of no further force or effect, (i) upon the final distribution by the Lease
Trustee of all moneys or other property or proceeds of the Lease Trust
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Estate in accordance with the terms of the Indenture, this Agreement and the
Lease Trust Paying Agent Agreement or (ii) at the times provided in Section 9.2
or 9.3. The bankruptcy, liquidation, dissolution, or termination, death or
incapacity of any Subordinated Noteholder or Lease Trust Certificateholder,
other than the holders of the Lease Trust Certificates and Subordinated Notes
issued to and required to be retained by the Depositor and Ford Credit Leasing
pursuant to Section 3.10 as described in Section 9.2 or 9.3, shall not (x)
operate to terminate this Agreement or the Lease Trust, nor (y) entitle such
Subordinated Noteholder's or Lease Trust Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all or any part of the
Lease Trust or Lease Trust Estate nor (z) otherwise affect the rights,
obligations and liabilities of the parties hereto.
(b) Except as provided in Section 9.1(a), none of the
Depositor, any Lease Trust Certificateholder or any Subordinated Noteholder
shall be entitled to revoke or terminate the Lease Trust.
(c) Notice of any termination of the Lease Trust Agreement
pursuant to Section 9.1(a) shall be given by the Lease Trustee by letter to
Lease Trust Certificateholders and Subordinated Noteholders mailed within five
Business Days of receipt of notice of such termination from the Administrative
Agent, stating (i) the Payment Date upon or with respect to which final payment
of the Subordinated Notes and Lease Trust Certificates shall be made upon
presentation and surrender of the Subordinated Notes and Lease Trust
Certificates at the office of the Lease Trust Paying Agent therein designated,
(ii) the amount of any such final payment with respect to the Subordinated
Notes or Lease Trust Certificates, as applicable; 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 Subordinated Notes and
Lease Trust Certificates at the office of the Lease Trust Paying Agent therein
specified. The Lease Trustee shall give such notice to the Lease Trust
Registrar (if other than the Lease Trustee) and the Lease Trust Paying Agent at
the time such notice is given to Subordinated Noteholders and Lease Trust
Certificateholders. Upon presentation and surrender of the Subordinated Notes
or the Lease Trust Certificates, the Lease Trust Paying Agent shall cause to be
paid to Subordinated Noteholders or Lease Trust Certificateholders, as applica-
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ble, amounts payable to them on such Payment Date pursuant to Section 5.2.
In the event that all of the Subordinated Noteholders and
Lease Trust Certificateholders shall not surrender their Subordinated Notes or
Lease Trust Certificates, as the case may be, for cancellation within six
months after the date specified in the above mentioned written notice, the
Lease Trustee shall give a second written notice to the remaining Subordinated
Noteholders and Lease Trust Certificateholders to surrender their Subordinated
Notes or Lease Trust Certificates, as the case may be, for cancellation and
receive the final distribution with respect thereto. If within one year after
the second notice all the Subordinated Notes or Lease Trust Certificates shall
not have been surrendered for cancellation, the Lease Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Subordinated Notes or Lease Trust Certificateholders, as
the case may be, concerning surrender of their Subordinated Notes or Lease
Trust Certificates, as applicable, and the cost thereof shall be paid out of
the funds and other assets that shall remain subject to this Agreement. Any
funds remaining in the Lease Trust after exhaustion of such remedies shall be
distributed by the Lease Trustee to the Edison Institute in Dearborn, Michigan.
Section 9.2 Dissolution upon Bankruptcy of the Depositor or
Ford Credit Leasing. In the event that a Bankruptcy, insolvency, or
termination shall occur with respect to a holder of a Lease Trust Certificate
or a Subordinated Note issued to and required to be retained by the Depositor
and Ford Credit Leasing pursuant to Section 3.10, this Agreement and the Lease
Trust shall terminate in accordance with Section 9.1. Promptly after the
occurrence of any Bankruptcy, insolvency, or termination with respect to a
holder of such a Lease Trust Certificate or Subordinated Note, (i) the
Depositor or Ford Credit Leasing, as the case may be, shall give the Indenture
Trustee, the Lease Trustee and the Rating Agencies written notice of such
Bankruptcy, insolvency, or termination, (ii) the Lease Trustee shall, upon the
receipt of such written notice from the Depositor or Ford Credit Leasing, give
prompt written notice to the Subordinated Noteholders and Lease Trust
Certificateholders of the occurrence of such Bankruptcy, insolvency, or
termination and (iii) the Indenture Trustee shall, upon receipt of written
notice of such Bankruptcy, insolvency, or termination from the Lease Trustee,
the Depositor or Ford Credit Leasing, give prompt written notice to the Senior
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Noteholders of the occurrence of such Bankruptcy, insolvency, or termination;
provided, however, that any failure to give a notice required by this sentence
shall not prevent or delay, in any manner, a termination of the Lease Trust
pursuant to the first sentence of this Section 9.2. Upon the receipt of such
notice or actual knowledge of a termination pursuant to this Section 9.2, the
Lease Trustee shall promptly sell, or if the lien of the Indenture is
outstanding shall direct the Indenture Trustee promptly to sell, the assets of
the Lease Trust (other than the Series 1996-1 Payments Account) in a
commercially reasonable manner and on commercially reasonable terms. In
connection with any such sale the Series 1996-1 Assets shall be distributed out
of FCTT and the purchaser shall take delivery of such Series 1996-1 Assets and,
with respect to the Series 1996-1 Leased Vehicles, shall cause the related
Certificates of Title to be reregistered in the name of or at the direction of
the purchaser. The proceeds of such sale shall be deposited in the Series
1996-1 Payments Account for distribution in accordance with the terms of the
Indenture and the Lease Trust Agreement. The Lease Trustee has no liability
with respect to the procedures of the Indenture Trustee in connection with such
sale or the sufficiency or adequacy of the proceeds therefrom.
Section 9.3 Redemption of the Subordinated Notes; Prepayment
of the Lease Trust Certificates.
(a) The Subordinated Notes shall be redeemed in whole,
but not in part, at the Redemption Price and the Lease Trust Certificates shall
be prepaid in whole, but not in part, at the Prepayment Price on any Payment
Date on which the Administrative Agent exercises its option to purchase the
Series 1996-1 Certificates pursuant to Section 7.1 of the Series 1996-1
Supplement; provided, however, that the Lease Trust has available funds
sufficient to pay the Redemption Price and the Prepayment Price. The
Administrative Agent or the Lease Trustee shall furnish the Rating Agencies
notice of such redemption and prepayment. In accordance with Section 7.1 of
the Series 1996-1 Supplement, if any of the Senior Notes are outstanding on the
Redemption Date, then on the Business Day preceding the Redemption Date the
Administrative Agent shall deposit the Series 1996-1 Asset Amount plus an
amount equal to one month's interest at a rate equal to the weighted average
Retail Operating Lease Factor for such Series 1996-1 Assets in the Series
1996-1 Collection Account, and if none of the Senior Notes are outstanding on
the Redemption Date, then on the Business Day preceding the Redemption Date the
Administrative Agent shall
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deposit the Series 1996-1 Asset Amount plus an amount equal to one month's
interest at a rate equal to the weighted average Retail Operating Lease Factor
for such Series 1996-1 Assets in the Series 1996-1 Payments Account, whereupon
all of the Subordinated Notes and Lease Trust Certificates shall be due and
payable on the Redemption Date upon the furnishing of a notice complying with
Section 9.3(b) to each Subordinated Noteholder and Lease Trust
Certificateholder, as the case may be.
(b) Notice of redemption or prepayment under Section 9.3(a)
shall be given by the Lease Trustee by facsimile or by first-class mail,
postage prepaid, transmitted or mailed at least thirty days prior to the
Redemption Date to each Subordinated Noteholder and Lease Trust
Certificateholder, on the Record Date preceding the Redemption Date, at address
of such Subordinated Noteholder or Lease Trust Certificateholder, as the case
may be, appearing in the Lease Trust Register.
All notices of redemption or prepayment shall state:
(i) the Redemption Date;
(ii) the Redemption Price or Prepayment Price, as
applicable; and
(iii) the place where the Subordinated Notes and Lease
Trust Certificates are to be surrendered for payment of the Redemption
Price or Prepayment Price, as applicable (which shall be the office or
agency of the Lease Trustee to be maintained as provided in Section
3.8).
Notice of redemption of the Subordinated Notes and of
prepayment of the Lease Trust Certificates shall be given by the Lease Trustee
in the name and at the expense of the Lease Trust. Failure to give notice of
redemption or prepayment, or any defect therein, to any Subordinated Noteholder
or Lease Trust Certificateholder, as the case may be, shall not impair or
affect the validity of the redemption or prepayment of any other Subordinated
Note or Lease Trust Certificate, as applicable.
(c) The Subordinated Notes to be redeemed shall, following
notice of redemption as required by Section 9.3(b) on the Redemption Date
become due and payable at the Redemption Price and (unless the Lease Trust
shall default the
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Redemption Price) no interest shall accrue on the Redemption Price for any
period from and including the Redemption Date. The Lease Trust Certificates to
be prepaid shall, following notice of prepayment as required by Section 9.3(b)
on the Redemption Date become due and payable at the Prepayment Price and
(unless the Lease Trust shall default in the payment of the Prepayment Price)
no interest shall accrue on the Prepayment Price for any period from and
including the Redemption Date.
ARTICLE X.
SUCCESSOR LEASE TRUSTEES AND ADDITIONAL LEASE TRUSTEES
Section 10.1 Eligibility Requirements for Lease Trustee. The
Lease Trustee shall at all times be authorized to exercise corporate trust
powers and be a Person with a long term debt rating of at least Baa3 (or its
equivalent) by Moody's Investors Service, Inc. (or is otherwise acceptable to
Rating Agencies) and having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or State
authorities. If such Person 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 10.1, the combined
capital and surplus of such Person 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 Lease Trustee shall cease to be eligible in accordance
with the provisions of this Section 10.1, the Lease Trustee shall resign
immediately in the manner and with the effect specified in Section 10.2.
Section 10.2 Resignation or Removal of Lease Trustee. The
Lease Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Administrative Agent, the
Depositor and the Lease Trust Certificateholders. The Lease Trustee shall not
be obligated to accept record title to the Series 1996-1 Leased Vehicles (or
part thereof) after notice of resignation but before appointment of a successor
and shall have no liability to any Person (including any Subordinated
Noteholder or Lease Trust Certificateholder) as a result of such inaction.
Upon receiving such notice of resignation, the Depositor shall promptly appoint
a successor Lease Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Lease
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Trustee and one copy to the successor Lease Trustee. If no successor Lease
Trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Lease
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Lease Trustee.
If at any time the Lease 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 Administrative Agent, the Depositor or Lease
Trust Certificateholders holding not less than a majority of the Aggregate
Certificate Balance, or if at any time the Lease Trustee shall be legally
unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the
Lease Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Lease Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation, then the
Administrative Agent, the Depositor or such Lease Trust Certificateholders may
remove the Lease Trustee. If the Administrative Agent, the Depositor or Lease
Trust Certificateholders holding not less than a majority of the Aggregate
Certificate Balance shall remove the Lease Trustee under the authority of the
immediately preceding sentence, the Administrative Agent or the Depositor shall
promptly appoint a successor Lease Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the outgoing Lease Trustee
so removed and one copy to the successor Lease Trustee.
Any resignation or removal of the Lease Trustee and
appointment of a successor Lease Trustee pursuant to any of the provisions of
this Section 10.2 shall not become effective until acceptance of appointment by
the successor Lease Trustee pursuant to Section 10.3 and payment of all fees
and expenses owed to the outgoing Lease Trustee. The Depositor shall provide
notice of such resignation or removal of the Lease Trustee to each of the
Rating Agencies, the Indenture Trustee and the Lease Trust Certificateholders.
Section 10.3 Successor Lease Trustee. Any successor Lease
Trustee appointed pursuant to Section 10.2 shall execute, acknowledge and
deliver to the Administrative Agent and to its predecessor Lease Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Lease Trustee shall become effective
and such successor Lease Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and
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obligations of its predecessor under this Agreement, with like effect as if
originally named as Lease Trustee. The predecessor Lease Trustee shall upon
payment of its fees and expenses deliver to the successor Lease Trustee all
documents and statements and monies held by it under this Agreement; and the
Depositor and the predecessor Lease 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 Lease Trustee all such
rights, powers, duties and obligations.
No successor Lease Trustee shall accept appointment as
provided in this Section 10.3 unless at the time of such acceptance such
successor Lease Trustee shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Lease Trustee
pursuant to this Section 10.3, the Depositor shall mail notice of the successor
of such Lease Trustee to all Lease Trust Certificateholders, the Indenture
Trustee, and the Rating Agencies. If the Depositor shall fail to mail such
notice within 10 days after acceptance of appointment by the successor Lease
Trustee, the successor Lease Trustee shall cause such notice to be mailed at
the expense of the Depositor.
Section 10.4 Merger or Consolidation of Lease Trustee. Any
Person into which the Lease Trustee may be merged or converted or with which it
may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Lease Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Lease Trustee, shall be the successor of the Lease Trustee hereunder, provided
such Person 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; provided,
further that the Lease Trustee shall mail notice of such merger, conversion, or
consolidation to the Rating Agencies, the Indenture Trustee and the Lease Trust
Certificateholders.
Section 10.5 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provision of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Lease Trust Estate may at the time be located, the Depositor and the
Lease Trustee acting jointly shall have the power and shall execute and deliver
all instruments to appoint one
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or more Persons to act as co-trustee, jointly with the Lease Trustee, or
separate trustee or separate trustees, of all or any part of the Lease Trust
Estate, and to vest in such Person, in such capacity, such title to the Lease
Trust, or any part thereof, and, subject to the other provisions of this
Section 10.5, such powers, duties, obligations, rights and trusts as the
Depositor and the Lease Trustee may consider necessary or desirable. If the
Depositor shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Lease Trustee alone shall have the
power to make such appointment. 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 10.3.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(a) all rights, powers, duties and obligations conferred or
imposed upon the Lease Trustee shall be conferred upon and exercised or
performed by the Lease 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 Lease 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 Lease 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 Lease Trust 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 Lease
Trustee;
(b) no trustee under this Agreement shall be personally liable
by reason of any act or omission of any other trustee under this Agreement; and
(c) jointly 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 Lease
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
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Agreement and the conditions of this Article X. 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 Lease 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 Lease Trustee. Each such instrument shall
be filed with the Lease Trustee and a copy thereof given to the Administrative
Agent and the Depositor.
Any separate trustee or co-trustee may at any time appoint the
Lease 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 Lease Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
ARTICLE XI.
TAX MATTERS
Section 11.1 Income Tax Characterization. (a) It is the
intention of the parties hereto that the Lease Trust not constitute a separate
entity for federal income tax or state income or franchise taxes. If, however,
the Lease Trust is characterized as a separate entity for federal income tax
purposes, it is the intention of the parties that it qualify as a partnership
for such purposes.
(b) It is the intent of the Depositor and Lease Trust
Certificateholders that the Lease Trust Certificates be treated as indebtedness
of the Depositor and Ford Credit Leasing for purposes of federal income tax and
state income and franchise taxes. If, however, the Lease Trust is
characterized as a separate entity and the Lease Trust Certificates are not
characterized as indebtedness of such entity for federal income tax purposes,
it is the intention of the parties that the Lease Trust qualify as a
partnership for such purposes and the Lease Trust Certificateholders (including
the Depositor and Ford Credit Leasing) will be treated as partners in that
partnership. The Depositor,
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Ford Credit Leasing, and the other Lease Trust Certificateholders, by
acceptance of a Lease Trust Certificate, agree to take no action inconsistent
with such tax treatment of the Lease Trust Certificates.
(c) It is the intent of the Depositor and Subordinated
Noteholders that the Subordinated Notes be treated as a direct ownership
interest in the assets of the Lease Trust for purposes of federal income tax
and state income and franchise taxes. If, however, the Lease Trust is
characterized as a separate entity for federal income tax purposes, it is the
intention of the parties that it qualify as a partnership for such purposes and
the Subordinated Noteholders (including the Depositor) will be treated as
partners in that partnership. The Depositor and the other Subordinated
Noteholders, by acceptance of a Subordinated Note, agree to take no action
inconsistent with such tax treatment of the Subordinated Notes.
Section 11.2 Annex A. The provisions of Annex A are intended
to apply to the extent the Lease Trust is classified as a partnership for
federal income tax purposes. Annex A shall be considered to be a part of this
Agreement for all purposes. The Administrative Agent, on behalf of the Lease
Trust, will maintain books and records sufficient to effectuate the provisions
of Annex A.
ARTICLE XII.
MISCELLANEOUS
Section 12.1 Supplements and Amendments.
(a) Without Consent of the Senior Noteholders, Subordinated
Noteholders or Lease Trust Certificateholders. This Agreement may be amended
by the Depositor and the Lease Trustee, with prior written notice by the
Depositor to the Rating Agencies, without the consent of any of the Senior
Noteholders, Subordinated Noteholders or Lease Trust Certificateholders, to
cure any ambiguity or defect, to correct or supplement any provisions in this
Agreement, to add any provisions to or change in any manner or eliminate any of
the provisions in this Agreement or to modify in any manner the rights of the
Senior Noteholders, Subordinated Noteholders or Lease Trust Certificateholders;
provided, however, that such action shall not, (i) as evidenced by an Opinion
of Counsel, materially adversely affect the interests of the Indenture Trustee,
any Senior Noteholder or
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Lease Trust Certificateholder unless 100% of the holders of the Senior Notes
and the Lease Trust Certificates materially adversely affected thereby have
consented to such amendment, (ii) as confirmed by each Rating Agency then
rating the Senior Notes and the Lease Trust Certificates, cause the then
current rating of either Class of Senior Notes or the Lease Trust Certificates
to be withdrawn or reduced or (iii) cause the Lease Trust, the Depositor or
FCTT to be taxable as an "association" or publicly traded partnership taxable
as a corporation for federal income tax purposes.
(b) With Consent of the Senior Noteholders and Lease Trust
Certificateholders. This Agreement may also be amended from time to time by
the Depositor and the Lease Trustee, with prior written notice to the Rating
Agencies, with the consent of Senior Noteholders holding not less than a
majority of the Outstanding Amount of the Senior Notes and, to the extent
affected thereby, the consent of Lease Trust Certificateholders holding not
less than a majority of the Aggregate Certificate Balance, 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
Senior Noteholders, Subordinated Noteholders or Lease Trust Certificateholders;
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of distributions that
are required to be made for the benefit of the Senior Noteholders or Lease
Trust Certificateholders, or (b) reduce the percentage of the Outstanding
Amount of the Senior Notes and the Aggregate Certificate Balance of the Lease
Trust Certificates required to consent to any such amendment, without the
consent of the holders of 100% of the Outstanding Amount of the Senior Notes or
of 100% of the Aggregate Certificate Balance, as the case may be, and provided,
further that an Opinion of Counsel shall be furnished to the Indenture Trustee
and the Lease Trustee to the effect that such amendment shall not (i) affect
the treatment of the Senior Notes as debt for federal income tax purposes, (ii)
be deemed to cause a taxable exchange of the Senior Notes for federal income
tax purposes or (iii) cause the Lease Trust, the Depositor or FCTT to be
classified as an association (or publicly traded partnership) taxable as a
corporation for federal income tax purposes.
(c) With Respect to Certain Tax Matters. Notwithstanding the
foregoing, this Agreement may be amended at any time by the Depositor (acting
at the direction of Ford Credit and Ford Credit Leasing) and the Lease Trustee
to the extent reasonably necessary to assure that none of FCTT, the
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Lease Trust or the Depositor will be classified as an association (or publicly
traded partnership) taxable as a corporation for federal income tax purposes.
(d) General Matters Concerning Amendments and Consents. The
Lease Trustee and the Depositor shall provide prior written notice of any such
amendment to each Rating Agency, and promptly after the execution of any such
amendment or consent, the Lease Trustee shall furnish written notification of
the substance of such amendment or consent to each Lease Trust
Certificateholder and the Indenture Trustee.
It shall not be necessary for the consent of the Lease Trust
Certificateholders, the Senior Noteholders or the Indenture Trustee pursuant to
this Section 12.1 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
Lease Trust Certificateholders provided for in this Agreement or in any other
Basic Document) and of evidencing the authorization of the execution thereof by
Lease Trust Certificateholders shall be subject to such reasonable requirements
as the Lease Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the
Lease 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 Lease Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Lease Trustee's
own rights, duties or immunities under this Agreement or otherwise.
Section 12.2 No Legal Title to Lease Trust Estate in Lease
Trust Certificateholders or Subordinated Noteholders. 1. The Lease Trust
Certificateholders shall not have legal title to any part of the Lease Trust
Estate. The Lease Trust Certificateholders shall be entitled to receive
distributions with respect to their undivided ownership interest in the Least
Trust only in accordance with Articles V and IX. No transfer, by operation of
law or otherwise, of any right, title or interest of the Lease Trust
Certificateholders to and in their ownership interest in the Lease Trust Estate
shall operate to terminate this Agreement or the trusts hereunder or entitle
any transferee
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to an accounting or to the transfer to it of legal title to any part of the
Lease Trust Estate.
(b) The Subordinated Noteholders shall not have legal title to
any part of the Lease Trust Estate. The Subordinated Noteholders shall be
entitled to receive payments with respect to their Subordinated Notes only in
accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title or interest of the Subordinated Noteholders to
and in their Subordinated Notes shall operate to terminate this Agreement or
the trusts hereunder or entitle any transferee to an accounting or to the
transfer to it of legal title to any part of the Lease Trust Estate.
Section 12.3 Limitations on Rights of Others. Except for
Section 2.7, the provisions of this Agreement are solely for the benefit of the
Lease Trustee, the Depositor, the Subordinated Noteholders, the Lease Trust
Certificateholders, the Administrative Agent, the Indenture Trustee and the
Senior Noteholders, and nothing in this Agreement, whether express or implied,
shall be construed to give to any other Person any legal or equitable right,
remedy or claim in the Lease Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
Section 12.4 Notices. (a) Unless otherwise expressly
specified or permitted by the terms hereof, all notices shall be in writing and
shall be deemed given upon receipt by the intended recipient or three Business
Days after mailing if mailed by certified mail, postage prepaid (except that
service of process in connection with any litigation hereunder shall be
effected in accordance with applicable law and that notice to the Lease Trustee
shall be deemed given only upon actual receipt by the Lease Trustee), or, as to
each party, at the address of such party specified below or at such other
address as shall be designated by such party in a written notice to each other
party.
1) If to the Lease Trustee:
PNC Bank, Delaware
222 Delaware Avenue
Wilmington, Delaware 19801
Attention: Michael B. McCarthy
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2) If to the Depositor:
RCL Trust 1996-1
c/o First Union Bank of Delaware
One Rodney Square
920 King Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
with a copy to:
First Union National Bank
of North Carolina
230 South Tryon Street CMC-9
Charlotte, North Carolina 28288
Attention: Pablo de la Canal
(b) Any notice required or permitted to be given to a
Subordinated Noteholder or Lease Trust Certificateholder shall be given by
first-class mail, confirmed, facsimile or overnight courier, postage prepaid,
at the address of such Subordinated Noteholder or Lease Trust Certificateholder
as shown in the Lease Trust Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Subordinated Noteholder or Lease Trust
Certificateholder receives such notice.
Section 12.5 Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 12.6 Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 12.7 Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the Depositor, the Lease Trustee and its successors, each Subordinated
Noteholder and its successors and permitted assigns and each Lease Trust
Certificateholder and its successors and permitted assigns, all
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as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by a Subordinated Noteholder or Lease Trust
Certificateholder shall bind the successors and assigns of such Subordinated
Noteholder or Lease Trust Certificateholder.
Section 12.8 No Petition. The Lease Trustee and the Depositor,
by entering into this Agreement, each Lease Trust Certificateholder, by
accepting a Lease Trust Certificate, each Subordinated Noteholder, by accepting
a Subordinated Note, the Indenture Trustee and each Senior Noteholder by
accepting the benefits of this Agreement, hereby covenants and agrees that, for
a period of one year and one day after payment in full of the Series 1996-1
Certificates, they will not at any time institute against the Depositor or the
Lease Trust or join in any institution against, the Depositor or the Lease
Trust 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
Lease Trust Certificates, the Subordinated Notes, the Senior Notes, this
Agreement or any of the other Basic Documents; provided, however, that Senior
Noteholders holding 100% of the Outstanding Amount of the Senior Notes, or if
the Senior Notes have been paid in full, Subordinated Noteholders holding 100%
of the Outstanding Amount of the Subordinated Notes or Lease Trust
Certificateholders holding 100% of the Aggregate Certificate Balance (in each
case, excluding Ford Credit Leasing, the Depositor or any of their Affiliates
and any Senior Notes, Subordinated Notes or Lease Trust Certificates held by
any of them) may at any time institute, or join in any institution of, any such
proceeding against the Lease Trust or the Depositor.
The Lease Trustee and the Depositor, by entering into this
Agreement, each Lease Trust Certificateholder, by accepting a Lease Trust
Certificate, each Subordinated Noteholder, by accepting a Subordinated Note,
and each Senior Noteholder, by accepting the benefits of this Agreement, hereby
covenants that for a period of one year and one day after payment in full of
all amounts due under any Series of Specified Beneficial Certificates,
including the Series 1996-1 Certificates, they will not institute or join in
the instituting, any Bankruptcy, reorganization, insolvency or liquidation
proceeding against Ford Credit Leasing without the consent of 100% of the
Holders (excluding Ford Credit Leasing, the Lease Trust or any of their
respective Affiliates) of the then outstanding Specified Beneficial
Certificates.
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Section 12.9 No Recourse. Each Lease Trust Certificate and
each Subordinated Note entitles the holder thereof to the respective rights and
benefits set forth in this Agreement and in the Lease Trust Certificates or the
Subordinated Notes, as applicable. The Lease Trust Certificates and the
Subordinated Notes do not represent interests in or obligations of the
Administrative Agent, the Depositor, the Lease Trustee, the Lease Trust Paying
Agent, the Indenture Trustee or any Affiliate thereof and no recourse may be
had against such parties or their assets, except as may be expressly set forth
or contemplated in this Agreement, the Lease Trust Certificates, the
Subordinated Notes or the other Basic Documents.
Section 12.10 Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
Section 12.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
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IN WITNESS WHEREOF the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
PNC BANK, DELAWARE
not in its individual capacity but
solely as Lease Trustee
By: /s/ Michael B. McCarthy
-------------------------------------
Name: Michael B. McCarthy
Title: Vice President
RCL TRUST 1996-1
By: FIRST UNION BANK OF DELAWARE,
not in its individual capacity
but solely as trustee of RCL
Trust 1996-1
By: /s/ Stephen J. Kaba
-------------------------------------
Name: Stephen J. Kaba
Title: Vice President
<PAGE> 67
ANNEX A
Partnership Matters
This Annex A contains provisions accounting for income, gain,
loss, and deductions of the Lease Trust in the event it is classified as a
partnership and the Lease Trust Certificates are not classified as debt of such
partnership for federal income tax purposes. The Depositor, on behalf of the
Lease Trust, shall at all times maintain records sufficient to enable it to
calculate Capital Account balances in accordance with the provisions of this
Annex A. This Annex A shall be considered to be a part of the Lease Trust
Agreement for all purposes.
Section 1. Definitions. The following capitalized terms shall have
meanings set forth below:
"Adjusted Capital Account Deficit" means the deficit balance, if any,
in any Lease Trust Certificateholder's Capital Account as of the end of the
relevant Fiscal Year after: (a) crediting to such Capital Account any amounts
which such Lease Trust Certificateholder is obligated to restore pursuant to
any provision of this Annex A or is deemed to be obligated to restore pursuant
to Section Section 1.704-1(b)(2)(ii)(c), 1.704-1(b)(2)(ii)(h), 1.704-2(g) or
1.704-2(i)(5) of the Treasury Regulations and (b) debiting to such Capital
Account the items described in Section Section 1.704-1(b)(2)(ii)(d)(4), (5)
and (6) of the Treasury Regulations. This definition of Adjusted Capital
Account Deficit is intended to comply with the provisions of Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations (captioned "Alternate Test for
Economic Effect") and shall be interpreted consistently therewith.
"Adjusted Fair Market Value" means with respect to any item of Lease
Trust property, the greater of (i) the fair market value of such property or
(ii) the amount of any nonrecourse indebtedness to which such property is
subject within the meaning of Section 7701(g) of the Code.
"Capital Account" means the account maintained for each Lease Trust
Certificateholder as provided in Section 3.
"Capital Contribution" means the amount of cash or the Gross Asset
Value of property contributed to the Lease Trust by any Lease Trust
Certificateholder. Upon initial sale of the Lease Trust Certificates, the
Capital Contribution of each Lease Trust Certificateholder (other than the
holders
Annex-1
<PAGE> 68
of the Lease Trust Certificates issued to the Depositor and Ford Credit Leasing
pursuant to Section 3.10(a) of this Agreement) shall equal the amount paid by
such Lease Trust Certificateholder for its Lease Trust Certificates. The
initial Capital Contribution of the Depositor and Ford Credit Leasing, as
holders of the Lease Trust Certificates issued to them pursuant to Section
3.10(a) of this Agreement, shall consist of their respective shares of (i) the
fair market value of the Series 1996-1 Certificates, (ii) the principal amounts
of the Demand Notes in the amounts of $19,600,000 and $200,000 assigned by the
Depositor to the Lease Trust pursuant to Section 2.5 of this Agreement and (ii)
the amount deemed to be contributed on the Closing Date pursuant to Section
2(c) of the Transfer Agreement for payment of certain expenses. In addition,
the initial Capital Contribution of Ford Credit Leasing shall include the
principal amount of the Demand Note in the amount of $200,000 assigned by Ford
Credit Leasing to the Lease Trust pursuant to Section 2.5 of this Agreement.
"Certificateholder Nonrecourse Debt" means "partner nonrecourse debt"
within the meaning of Section 1.704-2(b)(4) of the Treasury Regulations.
"Certificateholder Nonrecourse Deductions" means "partner nonrecourse
deductions" within the meaning of Section Section 1.704-2(i)(1) and (2) of
the Treasury Regulations.
"Depreciation" means, for each period, an amount equal to the
depreciation, amortization or other cost recovery deductions allowable with
respect to an asset for such period under the Code, except that if the Gross
Asset Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such period, Depreciation shall be an amount which
bears the same ratio to such beginning Gross Asset Value as the federal income
tax depreciation, amortization or other cost recovery deduction for such period
bears to such beginning adjusted tax basis; provided, however, that if the
federal income tax depreciation, amortization or other cost recovery deduction
for such period is zero, Depreciation shall be determined with reference to
such beginning Gross Asset Value or any reasonable method selected by the
Depositor.
"Fiscal Year" means the taxable year of the Lease Trust which, except
in the case of a short taxable year, shall be the year required by Section
706(b) of the Code.
Annex-2
<PAGE> 69
"Gross Asset Value" means, with respect to any asset, such asset's
adjusted basis for federal income tax purposes except as follows:
(a) The initial Gross Asset Value of any asset contributed by a
Lease Trust Certificateholder to the Lease Trust shall be the
gross fair market value of such asset at the time of
contribution, as determined by the contributing Lease Trust
Certificateholder and the Lease Trust;
(b) The Gross Asset Values of all Lease Trust assets shall be
adjusted to equal their respective Adjusted Fair Market
Values, as reasonably determined by the Depositor as of the
liquidation of the Lease Trust within the meaning of Section
1.704-1(b)(2)(ii)(g) of the Treasury Regulations;
(c) If the Gross Asset Value of an asset has been determined or
adjusted pursuant to subsection (a) or (b) of this definition,
such Gross Asset Value (if any) shall thereafter be adjusted
by the Depreciation taken into account with respect to such
asset for purposes of computing income, gain, loss and
deduction to be allocated to the Capital Accounts of the Lease
Trust Certificateholders; and
(d) For purposes of allocating Gross Asset Values with respect to
Lease Trust assets, the Depositor shall make such allocation
in accordance with the respective Adjusted Fair Market Values
of such assets, and such allocations shall be effective for
all purposes under this Annex A.
"Interest" means, as of any date, the ownership interest of a Lease
Trust Certificateholder in the Lease Trust as of such date, including the right
of such Lease Trust Certificateholder to any and all benefits to which such
Lease Trust Certificateholder may be entitled as provided in this Agreement,
together with the obligations of such Lease Trust Certificateholder to comply
with all the terms and provisions of this Agreement.
"Regulatory Allocations" means the allocations set forth in Sections 6
and 7.
Annex-3
<PAGE> 70
Section 2. Initial Capital Contributions. On the Closing Date, the
Capital Account of each Lease Trust Certificateholder will be credited with its
initial Capital Contribution.
Section 3. Capital Accounts.
(a) The Depositor, on behalf of the Lease Trust, shall maintain books
and records sufficient so that a separate Capital Account for each Lease Trust
Certificateholder can be calculated in accordance with federal income tax
accounting principles and Section 704(b) of the Code and Section Section
1.704-1(b) and 1.704-2 of the Treasury Regulations.
(b) If in the opinion of the Lease Trust's outside legal counsel the
manner in which Capital Accounts are to be maintained pursuant to the preceding
provisions of this Section 3 should be modified in order to comply with the
requirements of Section 704(b) of the Code and the Treasury Regulations
thereunder, then notwithstanding anything to the contrary contained herein, the
Depositor may amend this Annex A to alter the method in which Capital Accounts
are maintained in order to comply with such requirements; provided, however,
that any change in the manner of maintaining Capital Accounts shall not
materially alter the economic agreement among the Lease Trust
Certificateholders without the consent of such Lease Trust Certificateholders.
(c) The following rules shall apply in maintaining Capital Accounts:
(i) If any Interest in the Lease Trust is transferred in
accordance with the terms of this Agreement, the transferee
shall succeed to the Capital Account of the transferor to the
extent it relates to the transferred Interest.
(ii) For purposes of this Annex A, amounts described in Section
709 of the Code (other than amounts with respect to which an
election is in effect under Section 709(b) of the Code) shall
be treated as described in Section 705(a)(2)(B) of the Code.
Section 4. Restoration of Negative Capital Account Balances. Subject
to the following sentence, at no time during the term of the Lease Trust or
upon the dissolution and liquidation of the Lease Trust shall a Lease Trust
Certificateholder with a negative balance in its Capital Account have any
obligation to the Lease Trust or to any
Annex-4
<PAGE> 71
other Lease Trust Certificateholder to restore such negative balance, except as
may be required by law or in respect of any negative balance resulting from
withdrawal of capital or a distribution in contravention of this Annex A.
Notwithstanding the foregoing, each holder of the Lease Trust Certificates and
Subordinated Notes issued to the Depositor and Ford Credit Leasing shall be
obligated to restore any negative balance in its Capital Account in an amount
up to the Cash Collateral Amount.
Section 5. Allocation of Profits and Losses.
(a) Each item of Lease Trust income, gain, loss and deduction shall
be determined monthly by the Depositor or by accountants designated by it in
accordance with Section 703 of the Code and Section 1.704-1(b)(2)(iv) of the
Treasury Regulations.
(b) It is the intention of the parties that if the Lease Trust
Certificateholders (other than the Depositor and Ford Credit Leasing, as
holders of the Lease Trust Certificates issued to them pursuant to Section
3.10(a) of this Agreement, except to the extent of their share of the Aggregate
Certificate Balance) are classified as partners in a partnership, they shall be
treated as accruing, on a semiannual basis, a right to a guaranteed payment
equal to the sum of (i) all interest accrued on the Lease Trust Certificates
(other than the Lease Trust Certificates issued to the Depositor and Ford
Credit Leasing pursuant to Section 3.10(a) of this Agreement, except to the
extent of their share of the Aggregate Certificate Balance) for the related
Semiannual Interest Accrual Period (plus interest accrued on overdue interest),
and (ii) any discount that would have accrued on the Lease Trust Certificates
(other than the Lease Trust Certificates issued to the Depositor and Ford
Credit Leasing pursuant to Section 3.10(a) of this Agreement, except to the
extent of their share of the Aggregate Certificate Balance) if the Lease Trust
Certificates (other than the Lease Trust Certificates issued to the Depositor
and Ford Credit Leasing pursuant to Section 3.10(a) of this Agreement, except
to the extent of their share of the Aggregate Certificate Balance) were debt.
It is the further intention of the parties that the Lease Trust
Certificateholders (other than the Depositor and Ford Credit Leasing, as
holders of the Lease Trust Certificates issued to them pursuant to Section
3.10(a) of this Agreement) shall not otherwise be entitled to any distributive
share of partnership income or loss, except to the extent that it is determined
that such Lease Trust Certificateholders will actually suffer a loss of a
portion of their Certificate
Annex-5
<PAGE> 72
Balance (or as otherwise required by the Code), and that all such items of
partnership income, gain, loss, and deduction be allocated to the Depositor and
Ford Credit Leasing, as holders of the Lease Trust Certificates issued to them
pursuant to Section 3.10(a) of this Agreement.
(c) To the extent that the Lease Trust Certificateholders (other than
the Depositor and Ford Credit Leasing, as holders of the Lease Trust
Certificates issued to them pursuant to Section 3.10(a) of this Agreement,
except to the extent of their share of the Aggregate Certificate Balance) are
treated as partners but are not treated as accruing guaranteed payments, except
as provided otherwise in this Annex A (and without duplication of amounts that
are treated as guaranteed payments), on each Semiannual Payment Date, prior to
making distributions pursuant to Article V:
(i) items of gross income and gain of the Lease Trust shall be
allocated to the Lease Trust Certificateholders (other the
Depositor and Ford Credit Leasing, as holders of the Lease
Trust Certificates issued to them pursuant to Section 3.10(a)
of this Agreement) until the Capital Account of each such
Lease Trust Certificateholder, before taking into account
distributions made on such Semiannual Payment Date, is equal
to the sum of (x) the initial Capital Contribution credited to
such Lease Trust Certificateholders, (y) any amounts which
would be required to be accrued as discount if the Lease Trust
Certificates held by such Lease Trust Certificateholders were
characterized as debt instruments for federal income tax
purposes and the Lease Trust Certificateholder's adjusted tax
basis in its Lease Trust Certificates were equal to its
Capital Account Balance and (z) interest accrued for the
related Semiannual Interest Accrual Period plus any other
interest previously accrued, but not paid (and accrued
interest thereon) with respect to such Lease Trust
Certificates; and
(ii) all other items of income, gain, loss, and deduction, shall be
allocated to the Depositor and Ford Credit Leasing, as holders
of the Lease Trust Certificates and Subordinated Notes issued
to them pursuant to Section 3.10 of this Agreement.
(d) Notwithstanding the foregoing, if any allocation in accordance with
Section 5(c) would increase the Adjusted Capital Account Deficit of a holder of
the Lease Trust
Annex-6
<PAGE> 73
Certificates issued to the Depositor and Ford Credit Leasing pursuant to
Section 3.10 of this Agreement to an amount in excess of the balance on deposit
in the Cash Collateral Account, items of loss and deduction that would create
such excess shall be allocated to Lease Trust Certificateholders (other than
holders of the Lease Trust Certificates issued to the Depositor and Ford Credit
Leasing pursuant to Section 3.10(a) of this Agreement) until the Capital
Accounts of such Lease Trust Certificateholders have been reduced to zero. To
the extent that losses are allocated to a Lease Trust Certificateholder (other
than the Depositor and Ford Credit Leasing, as holders of the Lease Trust
Certificates issued to them pursuant to Section 3.10(a) of this Agreement,
except to the extent of their share of the Aggregate Certificate Balance) items
of gross income shall be specially allocated to each such Lease Trust
Certificateholder in an amount equal to such losses as quickly as possible,
consistent with Section 704(b) of the Code and the Treasury Regulations
thereunder.
Section 6. Additional Special Allocations.
(a) This Agreement shall be deemed to contain (i) a qualified income
offset as described in Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) of the
Treasury Regulations; (ii) a minimum gain chargeback as provided in Section
1.704-2(f) of the Treasury Regulations; and (iii) a partner minimum gain
chargeback in accordance with Section 1.704-2(i) of the Treasury Regulations.
(b) Certificateholder Nonrecourse Deductions. Any
Certificateholder Nonrecourse Deductions shall be allocated to the Lease Trust
Certificateholder that bears the economic risk of loss with respect to the
Certificateholder Nonrecourse Debt to which such Certificateholder Nonrecourse
Deductions are attributable in accordance with Section 1.704-2(i)(1) of the
Treasury Regulations.
Section 7. Tax Allocations; Section 704(c) of the Code.
(a) Income, gains, losses and deductions with respect to any property
(other than money) contributed to the capital of the Lease Trust shall, solely
for tax purposes, be allocated among the Lease Trust Certificateholders so as
to take account of any variation between the adjusted basis of such property to
the Lease Trust for federal income tax purposes and its initial Gross Asset
Value in accordance with Section 704(c) of the Code and the Treasury
Regulations thereunder.
Annex-7
<PAGE> 74
(b) In the event the Gross Asset Value of any Lease Trust asset is
adjusted (pursuant to the definition of Gross Asset Value), subsequent
allocations of income, gain, loss and deduction with respect to such asset
shall take account of any variation between the adjusted basis of such asset
for federal income tax purposes and its Gross Asset Value in the same manner as
under Section 704(c) of the Code and the Treasury Regulations thereunder.
(c) Any elections or other decisions relating to such allocations
shall be made by the Depositor in any manner that reasonably reflects the
purpose and intention of this Annex A. Allocations pursuant to this Section
7(c) are solely for purposes of federal, State and local taxes and shall not
affect, or in any way be taken into account in computing, any Lease Trust
Certificateholder's Capital Account or share of profits, losses, other items or
distributions pursuant to any provision of this Agreement.
Section 8. Code Section 754 Election. No election shall be made on
behalf of the Lease Trust pursuant to Section 754 of the Code.
Section 9. Allocations With Respect to Transferred Interests.
Profits and losses allocable to an Interest transferred or reissued during a
Fiscal Year shall be allocated to each Person who was the holder of such
Interest during such Fiscal Year, in proportion to the number of days that
each such holder was recognized as the owner of such Interest during such
Fiscal Year or by an interim closing of the books or in any other proportion
permitted by the Code and selected by the Depositor in accordance with this
Annex A, without regard to the results of Lease Trust operations or the date,
amount or recipient of any distributions which may have been made with respect
to such Interest. The effective date of any transfer shall be (i) in the case
of a voluntary transfer, the actual date the transfer is recorded on the books
of the Lease Trust or (ii) in the case of involuntary transfer, the date of the
operative event.
Section 10. Curative Allocations. The Regulatory Allocations are
intended to comply with certain requirements of Section 1.704-1(b) of the
Treasury Regulations. Notwithstanding any other provision of this Annex A
(other than the Regulatory Allocations), the Regulatory Allocations shall be
taken into account in allocating other Lease Trust items of income, gains, loss
and deduction among the Lease Trust Certificateholders so that, to the extent
possible, the net amount of such allocations of other Lease Trust items and
Annex-8
<PAGE> 75
the Regulatory Allocations shall be equal to the net amount that would have
been allocated to such Lease Trust Certificateholders if the Regulatory
Allocations had not occurred.
Section 11. Books and Records. The Depositor, as a holder of the
Lease Trust Certificates issued to it pursuant to Section 3.10(a) of this
Agreement, shall (a) maintain such information as may be required, if it should
later be determined that the Lease Trust should be classified as a partnership
for federal income tax purposes, to enable each Lease Trust Certificateholder
to prepare its federal and State income and franchise tax returns, and (b) if
it should be determined that the Lease Trust is properly classified as a
partnership for federal or other income or franchise tax purposes, prepare and
file or cause to be prepared and filed by the Lease Trustee such tax returns,
if any, relating to the Lease Trust, and make such elections as may from time
to time be required or appropriate, under any applicable federal or State
statute or rule or regulation thereunder. The Depositor shall elect under
Section 1278 of the Code to include in income currently any market discount
that accrues with respect to the assets of the Lease Trust.
Section 12. Signature on Returns; Tax Matters Partner.
(a) In the event that the Lease Trust shall be required to
file federal or other income or franchise tax returns as a partnership, such
returns shall be signed by an authorized signatory for the Depositor, as holder
of the Lease Trust Certificates and Subordinated Notes issued to it pursuant to
Section 3.10 of this Agreement, or such other person as shall be required by
law to sign such returns of the Lease Trust.
(b) By acceptance of its beneficial interest in a Lease Trust
Certificate, each Lease Trust Certificateholder agrees that in the event that
the Lease Trust is classified as a partnership for federal income tax purposes
and the Lease Trust Certificates are not classified as debt of such
partnership, the Depositor, as holder of the Lease Trust Certificates and
Subordinated Notes issued to it pursuant to Section 3.10 of this Agreement,
shall be the "tax matters partner" of the Lease Trust pursuant to the Code.
Annex-9
<PAGE> 76
EXHIBIT A
NUMBER $
R- CUSIP NO. 34527VAF1
THIS LEASE TRUST
CERTIFICATE MAY NOT
BE TRANSFERRED BY A
STOCK POWER BUT ONLY
AS SET FORTH BELOW
SEE REVERSE FOR CERTAIN DEFINITIONS
[TEXT OF LEGEND FOR LEASE TRUST CERTIFICATES ISSUED TO THE
DEPOSITOR AND FORD CREDIT LEASING PURSUANT TO SECTION 3.10(A) OF THE LEASE
TRUST AGREEMENT: THIS LEASE TRUST CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN
THE EVENT OF THE DISSOLUTION OR TERMINATION OF RCL TRUST 1996-1 WHEN IT IS THE
HOLDER HEREOF, AND ANY TRANSFER IN VIOLATION OF THIS PROVISION SHALL BE NULL
AND VOID.]
[TEXT OF LEGEND FOR OTHER LEASE TRUST CERTIFICATES: THIS
LEASE TRUST CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE
SECURITIES OR BLUE SKY LAW OF ANY STATE OF THE UNITED STATES. THE HOLDER
HEREOF, BY PURCHASING THIS LEASE TRUST CERTIFICATE, AGREES FOR THE BENEFIT OF
THE LEASE TRUST AND THE DEPOSITOR THAT THIS LEASE TRUST CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN A DENOMINATION OF
AT LEAST $1,000,000, ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS, AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN
EACH CASE, THAT THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, SUBJECT TO (A) THE RECEIPT BY THE LEASE TRUST AND THE
LEASE TRUST REGISTRAR OF A CERTIFICATE SUBSTANTIALLY IN THE FORM ATTACHED AS
EXHIBIT C TO THE LEASE TRUST AGREEMENT AND (B) THE RECEIPT BY THE LEASE TRUST
AND THE LEASE TRUST REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS
EXHIBIT D TO THE LEASE TRUST AGREEMENT, (2) PURSUANT TO AN EXEMPTION FROM
A-1
<PAGE> 77
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE),
SUBJECT TO THE RECEIPT BY THE LEASE TRUST, THE INITIAL PURCHASER AND THE LEASE
TRUST REGISTRAR OF SUCH EVIDENCE ACCEPTABLE TO THE LEASE TRUST AND THE INITIAL
PURCHASER THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH
THE LEASE TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER APPLICABLE LAWS, (3)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO
ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO (A) THE RECEIPT BY THE LEASE TRUST AND THE LEASE TRUST REGISTRAR OF
A LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT E TO THE LEASE TRUST
AGREEMENT OR (B) THE RECEIPT BY THE LEASE TRUST, THE INITIAL PURCHASER AND THE
LEASE TRUST REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE LEASE TRUST AND
THE INITIAL PURCHASER THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE LEASE TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER
APPLICABLE LAWS, OR (4) TO THE DEPOSITOR OR ITS AFFILIATES, IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND
SECURITIES AND BLUE SKY LAWS OF THE STATES OF THE UNITED STATES.]
THE PRINCIPAL OF THIS LEASE TRUST CERTIFICATE IS DISTRIBUTABLE
AS SET FORTH IN THE LEASE TRUST AGREEMENT. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL OF THIS LEASE TRUST CERTIFICATE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
FORD CREDIT AUTO LEASE TRUST 1996-1
6.10% ASSET BACKED LEASE TRUST CERTIFICATE
evidencing an interest in certain distributions of the Lease Trust, as defined
below, the property of which includes: (1) the right to receive certain
payments as program lessor under the Program Operating Lease pursuant to which
trust certificates representing a beneficial interest in certain specified
retail automobile and light truck leases were leased to the program lessee; and
(2) an interest in such certificates upon the expiration of such Program
Operating Lease. The property of the Lease Trust has been pledged to the
Indenture Trustee pursuant to the Indenture to secure the payment of the Senior
Notes issued thereunder.
A-2
<PAGE> 78
(This Lease Trust Certificate does not represent an interest in or obligation
of the Depositor, Ford Motor Credit Company, Ford Credit Leasing Company, Inc.
or any of their respective Affiliates, except to the extent described below.)
THIS CERTIFIES THAT is the registered
owner of DOLLARS nonassessable, fully-paid, beneficial
ownership interest in Lease Trust Certificates having an initial Aggregate
Certificate Balance of $30,821,533.09 of Ford Credit Auto Lease Trust 1996-1
(the "Lease Trust") formed by RCL Trust 1996-1 (the "Depositor"). The
Aggregate Certificate Balance of the Lease Trust Certificates bear interest at
a rate of 6.10% per annum (the "Certificate Interest Rate").
A-3
<PAGE> 79
LEASE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Lease Trust Certificates referred to in the
within-mentioned Lease Trust Agreement.
PNC Bank, Delaware or PNC Bank, Delaware
as Lease Trustee as Lease Trustee
By ________________________ By ________________________
Authenticating Agent
<PAGE> 80
The Lease Trust was created pursuant to a Lease Trust
Agreement, dated November 26, 1996 (the "Lease Trust Agreement"), between the
Depositor and PNC Bank, Delaware, as trustee (the "Lease Trustee"), a summary
of certain of the pertinent provisions of which is set forth below. To the
extent not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Lease Trust Agreement and the definitions
appendices incorporated by reference therein.
This Certificate is one of the duly authorized Lease Trust
Certificates designated as "6.10% Asset Backed Lease Trust Certificates" (the
"Lease Trust Certificates"). Also issued under the Lease Trust Agreement are
the 6.00% Asset Backed Subordinated Notes (the "Subordinated Notes") and issued
under the Indenture dated as of November 26, 1996 (the "Indenture"), between
the Lease Trustee and The Chase Manhattan Bank, as trustee (the "Indenture
Trustee"), are the 5.45125% Class A-1 Asset Backed Senior Notes and the 5.80%
Class A-2 Asset Backed Senior Notes (collectively, the "Senior Notes"). This
Lease Trust Certificate is issued under and is subject to the terms, provisions
and conditions of the Lease Trust Agreement and the Lease Trust Paying Agent
Agreement, to which Lease Trust Agreement and Lease Trust Paying Agent
Agreement the holder of this Lease Trust Certificate by virtue of the
acceptance hereof assents and by which such Lease Trust Certificateholder is
bound. The property of the Lease Trust includes (i) the rights of the Lease
Trust under the Series 1996-1 Certificates, (ii) the rights as lessor under the
Program Operating Lease, (iii) a security interest with respect to amounts on
deposit from time to time in the Series 1996-1 Collection Account, Series
1996-1 Payahead Account, the Series 1996-1 Payments Account and the Certificate
Distribution Account and all investments including all income thereon and
proceeds thereof, (iv) the rights of the Depositor under the Asset Contribution
Agreement, (v) the rights of the Lease Trust as the holder of the Series 1996-1
Certificates under the Administrative Agency Agreement and the Series 1996-1
Supplement, (vi) the security interest of the Lease Trust in the Subordinated
Notes and in amounts credited to the Cash Collateral Account and the right to
make withdrawals from the Cash Collateral Account and (vii) all proceeds of the
foregoing. THE RIGHTS OF THE LEASE TRUSTEE IN THE FOREGOING PROPERTY OF THE
LEASE TRUST HAVE BEEN PLEDGED TO THE INDENTURE TRUSTEE TO SECURE THE PAYMENT OF
THE SENIOR NOTES.
A-5
<PAGE> 81
The Lease Trust Certificates represent interests in the Lease
Trust only and do not represent interests in, recourse to or obligations of the
Depositor, Ford Credit or any of their respective affiliates.
Under the Lease Trust Agreement, there will be distributed on
May 15 and November 15, of each year or, if any such 15th day is not a Business
Day, the next Business Day (each, a "Semiannual Payment Date"), commencing May
15, 1997, to the Person in whose name this Lease Trust Certificate is
registered at the close of business on the last day of the preceding calendar
month) (the "Record Date") such Lease Trust Certificateholder's percentage
interest in the amount to be distributed with respect to the Aggregate
Certificate Balance of the Lease Trust Certificates on such Semiannual Payment
Date.
THE HOLDER OF THIS LEASE TRUST CERTIFICATE ACKNOWLEDGES AND
AGREES THAT ITS RIGHTS TO RECEIVE PAYMENTS IN RESPECT OF THIS LEASE TRUST
CERTIFICATE ARE SUBORDINATED TO THE RIGHTS OF THE SENIOR NOTEHOLDERS AND
SUBORDINATED NOTEHOLDER TO THE EXTENT DESCRIBED IN THE INDENTURE, THE LEASE
TRUST AGREEMENT AND THE LEASE TRUST PAYING AGENT AGREEMENT, AS APPLICABLE.
It is the intent of the Depositor and Lease Trust
Certificateholders that the Lease Trust Certificates be treated as indebtedness
of the Depositor and Ford Credit Leasing for purposes of federal income tax and
State income and franchise taxes. If, however, the Lease Trust is
characterized as a separate entity for federal income tax purposes, it is the
intention of the parties that it qualify as a partnership for such purposes and
the Lease Trust Certificateholders (including the Depositor) will be treated as
partners in that partnership. The Depositor and the other Lease Trust
Certificateholders, by acceptance of a Lease Trust Certificate, agree to take
no action inconsistent with such tax treatment of the Lease Trust Certificates.
Each Lease Trust Certificateholder by accepting a Lease Trust
Certificate covenants and agrees: (a) for a period of one year and one day
after payment in full of the Series 1996-1 Certificates, it will not institute
against the Depositor or the Lease Trust, or join in the institution against
the Depositor or the Lease Trust of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or State bankruptcy or similar
A-6
<PAGE> 82
law in connection with any obligations relating to the Lease Trust
Certificates, the Subordinated Notes, the Senior Notes, the Lease Trust
Agreement or any of the other Basic Documents and (b) for a period of one year
and one day after payment in full of all amounts due under any Series of
Specified Beneficial Certificates, including the Series 1996-1 Certificates,
they will not institute or join in the instituting, any bankruptcy,
reorganization, insolvency or liquidation proceeding against Ford Credit
Leasing without the consent of 100% of the Holders of the then outstanding
Specified Beneficial Certificates (excluding Ford Credit Leasing, the Lease
Trust or any of their respective Affiliates).
Distributions on this Lease Trust Certificate will be made as
provided in the Lease Trust Agreement by the Lease Trustee by wire transfer or
by check mailed to the Lease Trust Certificateholder of record in the Lease
Trust Register without the presentation or surrender of this Lease Trust
Certificate or the making of any notation hereon. Except as otherwise provided
in the Lease Trust Agreement and notwithstanding the above, the final
distribution on this Lease Trust Certificate will be made after due notice by
the Lease Trustee of the pendency of such distribution and only upon
presentation and surrender of this Lease Trust Certificate at the office or
agency maintained for the purpose by the Lease Trustee in Delaware.
Reference is hereby made to the further provisions of this
Lease Trust Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Lease Trustee, by manual
signature, this Lease Trust Certificate shall not entitle the holder hereof to
any benefit under the Lease Trust Agreement or Lease Trust Paying Agent
Agreement or be valid for any purpose.
THIS LEASE TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-7
<PAGE> 83
IN WITNESS WHEREOF, the Lease Trustee, on behalf of the Lease
Trust and not in its individual capacity, has caused this Lease Trust
Certificate to be duly executed.
Dated: November 26, 1996
FORD CREDIT AUTO LEASE TRUST 1996-1
By: PNC BANK, DELAWARE
as Lease Trustee
By: ____________________________
Authorized Officer
A-8
<PAGE> 84
(Reverse of Lease Trust Certificate)
The Lease Trust Certificates do not represent an obligation
of, or an interest in, the Depositor, the Administrative Agent, the Lease
Trustee or any Affiliates of any of them and no recourse may be had against
such parties or their assets, except as may be expressly set forth or
contemplated herein or in the Lease Trust Agreement or the other Basic
Documents. In addition, this Lease Trust Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections and recoveries (and certain other amounts) respecting the
assets of the Lease Trust, all as more specifically set forth in the Indenture,
the Lease Trust Agreement and Lease Trust Paying Agent Agreement. The Lease
Trustee will furnish, upon the request of any holder of a Lease Trust
Certificate, such information as is specified in paragraph (d)(4) of Rule 144A
with respect to the Lease Trust. A registration statement, which includes the
Lease Trust Agreement as an exhibit thereto, has been filed with the Securities
and Exchange Commission with respect to the Senior Notes of the Lease Trust
issued concurrently with this Lease Trust Certificate.
Each of the Lease Trust Agreement and the Lease Trust Paying
Agent Agreement may be amended by the Depositor and the Lease Trustee, with
prior written notice by the Depositor to the Rating Agencies, without the
consent of any of the Senior Noteholders or the Lease Trust Certificateholders,
to cure any ambiguity or defect, to correct or supplement any provisions in the
Lease Trust Agreement or Lease Trust Paying Agent Agreement, to add any
provisions to or change in any manner or eliminate any of the provisions in the
Lease Trust Agreement or Lease Trust Paying Agent Agreement or to modify in any
manner the rights of the Senior Noteholders, the Subordinated Noteholders or
the Lease Trust Certificateholders; provided, however, that such action shall
not, (i) as evidenced by an Opinion of Counsel, materially adversely affect the
interests of the Indenture Trustee, any Senior Noteholder or Lease Trust
Certificateholder unless 100% of the holders of the Senior Notes and the Lease
Trust Certificates materially adversely affected thereby have consented to such
amendment, (ii) as confirmed by each Rating Agency, cause the then current
rating of either Class of Senior Notes or the Lease Trust
A-9
<PAGE> 85
Certificates to be withdrawn or reduced or (iii) as evidenced by an Opinion of
Counsel cause the Lease Trust, the Depositor or Ford Credit Titling Trust
("FCTT") to be classified as an "association" (or publicly traded partnership)
taxable as a corporation for federal income tax purposes.
Each of the Lease Trust Agreement and the Lease Trust Paying
Agent Agreement may also be amended from time to time by the Depositor and the
Lease Trustee, with prior written notice to the Rating Agencies, with the
consent of the Senior Noteholders holding not less than a majority of the
Outstanding Amount of the Senior Notes and, to the extent affected thereby, the
consent of Lease Trust Certificateholders holding not less than a majority of
the Aggregate Certificate Balance, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of the Lease
Trust Agreement or Lease Trust Paying Agent Agreement or of modifying in any
manner the rights of the Senior Noteholders, the Subordinated Noteholders or
the Lease Trust Certificateholders; provided, however, that no such amendment
shall (a) increase or reduce in any manner the amount of, or accelerate or
delay the timing of distributions that are required to be made for the benefit
of the Senior Noteholders or the Lease Trust Certificateholders, (b) reduce the
percentage of the Outstanding Amount of the Senior Notes and the Aggregate
Certificate Balance required to consent to any such amendment, without the
consent of the holders of 100% of the Outstanding Amount of the Senior Notes or
of 100% of the Aggregate Certificate Balance, as the case may be, or (c) as
evidenced by an Opinion of Counsel to the Indenture Trustee and the Lease
Trustee to the effect that such amendment shall not (i) affect the treatment of
the Senior Notes as debt for federal income tax purposes, (ii) be deemed to
cause a taxable exchange of the Senior Notes for federal income tax purposes or
(iii) cause the Lease Trust, the Depositor or FCTT to be taxable as an
"association" or publicly traded partnership taxable as a corporation for
federal income tax purposes.
Notwithstanding the foregoing, the Lease Trust Agreement may
be amended at any time by the Depositor (acting at the direction of Ford Credit
and Ford Credit Leasing) and the Lease Trustee to the extent reasonably
necessary to assure that none of FCTT, the Lease Trust or the Depositor will be
classified as an association (or
A-10
<PAGE> 86
publicly traded partnership) taxable as a corporation for federal income tax
purposes.
[TEXT OF LEASE TRUST CERTIFICATES ISSUED TO THE DEPOSITOR AND
FORD CREDIT LEASING PURSUANT TO SECTION 3.10(A) OF THE LEASE TRUST AGREEMENT:
As provided in the Lease Trust Agreement, the transfer of this Lease Trust
Certificate is prohibited; provided, that upon a dissolution or termination of
the Depositor this Lease Trust Certificate, if held by the Depositor, shall be
distributed to the beneficiaries of the Depositor in accordance with their
percentage interests therein.]
[TEXT OF OTHER LEASE TRUST CERTIFICATES: This Least Trust
Certificate may be transferred only under the circumstances described on the
face of this Lease Trust Certificate and in Section 3.4 of the Lease Trust
Agreement, which, among other things, requires that each prospective transferee
represent in writing in the form provided as an exhibit to the Lease Trust
Agreement that it will not acquire or transfer the Lease Trust Certificate
through an established securities market, is not and will not become, except in
certain circumstances, a partnership, Subchapter S corporation or grantor trust
for U.S. federal income tax purposes, and will not acquire the Lease Trust
Certificate for or on behalf of an employee benefit plan, except in certain
limited circumstances.]
Any attempted transfer in contravention of the restrictions and conditions on
the face of this Lease Trust Certificate and in the Lease Trust Agreement shall
be null and void. As provided in the Lease Trust Agreement, the transfer of
this Lease Trust Certificate is registerable in the Lease Trust Register upon
surrender of this Lease Trust Certificate for registration of transfer at the
offices or agencies of the Lease Trust Registrar maintained by the Lease
Trustee in Wilmington, Delaware, accompanied by the written representations
required by the Lease Trust Agreement and a written instrument of transfer in
form satisfactory to the Lease Trust Registrar duly executed by the Lease Trust
Certificateholder hereof or such Lease Trust Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Lease Trust Certificates
of authorized denominations evidencing the same aggregate denomination will be
issued to the designated transferee. The initial Lease Trust Registrar
appointed under the Lease Trust Agreement is
A-11
<PAGE> 87
PNC Bank, Delaware, 222 Delaware Avenue, Wilmington, Delaware 19801.
Except for Lease Trust Certificates issued to the Depositor
and Ford Credit Leasing, the Lease Trust Certificates are issuable only as
registered Lease Trust Certificates without coupons in denominations of
$1,000,000 and in integral multiples of $1,000 in excess thereof. Lease Trust
Certificates are exchangeable for new Lease Trust Certificates of authorized
denominations evidencing the same aggregate denomination, as requested by the
Lease Trust Certificateholder surrendering the same. No service charge will be
made for any such registration of transfer or exchange, but the Lease Trustee
or the Lease Trust Registrar may require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Lease Trustee, the Lease Trust Registrar and any agent of
the Lease Trustee or the Lease Trust Registrar may treat the Person in whose
name this Lease Trust Certificate is registered as the owner hereof for all
purposes, and none of the Lease Trustee, the Lease Trust Registrar or any such
agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Lease
Trust Agreement and the Lease Trust created thereby shall terminate upon the
payment to Lease Trust Certificateholders of all amounts required to be paid to
them pursuant to the Lease Trust Agreement and the Indenture and the
disposition of all property held as part of the Lease Trust.
A-12
<PAGE> 88
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
_______________________________________________________________________________
Please print or type name and address, including postal zip code, of assignee)
_______________________________________________________________________________
the within Lease Trust Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
__________________________________________________ Attorney to transfer said
Lease Trust Certificate on the books of the Lease Trust Registrar, with full
power of substitution in the premises.
Dated:
_______________________*
Signature Guaranteed:
_______________________*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Lease Trust Certificate in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by a member firm of the New York Stock Exchange or
a commercial bank or trust company.
A-13
<PAGE> 89
EXHIBIT B
FORM OF SUBORDINATED NOTE
THIS SUBORDINATED NOTE
MAY NOT BE TRANSFERRED
BY A STOCK POWER
FORD CREDIT AUTO LEASE TRUST 1996-1
6.00% ASSET BACKED SUBORDINATED NOTE
Ford Credit Auto Lease Trust 1996-1 (the "Lease Trust"), a
trust created pursuant to a trust agreement dated as of November 26, 1996 (the
"Lease Trust Agreement") between RCL Trust 1996-1, as Depositor and PNC Bank,
Delaware, not in its individual capacity but solely as trustee of the Lease
Trust (the "Lease Trustee"), for value received, hereby promises to pay to RCL
TRUST 1996-1, upon presentation and surrender of this Subordinated Note the
principal sum of ONE HUNDRED SIX MILLION SIX HUNDRED NINETY THOUSAND THREE
HUNDRED THIRTY-ONE DOLLARS AND THIRTEEN CENTS (U.S. $106,690,331.13) on the May
15, 1999 Payment Date, or earlier, all in accordance with the Lease Trust
Agreement and the Lease Trust Paying Agent Agreement. The Lease Trust will pay
interest on this Subordinated Note at the rate per annum shown above on each
Payment Date until the principal of this Subordinated Note is paid or made
available for payment, on the principal amount of this Subordinated Note
outstanding on the preceding Payment Date (after giving effect to all payments
of principal made on such preceding Payment Date) in accordance with the Lease
Trust Agreement and the Lease Trust Paying Agent Agreement.
THE HOLDER OF THIS SUBORDINATED NOTE ACKNOWLEDGES AND AGREES
THAT ITS RIGHTS TO RECEIVE PAYMENTS IN RESPECT OF THIS SUBORDINATED NOTE ARE
SUBORDINATED TO THE RIGHTS OF THE SENIOR NOTEHOLDERS AS DESCRIBED IN THE
INDENTURE AND THE LEASE TRUST AGREEMENT, AS APPLICABLE.
Unless the certificate of authentication hereon has been
executed by the Lease Trustee whose name appears below by manual signature,
this Subordinated Note shall not be entitled to any benefit under the Lease
Trust
B-1
<PAGE> 90
Agreement or Lease Trust Paying Agent Agreement, or be valid or obligatory for
any purpose.
B-2
<PAGE> 91
IN WITNESS WHEREOF, the Lease Trust has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
Dated: November 26, 1996
FORD CREDIT AUTO LEASE TRUST 1996-1,
by PNC BANK, DELAWARE, not in its
individual capacity but solely as Lease
Trustee under the Lease Trust Agreement
By: _________________________
Name: Michael B. McCarthy
Title: Vice President
<PAGE> 92
LEASE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Subordinated Notes designated above and
referred to in the within-mentioned Lease Trust Agreement.
Dated: November 26, 1996
PNC BANK, DELAWARE, not in its
individual capacity but solely as
Lease Trustee under the Lease Trust
Agreement
By: _________________________
Authorized Signatory
<PAGE> 93
EXHIBIT C
FORM OF RULE 144A TRANSFEROR CERTIFICATE
[Date]
PNC Bank, Delaware
as Lease Trustee and
Lease Trust Registrar
222 Delaware Avenue
Wilmington, Delaware 19801
Ladies and Gentlemen:
This is to notify you as to the transfer of $ [*] in
denomination of Asset Backed Lease Trust Certificates (the "Certificates") of
Ford Credit Auto Lease Trust 1996-1 (the "Issuer").
The undersigned is the holder of the Certificates and with
this notice hereby deposits with the Lease Trustee $ [*] in denomination of
Certificates and requests that Certificates in the same aggregate denomination
be issued, executed and authenticated and registered to the purchaser on
___________, 199_, as specified in the Lease Trust Agreement dated as of
November 26, 1996 relating to the Certificates, as follows:
Name: Denominations:
Address:
Taxpayer I.D. No:
The undersigned represents and warrants that the undersigned
(i) reasonably believes the purchaser is a "qualified institutional buyer," as
defined in Rule 144A under the Securities Act of 1933 (the "Act"), (ii) such
purchaser has acquired the Certificates in a transaction effected in accordance
with the exemption from the registration requirements of the Act provided by
Rule 144A and, (iii) if the purchaser has purchased the Certificates for an
account for which it is acting as fiduciary or agent, such account is a
qualified institutional buyer and (iv) the purchaser is acquiring Certificates
for its own account or for an institutional account for which it is
________
[* minimum of $1,000,000] C-1
<PAGE> 94
acting as fiduciary or agent in a minimum amount equivalent to not less than
$1,000,000.
Very truly yours,
[NAME OF HOLDER
OF CERTIFICATES]
By: _______________________________
Name:
Title:
C-2
<PAGE> 95
EXHIBIT D
FORM OF INVESTMENT LETTER-
QUALIFIED INSTITUTIONAL BUYER
[Date]
Ford Credit Auto Lease Trust 1996-1
as Issuer
PNC Bank, Delaware
as Lease Trustee and
Lease Trust Registrar
222 Delaware Avenue
Wilmington, Delaware 19801
J.P. Morgan Securities Inc.
as Initial Purchaser in connection with
the Offering Circular referred to below
Asset Finance Group
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
In connection with our proposed purchase of the 6.10% Asset Backed
Lease Trust Certificates (the "Certificates") of Ford Credit Auto Lease Trust
1996-1 (the "Issuer"), a trust formed by RCL Trust 1996-1 (the "Depositor"), we
confirm that:
1. We have received a copy of the Offering Circular (the
"Offering Circular") dated November 19, 1996, relating to the Certificates and
such other information as we deem necessary in order to make our investment
decision. We understand that the Offering Circular speaks only as of its date
and that the information contained therein may not be correct or complete as of
any time subsequent to such date.
2. We agree to be bound by the restrictions and conditions set
forth under the heading "Notice to Investors" in the Offering Circular relating
to the Certificates and the undersigned agrees to the bound by, and not to
resell, transfer, assign, participate, pledge or otherwise dispose of (any such
act, a "Transfer") the Certificates except in compliance with, such
restrictions and
D-1
<PAGE> 96
conditions and the Securities Act of 1933, as amended (the "Securities Act").
3. We have neither acquired nor will we Transfer any
Certificate we purchase (or any interest therein) or cause any such
Certificates (or any interest therein) to be marketed on or through an
"established securities market" within the meaning of section 7704(b)(1) of the
Internal Revenue Code of 1986, as amended (the "Code"), including, without
limitation, an over-the-counter-market or an interdealer quotation system that
regularly disseminates firm buy or sell quotations.
4. We either (a) are not, and will not become, a partnership,
Subchapter S corporation, or grantor trust for U.S. federal income tax purposes
or (b) are such an entity, but none of the direct or indirect beneficial owners
of any of the interests in us have allowed or caused, or will allow or cause,
80% or more (or such other percentage as the Depositor may establish prior to
the time of such proposed Transfer) of the value of such interests to be
attributable to our ownership of Certificates.
5. We understand that no subsequent Transfer of the
Certificates is permitted unless (A) such Transfer is of a Certificate with a
denomination of at least $1,000,000, (B) we cause our proposed transferee to
provide to the Issuer, the Lease Trust Registrar and the Initial Purchaser a
letter substantially in the form of this Exhibit D or Exhibit E to the Lease
Trust Agreement, as applicable, or such other written statement as the
Depositor shall prescribe, and (C) the Depositor consents in writing to the
proposed Transfer.
6. We understand that the opinion of counsel that the Issuer
is not a publicly traded partnership taxable as a corporation is dependent in
part on the accuracy of the representations in paragraphs 3, 4 and 5.
7. We are a "qualified institutional buyer" (within the
meaning of Rule 144A under the Securities Act) (a "QIB") and we are acquiring
the Certificates for our own account or for a single account (which is a QIB
and from which no resale, pledge, or other transfer may be made) as to which we
exercise sole investment discretion.
8. We are not (A) an employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income
D-2
<PAGE> 97
Security Act of 1974, as amended ("ERISA")) that is subject to Title I of
ERISA, (B) a plan described in Section 4975(e)(1) of the Internal Revenue Code
of 1986, as amended (the "Code"), (C) a governmental plan, as defined in
Section 3(32) of ERISA, subject to any federal, State or local law which is, to
a material extent, similar to the provisions of Section 406 of ERISA or Section
4975 of the Code, (D) an entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (within the meaning of Department
of Labor Regulation 29 C.F.R. Section 2510.3-101) or (E) a person investing
"plan assets" of any such plan (including without limitation, for purposes of
this clause (E), any insurance company general account, but excluding any
entity registered under the Investment Company Act of 1940, as amended).
9. We are a person who is either (A) (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity organized
in or under the laws of the United States or any political subdivision thereof
or (iii) a person not described in (A)(i) or (ii) whose ownership of the
Certificates is effectively connected with such person's conduct of a trade or
business within the United States (within the meaning of the Code) and its
ownership of any interest in a Certificate will not result in any withholding
obligation with respect to any payments with respect to the Certificates by any
person (other than withholding, if any, under Section 1446 of the Code) or (B)
an estate or trust the income of which is includible in gross income for United
States federal income tax purposes, regardless of source. We agree that we
will provide a certification of non-foreign status signed under penalties of
perjury and, alternatively, that if we are a person described in clause
(A)(iii) above, we will furnish to the Depositor and the Lease Trustee a
properly executed IRS Form 4224 and a new Form IRS 4224 upon the expiration or
obsolescence of any previously delivered form (and such other certifications,
representations or opinions of counsel as may be requested by the Depositor and
the Lease Trustee).
10. We understand that any purported Transfer of any
Certificate (or any interest therein) in contravention of the restrictions and
conditions above shall be null and void (each, a "Void Transfer"), and the
purported transferee in a Void Transfer shall not be recognized by the Issuer
or any other person as a Certificateholder for any purpose.
D-3
<PAGE> 98
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By: _________________________
Name:
Title:
Securities To Be Purchased:
$ principal amount of Certificates
D-4
<PAGE> 99
EXHIBIT E
FORM OF INVESTMENT LETTER-
INSTITUTIONAL ACCREDITED INVESTOR
[Date]
Ford Credit Auto Lease Trust 1996-1
as Issuer
PNC Bank, Delaware
as Lease Trustee and
Lease Trust Registrar
222 Delaware Avenue
Wilmington, Delaware 19801
J.P. Morgan Securities Inc.
as Initial Purchaser in connection with
the Offering Circular referred to below
Asset Finance Group
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
In connection with our proposed purchase of the 6.10% Asset Backed
Lease Trust Certificates (the "Certificates") of Ford Credit Auto Lease Trust
1996-1 (the "Issuer"), a trust formed by RCL Trust 1996-1 (the "Depositor"), we
confirm that:
1. We have received a copy of the Offering Circular (the
"Offering Circular") dated November 19, 1996, relating to the Certificates and
such other information as we deem necessary in order to make our investment
decision. We understand that the Offering Circular speaks only as of its date
and that the information contained therein may not be correct or complete as of
any time subsequent to such date.
2. We agree to be bound by the restrictions and conditions set
forth under the heading "Notice to Investors" in the Offering Circular relating
to the Certificates and the undersigned agrees to the bound by, and not to
resell, transfer, assign, participate, pledge or otherwise dispose of (any such
act, a "Transfer") the Certificates except in compliance with, such
restrictions and
E-1
<PAGE> 100
conditions and the Securities Act of 1933, as amended (the "Securities Act").
3. We have neither acquired nor will we Transfer any
Certificate we purchase (or any interest therein) or cause any such
Certificates (or any interest therein) to be marketed on or through an
"established securities market" within the meaning of section 7704(b)(1) of the
Internal Revenue Code of 1986, as amended (the "Code"), including, without
limitation, an over-the-counter-market or an interdealer quotation system that
regularly disseminates firm buy or sell quotations.
4. We either (a) are not, and will not become, a partnership,
Subchapter S corporation, or grantor trust for U.S. federal income tax purposes
or (b) are such an entity, but none of the direct or indirect beneficial owners
of any of the interests in us have allowed or caused, or will allow or cause,
80% or more (or such other percentage as the Depositor may establish prior to
the time of such proposed Transfer) of the value of such interests to be
attributable to our ownership of Certificates.
5. We understand that no subsequent Transfer of the
Certificates is permitted unless (A) such Transfer is of a Certificate with a
denomination of at least $1,000,000, (B) we cause our proposed transferee to
provide to the Issuer, the Lease Trust Registrar and the Initial Purchaser a
letter substantially in the form of this Exhibit D or Exhibit E to the Lease
Trust Agreement, as applicable, or such other written statement as the
Depositor shall prescribe, and (C) the Depositor consents in writing to the
proposed Transfer.
6. We understand that the opinion of counsel that the Issuer
is not a publicly traded partnership taxable as a corporation is dependent in
part on the accuracy of the representations in paragraphs 3, 4 and 5.
7. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and we are
acquiring the Certificates for our own account.
8. We are not (A) 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 Title I of ERISA, (B) a plan described in Section
E-2
<PAGE> 101
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), (C) a
governmental plan, as defined in Section 3(32) of ERISA, subject to any
federal, State or local law which is, to a material extent, similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code, (D) an entity
whose underlying assets include plan assets by reason of a plan's investment in
the entity (within the meaning of Department of Labor Regulation 29 C.F.R.
Section 2510.3-101) or (E) a person investing "plan assets" of any such plan
(including without limitation, for purposes of this clause (E), any insurance
company general account, but excluding any entity registered under the
Investment Company Act of 1940, as amended)
9. We are a person who is either (A)(i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity organized
in or under the laws of the United States or any political subdivision thereof
or (iii) a person not described in (A)(i) or (ii) whose ownership of the
Certificates is effectively connected with such person's conduct of a trade or
business within the United States (within the meaning of the Code) and its
ownership of any interest in a Certificate will not result in any withholding
obligation with respect to any payments with respect to the Certificates by any
person (other than withholding, if any, under Section 1446 of the Code) or (B)
an estate or trust the income of which is includible in gross income for United
States federal income tax purposes, regardless of source. We agree that we
will provide a certification of non-foreign status signed under penalties of
perjury and, alternatively, that if we are a person described in clause
(A)(iii) above, we will furnish to the Depositor and the Lease Trustee a
properly executed IRS Form 4224 and a new IRS Form 4224 upon the expiration or
obsolescence of any previously delivered form (and such other certifications,
representations or opinions of counsel as may be requested by the Depositor and
the Lease Trustee).
10. We understand that any purported Transfer of any
Certificate (or any interest therein) in contravention of the restrictions and
conditions above shall be null and void (each, a "Void Transfer"), and the
purported transferee in a Void Transfer shall not be recognized by the Issuer
or any other person as a Certificateholder for any purpose.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy
E-3
<PAGE> 102
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
Very truly yours,
By: _________________________
Name:
Title:
Securities To Be Purchased:
$ principal amount of Certificates
E-4
<PAGE> 1
EXHIBIT 4.2
================================================================================
FORD CREDIT AUTO LEASE TRUST 1996-1
5.45125% Class A-1 Asset Backed Senior Notes
5.80% Class A-2 Asset Backed Senior Notes
------------------------
INDENTURE
Dated as of November 26, 1996
------------------------
THE CHASE MANHATTAN BANK
Indenture Trustee
================================================================================
<PAGE> 2
CROSS REFERENCE TABLE1
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- ------- ---------
<S> <C> <C>
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.2
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8; 6.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.14
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5; 11.5
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.12
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.6
</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> 3
TABLE OF CONTENTS
<TABLE>
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE II
THE SENIOR NOTES
Section 2.1 Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.2 Execution, Authentication and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.3 Temporary Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.4 Registration; Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.5 Mutilated, Destroyed, Lost or Stolen Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.6 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.7 Payment of Principal and Interest; Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.8 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.9 Release of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.10 Book-Entry Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.11 Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.12 Definitive Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.13 Authenticating Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE III
COVENANTS
Section 3.1 Payment of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.2 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.3 Money for Payments To Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.4 Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.5 Protection of Indenture Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.6 Opinions as to Indenture Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.7 Performance of Obligations; Administration of Specified Assets . . . . . . . . . . . . . . . . . . 27
Section 3.8 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.9 Annual Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 3.10 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
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<S> <C> <C>
Section 3.11 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 3.12 No Other Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 3.13 No Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 3.14 Administrative Agent's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 3.15 Guarantees, Loans, Advances and Other Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.16 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.17 [Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.18 Notice of Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.19 Further Instruments and Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 4.2 Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.3 Repayment of Moneys Held by Paying
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE V
EVENTS OF DEFAULT
Section 5.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.2 Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.3 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee . . . . . . . . . . . . . 37
Section 5.4 Remedies; Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.5 Optional Preservation of the Series 1996-1 Assets . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.6 Limitation of Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 5.7 Unconditional Rights of Senior Noteholders To Receive Principal and Interest . . . . . . . . . . . 45
Section 5.8 Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 5.9 Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 5.10 Delay or Omission Not a Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 5.11 Control by Senior Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 5.12 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 5.13 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.14 Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.15 Action on Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.16 Performance and Enforcement of Certain Obligations . . . . . . . . . . . . . . . . . . . . . . . . 49
</TABLE>
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ARTICLE VI
THE INDENTURE TRUSTEE
<S> <C> <C>
Section 6.1 Duties of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 6.2 Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.3 Individual Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 6.4 Indenture Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 6.5 Notice of Defaults; Bankruptcy of RCL Trust 1996-1 or Ford Credit Leasing . . . . . . . . . . . . . 53
Section 6.6 Reports by Indenture Trustee to Senior Noteholders . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.7 Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.8 Replacement of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 6.9 Successor Indenture Trustee by Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee . . . . . . . . . . . . . . . . . 58
Section 6.11 Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 6.12 Preferential Collection of Claims Against Lease Trustee . . . . . . . . . . . . . . . . . . . . . . 60
Section 6.13 Indenture Trustee as Holder of Series 1996-1 Certificates . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE VII
SENIOR NOTEHOLDERS' LISTS AND REPORTS
Section 7.1 Lease Trustee To Furnish Indenture Trustee Names and Addresses of Senior Noteholders . . . . . . . 61
Section 7.2 Preservation of Information; Communications to Senior Noteholders . . . . . . . . . . . . . . . . . 61
Section 7.3 Reports by Lease Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 7.4 Reports by Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.1 Collection of Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 8.2 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 8.3 Cash Collateral Account Certificate; Disbursement and Payment Instructions . . . . . . . . . . . . 69
Section 8.4 Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.5 General Provisions Regarding Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 8.6 Release of Indenture Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
</TABLE>
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<TABLE>
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ARTICLE IX
SUPPLEMENTAL INDENTURES
<S> <C> <C>
Section 9.1 Supplemental Indentures Without Consent of Senior Noteholders . . . . . . . . . . . . . . . . . . . 75
Section 9.2 Supplemental Indentures with Consent of Senior Noteholders . . . . . . . . . . . . . . . . . . . . 77
Section 9.3 Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 9.4 Effect of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 9.5 Conformity With Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 9.6 Reference in Senior Notes to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE X
REDEMPTION OF SENIOR NOTES
Section 10.1 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 10.2 Form of Redemption Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 10.3 Senior Notes Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
ARTICLE XI
MISCELLANEOUS
Section 11.1 Compliance Certificates and Opinions, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 11.2 Form of Documents Delivered to Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 11.3 Acts of Senior Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 11.4 Notices, etc., to Indenture Trustee, Lease Trustee and Rating Agencies . . . . . . . . . . . . . . 87
Section 11.5 Notices to Senior Noteholders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 11.6 Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 11.7 Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 11.8 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 11.9 Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 11.10 Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 11.11 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 11.12 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 11.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 11.14 Recording of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 11.15 Trust Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 11.16 No Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 11.17 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
</TABLE>
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Exhibits
- --------
<S> <C> <C>
Exhibit A-1 Form of Class A-1 Senior Note
Exhibit A-2 Form of Class A-2 Senior Note
Exhibit B Form of Depository Agreement
</TABLE>
v
<PAGE> 8
INDENTURE dated as of November 26, 1996, between PNC BANK,
DELAWARE, a Delaware banking corporation, not in its individual capacity but
solely as trustee (together with its successors under the Lease Trust
Agreement, the "Lease Trustee") of FORD CREDIT AUTO LEASE TRUST 1996-1 (the
"Lease Trust"), and THE CHASE MANHATTAN BANK, a New York corporation, not in
its individual capacity but solely as trustee hereunder (together with its
successors hereunder, the "Indenture Trustee").
PRELIMINARY STATEMENT
The Lease Trustee is duly authorized to execute and deliver
this Indenture on behalf of the Lease Trust to provide for the Senior Notes
issuable as provided in this Indenture. All covenants and agreements made by
the Lease Trust herein are for the benefit and security of the Senior
Noteholders and the Indenture Trustee. The Lease Trustee is entering into this
Indenture on behalf of the Lease Trust, and the Indenture Trustee is accepting
the trusts created hereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement
of the Lease Trust in accordance with the agreement's terms have been done.
GRANTING CLAUSE
The Lease Trust hereby Grants to the Indenture Trustee at the
Closing Date, as Indenture Trustee for the benefit of the Senior Noteholders,
all of the Lease Trust's right, title and interest in and to (i) the Lease
Trust Estate and (ii) 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 receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every
<PAGE> 9
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 (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Senior Notes, equally and ratably without prejudice, priority or distinction
except as set forth herein, and to secure compliance with the provisions of
this Indenture, all as provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Senior Noteholders, acknowledges such Grant and accepts the trusts under this
Indenture in accordance with the provisions of this Indenture.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions. (a) Whenever used in this
Indenture capitalized terms have the meanings assigned to them herein or, if
not defined herein, as defined in Appendix A attached hereto. To the extent
that the definitions set forth herein conflict with the definitions set forth
in Appendix A, or incorporated by reference therein, the definitions set forth
herein shall be controlling. All references to Articles, Sections, and
subsections are to Articles, Sections and subsections in this Indenture unless
otherwise specified.
"Act" has the meaning set forth in Section 11.3(a).
"Administrative Agent Default" has the meaning set forth in
Section 3.7(d).
"Authenticating Agent" has the meaning set forth in Section
2.13.
"Authorized Officer" means, with respect to the Lease Trust,
any officer within the Corporate Trust Department (or any successor business
unit) of the Lease Trustee, including without limitation any secretary,
2
<PAGE> 10
assistant secretary, vice president, assistant vice president, senior corporate
trust officer, corporate trust officer, assistant treasurer, senior trust
administration officer, assistant treasurer, senior trust administration
officer, trust administration officer, senior trust operations officer or trust
operations officer and, so long as the Administrative Agency Agreement is in
effect, any person who is authorized to act for the Administrative Agent in
matters relating to the Lease Trust and to be acted upon by the Administrative
Agent pursuant to the Administrative Agency Agreement and who is identified on
the list of authorized persons delivered by the Administrative Agent to the
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter); provided, however, that for
purposes of Section 3.9 such officer of the Administrative Agent must be any of
the principal executive officer, the principal financial officer or the
principal accounting officer.
"Book-Entry Senior Notes" means a beneficial interest in the
Senior Notes, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 2.10.
"Cash Collateral Account Certificate" has the meaning set
forth in Section 8.3(a).
"Class A-1 Senior Notes" means the 5.45125% Class A-1 Asset
Backed Senior Notes, substantially in the form of Exhibit A-1.
"Class A-2 Senior Notes" means the 5.80% Class A-2 Asset
Backed Senior Notes, substantially in the form of Exhibit A-2.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency.
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<PAGE> 11
"Collateral" has the meaning set forth in the Granting Clause
of this Indenture.
"Commission" means the Securities and Exchange Commission.
"Corporate Trust Office" means the principal office of the
Indenture Trustee at which at any particular time its corporate trust business
shall be administered which office at the date of the execution of this
Indenture is located at 450 West 33rd Street, New York, New York 10001; or at
such other address as the Indenture Trustee may designate from time to time by
notice to the Senior Noteholders and the Lease Trustee, or the principal
corporate trust office of any successor Indenture Trustee (the address of which
the successor Indenture Trustee will notify the Senior Noteholders and the
Lease Trustee).
"Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"Definitive Senior Notes" has the meaning set forth in Section
2.10.
"Depository Agreement" means the agreement among the Lease
Trust, the Indenture Trustee and The Depository Trust Company, as the initial
Clearing Agency, dated as of the Closing Date, substantially in the form of
Exhibit B.
"Disbursement and Payment Instructions" has the meaning set
forth in Section 8.3(b).
"Event of Default" has the meaning set forth in Section 5.1.
"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, the Secretary or the
Treasurer of such corporation; and with respect to any partnership, any general
partner thereof.
4
<PAGE> 12
"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 Collateral 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 Collateral 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.
"Indenture Trust Estate" means all money, instruments, rights
and other property that are subject or intended to be subject to the lien and
security interest of this Indenture for the benefit of the Senior Noteholders
(including, without limitation, the Collateral Granted to the Indenture
Trustee), including all proceeds.
"Independent" means, when used with respect to any specified
Person, that the Person (a) is in fact independent of the Lease Trust, any
other obligor upon the Senior Notes, the Administrative Agent 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 Lease Trust, any
such other obligor, the Administrative Agent or any Affiliate of any of the
foregoing Persons and (c) is not connected with the Lease Trust, any such other
obligor, the Administrative Agent 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 Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1, made by
an Independent appraiser or other expert appointed by
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<PAGE> 13
an Issuer Order and approved by the Indenture Trustee in the exercise of
reasonable care, 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.
"Issuer Order" and "Issuer Request" means a written order or
request of the Lease Trust signed in the name of the Lease Trust by any one of
its Authorized Officers and delivered to the Indenture Trustee.
"Note Pool Factor" shall mean, with respect to each Class of
Senior Notes on any Payment Date, the seven digit decimal equivalent of a
fraction the numerator of which is the Outstanding Amount of such Class on the
Payment Date (after giving effect to any payment of principal on such Payment
Date) and the denominator of which is the Outstanding Amount of such Class on
the Closing Date.
"Notice of Default" has the meaning set forth in Section
5.1(iv).
"Officers' Certificate" means a certificate signed by any
Authorized Officer of the Lease Trustee, under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 11.1, and
delivered to the Indenture Trustee. Unless otherwise specified, any reference
in this Indenture to an Officers' Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Lease Trustee.
"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 Lease Trustee or the Administrative Agent and
who shall be satisfactory to the Indenture Trustee, and which opinion or
opinions shall be addressed to the Indenture Trustee, shall comply with any
applicable requirements of Section 11.1, and shall be in form and substance
satisfactory to the Indenture Trustee.
"Outstanding" means, as of the date of determination, all
Senior Notes theretofore authenticated and delivered under this Indenture
except:
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<PAGE> 14
(i) Senior Notes theretofore cancelled by the Senior
Note Registrar or delivered to the Senior Note Registrar for
cancellation;
(ii) Senior Notes or portions thereof the payment
for which money in the necessary amount has been theretofore deposited
with the Indenture Trustee or any Paying Agent in trust for the
related Senior Noteholders (provided, however, that if such Senior
Notes are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor, satisfactory
to the Indenture Trustee); and
(iii) Senior Notes in exchange for or in lieu of
other Senior Notes which have been authenticated and delivered
pursuant to this Indenture unless proof satisfactory to the Indenture
Trustee is presented that any such Senior Notes are held by a bona
fide purchaser;
provided that in determining whether Senior Noteholders holding the requisite
Outstanding Amount of the Senior Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any
Basic Document, Senior Notes owned by the Lease Trust, RCL Trust 1996-1, the
Administrative Agent or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Senior Notes that a Responsible Officer knows to be so owned shall be so
disregarded. Senior Notes so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee the pledgee's right so to act with respect to such Senior
Notes and that the pledgee is not the Lease Trust, RCL Trust 1996-1, the
Administrative Agent or any Affiliate of any of the foregoing Persons.
"Paying Agent" means the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee set forth in
Section 6.11 and is authorized by the Lease Trustee to make the payments to and
distributions from the Series 1996-1 Payments Account and the other accounts
forming part of the Indenture
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<PAGE> 15
Trust Estate, including payment of principal of or interest on the Senior Notes
on behalf of the Lease Trust.
"Predecessor Senior Note" means, with respect to any
particular Senior Note, every previous Senior Note evidencing all or a portion
of the same debt as that evidenced by such particular Senior Note; and, for the
purpose of this definition, any Senior Note authenticated and delivered under
Section 2.5 in lieu of a mutilated, destroyed, lost, or stolen Senior Note
shall be deemed to evidence the same debt as the mutilated, destroyed, lost, or
stolen Senior Note.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Rating Agency Condition" means, with respect to any action,
that each Rating Agency shall have been given 10 days' prior notice thereof and
that the Rating Agencies shall have notified the Administrative Agent and the
Indenture Trustee in writing that such action will not result in a reduction or
withdrawal of the then current ratings of the Senior Notes.
"Record Date" means, with respect to a Payment Date or
Redemption Date, the close of business on the fourteenth day of the calendar
month in which such Payment Date or Redemption Date occurs (or, if Definitive
Senior Notes are issued, the last day of the preceding calendar month).
"Redemption Date" means the Payment Date specified by the
Administrative Agent or the Lease Trustee pursuant to Section 10.1.
"Redemption Price" means an amount equal to the unpaid
principal amount of the Senior Notes redeemed plus accrued and unpaid interest
thereon plus interest on any defaulted interest at the applicable Senior Note
Interest Rate to but excluding the Redemption Date.
"Registered Holder" means the Person in whose name a Senior
Note is registered on the Senior Note Register on the applicable Record Date.
"Responsible Officer" means any officer of the Indenture
Trustee, including any Vice President, Assis-
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<PAGE> 16
tant Vice President, Assistant Treasurer, Assistant Secretary or any other
officer of the Indenture 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 of and familiarity with the particular
subject.
"Senior Note Owner" means, with respect to a Book-Entry Senior
Note, the Person who is the beneficial owner of such Book-Entry Senior Note, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Senior Note Register" and "Senior Note Registrar" have the
respective meanings set forth in Section 2.4.
"Stamp" has the meaning set forth in Section 2.4.
"State" means any one of the 50 states of the United States of
America or the District of Columbia.
"Stated Maturity" means when used with respect to any
security, including a Senior Note, the date specified in such security as the
fixed date which the final payment of principal on such security is due and
payable or, if such date is not a Business Day, the next following Business
Day.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939 as amended and as in force on the date hereof, unless otherwise
specifically provided.
(b) All terms defined in this Indenture shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(c) As used in this Indenture and in any certificate or
other document made or delivered pursuant hereto, accounting terms not defined
in this Indenture or in any such certificate or other document, and accounting
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<PAGE> 17
terms partly defined in this Indenture or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Indenture or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Indenture or
in any such certificate or other document shall control.
(d) Interest on the Senior Notes shall be computed on the
basis of a 360-day year of twelve 30-day months for all purposes of this
Indenture.
Section 1.2 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:
"indenture securities" means the Senior Notes.
"indenture security holder" means a Senior Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Lease Trust
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.
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<PAGE> 18
ARTICLE II
THE SENIOR NOTES
Section 2.1 Form. The form of the Class A-1 Senior Notes and
the Class A-2 Senior Notes, together with the Indenture Trustee's certificate
of authentication, shall be in substantially the form set forth respectively as
Exhibit A-1 and Exhibit A-2, 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 Senior Notes, as evidenced by
their execution of the Senior Notes. Any portion of the text of any Senior
Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Senior Note.
The definitive Senior 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 Senior Notes, as evidenced by their execution of such Senior Notes.
Each Senior Note shall be dated the date of its
authentication. The terms of the Class A-1 Senior Notes and the Class A-2
Senior Notes set forth respectively in Exhibit A-1 and Exhibit A-2 are part of
the terms of this Indenture.
<TABLE>
<CAPTION>
Original Senior Note
Principal Interest Stated
Designation Amount Rate Maturity
- ----------- --------- -------- --------
<S> <C> <C> <C>
Class A-1
Asset Backed
Senior Notes $150,000,000 5.45125% November 15, 1997
Class A-2
Asset Backed
Senior Notes $660,843,000 5.80% May 15, 1999
</TABLE>
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<PAGE> 19
Section 2.2 Execution, Authentication and Delivery. The
Senior Notes shall be executed by the Lease Trustee by any of its Authorized
Officers on behalf of the Lease Trust. The signature of any such Authorized
Officer on the Senior Notes may be manual or facsimile.
Senior Notes bearing the manual or facsimile signature of
individuals who were at any time Authorized Officers of the Lease Trust shall
bind the Lease Trust, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Senior Notes or did not hold such offices at the date of such Senior Notes.
The Indenture Trustee shall upon Issuer Order authenticate and
deliver the Class A-1 Senior Notes for original issue in an aggregate principal
amount of $150,000,000 and the Class A-2 Senior Notes for original issue in an
aggregate principal amount of $660,843,000. The aggregate principal amount of
Class A-1 Senior Notes and Class A-2 Senior Notes outstanding at any time may
not exceed those respective amounts except as provided in Section 2.5.
The Senior Notes shall be issuable as registered Senior Notes
in minimum denominations of $1,000 and in integral multiples of $1,000 in
excess thereof.
No Senior Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears on
such Senior Note a certificate of authentication substantially in the form
provided for herein executed by the Indenture Trustee by the manual signature
of one of its authorized signatories, and such certificate upon any Senior Note
shall be conclusive evidence, and the only evidence, that such Senior Note has
been duly authenticated and delivered hereunder.
Section 2.3 Temporary Senior Notes. Pending the preparation
of definitive Senior Notes, the Lease Trustee may execute, on behalf of the
Lease Trust, and upon receipt of an Issuer Order the Indenture Trustee shall
authenticate and deliver, temporary Senior Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, substantially of
the tenor of the definitive Senior Notes in lieu of which they are
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<PAGE> 20
issued and with such variations not inconsistent with the terms of this
Indenture as the officers executing the temporary Senior Notes may determine,
as evidenced by their execution of such temporary Senior Notes.
If temporary Senior Notes are issued, the Lease Trust will
cause definitive Senior Notes to be prepared without unreasonable delay. After
the preparation of definitive Senior Notes, the temporary Senior Notes shall be
exchangeable for definitive Senior Notes upon surrender of the temporary Senior
Notes at the office or agency of the Lease Trustee to be maintained as provided
in Section 3.2, without charge to the Senior Noteholder. Upon surrender for
cancellation of any one or more temporary Senior Notes, the Lease Trustee shall
execute, on behalf of the Lease Trust, and the Indenture Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Senior Notes of authorized denominations. Until so exchanged, the
temporary Senior Notes shall in all respects be entitled to the same benefits
under this Indenture as definitive Senior Notes.
Section 2.4 Registration; Registration of Transfer and
Exchange. The Lease Trustee shall cause to be kept a register (the "Senior
Note Register") in which, subject to such reasonable regulations as it may
prescribe, the Lease Trustee shall provide for the registration of Senior Notes
and the registration of transfers of Senior Notes. The Indenture Trustee is
hereby appointed "Senior Note Registrar" for the purpose of registering Senior
Notes and transfers of Senior Notes as herein provided. Upon any resignation
of any Senior Note Registrar, the Lease Trustee shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties
of Senior Note Registrar.
If a Person other than the Indenture Trustee is appointed by
the Lease Trustee as Senior Note Registrar, the Lease Trustee will give the
Indenture Trustee prompt written notice of the appointment of such Senior Note
Registrar and of the location, and any further change in such location, of the
Senior Note Register, and the Indenture Trustee shall have the right to inspect
the Senior Note Register at all reasonable times and to obtain copies thereof,
and the Indenture Trustee shall have the right to rely upon a certificate
executed on
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<PAGE> 21
behalf of the Senior Note Registrar by an Executive Officer thereof as to the
names and addresses of the Senior Noteholders and the principal amounts and
number of such Senior Notes.
Upon surrender for registration of transfer of any Senior Note
at the office or agency of the Lease Trustee to be maintained as provided in
Section 3.2, if the requirements of Section 8-401(1) of the UCC are met the
Lease Trustee shall execute, on behalf of the Lease Trust, and the Indenture
Trustee shall authenticate and the Senior Noteholder shall obtain from the
Indenture Trustee, in the name of the designated transferee or transferees, one
or more new Senior Notes of the same Class in any authorized denominations, of
a like aggregate principal amount.
At the option of the Senior Noteholder, Senior Notes may be
exchanged for other Senior Notes of the same Class in any authorized
denominations, of a like aggregate principal amount, upon surrender of the
Senior Notes to be exchanged at such office or agency. Whenever any Senior
Notes are so surrendered for exchange, if the requirements of Section 8-401(1)
of the UCC are met, the Lease Trustee shall execute, on behalf of the Lease
Trust, the Indenture Trustee shall authenticate and the Senior Noteholder shall
obtain from the Indenture Trustee, the Senior Notes which the Senior Noteholder
making the exchange is entitled to receive.
All Senior Notes issued upon any registration of transfer or
exchange of Senior Notes shall be the valid obligations of the Lease Trust,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Senior Notes surrendered upon such registration of transfer
or exchange.
Every Senior Note presented or surrendered for registration of
transfer or exchange shall be (i) duly endorsed by, or be accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by, the Senior Noteholder thereof or such Senior Noteholder's
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Senior Note
Registrar which requirements include membership or participation in Securities
Transfer Agent's Medallion
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<PAGE> 22
Program ("Stamp") or such other "signature guarantee program" as may be
determined by the Senior Note Registrar in addition to, or in substitution for,
Stamp, all in accordance with the Exchange Act, and (ii) accompanied by such
other documents as the Indenture Trustee may require.
No service charge shall be made to a Senior Noteholder for any
registration of transfer or exchange of Senior Notes, but the Lease 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 Senior Notes, other than exchanges pursuant to Sections 2.3 or 9.6
not involving any transfer.
The preceding provisions of this Section 2.4 notwithstanding,
the Lease Trustee shall not be required to make and the Senior Note Registrar
need not register transfers or exchanges of Senior Notes selected for
redemption or of any Senior Note for a period of 15 days preceding the due date
for any payment with respect to the Senior Note.
Section 2.5 Mutilated, Destroyed, Lost or Stolen Senior
Notes. If (i) any mutilated Senior Note is surrendered to the Indenture
Trustee, or the Indenture Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Senior Note, and (ii) there is delivered to
the Indenture Trustee such security or indemnity as may be required by it to
hold the Lease Trust, the Lease Trustee and the Indenture Trustee harmless,
then, in the absence of notice to the Lease Trustee, the Senior Note Registrar
or the Indenture Trustee that such Senior Note has been acquired by a bona fide
purchaser, and provided that the requirements of Section 8-405 of the UCC are
met, the Lease Trustee shall execute, on behalf of the Lease Trust, and upon
Issuer Request the Indenture Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Senior
Note, a replacement Senior Note of the same Class; provided, however, that if
any such destroyed, lost or stolen Senior Note, but not a mutilated Senior
Note, shall have become or within seven days shall become due and payable, or
shall have been called for redemption, instead of issuing a replacement Senior
Note, the Lease Trust may pay such destroyed, lost
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<PAGE> 23
or stolen Senior Note when so due or payable or upon the Redemption Date. If,
after the delivery of such replacement Senior Note or payment of a destroyed,
lost or stolen Senior Note pursuant to the proviso to the preceding sentence, a
bona fide purchaser of the original Senior Note in lieu of which such
replacement Senior Note was issued presents for payment such original Senior
Note, the Lease Trust and the Indenture Trustee shall be entitled to recover
such replacement Senior Note (or such payment) from the Person to whom it was
delivered or any Person taking such replacement Senior Note from such Person to
whom such replacement Senior 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 Lease Trust or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Senior Note under this
Section 2.5, the Lease Trustee may require the payment by the Senior Noteholder
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 Indenture Trustee) connected therewith.
Every replacement Senior Note issued pursuant to this Section
2.5 in replacement of any mutilated, destroyed, lost or stolen Senior Note
shall constitute an original additional contractual obligation of the Lease
Trust, whether or not the mutilated, destroyed, lost or stolen Senior 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
Senior Notes duly issued hereunder.
The provisions of this Section 2.5 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 Senior
Notes.
Section 2.6 Persons Deemed Owners. Prior to due presentment
for registration of transfer of any Senior Note, the Lease Trustee, the
Indenture Trustee and any agent of the Lease Trustee or the Indenture Trustee
may treat the Person in whose name any Senior Note is
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<PAGE> 24
registered (as of the day of determination) as the owner of such Senior Note
for the purpose of receiving payments of principal of and interest, if any, on
such Senior Note and for all other purposes whatsoever, whether or not such
Senior Note be overdue, and neither the Lease Trustee, the Indenture Trustee
nor any agent of the Lease Trustee or the Indenture Trustee shall be affected
by notice to the contrary.
Section 2.7 Payment of Principal and Interest; Defaulted
Interest. (a) The Class A-1 Senior Notes and the Class A-2 Senior Notes shall
accrue interest during each Interest Accrual Period at the applicable Senior
Note Interest Rate specified in Section 2.1. Interest on the Senior Notes
shall be due and payable on each Payment Date immediately following the related
Interest Accrual Period. Any installment of interest or principal, if any,
payable on any Senior Note which is punctually paid or duly provided for by the
Lease Trust on the applicable Payment Date shall be paid to the Person in whose
name such Senior Note (or one or more Predecessor Senior Notes) is registered
on the Record Date, by check mailed first-class, postage prepaid to such
Person's address as it appears on the Senior Note Register on such Record Date,
except that, unless Definitive Senior Notes have been issued pursuant to
Section 2.12, with respect to Senior Notes registered on the Record Date in the
name of the nominee of the Clearing Agency (initially, such nominee to be Cede
& Co.), 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 Senior Note on a Payment Date or on the
Stated Maturity of such Senior Note (and except for the Redemption Price for
any Senior Note called for redemption pursuant to Section 10.1) which shall be
payable as provided below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.3.
(b) The principal of the Senior Notes of each Class shall be
payable in installments in accordance with the priorities set forth in Section
8.4(b) on each Payment Date until the Outstanding Amount of each Class of
Senior Notes has been reduced to zero as provided in the forms of the Senior
Notes set forth respectively in Exhibit A-1 and Exhibit A-2. No principal
payments shall be made on the Class A-2 Senior Notes until the principal
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<PAGE> 25
balance of the Class A-1 Senior Notes has been reduced to zero; provided that
if an Event of Default has occurred and the entire unpaid principal amounts of
the Senior Notes has become due and payable by declaration of acceleration,
principal payments will be made on a pro rata basis to holders of the Class A-1
Senior Notes and the Class A-2 Senior Notes based on their respective
Outstanding Amounts without any distinction between Classes. All principal
payments on the Senior Notes shall be made pro rata to the Senior Noteholders
of the Class or Classes entitled thereto. The Indenture Trustee shall notify
the Person in whose name a Senior Note is registered on the Record Date
preceding the Payment Date on which the Lease Trustee expects that the final
installment of principal of and interest on such Senior Note will be paid.
Such notice shall be mailed or transmitted by facsimile prior to such final
Payment Date and shall specify that such final installment will be payable only
upon presentation and surrender of such Senior Note and shall specify the place
where such Senior Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Senior Notes shall be
mailed to Senior Noteholders as provided in Section 10.2.
(c) If the Lease Trust defaults in a payment of interest on
the Senior Notes, the Lease Trust shall pay defaulted interest (plus interest
on such defaulted interest to the extent lawful at the applicable Senior Note
Interest Rate specified in Section 2.1) in any lawful manner from the day
following the day on which such interest was due until such defaulted interest
is paid.
Section 2.8 Cancellation. All Senior Notes surrendered for
payment, registration of transfer, exchange or redemption shall, if surrendered
to any Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly cancelled by the Indenture Trustee. The Lease
Trustee may at any time deliver to the Indenture Trustee for cancellation any
Senior Notes previously authenticated and delivered hereunder which the Lease
Trustee may have acquired in any manner whatsoever, and all Senior Notes so
delivered shall be promptly cancelled by the Indenture Trustee. No Senior
Notes shall be authenticated in lieu of or in exchange for any Senior Notes
cancelled as provided in
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<PAGE> 26
this Section 2.8, except as expressly permitted by this Indenture. All
cancelled Senior Notes may be held or disposed of by the Indenture Trustee in
accordance with its standard retention or disposal policy as in effect at the
time unless the Lease Trustee shall direct by an Issuer Order that they be
destroyed or returned to it and so long as such Issuer Order is timely and the
Senior Notes have not been previously disposed of by the Indenture Trustee.
Section 2.9 Release of Collateral. Subject to Section 11.1
and the terms of the Basic Documents, the Indenture Trustee shall release
property from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officers' Certificate, an Opinion of Counsel and Independent
Certificates in accordance with TIA Section Section 314(c) and 314(d)(l) or an
Opinion of Counsel in lieu of such Independent Certificates to the effect that
the TIA does not require any such Independent Certificates. If the Commission
shall issue an exemptive order under TIA Section 304(d) modifying the Lease
Trustee's obligations under TIA Section Section 314(c) and 314(d)(1), subject
to Section 11.1 and the terms of the Basic Documents, the Indenture Trustee
shall release property from the lien of this Indenture in accordance with the
conditions and procedures set forth in such exemptive order.
Section 2.10 Book-Entry Senior Notes. The Senior Notes, upon
original issuance, will be issued in the form of typewritten Senior Notes
representing the Book-Entry Senior Notes, to be delivered to The Depository
Trust Company, the initial Clearing Agency, by, or on behalf of, the Lease
Trust. Such Senior Notes shall initially be registered on the Senior Note
Register in the name of Cede & Co., the nominee of the initial Clearing Agency,
and no Senior Note Owner will receive a Definitive Senior Note (as defined
below) representing such Senior Note Owner's interest in such Senior Note,
except as provided in Section 2.12. Unless and until definitive, fully
registered Senior Notes (the "Definitive Senior Notes") have been issued to
Senior Note Owners pursuant to Section 2.12:
(a) the provisions of this Section 2.10 shall be in full
force and effect;
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(b) the Senior Note Registrar and the Indenture Trustee
shall be entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the Senior
Notes and the giving of instructions or directions hereunder) as the sole
Senior Noteholder, and shall have no obligation to the Senior Note Owners;
(c) to the extent that the provisions of this Section
2.10 conflict with any other provisions of this Indenture, the provisions of
this Section 2.10 shall control;
(d) the rights of Senior Note Owners shall be exercised
only through the Clearing Agency and shall be limited to those established by
law and agreements between such Senior Note Owners and the Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the Depository Agreement,
unless and until Definitive Senior Notes are issued pursuant to Section 2.12,
the initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments of principal of and
interest on the Senior Notes to such Clearing Agency Participants; and
(e) whenever this Indenture requires or permits actions
to be taken based upon instructions or directions of Senior Noteholders
evidencing a specified percentage of the Outstanding Amount of the Senior
Notes, the Clearing Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect from Senior Note
Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the Senior
Notes and has delivered such instructions to the Indenture Trustee.
Section 2.11 Notices to Clearing Agency. Whenever a notice or
other communication to the Senior Noteholders is required under this Indenture,
unless and until Definitive Senior Notes shall have been issued to Senior Note
Owners pursuant to Section 2.12, the Indenture Trustee shall give all such
notices and communications specified herein to be given to Senior Noteholders
to the Clearing Agency, and shall have no obligation to the Senior Note Owners.
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Section 2.12 Definitive Senior Notes. If (i) the
Administrative Agent advises the Indenture Trustee in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Senior Notes, and the Administrative Agent is unable to
locate a qualified successor, (ii) the Administrative Agent at its option
advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of
an Event of Default, Senior Note Owners representing beneficial interests
aggregating at least a majority of the Outstanding Amount of the Senior Notes
advise the Clearing Agency in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interests of the
Senior Note Owners, then the Clearing Agency shall notify all Senior Note
Owners and the Indenture Trustee of the occurrence of any such event and of the
availability of Definitive Senior Notes to Senior Note Owners requesting the
same. Upon surrender to the Indenture Trustee of the typewritten Senior Note
or Senior Notes representing the Book-Entry Senior Notes by the Clearing
Agency, accompanied by registration instructions, the Lease Trustee shall
execute, on behalf of the Lease Trust, and the Indenture Trustee shall
authenticate the Definitive Senior Notes in accordance with the instructions of
the Clearing Agency. None of the Lease Trustee, the Senior Note Registrar or
the Indenture 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 Senior Notes, the
Indenture Trustee shall recognize as Senior Noteholders the Persons whose names
are registered in the Senior Note Register.
Section 2.13 Authenticating Agents. Upon the request of the
Lease Trustee, the Indenture Trustee shall, and if the Indenture Trustee so
chooses the Indenture Trustee may, appoint one or more Persons (each, an
"Authenticating Agent") with power to act on its behalf and subject to its
direction in the authentication of Senior Notes in connection with issuance,
transfers and exchanges under Sections 2.2, 2.4, 2.5 and 9.6, as fully to all
intents and purposes as though each such Authenticating Agent had been
expressly authorized by those Sections to authenticate such Senior Notes. For
all purposes of this Indenture, the authentication of Senior
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Notes by an Authenticating Agent pursuant to this Section 2.13 shall be deemed
to be the authentication of Senior Notes "by the Indenture Trustee."
Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate trust business of any Authenticating Agent, shall be the successor of
such Authenticating Agent hereunder, without the execution or filing of any
further act on the part of the parties hereto or such Authenticating Agent or
such successor corporation.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Indenture Trustee and the Lease Trustee.
The Indenture Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Lease Trustee. Upon receiving such notice of
resignation or upon such a termination, the Indenture Trustee shall promptly
appoint a successor Authenticating Agent and shall give written notice of such
appointment to the Lease Trustee.
The Indenture Trustee agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its services, and
reimbursement for its reasonable expenses relating thereto and the Indenture
Trustee shall be entitled to be reimbursed for such payments, subject to
Section 6.7. The provisions of Sections 2.8 and 6.4 shall be applicable to any
Authenticating Agent.
ARTICLE III
COVENANTS
Section 3.1 Payment of Principal and Interest. The Lease
Trust will duly and punctually pay the principal of and interest on the Senior
Notes in accordance with the terms of the Senior Notes and this Indenture.
Without limiting the foregoing, the Lease Trustee, on behalf of the Lease
Trust, will cause the Indenture Trustee or the Paying Agent to distribute to
Senior
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Noteholders, the Lease Trust Paying Agent and the Certificate Distribution
Account all amounts on deposit in the Series 1996-1 Payments Account payable to
the Senior Noteholders, the Subordinated Noteholders and the Lease Trust
Certificateholders pursuant to Section 8.4. Amounts properly withheld under
the Code by any Person from a payment to any Senior Noteholder of interest
and/or principal shall be considered to have been paid by the Lease Trust to
such Senior Noteholder for all purposes of this Indenture.
Section 3.2 Maintenance of Office or Agency. The Senior Note
Registrar, on behalf of the Lease Trustee, will maintain at the Corporate Trust
Office or at such other location in the Borough of Manhattan, The City of New
York, chosen by the Senior Note Registrar, acting for the Lease Trustee an
office or agency, where Senior Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Lease
Trustee in respect of the Senior Notes and this Indenture may be served. The
Lease Trustee hereby appoints the Indenture Trustee as its agent to receive all
such surrenders, notices and demands.
Section 3.3 Money for Payments To Be Held in Trust. As
provided in Sections 8.4(b) and 5.4(b), all payments of amounts due and payable
with respect to any Senior Notes that are to be made from amounts withdrawn
from the Series 1996-1 Payments Account shall be made on behalf of the Lease
Trust by the Indenture Trustee or by another Paying Agent, and no amounts so
withdrawn therefrom for payments of Senior Notes shall be paid over to the
Lease Trust except as provided in this Section 3.3.
On or before each Payment Date and Redemption Date, the Lease
Trustee shall, on behalf of the Lease Trust, deposit or cause to be deposited
in the Series 1996-1 Payments Account an aggregate sum sufficient to pay the
amounts then becoming due under the Senior Notes, such sum to be held in trust
for the benefit of the Persons entitled thereto and (unless the Paying Agent is
the Indenture Trustee) shall promptly notify the Indenture Trustee of its
action or failure so to act.
The Lease Trustee will cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such
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Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees to the extent relevant),
subject to the provisions of this Section 3.3, that such Paying Agent will:
(i) hold all sums held by it for the payment of
amounts due with respect to the Senior 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;
(ii) give the Indenture Trustee notice of any
default by the Lease Trust of which it has actual knowledge (or any
other obligor upon the Senior Notes) in the making of any payment
required to be made with respect to the Senior Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee, forthwith
pay to the Indenture Trustee all sums so held in trust by such Paying
Agent;
(iv) immediately resign as a Paying Agent and
forthwith pay to the Indenture Trustee all sums held by it in trust
for the payment of Senior 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 Senior
Notes of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection
therewith.
The Lease Trustee 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 Indenture
Trustee all sums held in trust by such Paying Agent, such sums to be held by
the Indenture 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
Inden-
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ture 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 Indenture Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Senior Note and remaining
unclaimed for two years after such amount has become due and payable shall be
discharged from such trust and be paid to the Lease Trust on Issuer Request;
and the Senior Noteholder of such Senior Note shall thereafter, as an unsecured
general creditor, look only to the Lease Trust for payment thereof (but only to
the extent of the amounts so paid to the Lease Trust by the Indenture Trustee
or the Paying Agent), and all liability of the Indenture Trustee or such Paying
Agent with respect to such trust money shall thereupon cease; provided,
however, that the Indenture Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Lease Trust 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 the Lease Trust. The Indenture Trustee shall also adopt and employ, at the
expense of the Lease Trust, any other reasonable means of notification of such
repayment (including, but not limited to, mailing notice of such repayment to
Senior Noteholders whose Senior 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 Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Senior Noteholder).
Section 3.4 Existence. The Lease Trust will keep in full
effect its existence, rights and franchises under the laws of its jurisdiction
of organization, 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 Senior Notes,
the Collateral and the Indenture Trust Estate.
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Section 3.5 Protection of Indenture Trust Estate. The Lease
Trustee on behalf of the Lease Trust 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, and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security
interest (and the priority thereof) of this Indenture or carry out
more effectively the purposes hereof;
(ii) perfect, publish notice of or protect the
validity of any Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Indenture
Trust Estate and the rights of the Indenture Trustee and the Senior
Noteholders in such Indenture Trust Estate against the claims of all
Persons and parties.
The Lease Trust hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by the Indenture Trustee pursuant to this Section
3.5; provided, however, that the Indenture Trustee shall be under no obligation
to file any such financing statement, continuation statement or other
instrument required under this Section 3.5.
Section 3.6 Opinions as to Indenture Trust Estate. (a)
Promptly after the execution of this Indenture, the Lease Trustee shall furnish
to the Indenture 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 and any other action that
may be required by law, as are necessary to perfect and make effective the lien
and security interest of this Indenture and reciting the details of such
action, or stating that, in the
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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
1997, the Lease Trustee, shall furnish to the Indenture Trustee an Opinion of
Counsel 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 and any other action that may be
required by law as is necessary to maintain the lien and security interest
created by this Indenture and reciting the details of such action or stating
that in the opinion of such counsel no such action is necessary to maintain
such lien and security interest. Such Opinion of Counsel shall also describe
the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until April 30 in the following calendar
year.
Section 3.7 Performance of Obligations; Administration of
Specified Assets. (a) The Lease Trust will not take any action and will use
its best efforts not to permit any action to be taken by others, including but
not limited to the Administrative Agent, that would release any Person from any
of such Person's material covenants or obligations under any instrument or
agreement included in the Indenture 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 the Basic Documents.
(b) The Lease Trustee 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 Indenture Trustee in an Officers'
Certificate of the Lease Trustee shall be deemed to be action taken by the
Lease Trustee. Initially, the Lease Trustee has contracted with the
Administrative Agent and
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the Administrative Agent has agreed to assist the Lease Trustee in performing
its duties under this Indenture.
(c) The Lease Trust will, and shall cause the
Administrative Agent to, punctually perform and observe all of its obligations
and agreements contained in this Indenture, the other Basic Documents and in
the instruments and agreements included in the Indenture 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 other Basic Documents in accordance with and within the
time periods provided for herein and therein. Except as otherwise expressly
provided therein, the Lease Trust, as a party to the other Basic Documents and
as a Holder of the Series 1996-1 Certificates, shall not, and shall cause the
Administrative Agent not to, waive, amend, modify, supplement or terminate any
Basic Document or any provision thereof without the consent of the Indenture
Trustee or the Senior Noteholders of Senior Notes evidencing not less than a
majority of the Outstanding Amount of the Senior Notes or such greater
percentage as may be specified in the particular provision.
(d) If the Lease Trustee shall have knowledge of the
occurrence of an event of default by the Administrative Agent under the
Administrative Agency Agreement ("Administrative Agent Default"), the Lease
Trustee shall promptly notify the Indenture Trustee and the Rating Agencies
thereof, and shall specify in such notice the action, if any, the Lease Trustee
is taking in respect of such default. If an Administrative Agent Default shall
arise from the failure of the Administrative Agent to perform any of its duties
or obligations under the Administrative Agency Agreement with respect to the
Series 1996-1 Assets, the Lease Trustee shall take all reasonable steps
available to it to remedy such failure.
(e) Upon any termination of the Administrative Agent's
rights and powers pursuant to Section 7.1 or 7.3 of the Administrative Agency
Agreement or resignation of the Administrative Agent pursuant to Section 7.2 of
the Administrative Agency Agreement, the Lease Trustee shall promptly, but in
any event within two Business Days, notify the Indenture Trustee. As soon as a
substitute Administrative Agent is appointed pursuant to Section 7.1
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of the Administrative Agency Agreement or a successor Administrative Agent is
appointed pursuant to Section 7.3 of the Administrative Agency Agreement, the
Lease Trustee shall notify the Indenture Trustee of such appointment,
specifying in such notice the name and address of such substitute or successor
Administrative Agent.
Section 3.8 Negative Covenants. So long as any Senior Notes
are Outstanding, the Lease Trust shall not:
(i) other than the lease of the Series 1996-1
Certificates pursuant to the Program Operating Lease, which lease is
subject to the lien of this Indenture, and except as expressly
permitted by this Indenture or the other Basic Documents, sell,
transfer, exchange or otherwise dispose of any of the properties or
assets of the Lease Trust, including those included in the Indenture
Trust Estate, unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from
the principal or interest payable in respect of, the Senior 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 Senior Noteholder by reason of the payment of the taxes
levied or assessed upon any part of the Indenture Trust Estate; or
(iii) (A) permit the validity or effectiveness of
this Indenture to be impaired, or permit the lien of this Indenture to
be amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations
under this Indenture except as may be expressly permitted hereby, (B)
permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be
created on or extend to or otherwise arise upon or burden the
Indenture 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 any Series
1996-1 Assets and arising solely as a result of an action or omission
of the related Lessee) or (C) permit the lien of
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this Indenture not to constitute a valid first priority (other than
with respect to any such tax, mechanics' or other lien) security
interest in the Indenture Trust Estate.
Section 3.9 Annual Statement as to Compliance. The Lease
Trustee will deliver to the Indenture Trustee, within 120 days after the end of
each calendar year (commencing with the year 1996), an Officers' Certificate
stating, as to the Authorized Officer signing such Officers' Certificate, that
(i) a review of the activities of the Lease Trust
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 Lease Trust 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 [Reserved].
Section 3.11 [Reserved].
Section 3.12 No Other Activities. The Lease Trust shall not
engage in any activities other than financing, acquiring, owning, leasing
(subject to the lien of this Indenture), pledging and managing the Series
1996-1 Certificates in the manner contemplated by this Indenture and the other
Basic Documents and activities incidental thereto.
Section 3.13 No Borrowing. Other than as contemplated by the
Basic Documents, the Lease Trust shall not issue, incur, assume, guarantee or
otherwise become liable, directly or indirectly, for any indebtedness.
Section 3.14 Administrative Agent's Obligations. The Lease
Trust shall cause the Administrative Agent to comply with the terms and
provisions of the
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Basic Documents to which the Administrative Agent is a party.
Section 3.15 Guarantees, Loans, Advances and Other
Liabilities. Except as contemplated by the Basic Documents or this Indenture,
the Lease Trust shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
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, or any other interest in, or make any
capital contribution to, any other Person.
Section 3.16 Capital Expenditures. Except as contemplated by
the Basic Documents, the Lease Trust shall not make any expenditure (by
long-term or operating lease or otherwise) for capital assets (either realty or
personalty).
Section 3.17 [Reserved].
Section 3.18 Notice of Events of Default. The Lease Trustee
agrees to give the Indenture Trustee and the Rating Agencies prompt written
notice of each Event of Default hereunder on the part of the Administrative
Agent and each Lease Event of Default on the part of the RCL Trustee as lessee
under the Program Operating Lease.
Section 3.19 Further Instruments and Acts. Upon request of
the Indenture Trustee, the Lease Trustee, on behalf of the Lease Trust, 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.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further
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effect with respect to the Senior Notes except as to (i) rights of registration
of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or
stolen Senior Notes, (iii) rights of Senior Noteholders to receive payments of
principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8, 3.12
and 3.13, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section 6.7 and
the obligations of the Indenture Trustee under Section 4.2) and (vi) the rights
of Senior Noteholders as beneficiaries hereof with respect to the property so
deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand and at the expense and on behalf of the Lease
Trust, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(A) either
(1) all Senior Notes theretofore authenticated and
delivered (other than (i) Senior Notes that have been
mutilated, destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.5) and (ii) Senior
Notes for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Lease Trust
and thereafter repaid to the Lease Trust or discharged from
such trust, as provided in Section 3.3) have been delivered to
the Indenture Trustee for cancellation; or
(2) all Senior Notes not theretofore delivered to the
Indenture Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Indenture Trustee for the
giving of notice of redemption by the Indenture Trustee in the name,
and at the expense, of the Lease Trust,
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and the Lease Trust, in the case of (i), (ii) or
(iii) above, has (x) received an Opinion of Counsel to the effect that
the release of the Collateral or the release of the Lease Trust from
the liability hereunder will not be treated as a repayment of the
Senior Notes or an exchange pursuant to Section 1001 of the Code and
(y) irrevocably deposited or caused to be irrevocably deposited with
the Indenture Trustee 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 for such purpose, in an
amount sufficient without reinvestment to pay and discharge the entire
indebtedness on such Senior Notes (including interest) not theretofore
delivered to the Indenture Trustee for cancellation when due to their
Stated Maturity or Redemption Date (if Senior Notes shall have been
called for redemption pursuant to Section 10.1), as the case may be,
and all fees due and payable to the Lease Trustee or the Indenture
Trustee.
(B) the Lease Trust has paid or caused to be paid all
other sums payable hereunder by the Lease Trust; and
(C) the Lease Trustee has delivered to the Indenture
Trustee an Officers' Certificate, an Opinion of Counsel and (if
required by the TIA or the Indenture Trustee) an Independent
Certificate from a firm of certified public accountants, each meeting
the applicable requirements of Section 11.1 and each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Section 4.2 Application of Trust Money. All moneys deposited
with the Indenture Trustee pursuant to Section 4.1 shall be held in trust and
applied by it, in accordance with the provisions of the Senior Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Senior Noteholders of the particular
Senior Notes for the payment or redemption of which such moneys have been
deposited with the Indenture Trustee of all sums due and to become due thereon
for principal and interest, but such moneys need not be segregated from
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other funds except to the extent required herein or in the Administrative
Agency Agreement or required by law.
Section 4.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to the Senior Notes, all moneys then held by any Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with respect to such
Senior Notes shall, upon demand of the Lease Trustee, be paid to the Indenture
Trustee to be held and applied according to Section 3.3 and thereupon such
Paying Agent shall be released from all further liability with respect to such
moneys.
ARTICLE V
EVENTS OF DEFAULT
Section 5.1 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
Senior Note when the same becomes due and payable on each Payment
Date, and such default shall continue for a period of five days;
(ii) default in the payment of the principal of any
Senior Note at Stated Maturity or upon the Redemption Date;
(iii) the occurrence of a Lease Event of Default;
(iv) default in the observance or performance of any
covenant or agreement of the Lease Trust made in this Indenture (other
than a covenant or agreement, a default in the observance or
performance of which is elsewhere in this Section 5.1 specifically
dealt with), or any representation or warranty of the Lease Trust made
in this Indenture
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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 60 days or in the case of a materially incorrect
representation or warranty, 30 days, after there shall have been
given, by registered or certified mail, to the Lease Trustee by the
Indenture Trustee or to the Lease Trustee and the Indenture Trustee by
the Senior Noteholders holding not less than 25% of the Outstanding
Amount of the Senior 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;
(v) the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of the Lease
Trust or any substantial part of the Indenture Trust Estate in an
involuntary case under any applicable federal or State bankruptcy,
insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Lease Trust or for any
substantial part of the Indenture Trust Estate, or the winding-up or
liquidation of the Lease Trust's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive
days; or
(vi) the commencement by the Lease Trust of a
voluntary case under any applicable federal or State bankruptcy,
insolvency or other similar law now or hereafter in effect, or the
consent by the Lease Trust to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Lease Trust
to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Lease Trust or for any substantial part of the Indenture Trust Estate,
or the making by the Lease Trust of any general assignment for the
bene-
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fit of creditors, or the failure by the Lease Trust generally to pay
its debts as such debts become due, or the taking of action by the
Lease Trust in furtherance of any of the foregoing.
The Lease Trustee shall deliver to the Indenture Trustee,
within five days after the occurrence thereof, written notice in the form of an
Officers' Certificate of any event which with the giving of notice and the
lapse of time would become an Event of Default under clauses (iii) and (iv)
above, its status and what action the Lease Trustee is taking or proposes to
take with respect thereto.
Section 5.2 Acceleration of Maturity; Rescission and
Annulment. If an Event of Default should occur and be continuing, then and in
every such case the Indenture Trustee or the Senior Noteholders of Senior Notes
evidencing not less than a majority of the Outstanding Amount of the Senior
Notes may declare all the Senior Notes to be immediately due and payable, by a
notice in writing to the Lease Trustee (and to the Indenture Trustee if given
by Senior Noteholders), and upon any such declaration the unpaid principal
amount of such Senior Notes, together with accrued and unpaid interest thereon
through the date of acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of maturity
has been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter set forth in this Article
V, the Senior Noteholders of Senior Notes evidencing not less than a majority
of the Outstanding Amount of the Senior Notes, by written notice to the Lease
Trustee and the Indenture Trustee, may rescind and annul such declaration and
its consequences if:
(i) the Lease Trust has paid or deposited with the
Indenture Trustee a sum sufficient to pay
(A) all payments of principal of and interest on
all Senior Notes and all other amounts that would then be due
hereunder or upon such Senior Notes if the Event of Default
giving rise to such acceleration had not occurred; and
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(B) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel; and
(ii) all Events of Default, other than the
nonpayment of the principal of the Senior Notes that has become due
solely by such acceleration, have been cured or waived as provided in
Section 5.12.
No such rescission shall affect any subsequent default or
impair any right consequent thereto.
Section 5.3 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee. (a) The Lease Trust covenants that if (i)
default is made in the payment of any interest on any Senior Note when the same
becomes due and payable, and such default continues for a period of five days,
or (ii) default is made in the payment of the principal of any Senior Note at
Stated Maturity or the Redemption Date, the Lease Trust will, upon demand of
the Indenture Trustee, pay to it, for the benefit of such Senior Noteholders,
the whole amount then due and payable on such Senior 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 Senior Note Interest Rate borne by
the Senior Notes 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 Indenture
Trustee and its agents, attorneys and counsel.
(b) In case the Lease Trust shall fail forthwith to pay such
amounts upon such demand, the Indenture Trustee, in its own name and as trustee
of an express trust, may institute a Proceeding for the collection of the sums
so due and unpaid, and may prosecute such Proceeding to judgment or final
decree, and may enforce the same against the Lease Trust or other obligor upon
such Senior Notes and collect in the manner provided by law out of the property
of the Lease Trust or other obligor upon such Senior Notes, wherever situated,
the moneys adjudged or decreed to be payable.
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(c) If an Event of Default occurs and is continuing, the
Indenture Trustee may, as more particularly provided in Section 5.4, in its
discretion, proceed to protect and enforce its rights and the rights of the
Senior Noteholders, by such appropriate Proceedings as the Indenture 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 Indenture Trustee by this
Indenture or by law; provided that the Series 1996-1 Certificates may be sold
only as provided in Section 5.4 or Section 7.1 of the Series 1996-1 Supplement,
or as required by Section 9.2 of the Lease Trust Agreement; and provided,
further, that in connection with any sale pursuant to such Section 9.2 of the
Lease Trust Agreement, the Series 1996-1 Assets will be distributed to the
purchaser thereof, in accordance with terms of the FCTT Agreement and such
Section 9.2.
(d) In case there shall be pending, relative to the Lease
Trust or any other obligor upon the Senior Notes or any Person having or
claiming an ownership interest in the Indenture 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 Lease Trust
or its property or such other obligor or Person, or in case of any other
comparable judicial Proceedings relative to the Lease Trust or other obligor
upon the Senior Notes, or to the creditors or property of the Lease Trust or
such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Senior Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Indenture Trustee shall have made any demand pursuant to the provisions of this
Section 5.3, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the
whole amount of principal and interest owing and unpaid in respect of
the Senior Notes and to file such other papers or documents as may be
neces-
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sary or advisable in order to have the claims of the Indenture Trustee
(including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of all expenses
and liabilities incurred, and all advances and disbursements made, by
the Indenture Trustee and each predecessor Indenture Trustee, except
as a result of negligence or bad faith) and of the Senior Noteholders
allowed in such Proceedings;
(ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Senior Noteholders 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 Senior
Noteholders and of the Indenture 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 Indenture Trustee or the Senior Noteholders allowed in
any judicial proceedings relative to the Lease Trust, 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 Senior Noteholders to
make payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Senior
Noteholders, to pay to the Indenture Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances and
disbursements made, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence or bad faith, and any other amounts
due the Indenture Trustee under Section 6.7.
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(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Senior Noteholder any plan of reorganization, arrangement,
adjustment or composition affecting the Senior Notes or the rights of any
related Senior Noteholder or to authorize the Indenture Trustee to vote in
respect of the claim of any Senior Noteholder in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Senior Notes, may be enforced by the Indenture
Trustee without the possession of any of the Senior Notes or the production
thereof in any trial or other Proceedings relative thereto, and any such action
or Proceedings instituted by the Indenture 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, advances, disbursements and compensation of the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel shall be for the ratable benefit of the Senior
Noteholders in respect of which such judgment has been recovered.
(g) In any Proceedings brought by the Indenture Trustee (and
also any Proceedings involving the interpretation of any provision of this
Indenture to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Senior Noteholders, and it shall not
be necessary to make any Senior Noteholder a party to any such Proceedings.
Section 5.4 Remedies; Priorities. (a) If an Event of
Default shall have occurred and be continuing, the Indenture Trustee may do one
or more of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as
trustee of an express trust for the collection of all amounts then
payable on the Senior Notes or under this Indenture with respect
thereto, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Lease Trust and any other obligor upon
such Senior Notes moneys adjudged due;
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(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Indenture Trust Estate;
(iii) exercise any remedies of a secured party under
the UCC and take any other appropriate action to protect and enforce
the rights and remedies of the Indenture Trustee and the Senior
Noteholders; and
(iv) after a declaration of acceleration of the
maturity of the Senior Notes pursuant to Section 5.2, sell the
Indenture 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, unless directed to sell the Indenture Trust
Estate in accordance with Section 9.2 of the Lease Trust Agreement,
the Indenture Trustee may not sell or otherwise liquidate the
Indenture Trust Estate following an Event of Default, other than an
Event of Default described in Section 5.1(i) or (ii), unless (I)(A)
Senior Noteholders holding 100% of the Outstanding Amount of the
Senior Notes consent thereto, (B) the proceeds of such sale or
liquidation are sufficient to discharge in full all amounts then due
and unpaid upon the Senior Notes for principal and interest and all
amounts payable to the Subordinated Noteholders and the Lease Trust
Certificateholders or (C) the Indenture Trustee determines (but shall
have no obligation to make such determination) that the Indenture
Trust Estate will not continue to provide sufficient funds for the
payment of principal of and interest on the Senior Notes as they would
have become due if the Senior Notes had not been declared due and
payable, and the Indenture Trustee obtains the consent of Senior
Noteholders holding not less than 66-2/3% of the Outstanding Amount of
the Senior Notes and provided further that the Indenture Trustee may
not sell the Indenture Trust Estate except pursuant to Section 9.2 of
the Lease Trust Agreement unless it shall first have obtained an
Opinion of Counsel that such sale will not cause FCTT or an interest
therein or portion thereof to be classified
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as an association (or publicly traded partnership) taxable as a
corporation for federal income tax purposes. In determining such
sufficiency or insufficiency with respect to clauses (B) and (C), the
Indenture Trustee may, but need not, obtain, at the expense of the
Lease Trust, 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
Indenture Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property
pursuant to this Article V upon sale of the Indenture Trust Estate, it shall
pay out such money or property held as Collateral for the benefit of the Senior
Noteholders in the following order:
FIRST: to the Indenture Trustee for all amounts due under
Section 6.7;
SECOND: to the Administrative Agent for reimbursement of all
outstanding Sale Proceeds Advances and Monthly Payment Advances;
THIRD: to the Administrative Agent for due and unpaid Series
1996-1 Administrative Fees;
FOURTH: to Senior Noteholders for amounts due and unpaid on
the Senior Notes for interest plus interest on any defaulted interest
at the applicable Senior Note Interest Rate, in respect of which or
for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Senior Notes for interest;
FIFTH: to the Lease Trust Paying Agent for amounts due and
unpaid on the Subordinated Notes for interest plus interest on any
overdue interest at the Subordinated Note Interest Rate, in respect of
which or for the benefit of which such money has been collected;
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SIXTH: to the Certificate Distribution Account for amounts
due and unpaid on the Lease Trust Certificates for interest plus
interest on any overdue interest at the Certificate Interest Rate, in
respect of which or for the benefit of which such money has been
collected;
SEVENTH: to the Senior Noteholders of Class A-1 Senior Notes
and the Senior Noteholders of Class A-2 Senior Notes in payment of the
principal amount due and unpaid on the Senior Notes, ratably, without
preference or priority of any kind, according to the principal amount
due and payable on the Class A-1 Senior Notes and the Class A-2 Senior
Notes; and
EIGHTH: to the Lease Trustee for distributions in respect of
principal to the Subordinated Noteholders and the Lease Trust
Certificateholders in accordance with the terms of the Subordinated
Notes and the Lease Trust Agreement;
provided, however, that any money or property paid out pursuant to clause FIFTH
above which is thereafter deposited into the Cash Collateral Account by the
Lease Trust Paying Agent in accordance with Section 6.5 of the Program
Operating Lease shall be withdrawn by the Indenture Trustee and paid out in
accordance with clauses FIFTH, SIXTH, SEVENTH and EIGHTH above, in that order
of priority.
The Indenture Trustee may fix a record date and payment date
for any payment to Senior Noteholders pursuant to this Section 5.4(b). At
least 15 days before such record date, the Lease Trustee shall mail to each
Senior Noteholder and the Indenture Trustee a notice that states the record
date, the payment date and the amount to be paid.
Section 5.5 Optional Preservation of the Series 1996-1
Assets. If the Senior Notes have been declared to be due and payable under
Section 5.2 following an Event of Default and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee may,
unless directed to sell pursuant to Section 9.2 of the Lease Trust Agreement,
but need not, elect to maintain possession of the Indenture Trust Estate. It
is the desire of the parties hereto and the
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Senior Noteholders that there be at all times sufficient funds for the payment
of principal of and interest on the Senior Notes, and the Indenture Trustee
shall take such desire into account when determining whether or not to maintain
possession of the Indenture Trust Estate. In determining whether to maintain
possession of the Indenture Trust Estate, the Indenture Trustee may, but need
not, obtain at the expense of the Lease Trust 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
Indenture Trust Estate for such purpose. Notwithstanding the foregoing
provisions of this Section 5.5 and Section 5.4, the Indenture Trustee shall
sell the Indenture Trust Estate if so instructed by the Lease Trustee pursuant
to Section 9.2 of the Lease Trust Agreement, and the proceeds of such sale will
be deposited in the Series 1996-1 Payments Account and distributed in
accordance with Sections 2.7 and 8.4(b).
Section 5.6 Limitation of Suits. No Senior Noteholder 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 Senior Noteholder has previously given
written notice to the Indenture Trustee of a continuing Event of
Default;
(ii) Senior Noteholders holding not less than 25% of
the Outstanding Amount of the Senior Notes have made written request
to the Indenture Trustee to institute such Proceeding in respect of
such Event of Default in its own name as Indenture Trustee hereunder;
(iii) such Senior Noteholder or Senior Noteholders
have offered to the Indenture Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in complying with such
request;
(iv) the Indenture Trustee for 60 days after its
receipt of such notice, request and offer of indemnity has failed to
institute such Proceedings; and
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(v) no direction inconsistent with such written
request has been given to the Indenture Trustee during such 60-day
period by the Senior Noteholders holding not less than a majority of
the Outstanding Amount of the Senior Notes;
it being understood and intended that no Senior Noteholder, or group of Senior
Noteholders, 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 Senior Noteholders or to obtain or to seek to obtain
priority or preference over any other Senior Noteholders or to enforce any
right under this Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting
or inconsistent requests and indemnity from two or more groups of Senior
Noteholders, each representing less than a majority of the Outstanding Amount
of the Senior Notes, the Indenture Trustee in its sole discretion may determine
what action, if any, shall be taken, notwithstanding any other provisions of
this Indenture.
Section 5.7 Unconditional Rights of Senior Noteholders To
Receive Principal and Interest. Notwithstanding any other provisions in this
Indenture, any Senior Noteholder shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
its Senior Note on or after the respective due dates thereof expressed in such
Senior 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
Senior Noteholder.
Section 5.8 Restoration of Rights and Remedies. If the
Indenture Trustee or any Senior 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 Indenture Trustee or to such Senior Noteholder, then and in every such case
the Lease Trust, the Indenture Trustee and the Senior Noteholders shall,
subject to any determination in such
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Proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee and
the Senior Noteholders shall continue as though no such Proceeding had been
instituted.
Section 5.9 Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Indenture Trustee or to the
Senior 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 5.10 Delay or Omission Not a Waiver. No delay or
omission of the Indenture Trustee or any Senior Noteholder 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 Indenture Trustee or to the Senior Noteholders may
be exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Senior Noteholders, as the case may be.
Section 5.11 Control by Senior Noteholders. The Senior
Noteholders holding not less than a majority of the Outstanding Amount of the
Senior Notes shall have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee
with respect to the Senior Notes or exercising any trust or power conferred on
the Indenture 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 5.4,
any direction to the Indenture Trustee to sell or liquidate the
Indenture Trust Estate shall be by the Senior Noteholders holding not
less than 100% of the Outstanding Amount of the Senior Notes;
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(iii) if the conditions set forth in Section 5.5
have been satisfied and the Indenture Trustee elects to retain the
Indenture Trust Estate pursuant to such Section 5.5, and except in the
case of a sale of the Indenture Trust Estate pursuant to Section 9.2
of the Lease Trust Agreement then any direction to the Indenture
Trustee by Senior Noteholders holding less than 100% of the
Outstanding Amount of the Senior Notes to sell or liquidate the
Indenture Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not inconsistent with
such direction;
provided, however, that the Indenture Trustee need not take any action that it
determines might expose it to personal liability or might materially adversely
affect or unduly prejudice the rights of any Senior Noteholders not consenting
to such action.
Section 5.12 Waiver of Past Defaults. Prior to the
declaration of the acceleration of the maturity of the Senior Notes as provided
in Section 5.2, Senior Noteholders holding not less than a majority of the
Outstanding Amount of the Senior 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 Senior Notes or (b) in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of
each Senior Noteholder. In the case of any such waiver, the Lease Trust, the
Indenture Trustee and the Senior Noteholders 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.
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Section 5.13 Undertaking for Costs. All parties to this
Indenture agree, and each Senior Noteholder by such Senior Noteholder'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 Indenture Trustee for any
action taken, suffered or omitted by it as Indenture 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 5.13 shall not apply to (a)
any suit instituted by the Indenture Trustee, (b) any suit instituted by any
Senior Noteholder, or group of Senior Noteholders, in each case holding in the
aggregate more than 10% of the Outstanding Amount of the Senior Notes or (c)
any suit instituted by any Senior Noteholder for the enforcement of the payment
of principal of or interest on any Senior Note on or after the respective
Stated Maturity expressed in such Senior Note and in this Indenture (or, in the
case of redemption, on or after the Redemption Date).
Section 5.14 Waiver of Stay or Extension Laws. The Lease
Trust 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 Lease Trust (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 5.15 Action on Senior Notes. The Indenture Trustee's
right to seek and recover judgment on the Senior 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
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remedies of the Indenture Trustee or the Senior Noteholders shall be impaired
by the recovery of any judgment by the Indenture Trustee against the Lease
Trust or by the levy of any execution under such judgment upon any portion of
the Indenture Trust Estate or upon any of the assets of the Lease Trust.
Section 5.16 Performance and Enforcement of Certain
Obligations. (a) Promptly following a request from the Indenture Trustee to
do so, the Lease Trustee, on behalf of and at the expense of the Lease Trust,
agrees to take all such lawful action as the Indenture Trustee may request to
compel or secure the performance and observance by RCL Trust 1996-1 and the
Administrative Agent, as applicable, of each of their obligations to the Lease
Trust under or in connection with the Program Operating Lease and the
Administrative Agency Agreement, respectively, in accordance with the terms
thereof, and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Lease Trust under or in connection with each such
agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of RCL Trust
1996-1 or the Administrative Agent, as the case may be, thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by RCL Trust 1996-1 or the Administrative Agent, as the case
may be, of its obligations under the Program Operating Lease or the
Administrative Agency Agreement, as applicable.
(b) If an Event of Default has occurred and is continuing,
the Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of Senior
Noteholders holding not less than a majority of the Outstanding Amount of the
Senior Notes shall, exercise all rights, remedies, powers, privileges and
claims of the Lease Trust against the RCL Trustee and the Administrative Agent
under or in connection with the Program Operating Lease and the Administrative
Agency Agreement as supplemented by the Series 1996-1 Supplement, respectively,
including the right or power to take any action to compel or secure performance
or observance by RCL Trust 1996-1 or the Administrative Agent, as the case may
be, of its obligations to the Lease Trust thereunder and to give any consent,
request, notice, direction, approval,
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extension or waiver under the Program Operating Lease or the Administrative
Agency Agreement, and any right of the Lease Trust to take such action shall be
suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.1 Duties of Indenture Trustee. (a) If an Event of
Default has occurred and is continuing, the Indenture Trustee shall exercise
the rights and powers vested in it by this Indenture and use 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 Indenture 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 Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture 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 Indenture Trustee and
conforming to the requirements of this Indenture; provided, however,
that the Indenture Trustee shall examine any such certificates and
opinions, which by any provision hereof are specifically required to
be furnished to the Indenture Trustee, to determine whether or not
they conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act or its own
wilful misconduct, except that:
(i) this paragraph does not limit the effect of
Section 6.1(b);
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(ii) the Indenture Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer
unless it is proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Indenture 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 5.11.
(d) Every provision of this Indenture that in any way relates
to the Indenture Trustee is subject to Sections 6.1(a), (b), (c) and (g).
(e) The Indenture Trustee shall not be liable for interest on
any money received by it except as the Indenture Trustee may agree in writing
with the Lease Trustee.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms
of this Indenture or the Administrative Agency Agreement.
(g) No provision of this Indenture shall require the
Indenture 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 Indenture Trustee
shall be subject to the provisions of this Section 6.1 and to the provisions of
the TIA.
(i) The Indenture Trustee shall not be deemed to have
knowledge of any Default or other event unless a Responsible Officer has actual
knowledge thereof or has received written notice thereof in accordance with the
provisions of this Indenture.
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Section 6.2 Rights of Indenture Trustee. (a) The Indenture
Trustee may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper Person. The Indenture Trustee need not investigate any fact or
matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from
acting, it may require an Officers' Certificate or an Opinion of Counsel. The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on the Officers' Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or nominee, and the Indenture
Trustee shall not be responsible for any misconduct or negligence on the part
of, or for the supervision of, the Administrative Agent, any co-trustee or
separate trustee appointed in accordance with the provisions of Section 6.10 or
any other such agent, attorney, custodian or nominee appointed with due care by
it hereunder.
(d) The Indenture 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 Indenture Trustee's
conduct does not constitute wilful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the
advice of such counsel or any Opinion of Counsel relating to this Indenture and
the Senior 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 Indenture Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture or to honor
the request or direction of any of the Senior Noteholders pursuant to this
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Indenture unless such Senior Noteholders shall have offered to the Indenture
Trustee reasonable security or indemnity against the reasonable costs,
expenses, disbursements, advances and liabilities which might be incurred by
it, its agents and its counsel in compliance with such request or direction.
(g) Any request or direction of the Lease Trust mentioned
herein shall be sufficiently evidenced by an Issuer Request.
Section 6.3 Individual Rights of Indenture Trustee. The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Senior Notes and may otherwise deal with the Lease Trust or its
Affiliates with the same rights it would have if it were not Indenture Trustee.
Any Paying Agent, Senior Note Registrar, co-registrar, co-paying agent,
co-trustee or separate trustee agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
Section 6.4 Indenture Trustee's Disclaimer. The Indenture
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Senior Notes, it shall not be
accountable for the Lease Trust's use of the proceeds from the Senior Notes,
and it shall not be responsible for any statement in the Indenture or in any
document issued in connection with the sale of the Senior Notes or in the
Senior Notes, all of which shall be taken as the statements of the Lease Trust,
other than the Indenture Trustee's certificate of authentication.
Section 6.5 Notice of Defaults; Bankruptcy of RCL Trust
1996-1 or Ford Credit Leasing. (a) If a Default occurs and is continuing and
if it is known to a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall notify the Rating Agencies within two Business Days and shall
mail to each Senior 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 Senior Note (including payments pursuant to the mandatory redemption
provisions of such Senior Note), the Indenture Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the
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notice is in the interests of Senior Noteholders; provided, however, that in
the case of any Default of the character specified in Section 5.1(iv), no such
notice to Senior Noteholders shall be given until at least 30 days after the
occurrence thereof.
(b) If, pursuant to Section 9.2 of the Lease Trust Agreement,
the Indenture Trustee receives notice from the Lease Trustee, RCL Trust 1996-1
or Ford Credit Leasing of the occurrence of a Bankruptcy, insolvency or
termination with respect to a holder of the Lease Trust Certificates issued to
RCL Trust 1996-1 and Ford Credit Leasing on the Closing Date, the Indenture
Trustee shall give prompt written notice to the Senior Noteholders of the
occurrence of such event. Upon termination of the Trust pursuant to such
Section 9.2, the Indenture Trustee shall, if so directed by the Owner Trustee,
sell the assets of the Lease Trust (other than the Series 1996-1 Payments
Account) in a commercially reasonable manner and on commercially reasonable
terms. In connection with any such sale the Series 1996-1 Assets shall be
distributed out of FCTT and the purchaser shall take delivery of such Series
1996-1 Assets and, with respect to the Series 1996-1 Leased Vehicles, shall
cause the related Certificates of Title to be reregistered in the name of or at
the direction of the purchaser. The proceeds of such sale shall be deposited
in the Series 1996-1 Payments Account for distribution in accordance with the
terms of this Indenture.
Section 6.6 Reports by Indenture Trustee to Senior
Noteholders. The Indenture Trustee shall deliver, if provided to the Indenture
Trustee by the Lease Trust, to each Senior Noteholder such information as may
be required to enable such holder to prepare its federal and State income tax
returns.
Section 6.7 Compensation and Indemnity. Pursuant to Section
4.1 of the Series 1996-1 Supplement the Administrative Agent shall pay to the
Indenture Trustee from time to time reasonable compensation for its services
rendered by it hereunder and reimburse the Indenture Trustee for all reasonable
out-of-pocket expenses, advances and disbursements incurred or made by it,
including costs of collection. The Indenture Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
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expenses of the Indenture Trustee to be reimbursed shall include the reasonable
compensation and expenses, disbursements and advances of the Indenture
Trustee's agents, counsel, accountants and experts. The Lease Trust shall or
shall cause the Administrative Agent to indemnify the Indenture Trustee
individually or in its capacity as Indenture Trustee for, and to hold it
harmless against, any and all loss, liability or expense (including attorneys'
fees) incurred by it in connection with the acceptance or the administration of
this trust and the performance of its duties hereunder including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The
Indenture Trustee shall notify the Lease Trustee and the Administrative Agent
promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Lease Trustee and the Administrative Agent
shall not relieve the Lease Trust or the Administrative Agent of its
obligations hereunder. The Lease Trust shall or shall cause the Administrative
Agent to defend the claim if so requested by the Indenture Trustee and the
Indenture Trustee may have separate counsel and the Lease Trust shall or shall
cause the Administrative Agent to pay the fees and expenses of such counsel.
Neither the Lease Trust nor the Administrative Agent need reimburse any expense
or indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee's own wilful misconduct, negligence or
bad faith.
The Lease Trust's payment obligations to the Indenture Trustee
pursuant to this Section 6.7 shall survive the discharge of this Indenture.
When the Indenture Trustee incurs expenses after the occurrence of a Default
set forth in Section 5.l(v) or (vi) with respect to the Lease Trust, 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.
Section 6.8 Replacement of Indenture Trustee. Senior
Noteholders holding not less than a majority in Outstanding Amount of the
Senior Notes may remove the Indenture Trustee without cause by so notifying the
Lease Trustee and the Indenture Trustee and following such removal may appoint
a successor Indenture Trustee. The
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Indenture Trustee may resign at any time by so notifying the Lease Trustee and
the Senior Noteholders. The Lease Trustee shall remove the Indenture Trustee
if:
(i) the Indenture Trustee fails to comply with
Section 6.11;
(ii) the Indenture Trustee is adjudged to be a
bankrupt or insolvent;
(iii) a receiver or other public officer takes
charge of the Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes
incapable of acting.
If the Indenture Trustee resigns or is removed by Senior
Noteholders holding not less than a majority of the Outstanding Amount of the
Senior Notes or by the Lease Trustee or if a vacancy exists in the office of
Indenture Trustee for any reason (the Indenture Trustee in such event being
referred to herein as the retiring Indenture Trustee), the Lease Trustee shall
promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee and to the
Lease Trustee. Thereupon, if all sums due the retiring Indenture Trustee
pursuant to Section 6.7 have been paid in full, the resignation or removal of
the retiring Indenture Trustee shall become effective, and the successor
Indenture Trustee, without any further act, deed or conveyance, shall have all
the rights, powers and duties of the Indenture Trustee under this Indenture
subject to satisfaction of the Rating Agency Condition. The successor
Indenture Trustee shall mail a notice of its succession to Senior Noteholders,
which shall include the name of the successor Indenture Trustee and the address
of its principal corporate trust office. If all sums due the retiring
Indenture Trustee pursuant to Section 6.7 have been paid in full, the retiring
Indenture Trustee shall promptly transfer all property held by it as Indenture
Trustee to the successor Indenture Trustee.
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If a successor Indenture Trustee does not take office within
60 days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee, the Lease Trust or Senior Noteholders holding not
less than a majority in Outstanding Amount of the Senior Notes may petition any
court of competent jurisdiction for the appointment of a successor Indenture
Trustee.
If the Indenture Trustee fails to comply with Section 6.11,
any Senior Noteholder who has been a bona fide Senior Noteholder for at least
six months may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Any resignation or removal of the Indenture Trustee and
appointment of a successor Indenture Trustee pursuant to any of the provisions
of this Section 6.8 shall not become effective until acceptance of appointment
by the successor Indenture Trustee pursuant to this Section 6.8 and payment in
full of all sums due to the outgoing Indenture Trustee pursuant to Section 6.7.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section 6.8, the Lease Trust's and the Administrative Agent's obligations under
Section 6.7 shall continue for the benefit of the retiring Indenture Trustee.
Section 6.9 Successor Indenture Trustee by Merger. If the
Indenture 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 Indenture Trustee;
provided that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall provide
the Rating Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the
trusts created by this Indenture any of the Senior Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee
may adopt the certificate of authentication of any predecessor trustee, and
deliver such
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Senior Notes so authenticated; and in case at that time any of the Senior Notes
shall not have been authenticated, any successor to the Indenture Trustee may
authenticate such Senior Notes either in the name of any predecessor hereunder
or in the name of the successor to the Indenture Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Senior
Notes or in this Indenture provided that the certificate of the Indenture
Trustee shall have.
Section 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture 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 of the Collateral may at the time be located, the
Indenture 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 Collateral, and to vest in such Person or Persons, in such capacity and for
the benefit of the Senior Noteholders, such title to the Collateral, or any
part hereof, and, subject to the other provisions of this Section 6.10, such
powers, duties, obligations, rights and trusts as the Indenture 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 Senior Noteholders of the appointment of any
co-trustee or separate trustee shall be required under Section 6.8.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Indenture Trustee shall be conferred or
imposed upon and exercised or performed by the Indenture 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 Indenture 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 Indenture Trustee shall
be incompetent or un-
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qualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
Indenture Trust Estate 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 Indenture
Trustee;
(ii) no separate trustee or co-trustee hereunder
shall be personally liable by reason of any act or omission of any
other trustee hereunder; and
(iii) the Indenture 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
Indenture 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 Indenture 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 Indenture 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 Indenture Trustee. Every such instrument
shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture 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 Indenture 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 Indenture Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
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Section 6.11 Eligibility; Disqualification. The Indenture
Trustee shall at all times satisfy the requirements of TIA Section 310(a). The
Indenture 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 and it shall have a long term debt rating of investment grade or
better by the Rating Agencies. The Indenture Trustee shall comply with TIA
Section 310(b).
Section 6.12 Preferential Collection of Claims Against Lease
Trustee. The Indenture Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). An Indenture Trustee
who has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
Section 6.13 Indenture Trustee as Holder of Series 1996-1
Certificates. So long as any Senior Notes are Outstanding, to the extent that
the Lease Trustee has rights as a "Holder" of the Series 1996-1 Certificates or
is entitled to consent to any actions taken by RCL Trust 1996-1 or the holders
of the Lease Trust Certificates issued to RCL Trust 1996-1 and Ford Credit
Leasing on the Closing Date, the Lease Trustee may initiate such action or
grant such consent only with consent of the Indenture Trustee. To the extent
that the Indenture Trustee has rights as a "Holder" of the Series 1996-1
Certificates, or has the right to consent or withhold consent with respect to
actions taken by RCL Trust 1996-1 or the holders of the Lease Trust
Certificates issued to RCL Trust 1996-1 and Ford Credit Leasing on the Closing
Date or the Lease Trustee (acting on behalf of the Lease Trust), such rights
shall be exercised, or consent granted (or withheld) upon the written direction
of Senior Noteholders holding a majority of the Outstanding Amount of the
Senior Notes; provided that with respect to Section 7.1(b) of the
Administrative Agency Agreement and Section 4.3(f) of the FCTT Agreement, such
direction shall require the written direction of Senior Noteholders holding
100% of the Outstanding Amount of the Senior Notes.
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ARTICLE VII
SENIOR NOTEHOLDERS' LISTS AND REPORTS
Section 7.1 Lease Trustee To Furnish Indenture Trustee Names
and Addresses of Senior Noteholders. The Lease Trustee will furnish or cause
to be furnished to the Indenture Trustee (i) not more than five days after each
Record Date, a list, in such form as the Indenture Trustee may reasonably
require, of the names and addresses of the Senior Noteholders as of such Record
Date, (ii) at such other times as the Indenture Trustee may request in writing,
within 30 days after receipt by the Lease Trustee 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 (i) the
Indenture Trustee is the Senior Note Registrar or (ii) the Senior Notes are
issued as Book-Entry Senior Notes no such list shall be required to be
furnished to the Indenture Trustee.
Section 7.2 Preservation of Information; Communications to
Senior Noteholders. (a) The Indenture Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses of the Senior
Noteholders contained in the most recent list furnished to the Indenture
Trustee as provided in Section 7.1 and the names and addresses of Senior
Noteholders received by the Indenture Trustee in its capacity as Senior Note
Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in Section 7.1 upon receipt of a new list so furnished.
(b) Senior Noteholders may communicate pursuant to TIA
Section 312(b) with other Senior Noteholders with respect to their rights
under this Indenture or under the Senior Notes. Upon receipt by the Indenture
Trustee of any request by three or more Senior Noteholders or by one or more
Senior Noteholders holding not less than 25% of the Outstanding Amount of the
Senior Notes to receive a copy of the current list of Senior Noteholders
(whether or not made pursuant to TIA Section 312(b)), the Indenture Trustee
shall promptly notify the Administrative Agent by providing to the
Administrative Agent a copy of such request and a copy of the list of Senior
Noteholders produced in response thereto.
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(c) The Lease Trustee, the Indenture Trustee and the Senior
Note Registrar shall have the protection of TIA Section 312(c).
Section 7.3 Reports by Lease Trustee. (a) The Lease Trustee,
on behalf of the Lease Trust, shall:
(i) file with the Indenture Trustee, within 15 days
after the Lease Trust 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 Lease Trust may be required to file
with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act;
(ii) file with the Indenture 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 Lease Trust 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 Indenture Trustee (and the
Indenture Trustee shall transmit by mail to all Senior Noteholders
described in TIA Section 313(c)) such summaries of any information,
documents and reports required to be filed by the Lease Trustee on
behalf of the Lease Trust pursuant to clauses (i) and (ii) of this
Section 7.3(a) as may be required by rules and regulations prescribed
from time to time by the Commission.
(b) Unless the Lease Trust otherwise determines, the fiscal
year of the Lease Trust shall end on December 31 of each year.
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Section 7.4 Reports by Indenture Trustee. If required by TIA
Section 313(a), within 60 days after each May 15 beginning with May 15, 1997,
the Indenture Trustee shall mail to each Senior Noteholder as required by TIA
Section 313(c) a brief report dated as of such date that complies with TIA
Section 313(a). The Indenture Trustee also shall comply with TIA Section
313(b).
A copy of each report at the time of its mailing to Senior
Noteholders shall be filed by the Indenture Trustee with the Commission and
each stock exchange, if any, on which the Senior Notes are listed.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.1 Collection of Money. Except as otherwise
expressly provided herein, the Indenture 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 Indenture Trustee pursuant to this
Indenture. The Indenture 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 the Indenture Trust Estate,
the Indenture 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 8.2 Accounts. (a) Pursuant to Section 5.1(c) of the
Series 1996-1 Supplement, the Administrative Agent shall establish and maintain
an Eligible Account in the name of the Indenture Trustee until the Outstanding
Amount of the Senior Notes has been reduced to zero, and thereafter in the name
of the Lease Trustee, initially at The Chase Manhattan Bank which is designated
as the "Series 1996-1 Payments Account." The Series 1996-1 Payments Account
shall be under the sole dominion
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and control of the Indenture Trustee, until the Outstanding Amount of the
Senior Notes has been reduced to zero, and thereafter under the sole dominion
and control of the Lease Trustee; provided, that the Administrative Agent may
make deposits to or request the Indenture Trustee to make deposits to or
withdrawals from the Series 1996-1 Payments Account in accordance with Section
5.2(e) of the Series 1996-1 Supplement. All monies deposited from time to time
in the Series 1996-1 Payments Account pursuant to this Indenture and the Series
1996-1 Supplement shall be held by the Indenture Trustee as part of the
Collateral and shall be applied only upon the terms and conditions of the Basic
Documents.
Any amounts on deposit in the Series 1996-1 Payments Account
shall be invested by the Indenture Trustee until the Outstanding Amount of the
Senior Notes has been reduced to zero, and thereafter by the Lease Trustee, in
Permitted Investments which mature on the Business Day preceding the next
succeeding Payment Date. No such investment shall be sold prior to maturity.
All investment earnings on amounts deposited to the Series 1996-1 Payments
Account, including any proceeds thereof, shall be credited to the
Administrative Agent, and losses, if any, and investment expenses resulting
from Permitted Investments in the Series 1996-1 Payments Account shall be
charged to the Administrative Agent. All such investment income shall be
reported for federal income tax purposes as earned by the Administrative
Agent. The authority of the Administrative Agent to make deposits to the
Series 1996-1 Payments Account is revocable at any time by the Indenture
Trustee until the Outstanding Amount of Senior Notes has been reduced to zero,
and thereafter by the Lease Trustee. If the Series 1996-1 Payments Account
ceases to be an Eligible Account, then the Series 1996-1 Payments Account shall
be moved to an institution at which the Series 1996-1 Payments Account shall be
an Eligible Account within 10 Business Days (or such longer period not to
exceed 30 calendar days as to which each Rating Agency may consent).
(b) Pursuant to Section 5.1(a) of the Series 1996-1
Supplement, there has been established and there shall be maintained an account
in the name of the Indenture Trustee until the Outstanding Amount of the Senior
Notes has been reduced to zero, and thereafter in the name of the Lease
Trustee, at an Eligible Institution
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(which initially shall be The Chase Manhattan Bank), which is designated as the
FCTT Specified Assets Collection Account, Series 1996-1 (the "Series 1996-1
Collection Account"). The Series 1996-1 Collection Account shall be under the
sole dominion and control of the Indenture Trustee until the Outstanding Amount
of the Senior Notes has been reduced to zero, and thereafter under the sole
dominion and control of the Lease Trustee; provided, that the Administrative
Agent may make deposits to and withdrawals from or request the Indenture
Trustee to make withdrawals from the Series 1996-1 Collection Account in
accordance with Sections 5.2(c) and (d) of the FCTT Agreement, Section 6.2(b)
of the Administrative Agency Agreement and Section 5.2(a) of the Series 1996-1
Supplement. All deposits to and withdrawals from the Series 1996-1 Collection
Account shall be made only upon the terms and conditions of the Basic
Documents.
Any amounts on deposit in the Series 1996-1 Collection Account
shall be invested by the Indenture Trustee until the Outstanding Amount of the
Senior Notes has been reduced to zero, and thereafter by the Lease Trustee, in
Permitted Investments which mature on the Business Day preceding the next
succeeding Payment Date. No such investment shall be sold prior to maturity.
All investment earnings on amounts deposited to the Series 1996-1 Collection
Account, including any proceeds thereof, shall be credited to the Series 1996-1
Collection Account, and losses, if any, and investment expenses resulting from
Permitted Investments in the Series 1996-1 Collection Account shall be charged
to the Series 1996-1 Collection Account. All such investment income shall be
reported for federal income tax purposes as earned (i) 99% by RCL Trust 1996-1
and (ii) 1% by Ford Credit Leasing; the 99% accruing to RCL Trust 1996-1 shall
be reported by Ford Credit and Ford Credit Leasing in accordance with their
respective Percentage Interests in RCL Trust 1996-1. The authority of the
Administrative Agent to make deposits to and withdrawals from the Series 1996-1
Collection Account is revocable at any time by the Indenture Trustee until the
Outstanding Amount of Senior Notes has been reduced to zero, and thereafter by
the Lease Trustee. If the institution at which the Series 1996-1 Collection
Account is established ceases to be an Eligible Institution, then the Series
1996-1 Collection Account shall be moved to an Eligible Institution within 10
Business Days (or such longer period not to exceed 30
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calendar days as to which each Rating Agency may consent).
(c) Pursuant to Section 5.1(b) of the Series 1996-1
Supplement, there has been established and there shall be maintained an account
in the name of the Indenture Trustee until the Outstanding Amount of the Senior
Notes has been reduced to zero, and thereafter in the name of the Lease
Trustee, at an Eligible Institution (which initially shall be The Chase
Manhattan Bank), which is designated as the "Series 1996-1 Payahead Account."
The Series 1996-1 Payahead Account shall be under the sole dominion and control
of the Indenture Trustee until the Outstanding Amount of the Senior Notes has
been reduced to zero, and thereafter under the sole dominion and control of the
Lease Trustee; provided, that the Administrative Agent may make deposits to and
withdrawals from or request the Indenture Trustee to make withdrawals from the
Series 1996-1 Payahead Account in accordance with Section 6.1(a) of the
Administrative Agency Agreement and Section 5.2(b) of the Series 1996-1
Supplement. All deposits to and withdrawals from the Series 1996-1 Payahead
Account shall be made only upon the terms and conditions of the Basic
Documents.
Any amounts on deposit in the Series 1996-1 Payahead Account
shall be invested by the Indenture Trustee until the Outstanding Amount of the
Senior Notes has been reduced to zero, and thereafter by the Lease Trustee, in
Permitted Investments which mature on the Business Day preceding the next
succeeding Distribution Date. No such investment shall be sold prior to
maturity. All investment earnings on amounts deposited to the Series 1996-1
Payahead Account, including any proceeds thereof, shall be credited to the RCL
Account, and losses, if any, and investment expenses resulting from Permitted
Investments in the Series 1996-1 Payahead Account shall be charged to the RCL
Account. All such investment income shall be reported for federal income tax
purposes as earned (i) 99% by RCL Trust 1996-1 and (ii) 1% by Ford Credit
Leasing; the 99% accruing to RCL Trust 1996-1 shall be reported by Ford Credit
and Ford Credit Leasing in accordance with their respective Percentage
Interests in RCL Trust 1996-1. The authority of the Administrative Agent to
make deposits to and withdrawals from the Series 1996-1 Payahead Account is
revocable at any time by the Indenture Trustee until the Outstanding Amount of
the
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Senior Notes has been reduced to zero, and thereafter by the Lease Trustee. If
the institution at which the Series 1996-1 Payahead Account is established
ceases to be an Eligible Institution, then the Series 1996-1 Payahead Account
shall be moved to an Eligible Institution within 10 Business Days (or such
longer period not to exceed 30 calendar days as to which each Rating Agency may
consent).
(d) Pursuant to Section 5.1(b) of the Lease Trust Agreement
there has been established and there shall be maintained an Eligible Account in
the name of the Indenture Trustee until the Outstanding Amount of the Senior
Notes has been reduced to zero, and thereafter in the name of the Lease
Trustee, initially at The Chase Manhattan Bank which is designated as the
"Certificate Distribution Account". The Certificate Distribution Account shall
be under the sole dominion and control of the Indenture Trustee until the
Outstanding Amount of the Senior Notes has been reduced to zero, and thereafter
under the sole dominion and control of the Lease Trustee; provided, that the
Lease Trustee may make withdrawals from the Certificate Distribution Account in
accordance with Section 3(c) of the Lease Trust Paying Agent Agreement and the
Administrative Agent may make withdrawals from the Certificate Distribution
Account in accordance with Section 5.2(e) of the Series 1996-1 Supplement. All
deposits to and withdrawals from the Certificate Distribution Account shall be
made only upon the terms and conditions of the Basic Documents.
Any amounts on deposit in the Certificate Distribution Account
shall be invested by the Indenture Trustee until the Outstanding Amount of the
Senior Notes has been reduced to zero, and thereafter by the Lease Trustee, in
Permitted Investments which mature on the Business Day preceding the next
succeeding Payment Date. No such investment shall be sold prior to maturity.
All investment earnings on amounts deposited to the Certificate Distribution
Account, including any proceeds thereof, shall be credited to the Cash
Collateral Account, and losses, if any, and investment expenses resulting from
Permitted Investments in the Certificate Distribution Account shall be charged
to the Cash Collateral Account. All such investment income shall be reported
for federal income tax purposes as earned (i) 99% by RCL Trust 1996- 1 and (ii)
1% by Ford Credit Leasing; the 99% accruing to
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RCL Trust 1996-1 shall be reported by Ford Credit and Ford Credit Leasing in
accordance with their respective Percentage Interests in RCL Trust 1996-1. If
the Certificate Distribution Account ceases to be an Eligible Account, then the
Certificate Distribution Account shall be moved to an institution at which the
Certificate Distribution Account shall be an Eligible Account within 10
Business Days (or such longer period not to exceed 30 calendar days as to which
each Rating Agency may consent).
(e) Pursuant to Section 3.5(a) of the Program Operating
Lease, there has been established and there shall be maintained an account (the
"Cash Collateral Account") at an Eligible Institution which agrees to the
provisions of Section 3.7 of the Program Operating Lease, in the name of "RCL
Trust 1996-1, subject to the security interest of The Chase Manhattan Bank, as
Indenture Trustee, and Ford Credit Auto Lease Trust 1996-1, as secured parties"
and which initially shall be The Chase Manhattan Bank. The Cash Collateral
Account has been initially established at The Chase Manhattan Bank. The Cash
Collateral Account shall be under the sole dominion and control of the
Indenture Trustee until the Outstanding Amount of the Senior Notes has been
reduced to zero, and thereafter, under the sole dominion and control of the
Lease Trustee. Cash Collateral Account Property shall be invested by the
Indenture Trustee until the Outstanding Amount of the Senior Notes has been
reduced to zero, and thereafter by the Lease Trustee, in Cash Collateral
Account Investments. All investment earnings on amounts deposited to the Cash
Collateral Account, including any proceeds thereof, shall be credited to the
Cash Collateral Account, and losses, if any, and investment expenses resulting
from Cash Collateral Account Investments in the Cash Collateral Account shall
be charged to the Cash Collateral Account. All such investment income shall be
reported for federal income tax purposes as earned (i) 99% by RCL Trust 1996-1
and (ii) 1% by Ford Credit Leasing; the 99% accruing to RCL Trust 1996-1 shall
be reported by Ford Credit and Ford Credit Leasing in accordance with their
respective Percentage Interests in RCL Trust 1996-1. If the institution at
which the Cash Collateral Account is maintained ceases to be an Eligible
Institution, then the Cash Collateral Account shall be moved to an Eligible
Institution within ten Business Days
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(or such longer period not to exceed 30 calendar days as to which each Rating
Agency may consent).
Section 8.3 Cash Collateral Account Certificate; Disbursement
and Payment Instructions. (a) On the second Business Day preceding each
Payment Date, the Lease Trustee shall cause the Administrative Agent, on behalf
of the Lease Trust, to deliver to the Indenture Trustee a certificate (the
"Cash Collateral Account Certificate") setting forth the following information
with respect to such Payment Date:
(i) the Series 1996-1 Administrative Fee for the
preceding Accrual Period;
(ii) the Required Interest Payment;
(iii) the Cash Collateral Amount on the Business Day
preceding such Payment Date; and
(iv) the Cash Collateral Required Draw Amount and
the Cash Collateral Additional Draw Amount.
(b) On the second Business Day preceding each Payment Date
the Lease Trustee shall cause the Administrative Agent, on behalf of the Lease
Trust, to deliver to the Indenture Trustee a certificate (the "Disbursement and
Payment Instructions") including the following information with respect to such
Payment Date, the related Accrual Period and Series 1996-1:
(i) the amount of interest accrued during the
preceding Interest Accrual Period on the Class A-1 Senior Notes and
the Class A-2 Senior Notes, respectively, the amounts payable with
respect to such interest, and any resulting shortfall with respect to
each such Class (separately stated);
(ii) the amount of interest accrued during the
preceding Interest Accrual Period on the Subordinated Notes, the
amounts payable with respect to such interest (net of amounts paid
pursuant to Section 6.6 of the Program Operating Lease), and any
resulting shortfall (separately stated);
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(iii) the amount of interest accrued during the
preceding Interest Accrual Period on the Lease Trust Certificates, the
amounts payable with respect to such interest, and any resulting
shortfall (separately stated);
(iv) the amount of principal to be paid on the Class
A-1 Senior Notes and the Class A-2 Senior Notes, respectively
(separately stated);
(v) the Series 1996-1 Administrative Fee; and
(vi) the amount, if any, to be distributed to the
Lease Trustee for payment of principal of the Subordinated Notes (net
of amounts paid pursuant to Section 6.6 of the Program Operating
Lease) and Lease Trust Certificates in accordance with the terms
thereof.
(c) The Indenture Trustee shall have no duty or obligation to
verify or confirm the accuracy of any of the information or numbers set forth
in any of the certificates required to be delivered to the Indenture Trustee in
accordance with this Section 8.3 and the Indenture Trustee shall be fully
protected in relying upon such certificates.
Section 8.4 Disbursement of Funds. (a) Pursuant to Section
5.2(e) of the Series 1996-1 Supplement, on the Business Day preceding each
Payment Date, the Administrative Agent shall withdraw an amount equal to the
Available Sale Proceeds from the Series 1996-1 Collection Account and deposit
such amount in the Series 1996-1 Payments Account. Pursuant to Sections 5.2(e)
of the Series 1996-1 Supplement, on the Business Day preceding each Payment
Date, the Administrative Agent shall withdraw an amount equal to the Cash
Collateral Deposit Amount from the Series 1996-1 Collection Account and deposit
such amount into the Cash Collateral Account.
On the Business Day preceding each Payment Date, the Indenture
Trustee shall, in accordance with the Cash Collateral Account Certificate
received from the Administrative Agent pursuant to Section 8.3(a), withdraw
from the Cash Collateral Account and deposit in the
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Series 1996-1 Payments Account the Cash Collateral Required Draw Amount.
(b) On each Payment Date the Indenture Trustee shall, in
accordance with the Disbursement and Payment Instructions received from the
Administrative Agent pursuant to Section 8.3(b), withdraw from the Series
1996-1 Payments Account the Available Funds on deposit therein and apply such
amounts in accordance with the following priorities:
(i) to the Administrative Agent, the Series 1996-1
Administrative Fee for the preceding Accrual Period;
(ii) to the Senior Noteholders, pro rata without any
priority between Classes, an amount equal to the interest accrued at
the applicable Senior Note Interest Rate set forth in Section 2.1
during the preceding Interest Accrual Period on all Outstanding
Classes of Senior Notes plus any defaulted interest and interest on
any defaulted interest at the applicable Senior Note Interest Rate;
provided however, that if there are not sufficient funds to pay the
entire amount of accrued and unpaid interest then due on the Senior
Notes, such funds shall be applied to the payment of such interest on
each Class of Senior Notes pro rata on the basis of the total of such
interest due on the Senior Notes including any defaulted interest at
the applicable Senior Note Interest Rate;
(iii) to the Lease Trust Paying Agent, for payment to
the Subordinated Noteholders, pro rata, an amount equal to the
interest accrued on the Outstanding Amount of the Subordinated Notes
at the Subordinated Note Interest Rate plus any overdue interest and
interest on any overdue interest at the Subordinated Note Interest
Rate during the preceding Interest Accrual Period (net of amounts paid
pursuant to Section 6.6 of the Program Operating Lease);
(iv) to the Certificate Distribution Account, an
amount equal to the interest accrued (including any interest accrued
but not deposited to the Certificate Distribution Account on the
previous Payment Date) on the Aggregate Certificate Balance
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at the Certificate Interest Rate plus any overdue interest and
interest on any overdue interest at the Certificate Interest Rate
during the preceding Interest Accrual Period plus any Certificate
Distribution Draw Amount on such Payment Date;
(v) to the Senior Noteholders, as payments of
principal in the following order of priority:
(A) to Senior Noteholders of Class A-1 Senior Notes
pro rata, until the Class A-1 Senior Notes have been paid in
full; and
(B) to Senior Noteholders of Class A-2 Senior Notes
pro rata, until the Class A-2 Senior Notes have been paid in
full;
provided, however, that on any Payment Date occurring after
the maturity of the Senior Notes has been accelerated pursuant to Section 5.2,
amounts to be applied pursuant to this clause (v) shall be paid as principal to
the Senior Noteholders of Class A-1 Senior Notes and the Senior Noteholders of
Class A-2 Senior Notes, ratably, without preference or priority of any kind,
according to the principal amount due and payable on the Class A-1 Senior Notes
and the Class A-2 Senior Notes.
Amounts remaining, if any, after the application of funds pursuant to clauses
(i) through (v) above shall be distributed to the Lease Trustee for
distribution in accordance with the terms of the Subordinated Notes and the
Lease Trust Agreement.
(c) On each Payment Date, the Indenture Trustee shall, in
accordance with the Cash Collateral Account Certificate received from the
Administrative Agent pursuant to Section 8.3(a), withdraw the Cash Collateral
Additional Draw Amount from the Cash Collateral Account and apply such amounts
to pay each of the items specified in Section 8.4(b) without duplication of the
amounts already paid on such Payment Date, in accordance with the priorities
set forth therein.
(d) On the Business Day preceding each Semiannual Payment
Date for which the Available Funds, as set forth in the Disbursement and
Payment Instructions re-
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ceived from the Administrative Agent pursuant to Section 8.3(b), is less than
the sum of the amounts specified in clauses (i), (ii) and (iii) of Section
8.4(b), the Indenture Trustee shall withdraw the Certificate Distribution Draw
Amount, as set forth in the Disbursement and Payment Instructions, from the
Certificate Distribution Account, deposit such amount in the Series 1996-1
Payments Account and apply such amount on the related Semiannual Payment Date
to pay each of the items set forth in clauses (i), (ii) and (iii) of Section
8.4(b) without duplication of the amounts already paid on such Semiannual
Payment Date, in accordance with the priorities set forth therein.
(e) On each Payment Date the Indenture Trustee shall send, by
first class mail, a report to each Person who was a Senior Noteholder on the
prior Record Date including the following information with respect to such
Payment Date and the related Accrual Period:
(i) the Note Pool Factor of each Class of Senior
Notes;
(ii) the amount of interest paid to each Outstanding
Class of Senior Notes;
(iii) the amount of principal paid to each
Outstanding Class of Senior Notes;
(iv) the aggregate amount of Series 1996-1
Collections deposited in the Series 1996-1 Collection Account (stating
separately the components thereof);
(v) the Aggregate Net Sale Proceeds Advances
deposited in the Series 1996-1 Collection Account;
(vi) the Aggregate Net Monthly Payment Advances
deposited in the Series 1996-1 Collection Account;
(vii) the amount of Available Sale Proceeds (stating
separately the components thereof);
(viii) the Cash Collateral Required Draw Amount and
the Cash Collateral Additional Draw Amount;
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(ix) the Available Funds;
(x) the amount distributed to the Lease Trust Paying
Agent for payment of interest (net of amounts paid pursuant to Section
6.6 of the Program Operating Lease) to the Subordinated Noteholders;
(xi) the amount deposited in the Certificate
Distribution Account for payment of interest to the Lease Trust
Certificateholders;
(xii) the Outstanding Amount of each Class of Senior
Notes and of the Subordinated Notes, the Aggregate Certificate Balance
and the Pool Balance (separately stated);
(xiii) the Cash Collateral Amount (after giving
effect to all deposits and withdrawals with respect to such Payment
Date);
(xiv) the aggregate of the Series 1996-1 Credit
Losses for each of the three preceding Collection Periods;
(xv) the aggregate of the Series 1996-1 Residual
Losses for each of the three preceding Collection Periods; and
(xvi) the amounts invested in Permitted Investments
of each of the banks listed in the definition thereof (separately
stated) as of the last day of each of the three Collection Periods
preceding such Payment Date.
Section 8.5 General Provisions Regarding Accounts. Subject
to Section 6.1(c), the Indenture Trustee shall not in any way be held liable by
reason of any insufficiency in the Series 1996-1 Payments Account, the Series
1996-1 Collection Account, the Series 1996-1 Payahead Account, the Certificate
Distribution Account or the Cash Collateral Account resulting from any loss on
any Permitted Investment or Cash Collateral Account Investment, as applicable,
included therein except for losses attributable to the Indenture Trustee's
failure to make payments on any such Permitted Investments or Cash Collateral
Account Investments issued by the Indenture
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Trustee, in its commercial capacity as principal obligor and not as trustee, in
accordance with their terms.
Section 8.6 Release of Indenture Trust Estate. The Indenture
Trustee shall, at such time as there are no Senior Notes Outstanding and all
sums due the Indenture Trustee pursuant to Section 6.7 have been paid, release
any remaining portion of the Indenture Trust Estate that secured the Senior
Notes from the lien of this Indenture, release to the Lease Trustee or any
other Person entitled thereto any funds then on deposit in the Series 1996-1
Payments Account and deliver the Subordinated Notes to the Lease Trustee which
shall hold the Subordinated Notes in accordance with Section 6.4 of the Program
Operating Lease. The Indenture Trustee shall release property from the lien of
this Indenture pursuant to this Section 8.6 only upon receipt of an Issuer
Request accompanied by an Officers' Certificate, an Opinion of Counsel and (if
required by the TIA) Independent Certificates in accordance with TIA Section
Section 314(c) and 314(d)(1) meeting the applicable requirements of Section
11.1.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1 Supplemental Indentures Without Consent of Senior
Noteholders. (a) Without the consent of the Senior Noteholders, but with prior
notice to the Rating Agencies, the Lease Trustee, on behalf of the Lease Trust,
and the Indenture Trustee, when requested by an Issuer Request, 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 TIA as in force at the date of
the execution thereof), in form satisfactory to the Indenture 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 Indenture Trustee any property
subject or required to be subjected to the lien of this Indenture, or
to subject to the lien of this Indenture additional property;
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(ii) to evidence the succession, in compliance with
the applicable provisions hereof, of another Person to the Lease
Trust, and the assumption by any such successor of the covenants of
the Lease Trust herein and in the Senior Notes contained;
(iii) to add to the covenants of the Lease Trust,
for the benefit of the Senior Noteholders, or to surrender any right
or power herein conferred upon the Lease Trust;
(iv) to convey, transfer, assign, mortgage or pledge
any property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement
any provision herein or in any supplemental indenture which may be
defective or inconsistent with any other provision herein or in any
supplemental indenture or to make any other provisions with respect to
matters or questions arising under this Indenture or in any
supplemental indenture which shall not be inconsistent with the
provisions of this Indenture; provided that such other provisions
shall not adversely affect the interests of the Senior Noteholders; or
(vi) to evidence and provide for the acceptance of
the appointment hereunder by a successor trustee with respect to the
Senior 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; or
(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.
The Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture
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and to make any further appropriate agreements and stipulations that may be
therein contained.
(b) The Lease Trustee, on behalf of the Lease Trust, and the
Indenture Trustee, when requested by an Issuer Request, may, also without the
consent of the Senior Noteholders, 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 (other than the modifications set forth in Section 9.2
which require consent of the Holder of each Senior Note affected thereby) the
rights of the Senior Noteholders under this Indenture; provided, however, that
(i) such action shall not, as evidenced by an Opinion of Counsel, materially
adversely affect the interests of any Senior Noteholder, (ii) the Rating Agency
Condition shall have been satisfied with respect to such action and (iii) such
action shall not, as evidenced by an Opinion of Counsel, (x) affect the
treatment of the Senior Notes as debt for federal income tax purposes, (y) be
deemed to cause a taxable exchange of the Senior Notes for federal income tax
purposes or (z) cause the Issuer, RCL Trust 1996-1 or FCTT to be taxable as an
"association" or publicly traded partnership taxable as a corporation for
federal income tax purposes.
Section 9.2 Supplemental Indentures with Consent of Senior
Noteholders. The Lease Trustee, on behalf of the Lease Trust, and the
Indenture Trustee, when requested by an Issuer Request, also may, with the
consent of Senior Noteholders holding not less than a majority of the
Outstanding Amount of the Senior Notes, by Act of such Senior Noteholders
delivered to the Lease Trustee and the Indenture Trustee, 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 Senior
Noteholders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Senior Noteholder of each
Outstanding Senior Note affected thereby:
(i) change the Stated Maturity of or the date of
payment of any installment of principal of or interest on any Senior
Note, or reduce the prin-
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cipal amount thereof, the interest rate thereon or the Redemption
Price with respect thereto, change the provisions of this Indenture
relating to the application of collections on, or the proceeds of the
sale of, the Indenture Trust Estate to payment of principal of or
interest on the Senior Notes, or change any place of payment where, or
the coin or currency in which, any Senior 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 Senior Notes on or after the respective due
dates thereof (or, in the case of redemption, on or after the
Redemption Date);
(ii) reduce the percentage of the Outstanding Amount
of the Senior Notes, the consent of the Senior Noteholders of which is
required for any such supplemental indenture, or the consent of the
Senior Noteholders of which is required for any waiver of compliance
with provisions of this Indenture or Defaults or Events of Default
hereunder and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso
to the definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount
of the Senior Notes required to direct the Indenture Trustee to direct
the Lease Trustee to sell or liquidate the Indenture Trust Estate
pursuant to Section 5.4 if the proceeds of such sale would be
insufficient to pay the Outstanding Amount plus accrued but unpaid
interest on the Senior Notes;
(v) modify any provision of this Section 9.2 except
to increase any percentage specified herein or to provide that certain
additional provisions of this Indenture or the other Basic Documents
cannot be modified or waived without the consent of the Senior
Noteholder of each Outstanding Senior Note affected thereby;
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(vi) modify any of the provisions of this Indenture
in such manner as to affect the calculation of the amount of any
payment of interest or principal due on any Senior Note on any Payment
Date (including the calculation of any of the individual components of
such calculation);
(vii) permit the creation of any lien ranking prior
to or on a parity with the lien of this Indenture with respect to any
part of the Indenture Trust Estate or, except as otherwise permitted
or contemplated herein, terminate the lien of this Indenture on any
property at any time subject hereto or deprive any Senior Noteholder
of the security provided by the lien of this Indenture; or
(viii) impair the right to institute suit for the
enforcement of payment as provided in Section 5.7.
Any such supplemental indenture shall be executed only upon
delivery of an Opinion of Counsel to the same effect as in Section
9.1(b)(iii)(z) above. The Indenture Trustee may in its discretion determine
whether or not any Senior Notes would be affected by any supplemental indenture
and any such determination shall be conclusive upon all Senior Noteholders,
whether theretofore or thereafter authenticated and delivered hereunder. The
Indenture Trustee shall not be liable for any such determination made in good
faith.
It shall not be necessary for any Act of Senior Noteholders
under this Section 9.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof.
Promptly after the execution by the Lease Trustee, on behalf
of the Lease Trust, and the Indenture Trustee of any supplemental indenture
pursuant to this Section 9.2, the Indenture Trustee shall mail to the Senior
Noteholders 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 Indenture Trustee to mail such notice, or any defect
therein, shall not, however, in any way
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impair or affect the validity of any such supplemental indenture.
Section 9.3 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, the Indenture Trustee shall be entitled to
receive, and subject to Sections 6.1 and 6.2, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights, duties,
liabilities or indemnities under this Indenture or otherwise.
Section 9.4 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 Senior Notes affected thereby, and the respective
rights, limitations of rights, obligations, duties, liabilities and immunities
under this Indenture of the Indenture Trustee, the Lease Trust, the Lease
Trustee and the Senior Noteholders 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 9.5 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 TIA as then in
effect so long as this Indenture is required to be qualified under the TIA.
Section 9.6 Reference in Senior Notes to Supplemental
Indentures. Senior Notes authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article IX may, and if required by
the Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Lease
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Trustee or the Indenture Trustee shall so determine, new Senior Notes so
modified as to conform, in the opinion of the Indenture Trustee and the Lease
Trustee, to any such supplemental indenture may be prepared and executed by the
Lease Trustee, on behalf of the Trust, and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Senior Notes.
ARTICLE X
REDEMPTION OF SENIOR NOTES
Section 10.1 Redemption. The Senior Notes shall be redeemed
in whole, but not in part, for a purchase price equal to the Redemption Price
on any Payment Date on which the Administrative Agent exercises its option to
purchase the Series 1996-1 Certificates pursuant to Section 7.1 of the Series
1996-1 Supplement; provided, however, that the Lease Trust has available funds
sufficient to pay the Redemption Price. The Administrative Agent or the Lease
Trustee shall furnish the Rating Agencies notice of such redemption. If the
Senior Notes are to be redeemed pursuant to this Section 10.1, the Lease
Trustee shall or shall cause the Administrative Agent to furnish notice of such
election to the Indenture Trustee not later than forty-five days (unless a
shorter notice shall be satisfactory to the Indenture Trustee) prior to the
Redemption Date. Pursuant to Section 7.1 of the Series 1996-1 Supplement, on
the Business Day preceding the Redemption Date the Administrative Agent shall
deposit the Series 1996-1 Asset Amount plus an amount equal to one month's
interest calculated at a rate equal to the weighted average Retail Operating
Lease Factor for such Series 1996-1 Assets with the Indenture Trustee in the
Series 1996-1 Collection Account whereupon all such Senior Notes shall be due
and payable on the Redemption Date upon the furnishing of a notice complying
with Section 10.2 to each Senior Noteholder.
Section 10.2 Form of Redemption Notice. Notice of redemption
under Section 10.1 shall be given by the Indenture Trustee by facsimile or by
first-class mail, postage prepaid, transmitted or mailed at least thirty days
prior to the Redemption Date to each Senior Noteholder, on the Record Date
immediately preceding the
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Redemption Date, at such Senior Noteholder's address appearing in the Senior
Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the place where the Senior Notes to be
redeemed are to be surrendered for payment of the Redemption Price
(which shall be the office or agency of the Lease Trustee to be
maintained as provided in Section 3.2); and
(iv) that on the Redemption Date, the Redemption
Price will become due and payable upon each such Senior Note and that
interest thereon shall cease to accrue for and after said date.
Notice of redemption of the Senior Notes shall be given by the
Indenture Trustee in the name and at the expense of the Lease Trust. Failure
to give notice of redemption, or any defect therein, to any Senior Noteholder
shall not impair or affect the validity of the redemption of any other Senior
Note.
Section 10.3 Senior Notes Payable on Redemption Date. The
Senior Notes to be redeemed shall, following notice of redemption as required
by Section 10.2, become due and payable on the Redemption Date at the
Redemption Price and (unless the Lease Trust shall default in the payment of
the Redemption Price) no interest shall accrue on the Redemption Price for any
period from and including the Redemption Date.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Compliance Certificates and Opinions, etc. (a)
Upon any application or request by the Lease Trustee to the Indenture Trustee
to take any action under any provision of this Indenture, the Lease Trustee
shall furnish to the Indenture Trustee (i) an Officer's Certificate stating
that all conditions prece-
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dent, 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 11.1, 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 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 Collateral or other
property or securities with the Indenture Trustee that is to be made the basis
for the release of any property or securities subject to the lien of this
Indenture, the Lease Trustee shall, in addition to any obligation imposed in
Section 11.1(a) or elsewhere in this Indenture, furnish to the Indenture
Trustee an Officers' Certificate certifying or stating the opinion of each
Person signing such certificate as to the fair
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value (within 90 days of such deposit) to the Lease Trust of the Collateral or
other property or securities to be so deposited.
(ii) Whenever the Lease Trustee is required to
furnish to the Indenture Trustee an Officers' Certificate certifying
or stating the opinion of any signer thereof as to the matters
described in clause (i) above, the Lease Trustee shall also deliver to
the Indenture Trustee an Independent Certificate as to the same
matters, if the fair value of the property or securities to be so
deposited and of all other such securities made the basis of any such
withdrawal or release since the commencement of the then-current
calendar year of the Lease Trust, 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 Senior Notes, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Lease Trust as set forth
in the related Officers' Certificate is less than $25,000 or less than
one percent of the Outstanding Amount of the Senior Notes.
(iii) Whenever any property or securities are to be
released from the lien of this Indenture, the Lease Trustee shall also
furnish to the Indenture Trustee an Officers' 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 under
this Indenture in contravention of the provisions hereof.
(iv) Whenever the Lease Trustee is required to
furnish to the Indenture Trustee an Officers' Certificate certifying
or stating the opinion of any signer thereof as to the matters
described in clause (iii) above, the Lease Trustee shall also furnish
to the Indenture 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 released from the lien of this Indenture
since the commencement of the then
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current calendar 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 Senior 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 Officers'
Certificate is less than $25,000 or less than one percent of the then
Outstanding Amount of the Senior Notes.
(v) Notwithstanding Section 2.9 or any other
provision of this Section 11.1, the Lease Trustee may (A) collect,
liquidate, sell or otherwise dispose of the Collateral as and to the
extent permitted or required by the Basic Documents and (B) make cash
payments out of the Series 1996-1 Payments Account as and to the
extent permitted or required by the Basic Documents.
Section 11.2 Form of Documents Delivered to Indenture
Trustee. In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer 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 Administrative Agent, the RCL Trustee or the Lease Trustee, stating
that the information with respect to such factual matters is in the possession
of the Administrative Agent, the RCL Trustee or the Lease Trustee, unless such
officer or counsel knows, or in the exercise
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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 Indenture Trustee, it is provided that the
Lease Trustee shall deliver, on behalf of the Lease Trust, any document as a
condition of the granting of such application, or as evidence of the Lease
Trust'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 Lease Trust to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however,
be construed to affect the Indenture 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 11.3 Acts of Senior Noteholders. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Senior Noteholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Senior 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
Indenture Trustee, and, where it is hereby expressly required, to the Lease
Trustee. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Senior
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 6.1) conclusive in
favor of the Indenture Trustee and the
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Lease Trustee, if made in the manner provided in this Section 11.3.
(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 Indenture
Trustee deems sufficient.
(c) The ownership of Senior Notes shall be proved by the
Senior Note Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the holder of any Senior Note shall bind the
holder of every Senior 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 Indenture Trustee or the Lease Trustee in reliance thereon,
whether or not notation of such action is made upon such Senior Note.
Section 11.4 Notices, etc., to Indenture Trustee, Lease
Trustee and Rating Agencies. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Senior Noteholders or other documents
provided or permitted by this Indenture to be made upon, given or furnished to
or filed with:
(a) the Indenture Trustee by any Senior Noteholder, the
Administrative Agent or the Lease Trustee shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the
Indenture Trustee at its Corporate Trust Office, or
(b) the Lease Trustee by the Indenture Trustee, or by any
Senior Noteholder shall be sufficient for every purpose hereunder if in writing
and mailed, first-class, postage prepaid, to the Lease Trustee addressed to:
Ford Credit Auto Lease Trust 1996-1, in care of PNC Bank, Delaware, 222
Delaware Avenue, Wilmington, Delaware 19801, Attention: Michael B. McCarthy,
or at any other address previously furnished in writing to the Indenture
Trustee by the Lease Trustee. The Lease Trustee shall promptly transmit any
notice received by it from the Senior Noteholders to the Indenture Trustee;
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provided, however, that service of process in connection with any litigation
hereunder shall be effected in accordance with applicable law.
Notices required to be given to the Rating Agencies by the
Lease Trustee or the Indenture Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested to (i) in the
case of Moody's Investors Service, at the following address: 99 Church Street,
New York, NY 10007, Attention: ABS Monitoring Group; with a copy to Christina
Cotton and (ii) in the case of Standard & Poor's Ratings Group, at the
following address: Standard & Poor's Ratings Group, 26 Broadway (15th Floor),
New York, New York 10004, Attention: Asset Backed Surveillance Department; or
as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
Section 11.5 Notices to Senior Noteholders; Waiver. Where
this Indenture provides for notice to Senior 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 Senior
Noteholder affected by such event, at his address as it appears on the Senior
Note Register, not later than the latest and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Senior Noteholders is given by mail, neither the failure to mail such notice
nor any defect in any notice so mailed to any particular Senior Noteholder
shall affect the sufficiency of such notice with respect to other Senior
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 Senior Noteholders shall be filed with the
Indenture 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
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of any event of Senior Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture 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 11.6 Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required or deemed to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such required or deemed provision shall
control.
The provisions of TIA Section Section 310 through 317 that
impose duties on any person (including the provisions automatically deemed
included herein unless expressly excluded by this Indenture) are a part of and
govern this Indenture, whether or not physically contained herein.
Section 11.7 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 11.8 Successors and Assigns. All covenants and
agreements in this Indenture and the Senior Notes by the Lease Trust shall bind
its successors and assigns, whether so expressed or not.
All agreements of the Indenture Trustee in this Indenture
shall bind its successors.
Section 11.9 Separability. In case any provision in this
Indenture or in the Senior 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 11.10 Benefits of Indenture. Nothing in this
Indenture or in the Senior Notes, express or implied, shall give to any Person,
other than the parties
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hereto and their successors hereunder, and the Senior Noteholders (and, with
respect to Sections 8.3 and 8.4, the Subordinated Noteholders and the Lease
Trust Certificateholders), and any other party secured hereunder, and any other
Person with an ownership interest in any part of the Indenture Trust Estate,
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 11.11 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 Senior 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 11.12 GOVERNING LAW. THIS INDENTURE SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 11.13 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 11.14 Recording of Indenture. If this Indenture is
subject to recording in any appropriate public recording offices, such
recording is to be effected by the Lease Trustee, on behalf of the Lease Trust,
accompanied by an Opinion of Counsel (which may be counsel to the Indenture
Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to
the effect that such recording is necessary either for the protection of the
Senior Noteholders or any other Person secured hereunder or for the enforcement
of any right or remedy granted to the Indenture Trustee under this Indenture.
Section 11.15 Trust Obligation. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Lease Trust, the
Lease Trustee, or the
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Indenture Trustee on the Senior Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Lease Trustee in their individual
capacities, (ii) any Subordinated Noteholder, (iii) any Lease Trust
Certificateholder or (iv) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Indenture Trustee or the Lease Trustee in
their individual capacities, any Subordinated Noteholder, any Lease Trust
Certificateholder, the Lease Trustee or the Indenture Trustee of any successor
or assign of the Indenture Trustee or the Lease Trustee in their individual
capacities, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Lease Trustee have no such
obligations in their individual capacities) 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 Lease Trust hereunder, the Lease Trustee shall be subject
to, and entitled to the benefits of, the terms and provisions of Article VI,
VII and VIII of the Lease Trust Agreement.
Section 11.16 No Petition. The Indenture Trustee, by
entering into this Indenture, and each Senior Noteholder or Note Owner, by
accepting a Senior Note or, in the case of a Note Owner, a beneficial interest
in a Senior Note, hereby covenants and agree that for a period of one year and
one day after payment in full of the Series 1996-1 Certificates they will not
institute against FCTT, RCL Trust 1996-1, Ford Credit Leasing or the Lease
Trust, or join in any institution against FCTT, RCL Trust 1996-1 Ford Credit
Leasing or the Lease Trust 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 Senior Notes, this Indenture or any of the other
Basic Documents; provided, however, that Senior Noteholders holding 100% of the
Outstanding Amount of the Senior Notes may at any time institute, or join in
any institution of, any such proceedings. Nothing in this Section 11.16 shall
preclude, or be deemed to stop, the Indenture Trustee (i) from taking any
action prior to the
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expiration of the aforementioned one year and one day period in (A) any case or
proceeding voluntarily filed by the Lease Trust or (B) any involuntary
insolvency proceeding filed or commenced by a Person other than the Indenture
Trustee, or (ii) from commencing against the Lease Trust or any of its
properties any legal action which is not a bankruptcy, moratorium or
liquidation.
Section 11.17 Inspection. The Lease Trust agrees that, on
reasonable prior notice, it will permit any representative of the Indenture
Trustee, during the Lease Trust's normal business hours, to examine all the
books of account, records, reports, and other papers of the Lease Trust, to
make copies and extracts therefrom, to cause such books to be audited by
Independent certified public accountants, and to discuss the Lease Trust's
affairs, finances and accounts with the Lease Trust's officers, employees, and
Independent certified public accountants, all at such reasonable times and as
often as may be reasonably requested. The Indenture Trustee shall and shall
cause its representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
[THIS SPACE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the Lease Trustee, on behalf of the Lease
Trust, and the Indenture 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.
FORD CREDIT AUTO LEASE TRUST
1996-1
By: PNC BANK, DELAWARE, not in
its individual capacity but
solely as Lease Trustee
By: /s/ Michael B. McCarthy
----------------------------
Name: Michael B. McCarthy
Title: Vice President
THE CHASE MANHATTAN BANK, not in
its individual capacity but
solely as Indenture Trustee
By: /s/ Michael A. Smith
Name: Michael A. Smith
----------------------------
Title: Vice President
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<PAGE> 101
[Form of Class A-1 Senior Note] EXHIBIT A-1
REGISTERED
No. R-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 34527VAD6
Unless this Senior Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Lease
Trustee or its agent for registration of transfer, exchange or payment, and any
Senior Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
AS SET FORTH HEREIN THE OUTSTANDING PRINCIPAL AMOUNT OF THIS
SENIOR NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
FORD CREDIT AUTO LEASE TRUST 1996-1
5.45125% CLASS A-1 ASSET BACKED SENIOR NOTE
Ford Credit Auto Lease Trust 1996-1 (the "Lease Trust"), a
trust created pursuant to a trust agreement dated as of November 26, 1996
between First Union Bank of Delaware, not in its individual capacity but solely
as trustee of RCL Trust 1996-1, as Depositor and PNC Bank, Delaware, not in its
individual capacity but solely as trustee of the Lease Trust (the "Lease
Trustee"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, upon presentation and surrender of this Senior Note the
principal sum of ONE HUNDRED FIFTY MILLION DOLLARS (U.S. $150,000,000) on the
earlier of the November 15, 1997 Payment Date (the "Stated Maturity")
<PAGE> 102
and the Redemption Date, if any, pursuant to Section 10.1 of the Indenture.
The Lease Trust will pay interest on this Senior Note at the rate per annum
shown above (the "Senior Note Interest Rate") on each Payment Date until the
principal of this Senior Note is paid or made available for payment, on the
principal amount of this Senior Note outstanding on the preceding Payment Date
(after giving effect to all payments of principal made on the preceding Payment
Date). Interest on this Senior Note will accrue from and including the most
recent Payment Date on which interest has been paid to but excluding the
following Payment Date or, if no interest has yet been paid, from and including
November 26, 1996. Interest will be computed on the basis of actual days
elapsed and a 360-day year. Such principal of and interest on this Senior Note
shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Senior Note are payable
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. All payments
made by the Lease Trust with respect to this Senior Note shall be applied first
to interest due and payable on this Senior Note as provided above and then to
the unpaid principal of this Senior Note.
Reference is made to the further provisions of this Senior
Note set forth on the reverse hereof, which shall have the same effect as
though fully set forth on the face of this Senior Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Senior Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any purpose.
A-1-2
<PAGE> 103
IN WITNESS WHEREOF, the Lease Trust has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
Date: November 26, 1996
FORD CREDIT AUTO LEASE TRUST 1996-1,
By: PNC BANK, DELAWARE, not in its
individual capacity but solely as
Lease Trustee under the Lease Trust
Agreement
By:
-------------------------------
Name:
Title:
<PAGE> 104
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Senior Notes designated above and
referred to in the within-mentioned Indenture.
Date: November 26, 1996
THE CHASE MANHATTAN BANK, not in
its individual capacity but
solely as Indenture Trustee
By:
------------------------------
Authorized Signatory
<PAGE> 105
[REVERSE OF SENIOR NOTE]
This Senior Note is one of a duly authorized issue of Senior
Notes of the Lease Trust, designated as its "5.45125% Class A-1 Asset Backed
Senior Notes" (herein called the "Class A-1 Senior Notes") issued under an
Indenture, dated as of November 26, 1996 (such indenture, as supplemented or
amended, is herein called the "Indenture"), between the Lease Trust and The
Chase Manhattan Bank, as trustee (the "Indenture Trustee", which term includes
any successor Indenture Trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Lease Trust, the
Indenture Trustee and the Senior Noteholders. Also issued under the Indenture
are the 5.80% Class A-2 Asset Backed Senior Notes (the "Class A-2 Senior
Notes" and together with the Class A-1 Senior Notes, collectively, the "Senior
Notes"). The Senior Notes are subject to all terms of the Indenture. All
terms used in this Senior Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or
pursuant to the Indenture, as so supplemented or amended.
The Senior Notes are and will be equally and ratably secured
by the Collateral as provided in the Indenture.
Under the Indenture, interest will be payable on February 15,
May 15, August 15, and November 15, of each year or, if any such 15th day is
not a Business Day, the next Business Day (each, a "Payment Date"), commencing
February 17, 1997, to the Person in whose name this Senior Note is registered
at the close of business on the 14th day of the calendar month in which such
Payment Date occurs, or if Definitive Senior Notes have been issued, to the
Person in whose name this Senior Note is registered on the last day of the
calendar month preceding such Payment Date (the "Record Date"). On each
Payment Date, there shall be distributed to such Senior Noteholder the interest
accrued at the Senior Note Interest Rate during the preceding Interest Accrual
Period on the Outstanding Amount of this Senior Note and the principal, if any,
available to be paid on such Payment Date in accordance with the terms of the
Indenture; provided,
A-1-5
<PAGE> 106
however, that no principal shall be paid on the Class A-2 Senior Notes until
the Class A-1 Senior Notes have been paid in full.
As described above, the entire unpaid principal amount of this
Senior Note shall be due and payable on the earlier of the Stated Maturity and
the Redemption Date, if any, pursuant to Section 10.1 of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Senior
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or Senior Noteholders
of Senior Notes evidencing not less than a majority of the Outstanding Amount
of the Senior Notes have declared the Senior Notes to be immediately due and
payable in the manner provided in Section 5.2 of the Indenture. On and after
such date all principal payments on the Senior Notes shall be made to the
Senior Noteholders of the Class A-1 Senior Notes and the Class A-2 Senior Notes
ratably and without preference or priority of any kind until the Outstanding
Amount of the Class A-1 Senior Notes and the Class A- 2 Senior Notes each have
been reduced to zero.
Payments of interest on this Senior Note due and payable on
each Payment Date, together with the payments of principal, if any, to the
extent not in full payment of this Senior Note, shall be made by check mailed
to the Person whose name appears as the Registered Holder of this Senior Note
(or one or more Predecessor Senior Notes) on the Senior Note Register as of the
close of business on each Record Date, except that with respect to Senior Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Senior Note Register as of the
applicable Record Date without requiring that this Senior Note be submitted for
notation of payment. Any reduction in the principal amount of this Senior Note
(or any one or more Predecessor Senior Notes) effected by any payments made on
any Payment Date shall be binding upon all future Senior Noteholders of this
Senior Note and of any Senior Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether
A-1-6
<PAGE> 107
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Senior Note on a Payment Date, then the Indenture Trustee, in the name of
and on behalf of the Lease Trust, will notify the Person who was the Registered
Holder hereof as of the Record Date preceding such Payment Date by notice
mailed prior to such Payment Date and the amount then due and payable shall be
payable only upon presentation and surrender of this Senior Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of
New York.
The Lease Trust shall pay interest on overdue installments of
interest at the Senior Note Interest Rate to the extent lawful.
As provided in the Indenture, the Senior Notes shall be
redeemed in whole, but not in part, on any Payment Date on or after the date on
which the Pool Balance is less than ten percent of the initial Pool Balance and
on which the Administrative Agent exercises its option to purchase the Series
1996-1 Certificates. The Senior Notes to be redeemed shall, following notice
of redemption as required by Section 10.2 of the Indenture, become due and
payable on the Redemption Date at the Redemption Price and (unless the Lease
Trust shall default in the payment of the Redemption Price) no interest shall
accrue on the Redemption Price for any period from and including the Redemption
Date.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Senior Note may be
registered on the Senior Note Register upon surrender of this Senior Note for
registration of transfer at the office or agency designated by the Lease
Trustee pursuant to the Indenture, (i) duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by, the Senior Noteholder of this Senior Note or his attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Senior Note Registrar
which requirements include membership or participation in Securities Transfer
Agent's Medallion Program ("Stamp") or such other "signature guarantee
A-1-7
<PAGE> 108
program" as may be determined by the Senior Note Registrar in addition to, or
in substitution for, Stamp, all in accordance with the Exchange Act, and (ii)
accompanied by such other documents as the Indenture Trustee may require, and
thereupon one or more new Senior Notes of authorized denominations and in the
same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of
transfer or exchange of this Senior Note, but the transferor may be required to
pay a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.
Each Senior Noteholder or Senior Note Owner, by acceptance of
a Senior Note or, in the case of a Senior Note Owner, a beneficial interest in
a Senior Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Lease Trust, the Lease
Trustee or the Indenture Trustee on the Senior Notes or under the Indenture or
any certificate or other writing delivered in connection therewith, against (i)
the Indenture Trustee or the Lease Trustee in their individual capacities, (ii)
any owner of a beneficial interest in the Lease Trust or (iii) any partner,
owner, beneficiary, agent, officer, director or employee of the Indenture
Trustee or the Lease Trustee in their individual capacities, any holder of a
beneficial interest in the Lease Trust, the Lease Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Lease
Trustee in their individual capacities, except as any such Person may have
expressly agreed 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.
The Senior Notes represent obligations of the Lease Trust only
and do not represent interests in, recourse to or obligations of RCL Trust
1996-1, Ford Credit or any of their respective affiliates.
Each Senior Noteholder or Senior Note Owner, by acceptance of
a Senior Note or, in the case of a Senior Note Owner, a beneficial interest in
a Senior Note covenants and agrees that by accepting the benefits of the
A-1-8
<PAGE> 109
Indenture that such Senior Noteholder will not at any time institute against
the Lease Trust, Ford Credit Leasing, FCTT or RCL Trust 1996-1, or join in any
institution against the Lease Trust, Ford Credit Leasing, FCTT or RCL Trust
1996-1 of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or State bankruptcy or
similar law in connection with any obligations relating to the Senior Notes,
the Indenture or the other Basic Documents; provided, however, that Senior
Noteholders holding 100% of the Outstanding Amount of the Senior Notes may
institute or join in any institution of any such proceedings.
Prior to the due presentment for registration of transfer of
this Senior Note, the Lease Trustee, the Indenture Trustee and any agent of the
Lease Trustee or the Indenture Trustee may treat the Person in whose name this
Senior Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Senior Note be overdue, and neither the Lease Trustee, the
Indenture Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Lease Trust and the rights of the Senior Noteholders under
the Indenture at any time by the Lease Trust with the consent of Senior
Noteholders holding not less than a majority of the Outstanding Amount of the
Senior Notes. The Indenture also contains provisions permitting Senior
Noteholders holding specified percentages of the Outstanding Amount of the
Senior Notes, on behalf of all Senior Noteholders, to waive compliance by the
Lease Trust with certain provisions of the Indenture and certain past Defaults
under the Indenture and their consequences. Any such consent or waiver by the
Senior Noteholder of this Senior Note (or any one of more Predecessor Senior
Notes) shall be conclusive and binding upon such Senior Noteholder and upon all
future Senior Noteholders of this Senior Note and of any Senior Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Senior Note. The Indenture also permits the Indenture Trustee to amend
A-1-9
<PAGE> 110
or waive certain terms and conditions set forth in the Indenture without the
consent of the Senior Noteholders.
The term "Lease Trust" as used in this Senior Note includes
any successor to the Lease Trust under the Indenture.
The Senior Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
THIS SENIOR NOTE AND THE INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
No reference herein to the Indenture and no provision of this
Senior Note or of the Indenture shall alter or impair the obligation of the
Lease Trust, which is absolute and unconditional, to pay the principal of and
interest on this Senior Note at the times, place, and rate, and in the coin or
currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither PNC Bank, Delaware in its
individual capacity, any owner of a beneficial interest in the Lease Trust, nor
any of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Senior Note or the Indenture, it being
expressly understood that said covenants, obligations and indemnifications have
been made by the Lease Trustee for the sole purpose of binding the interests of
the Lease Trustee in the assets of the Lease Trust. The Senior Noteholder of
this Senior Note by the acceptance hereof agrees that except as expressly
provided in the Basic Documents, in the case of an Event of Default under the
Indenture, the Senior Noteholder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and
A-1-10
<PAGE> 111
enforcement against, the assets of the Lease Trust for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Senior Note.
A-1-11
<PAGE> 112
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number
of assignee
______________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____________________________________________________________
______________________________________________________________________________
(name and address of assignee)
the within Senior Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _____________, attorney, to transfer said Senior Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: ___________________________________ _____________________________*
Signature Guaranteed:
_____________________________
_____________________________
_____________________________
* Note: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Senior
Note in every particular, without alteration, enlargement or any
change whatsoever.
A-1-12
<PAGE> 113
[Form of Class A-2 Senior Note] EXHIBIT A-2
REGISTERED
No. R-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 34527VAE4
Unless this Senior Note is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the Lease Trustee or its agent for registration of transfer, exchange or
payment, and any Senior Note issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
AS SET FORTH HEREIN THE OUTSTANDING PRINCIPAL AMOUNT OF THIS
SENIOR NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
FORD CREDIT AUTO LEASE TRUST 1996-1
5.80% CLASS A-2 ASSET BACKED SENIOR NOTE
Ford Credit Auto Lease Trust 1996-1 (the "Lease Trust"), a
trust created pursuant to a trust agreement dated as of November 26, 1996
between First Union Bank of Delaware, not in its individual capacity but solely
as trustee of RCL Trust 1996-1, as Depositor and PNC Bank, Delaware, not in its
individual capacity but solely as trustee of the Lease Trust (the "Lease
Trustee"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, upon presentation and surrender of
A-2-1
<PAGE> 114
this Senior Note the principal sum of SIX HUNDRED SIXTY MILLION EIGHT HUNDRED
FORTY-THREE THOUSAND DOLLARS (U.S.$660,843,000) on the earlier of the May 15,
1999 Payment Date (the "Stated Maturity") and the Redemption Date, if any,
pursuant to Section 10.1 of the Indenture. The Lease Trust will pay interest
on this Senior Note at the rate per annum shown above (the "Senior Note
Interest Rate") on each Payment Date until the principal of this Senior Note is
paid or made available for payment, on the principal amount of this Senior Note
outstanding on the preceding Payment Date (after giving effect to all payments
of principal made on the preceding Payment Date). Interest on this Senior Note
will accrue for each Payment Date from and including the 15th day of the
calendar month third preceding the calendar month in which such Payment Date
occurs, to but excluding the 15th day of the calendar month in which such
Payment Date occurs or, if no interest has yet been paid, from November 26,
1996. Interest will be computed on the basis of a 360-day year of twelve
30-day months. Such principal of and interest on this Senior Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Senior Note are payable
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. All payments
made by the Lease Trust with respect to this Senior Note shall be applied first
to interest due and payable on this Senior Note as provided above and then to
the unpaid principal of this Senior Note.
Reference is made to the further provisions of this Senior
Note set forth on the reverse hereof, which shall have the same effect as
though fully set forth on the face of this Senior Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Senior Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any purpose.
A-2-2
<PAGE> 115
IN WITNESS WHEREOF, the Lease Trust has caused this instrument
to be signed, manually or in facsimile, by its Authorized Officer as of the
date set forth below.
Date: November 26, 1996
FORD CREDIT AUTO LEASE TRUST 1996-1,
By: PNC BANK, DELAWARE, not in its
individual capacity but solely as Lease
Trustee under the Lease Trust Agreement
By:_____________________________________
Name:
Title:
<PAGE> 116
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Senior Notes designated above and
referred to in the within-mentioned Indenture.
Date: November 26, 1996
THE CHASE MANHATTAN BANK, not in its
individual capacity but solely as
Indenture Trustee
By:____________________________________
Authorized Signatory
<PAGE> 117
[REVERSE OF SENIOR NOTE]
This Senior Note is one of a duly authorized issue of Senior
Notes of the Lease Trust, designated as its "5.80% Class A-2 Asset Backed
Senior Notes" (herein called the "Class A-2 Senior Notes") issued under an
Indenture, dated as of November 26, 1996 (such indenture, as supplemented or
amended, is herein called the "Indenture"), between the Lease Trust and The
Chase Manhattan Bank, as trustee (the "Indenture Trustee", which term includes
any successor Indenture Trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Lease Trust, the
Indenture Trustee and the Senior Noteholders. Also issued under the Indenture
are the 5.45125% Class A-1 Asset Backed Senior Notes (the "Class A-1 Senior
Notes" and together with the Class A-2 Senior Notes, collectively, the "Senior
Notes"). The Senior Notes are subject to all terms of the Indenture. All
terms used in this Senior Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or
pursuant to the Indenture, as so supplemented or amended.
The Senior Notes are and will be equally and ratably secured
by the Collateral as provided in the Indenture.
Under the Indenture, interest will be payable on February 15,
May 15, August 15 and November 15, of each year or, if any such 15th day is not
a Business Day, the next Business Day (each, a "Payment Date"), commencing
February 17, 1997, to the Person in whose name this Senior Note is registered
at the close of business on the 14th day of the calendar month in which such
Date occurs, or if Definitive Senior Notes have been issued, to the Person in
whose name this Senior Note is registered on the last day of the calendar month
preceding such Payment Date (the "Record Date"). On each Payment Date, there
shall be distributed to such Senior Noteholder the interest accrued at the
Senior Note Interest Rate during the preceding Interest Accrual Period on the
Outstanding Amount of this Senior Note and the principal, if any, available to
be paid on such Payment Date in accordance with the terms of the Indenture;
provided, however, that
A-2-5
<PAGE> 118
no principal shall be paid on the Class A-2 Senior Notes until the Class A-1
Senior Notes have been paid in full.
As described above, the entire unpaid principal amount of this
Senior Note shall be due and payable on the earlier of the Stated Maturity and
the Redemption Date, if any, pursuant to Section 10.1 of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Senior
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or Senior Noteholders
of Senior Notes evidencing not less than a majority of the Outstanding Amount
of the Senior Notes have declared the Senior Notes to be immediately due and
payable in the manner provided in Section 5.2 of the Indenture. On and after
such date all principal payments on the Senior Notes shall be made to the
Senior Noteholders of the Class A-1 Senior Notes and the Class A-2 Senior Notes
ratably and without preference or priority of any kind until the Outstanding
Amount of the Class A-1 Senior Notes and the Class A-2 Senior Notes each have
been reduced to zero.
Payments of interest on this Senior Note due and payable on
each Payment Date, together with the payment of principal, if any, to the
extent not in full payment of this Senior Note, shall be made by check mailed
to the Person whose name appears as the Registered Holder of this Senior Note
(or one or more Predecessor Senior Notes) on the Senior Note Register as of the
close of business on each Record Date, except that with respect to Senior Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Senior Note Register as of the
applicable Record Date without requiring that this Senior Note be submitted for
notation of payment. Any reduction in the principal amount of this Senior Note
(or any one or more Predecessor Senior Notes) effected by any payments made on
any Payment Date shall be binding upon all future Senior Noteholders of this
Senior Note and of any Senior Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.
If funds are expected to be avail-
A-2-6
<PAGE> 119
able, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Senior Note on a Payment Date, then
the Indenture Trustee, in the name of and on behalf of the Lease Trust, will
notify the Person who was the Registered Holder hereof as of the Record Date
preceding such Payment Date by notice mailed prior to such Payment Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Senior Note at the Indenture Trustee's principal Corporate
Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located in The City of New York.
The Lease Trust shall pay interest on overdue installments of
interest at the Senior Note Interest Rate to the extent lawful.
As provided in the Indenture, the Senior Notes shall be
redeemed in whole, but not in part, on any Payment Date on or after the date on
which the Pool Balance is less than ten percent of the initial Pool Balance and
on which the Administrative Agent exercises its option to purchase the Series
1996-1 Certificates. The Senior Notes to be redeemed shall, following notice
of redemption as required by Section 10.2 of the Indenture, become due and
payable on the Redemption Date at the Redemption Price and (unless the Lease
Trust shall default in the payment of the Redemption Price) no interest shall
accrue on the Redemption Price for any period from and including the Redemption
Date.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Senior Note may be
registered on the Senior Note Register upon surrender of this Senior Note for
registration of transfer at the office or agency designated by the Lease
Trustee pursuant to the Indenture, (i) duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by, the Senior Noteholder of this Senior Note or his attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Senior Note Registrar
which requirements include membership or participation in Securities Transfer
Agent's Medallion Program ("Stamp") or such other "signature guarantee program"
as may be determined by the Senior Note Regis-
A-2-7
<PAGE> 120
trar in addition to, or in substitution for, Stamp, all in accordance with the
Exchange Act, and (ii) accompanied by such other documents as the Indenture
Trustee may require, and thereupon one or more new Senior Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for
any registration of transfer or exchange of this Senior Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Senior Noteholder or Senior Note Owner, by acceptance of
a Senior Note or, in the case of a Senior Note Owner, a beneficial interest in
a Senior Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Lease Trust, the Lease
Trustee or the Indenture Trustee on the Senior Notes or under the Indenture or
any certificate or other writing delivered in connection therewith, against (i)
the Indenture Trustee or the Lease Trustee in their individual capacities, (ii)
any owner of a beneficial interest in the Lease Trust or (iii) any partner,
owner, beneficiary, agent, officer, director or employee of the Indenture
Trustee or the Lease Trustee in their individual capacities, any holder of a
beneficial interest in the Lease Trust, the Lease Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Lease
Trustee in their individual capacities, except as any such Person may have
expressly agreed 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.
The Senior Notes represent obligations of the Lease Trust only
and do not represent interests in, recourse to or obligations of RCL Trust
1996-1, Ford Credit or any of their respective affiliates.
Each Senior Noteholder or Senior Note Owner, by acceptance of
a Senior Note or, in the case of a Senior Note Owner, a beneficial interest in
a Senior Note covenants and agrees that by accepting the benefits of the
Indenture that such Senior Noteholder will not at any
A-2-8
<PAGE> 121
time institute against the Lease Trust, Ford Credit Leasing, FCTT or RCL Trust
1996-1, or join in any institution against the Lease Trust, Ford Credit Leasing
or the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or State bankruptcy or
similar law in connection with any obligations relating to the Senior Notes,
the Indenture or the other Basic Documents; provided, however, that Senior
Noteholders holding 100% of the Outstanding Amount of the Senior Notes may
institute or join in any institution of any such proceedings.
Prior to the due presentment for registration of transfer of
this Senior Note, the Lease Trustee, the Indenture Trustee and any agent of the
Lease Trustee or the Indenture Trustee may treat the Person in whose name this
Senior Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Senior Note be overdue, and neither the Lease Trustee, the
Indenture Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Lease Trust and the rights of the Senior Noteholders under
the Indenture at any time by the Lease Trust with the consent of Senior
Noteholders holding not less than a majority of the Outstanding Amount of the
Senior Notes. The Indenture also contains provisions permitting Senior
Noteholders holding specified percentages of the Outstanding Amount of the
Senior Notes, on behalf of all Senior Noteholders, to waive compliance by the
Lease Trust with certain provisions of the Indenture and certain past Defaults
under the Indenture and their consequences. Any such consent or waiver by the
Senior Noteholder of this Senior Note (or any one of more Predecessor Senior
Notes) shall be conclusive and binding upon such Senior Noteholder and upon all
future Senior Noteholders of this Senior Note and of any Senior Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Senior Note. The Indenture also permits the Indenture Trustee to amend or
waive certain terms and conditions set forth in the Indenture without the
consent of the Senior Noteholders.
A-2-9
<PAGE> 122
The term "Lease Trust" as used in this Senior Note includes
any successor to the Lease Trust under the Indenture.
The Senior Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
THIS SENIOR NOTE AND THE INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
No reference herein to the Indenture and no provision of this
Senior Note or of the Indenture shall alter or impair the obligation of the
Lease Trust, which is absolute and unconditional, to pay the principal of and
interest on this Senior Note at the times, place, and rate, and in the coin or
currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither PNC Bank, Delaware in its
individual capacity, any owner of a beneficial interest in the Lease Trust, nor
any of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Senior Note or the Indenture, it being
expressly understood that said covenants, obligations and indemnifications have
been made by the Lease Trustee for the sole purposes of binding the interests
of the Lease Trustee in the assets of the Lease Trust. The Senior Noteholder
of this Senior Note by the acceptance hereof agrees that except as expressly
provided in the Basic Documents, in the case of an Event of Default under the
Indenture, the Senior Noteholder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Lease Trust for any and all liabilities, obligations
and undertakings contained in the Indenture or in this Senior Note.
A-2-10
<PAGE> 123
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number
of assignee
______________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________________________________________________________
______________________________________________________________________________
(name and address of assignee)
the within Senior Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _____________, attorney, to transfer said Senior Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: ___________________________________ _________________________*
Signature Guaranteed:
_________________________
______________________________
_____________________________
* Note: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Senior
Note in every particular, without alteration, enlargement or any
change whatsoever.
A-2-11
<PAGE> 1
EXHIBIT 4.5
SERIES 1996-1 SUPPLEMENT
dated as of
November 26, 1996
to
ADMINISTRATIVE AGENCY AGREEMENT
dated as of
January 31, 1994
among
COMERICA BANK,
as trustee of Ford Credit Titling Trust,
FORD MOTOR CREDIT COMPANY,
as Administrative Agent and initial Beneficiary
of Ford Credit Titling Trust,
and
FORD CREDIT LEASING COMPANY, INC.
as initial Beneficiary of
Ford Credit Titling Trust
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE I
DESIGNATION OF SUPPLEMENT FOR
SERIES 1996-1 CERTIFICATES
Section 1.1 Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
DEFINITIONS
Section 2.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III
THE LEASES
Section 3.1 Representations and Warranties of Administrative Agent . . . . . . . . . . . . . . . . . 3
ARTICLE IV
FEES AND EXPENSES
Section 4.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V
COLLECTIONS
Section 5.1 Establishment of Series Collection Account, Series Payahead
Account and Series 1996-1 Payments Account . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.2 Application and Distribution of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.3 RCL Trust 1996-1 Purchase Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.4 Sale Proceeds Advances and Monthly Payment Advances . . . . . . . . . . . . . . . . . . . 14
Section 5.5 Administrative Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VI
REPORTS TO CERTIFICATEHOLDERS
Section 6.1 Statements to Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
i
<PAGE> 3
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ARTICLE VII
OPTIONAL PURCHASE
Section 7.1 Optional Purchase of Series 1996-1 Certificates . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Provision of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.2 Ratification of Administrative Agency Agreement . . . . . . . . . . . . . . . . . . . . . 17
Section 8.3 Actions on Behalf of the Lease Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.4 Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.5 Third Party Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.6 Holders of the Series 1996-1 Certificates . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.7 Demand Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.9 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
Exhibit A - Schedule of Series 1996-1 Leases and Series 1996-1 Leased
Vehicles
Exhibit B - Form of Series 1996-1 Certificate
Exhibit C - Form of Lease
ii
<PAGE> 4
SERIES 1996-1 SUPPLEMENT, dated and effective as of November
26, 1996 (this "Supplement"), among FORD MOTOR CREDIT COMPANY, a Delaware
corporation ("Ford Credit"), as Administrative Agent, initial Beneficiary of
Ford Credit Titling Trust ("FCTT") and Holder of an Exchangeable Beneficial
Certificate, FORD CREDIT LEASING COMPANY, INC., a Delaware corporation ("Ford
Credit Leasing") as initial Beneficiary of FCTT and Holder of an Exchangeable
Beneficial Certificate, and COMERICA BANK, a Michigan banking corporation, not
in its individual capacity but as trustee for FCTT ("Comerica").
WHEREAS, pursuant to Section 4.3 of the FCTT Agreement, the
Administrative Agent, acting at the unanimous direction of the Holders of
Exchangeable Beneficial Certificates, has delivered to Comerica a Series
Specification Notice listing certain FCTT Assets which are to be designated as
Series 1996-1 Assets;
WHEREAS, on the Series Issue Date Comerica shall issue a
Series of Specified Beneficial Certificates designated as the "Series 1996-1
Certificates" representing in the aggregate a 100 percent interest in the
Series Specified Assets designated as the Series 1996-1 Assets;
WHEREAS, Ford Credit and Ford Credit Leasing intend to
contribute their interest in their respective Series 1996-1 Certificates to RCL
Trust 1996-1, including their rights under the Administrative Agency Agreement
and this Supplement; and
WHEREAS, in order to administer and service the Series 1996-1
Assets in the manner contemplated by the Administrative Agency Agreement the
parties hereto have determined that it is in the best interests of each of the
Beneficiaries of FCTT, the transferees of such Beneficiaries, the
Administrative Agent and Comerica to enter into this Supplement;
NOW THEREFORE, Ford Credit, Ford Credit Leasing and Comerica
hereby agree as follows:
<PAGE> 5
ARTICLE I
DESIGNATION OF SUPPLEMENT FOR
SERIES 1996-1 CERTIFICATES
Section 1.1 Designation. (a) Pursuant to Sections 3.3 and
4.3 of the FCTT Agreement, the Administrative Agent, acting on behalf of FCTT
and the Holders of Exchangeable Beneficial Certificates, has designated the
Leases and Leased Vehicles listed in the Series 1996-1 Specification Notice and
in Exhibit A attached hereto, as the Series Specified Assets with respect to
Series 1996-1 (the "Series 1996-1 Assets") and, in accordance with instructions
of the Holders of the Exchangeable Beneficial Certificates set forth in the
Series 1996-1 Specification Notice, hereby issues to the Holders of the
Exchangeable Beneficial Certificates the Specified Beneficial Certificates in
the form attached hereto as Exhibit B representing the beneficial interest in
such Series 1996-1 Assets to be known as the Series 1996-1 Certificates. The
parties hereto agree to the following supplemental provisions to the
Administrative Agency Agreement with respect to the Series 1996-1 Certificates.
(b) In the event that any term or provision contained
herein shall conflict with or be inconsistent with any term or provision
contained in the Administrative Agency Agreement, the terms and provisions of
this Supplement shall govern.
ARTICLE II
DEFINITIONS
Section 2.1 Definitions. All capitalized terms which are
used herein and are not defined herein have the meanings assigned to such terms
in Appendix A attached hereto. References to "this Supplement" are to this
Series 1996-1 Supplement to the Administrative Agency Agreement. References to
"the Administrative Agency Agreement" are to the Administrative Agency
Agreement, as supplemented by this Supplement, and as may be otherwise
supplemented, amended or modified from time to time. To the extent that any
term is defined in both the Administrative Agency Agreement (or Appendix I
attached thereto) and this Supplement (or Appendix A attached hereto), the
definition set forth in this Supplement (or Appendix A) shall be controlling.
All references to
2
<PAGE> 6
Articles, Sections, subsections and schedules are to Articles, Sections,
subsections and schedules of this Supplement unless otherwise specified.
ARTICLE III
THE LEASES
Section 3.1 Representations and Warranties of Administrative
Agent. Ford Credit, in its capacity as Administrative Agent, makes the
following representations and warranties as to the Series 1996-1 Assets, on
which Comerica relies in executing and authenticating the Series 1996-1
Certificates and on which Ford Credit and Ford Credit Leasing, in their
capacities as initial Beneficiaries, rely in making subsequent transfers of the
Series 1996-1 Certificates. Such representations and warranties speak as of
the execution and delivery of this Supplement, and shall survive the sale,
transfer, and assignment of the Series 1996-1 Certificates by Ford Credit and
Ford Credit Leasing to RCL Trust 1996-1 and any subsequent transferee:
(a) New Vehicle. Each Series 1996-1 Leased Vehicle was a new
automobile or light truck at the inception of the related 1996-1 Lease.
(b) Certificate of Title. Each Series 1996-1 Leased Vehicle
was titled in the name of "Ford Credit Titling Trust," "Ford Credit Titling
Trust, Comerica Bank [or applicable co-trustee or separate trustee], Trustee"
or such substantially similar words acceptable to the relevant Governmental
Authority.
(c) Residual Value. The Residual Value of each Series 1996-1
Leased Vehicle does not exceed an amount established by the Administrative
Agent consistent with its policies and practices regarding the setting of
residual values as applied with respect to closed-end retail automobile and
light truck leases.
(d) Pool Balance. At the Series 1996-1 Cut-Off Date the Pool
Balance was $948,354,864.22.
(e) Interest in Lease and Leased Vehicle. Each Series 1996-1
Lease was entered into by a Dealer located in the United States, as lessor, and
a Lessee
3
<PAGE> 7
with a billing address in an Eligible State, as lessee, and all of the Dealer's
right, title and interest in such Series 1996-1 Lease and the related Series
1996-1 Leased Vehicle was validly assigned by such Dealer to FCTT.
(f) Customary and Enforceable Provisions. Each Series 1996-1
Lease (i) was originated by a Dealer in the ordinary course of its business and
in compliance with the Administrative Agent's, normal credit and collection
policies and practices, (ii) contains customary and enforceable provisions and
(iii) is substantially in the form of Exhibit C.
(g) Total Monthly Payments. Each Series 1996-1 Lease
provides for Total Monthly Payments which include Constant Yield Payments that
fully amortize the Balance Subject to Lease Charges of such Series 1996-1 Lease
to a final payment equal to the Residual Value of the related Series 1996-1
Leased Vehicle over the term of such Series 1996-1 Lease.
(h) Compliance with Law. At the time it was originated or
made, and as of the date of this Supplement, each Series 1996-1 Lease complied
in all material respects with all requirements of applicable federal, state,
and local laws, and regulations thereunder.
(i) Binding Obligation. Each Series 1996-1 Lease represents
the genuine, legal, valid and binding payment obligation in writing of the
related Lessee, enforceable by the holder thereof in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights generally and
general principles of equity.
(j) No Government Lessee. None of the Series 1996-1 Leases
is an obligation of the United States of America or any state or of any agency,
department, or instrumentality of the United States of America or any state.
(k) Leases in Force. As of the Series 1996-1 Issue Date, no
Series 1996-1 Lease had been satisfied, subordinated, rescinded, cancelled or
terminated.
4
<PAGE> 8
(l) No Waiver. No provision (other than the assessment of a
Security Deposit or Reconditioning Reserve) of a Series 1996-1 Lease has been
waived.
(m) No Defenses. No right of rescission, setoff,
counterclaim, or defense has been asserted or threatened with respect to any
Series 1996-1 Lease.
(n) No Default. As of the Series 1996-1 Issue Date, no
default in payment by any Lessee of any payments due with respect to a Series
1996-1 Lease had occurred and was continuing for a period of more than thirty
days; and no continuing condition that with notice or the lapse of time or both
would constitute a default, breach, violation, or event permitting termination
or cancellation under the terms of any Series 1996-1 Lease had arisen.
(o) No Credit-Related Recourse to Dealer. No Series 1996-1
Lease provides for credit-related recourse to the related Dealer.
(p) Insurance. Each Lessee, to the best knowledge of the
Administrative Agent, has obtained or agreed to obtain physical damage
insurance and liability insurance covering the related Series 1996-1 Leased
Vehicle as required under the related Series 1996-1 Lease.
(q) Title. No Series 1996-1 Asset has been sold,
transferred, assigned, or pledged by any Dealer to any Person other than FCTT.
Comerica, as trustee for FCTT and for the benefit of the Holders of Series
1996-1 Certificates, has good and marketable title to each Series 1996-1 Lease
and each Series 1996-1 Leased Vehicle, free and clear of all Liens,
encumbrances, security interests, and rights of others, including liens or
claims for work, labor or material relating to such Series 1996-1 Leased
Vehicle.
(r) Valid Assignment. No Series 1996-1 Lease was originated
in, or is subject to the laws of, any jurisdiction under which the sale,
transfer, and assignment of such Series 1996-1 Lease to FCTT or of a beneficial
interest in such Series 1996-1 Lease pursuant to transfers of Series 1996-1
Certificates is unlawful, void, or voidable. No Series 1996-1 Leased Vehicle
is subject to the laws of any jurisdiction under which the
5
<PAGE> 9
sale, transfer, and assignment of such Series 1996-1 Leased Vehicle to FCTT or
of a beneficial interest in such Series 1996-1 Leased Vehicle pursuant to
transfers of Series 1996-1 Certificates is unlawful, void, or voidable. No
Dealer has entered into any agreement with any Lessee that prohibits, restricts
or conditions the assignment of any portion of a Series 1996-1 Lease.
(s) All Filings Made. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give Comerica, on
behalf of FCTT, a first perfected ownership interest in each Series 1996-1
Lease have been made.
(t) Chattel Paper. Each Series 1996-1 Lease constitutes
"chattel paper" as defined in the UCC.
(u) One Original. There is only one original of each Series
1996-1 Lease, which is held by the Administrative Agent on behalf of FCTT.
(v) No Excess Deferred Gross. No Series 1996-1 Lease is
subject to a holdback of Excess Deferred Gross.
(w) Origination. Each Series 1996-1 Lease has an origination
date on or after February 22, 1995.
(x) Maturity of Leases. Each Series 1996-1 Lease has a
Scheduled Lease End Date of not greater than 36 months from the date on which
it was entered into.
(y) Minimum Retail Operating Lease Factor. Each Series
1996-1 Lease has a Retail Operating Lease Factor equal to or greater than 5.0%.
(z) Location of Lease Files. The Lease Files relating to
each Series 1996-1 Lease are maintained at the offices of the Administrative
Agent.
(aa) No Delinquency. No Series 1996-1 Lease has a Total
Monthly Payment that was more than 30 days overdue as of the Series 1996-1
Cut-Off Date.
(ab) No Extensions. No Term Extension or Payment Extension
had been granted to the Lessee under
6
<PAGE> 10
any Series 1996-1 Lease prior to the Series 1996-1 Cut-Off Date.
(ac) Advance Payment Plan. No Series 1996-1 Lease was
originated under the Advance Payment Plan.
(ad) Other Data. The information relating to the Series
1996-1 Leases and Series 1996-1 Leased Vehicles contained in the Schedule of
Series 1996-1 Assets attached hereto as Exhibit A is true and correct in all
material respects and no selection procedures believed to be adverse to the
Holders of Series 1996-1 Certificates were utilized in selecting the Series
1996-1 Assets.
(ae) Administrative Agency Agreement. The representations
and warranties made by the Administrative Agent in the Administrative Agency
Agreement are true and correct.
(af) True Lease. Each Series 1996-1 Lease is a "true lease"
for federal income tax purposes.
ARTICLE IV
FEES AND EXPENSES
Section 4.1 Fees and Expenses. On each Payment Date, the
Administrative Agent shall be paid the Series 1996-1 Administrative Fee in
accordance with terms of the Indenture. In consideration for the payment of
such fee, the Administrative Agent shall pay on each Payment Date (i) the
Series 1996-1 Comerica Fee to Comerica, (ii) the fees and expenses of the
Indenture Trustee as agreed upon in Section 6.7 of the Indenture, (iii) the
fees and expenses of the Lease Trustee as agreed upon in Section 8.1 of the
Lease Trust Agreement and (iv) the fees and expenses of the Lease Trust Paying
Agent as agreed upon in Section 4 of the Lease Trust Paying Agent Agreement.
ARTICLE V
COLLECTIONS
Series 1996-1 Collections shall be allocated to the Series
1996-1 Certificates and distributed as set
7
<PAGE> 11
forth in Article V and Article VI of the Administrative Agency Agreement, as
modified pursuant to this Article V.
Section 5.1 Establishment of Series Collection Account,
Series Payahead Account and Series 1996-1 Payments Account. (a) Subject to
Section 5.1(d) hereof, the Administrative Agent shall establish and maintain an
account in the name of the Indenture Trustee until the Outstanding Amount of
the Senior Notes has been reduced to zero, and thereafter in the name of the
Lease Trustee, at an Eligible Institution (which initially shall be The Chase
Manhattan Bank), to be designated as the FCTT Specified Assets Collection
Account, Series 1996-1 (the "Series 1996-1 Collection Account"). The Series
1996-1 Collection Account is the "Series Collection Account" for Series 1996-1.
The Series 1996-1 Collection Account shall be under the sole dominion and
control of the Indenture Trustee until the Outstanding Amount of the Senior
Notes has been reduced to zero, and thereafter under the sole dominion and
control of the Lease Trustee; provided, that the Administrative Agent may make
deposits to and withdrawals from the Series 1996-1 Collection Account in
accordance with Sections 5.2(c) and 5.2(d) of the FCTT Agreement, Section
6.2(b) of the Administrative Agency Agreement and Sections 5.2(a), 5.2(c),
5.2(d), 5.2(e), and 5.4(a) and 5.4(b) hereof. All deposits to and withdrawals
from the Series 1996-1 Collection Account shall be made only upon the terms and
conditions of the Basic Documents.
Any amounts on deposit in the Series 1996-1 Collection Account
shall be invested by the Indenture Trustee until the Outstanding Amount of the
Senior Notes has been reduced to zero, and thereafter by the Lease Trustee, in
Permitted Investments which mature on the Business Day preceding the next
succeeding Payment Date. No such investment shall be sold prior to maturity.
All investment earnings on amounts deposited to the Series 1996-1 Collection
Account, including any proceeds thereof, shall be credited to the Series 1996-1
Collection Account, and losses, if any, and investment expenses resulting from
Permitted Investments in the Series 1996-1 Collection Account shall be charged
to the Series 1996-1 Collection Account. All such investment income shall be
reported for federal income tax purposes as earned (i) 99% by RCL Trust 1996-1
and (ii) 1% by Ford Credit Leasing; the 99% accruing to RCL Trust 1996-1 shall
be re-
8
<PAGE> 12
ported in accordance with the Percentage Interests of Ford Credit and Ford
Credit Leasing in RCL Trust 1996-1. The authority of the Administrative Agent
to make deposits to and withdrawals from the Series 1996-1 Collection Account
is revocable at any time by the Indenture Trustee until the Outstanding Amount
of the Senior Notes has been reduced to zero, and thereafter by the Lease
Trustee. If the institution at which the Series 1996-1 Collection Account is
established ceases to be an Eligible Institution, then the Series 1996-1
Collection Account shall be moved to an Eligible Institution within 10 Business
Days (or such longer period not to exceed 30 calendar days as to which each
Rating Agency may consent).
(b) Subject to Section 5.1(d) hereof, the Administrative
Agent shall establish and maintain an account in the name of the Indenture
Trustee until the Outstanding Amount of the Senior Notes has been reduced to
zero, and thereafter in the name of the Lease Trustee, at an Eligible
Institution (which initially shall be The Chase Manhattan Bank), to be
designated as the "Series 1996-1 Payahead Account." The Series 1996-1 Payahead
Account is the "Series Payahead Account" for Series 1996-1. The Series 1996-1
Payahead Account shall be under the sole dominion and control of the Indenture
Trustee until the Outstanding Amount of the Senior Notes has been reduced to
zero, and thereafter under the sole dominion and control of the Lease Trustee;
provided, that the Administrative Agent may make deposits to and withdrawals
from the Series 1996-1 Payahead Account in accordance with Section 6.1(a) of
the Administrative Agency Agreement and Section 5.2(b) hereof. All deposits to
and withdrawals from the Series 1996-1 Payahead Account shall be made only upon
the terms and conditions of the Basic Documents.
Any amounts on deposit in the Series 1996-1 Payahead Account
shall be invested by the Indenture Trustee until the Outstanding Amount of the
Senior Notes has been reduced to zero, and thereafter on behalf of the Lease
Trustee, in Permitted Investments which mature on the Business Day preceding
the next succeeding Distribution Date. No such investment shall be sold prior
to maturity. All investment earnings on amounts deposited to the Series 1996-1
Payahead Account, including any proceeds thereof, shall be credited to the RCL
Account, and losses, if any, and investment expenses resulting
9
<PAGE> 13
from Permitted Investments in the Series 1996-1 Payahead Account shall be
charged to the RCL Account. All such investment income shall be reported for
federal income tax purposes as earned (i) 99% by RCL Trust 1996-1 and (ii) 1%
by Ford Credit Leasing; the 99% accruing to RCL Trust 1996-1 shall be reported
in accordance with the Percentage Interests of Ford Credit and Ford Credit
Leasing in RCL Trust 1996-1. The authority of the Administrative Agent to make
deposits to and withdrawals from the Series 1996-1 Payahead Account is
revocable at any time by the Indenture Trustee until the Outstanding Amount of
the Senior Notes has been reduced to zero, and thereafter by the Lease Trustee.
If the institution at which the Series 1996-1 Payahead Account is established
ceases to be an Eligible Institution, then the Series 1996-1 Payahead Account
shall be moved to an Eligible Institution within 10 Business Days (or such
longer period not to exceed 30 calendar days) as to which each Rating Agency
may consent.
(c) Subject to Section 5.1(d) hereof, the Administrative Agent
shall establish and maintain an Eligible Account in the name of the Indenture
Trustee until the Outstanding Amount of the Senior Notes has been reduced to
zero, and thereafter in the name of the Lease Trustee, initially at The Chase
Manhattan Bank which is designated as the "Series 1996-1 Payments Account."
The Series 1996-1 Payments Account shall be under the sole dominion and control
of the Indenture Trustee, until the Outstanding Amount of the Senior Notes has
been reduced to zero, and thereafter under the sole dominion and control of the
Lease Trustee; provided, that the Administrative Agent may make deposits to or
request the Indenture Trustee to make deposits to or withdrawals from the
Series 1996-1 Payments Account in accordance with Section 5.2(e). All deposits
to and withdrawals from the Series 1996-1 Payments Account shall be made only
upon the terms and conditions of the Basic Documents.
Any amounts on deposit in the Series 1996-1 Payments Account
shall be invested by the Indenture Trustee until the Outstanding Amount of the
Senior Notes has been reduced to zero, and thereafter by the Lease Trustee, in
Permitted Investments which mature on the Business Day preceding the next
succeeding Payment Date. No such investment shall be sold prior to maturity.
All investment earnings on amounts deposited to the Series
10
<PAGE> 14
1996-1 Payments Account, including any proceeds thereof, shall be credited to
the Administrative Agent, and losses, if any, and investment expenses resulting
from Permitted Investments in the Series 1996-1 Payments Account shall be
charged to the Administrative Agent. All such investment income shall be
reported for federal income tax purposes as earned by the Administrative Agent.
The authority of the Administrative Agent to make deposits to the Series 1996-1
Payments Account is revocable at any time by the Indenture Trustee until the
Outstanding Amount of Senior Notes has been reduced to zero, and thereafter by
the Lease Trustee. If the Series 1996-1 Payments Account ceases to be an
Eligible Account, then the Series 1996-1 Payments Account shall be moved to an
institution at which the Series 1996-1 Payments Account shall be an Eligible
Account within 10 Business Days (or such longer period not to exceed 30
calendar days as to which each Rating Agency may consent).
(d) Notwithstanding anything else contained herein, the Series
1996-1 Collection Account and the Series 1996-1 Payahead Account shall only be
established at an Eligible Institution and the Series 1996-1 Payments Account
shall only be established at an institution, in each case, that agrees in
writing that (i) all securities, instruments, cash or other property delivered
to it hereunder and all investments of funds held in the Series Collection
Account, Series 1996-1 Payahead Account or Series 1996-1 Payments Account will
be promptly credited to the Series 1996-1 Collection Account, Series 1996-1
Payahead Account or Series 1996-1 Payments Account, (ii) all securities,
instruments, cash or other property credited to the Series 1996-1 Collection
Account, Series 1996-1 Payahead Account or Series 1996-1 Payments Account shall
be treated as a "financial asset" within the meaning of Section 8-102(a)(9) of
the 1994 Official Text of Article 8 of the Uniform Commercial Code ("Revised
Article 8"), (iii)(x) at all times prior to being notified in writing by the
Indenture Trustee that the Outstanding Amount of the Senior Notes has been
reduced to zero, it will comply with entitlement orders (as defined in Section
8-102(a)(8) of Revised Article 8) origi- nated by the Indenture Trustee without
further consent of RCL Trust 1996-1 or any other person and (y) after being
notified in writing by the Indenture Trustee that the Outstanding Amount of the
Senior Notes has been reduced to zero, it will comply with entitlement orders
(as defined in Sec-
11
<PAGE> 15
tion 8-102(a)(8) of Revised Article 8) originated by the Lease Trustee without
further consent of RCL Trust 1996-1 or any other person and (iv) each of the
Series 1996-1 Collection Account, Series 1996-1 Payahead Account and Series
1996-1 Payments Account shall be governed by the law of the State of New York
as the same may be amended from time to time.
Section 5.2 Application and Distribution of Funds. (a) On
each Business Day the Administrative Agent shall deposit Series 1996-1
Collections in the Series 1996-1 Collection Account pursuant to Section 6.2(b)
of the Administrative Agency Agreement; provided, however, for so long as each
Monthly Remittance Condition is satisfied, the Administrative Agent may make
such deposits with respect to each Collection Period on the related
Distribution Date; provided, further, that if such Distribution Date is also a
Payment Date, such deposit shall be made on the Business Day preceding the
related Payment Date.
(b) On each Business Day the Administrative Agent shall
deposit Payaheads with respect to Series 1996-1 Assets in the Series 1996-1
Payahead Account pursuant to Section 6.1(a) of the Administrative Agency
Agreement; provided, however, that for so long as each Monthly Remittance
Condition is satisfied, the Administrative Agent shall not be required to
deposit Payaheads in the Series 1996-1 Payahead Account or to segregate or
otherwise hold separate any Payaheads remitted by Lessees, but shall be
required on each Distribution Date (or on the Business Day preceding such
Distribution Date, if such Distribution Date is a Payment Date) to deposit
Payaheads with respect to any Series 1996-1 Lease for which the related Lessee
has failed to remit all or a portion of the Monthly Payment due during the
preceding Collection Period in the Series 1996-1 Collection Account as a Series
1996-1 Collection in an amount equal to the lesser of (x) the Payahead Balance
outstanding on such Distribution Date with respect to such Series 1996-1 Lease
and (y) the portion of such Monthly Payment not received. On the Business Day
preceding each Payment Date, the Administrative Agent shall withdraw all
investment earnings on amounts deposited in the Series 1996-1 Payahead Account
during the related Accrual Period and any proceeds thereof and deposit such
amounts in the RCL Account and shall charge to the RCL Account all losses,
12
<PAGE> 16
if any, and investment expenses resulting from Permitted Investments in the
Series 1996-1 Payahead Account during the related Accrual Period.
(c) In accordance with Section 5.4(a), on the Business
Day preceding each Payment Date, the Administrative Agent shall deposit to, or
withdraw from, the Series 1996-1 Collection Account the Aggregate Net Sale
Proceeds Advances for the preceding Accrual Period.
(d) In accordance with Section 5.4(b), on the Business Day
preceding each Payment Date, the Administrative Agent shall deposit to, or
withdraw from, the Series 1996-1 Collection Account the Aggregate Net Monthly
Payment Advances for the preceding Accrual Period.
(e) On the Business Day preceding each Payment Date, after
making the deposits and withdrawals set forth in Sections 5.2(a), (b), (c) and
(d), the Administrative Agent shall withdraw from the Series 1996-1 Collection
Account an amount equal to (i) the Cash Collateral Deposit Amount and deposit
such amount into the Cash Collateral Account and (ii) the Available Sale
Proceeds and deposit such amount into the Series 1996-1 Payments Account. On
the Business Day preceding each Payment Date, the Administrative Agent shall
charge to the Series 1996-1 Collection Account all losses, if any, and
investment expenses resulting from Permitted Investments in the Series 1996-1
Collection Account during the related Accrual Period. On the Business Day
preceding each Payment Date, the Administrative Agent shall withdraw all
investment earnings on amounts deposited in the Certificate Distribution
Account during the related Accrual Period and any proceeds thereof and deposit
such amounts in the Cash Collateral Account and shall charge to the Cash
Collateral Account all losses, if any, and investment expenses resulting from
Permitted Investments in the Certificate Distribution Account during the
related Accrual Period.
(f) On or before the second Business Day preceding each
Payment Date, the Administrative Agent shall prepare and deliver to the
Indenture Trustee, and to the Lease Trustee after the Senior Notes are paid in
full, the Cash Collateral Account Certificate and the Disbursement and Payment
Instructions described in Section 8.3 of
13
<PAGE> 17
the Indenture and Section 2 of the Lease Trust Paying Agent Agreement.
Section 5.3 RCL Trust 1996-1 Purchase Option. To the extent
that the proceeds received by the Administrative Agent from the sale of any
Series 1996-1 Leased Vehicle after the expiration of the related Series 1996-1
Lease exceeds the Residual Value for such Series 1996-1 Leased Vehicle, RCL
Trust 1996-1 will be assumed to have exercised its option, granted in the
Program Operating Lease, to purchase the beneficial interest in such Series
1996-1 Leased Vehicle at the RCL Purchase Option Price, and to have caused the
Administrative Agent to have subsequently sold the beneficial interest in such
Series 1996-1 Leased Vehicle on behalf of RCL Trust 1996-1 for an amount equal
to the proceeds from such sale. Such assumption with respect to the beneficial
interest in any Series 1996-1 Leased Vehicle shall be rebutted upon receipt of
written direction from RCL Trust 1996-1 that it has not exercised its option to
purchase the beneficial interest in such Series 1996-1 Leased Vehicle. On each
Business Day the Administrative Agent shall deposit any Transferor Purchase
Option Net Proceeds with respect to the Series 1996-1 Leased Vehicles into (i)
the Cash Collateral Account, until the aggregate cumulative amount of
Transferor Purchase Option Net Proceeds deposited in the Cash Collateral
Account equals $94,835,486.42 and (ii) thereafter, into the RCL Account and any
Transferor Purchase Option Net Proceeds so deposited shall be property of RCL
Trust 1996-1; provided, however, for so long as each Monthly Remittance
Condition is satisfied, the Administrative Agent may make such deposits with
respect to each Accrual Period on the Business Day preceding the related
Payment Date.
Section 5.4 Sale Proceeds Advances and Monthly Payment
Advances. (a) On the Business Day preceding each Payment Date, the
Administrative Agent shall make a Sale Proceeds Advance with respect to each
Series 1996-1 Leased Vehicle with respect to which the related Scheduled Lease
End Date has occurred in the related Accrual Period and the related Sale
Proceeds have not been deposited in the Series 1996-1 Collection Account.
(b) On the Business Day preceding each Payment Date, the
Administrative Agent shall make Monthly Payment Advances with respect to each
overdue Monthly Payment,
14
<PAGE> 18
determined as of the end of the related Accrual Period, for all Series 1996-1
Leases (other than Liquidated Leases) in accordance with Section 6.3 of the
Administrative Agency Agreement.
(c) The Administrative Agent shall be reimbursed for any
outstanding Monthly Payment Advances and Sale Proceeds Advances with respect to
a Series 1996-1 Lease as follows:
first, by retaining any subsequent Collections with respect to the
related Series 1996-1 Lease or the related Series 1996-1 Leased
Vehicle;
second, by retaining Collections with respect to other Series 1996-1
Leases and Series 1996-1 Leased Vehicles; and
third, from a draw on the Cash Collateral Account after the
Outstanding Amount of the Senior Notes, the Outstanding Amount of the
Subordinated Notes and the Aggregate Certificate Balance each have
been reduced to zero.
Section 5.5 Administrative Purchases. Notwithstanding the
provisions of Section 4.7 of the Administrative Agency Agreement permitting the
deposit of Administrative Purchase Amounts on the Distribution Date, the
Administrative Agent, on behalf of the Holders of Exchangeable Beneficial
Certificates, shall deposit in the Series 1996-1 Collection Account, on the
Business Day preceding each Payment Date, the Administrative Purchase Amount
for each Series 1996-1 Leased Vehicle or Series 1996-1 Lease which has been the
subject of a breach of any of the covenants set forth in Sections 4.2, 4.5 or
4.6 of the Administrative Agency Agreement during the immediately preceding
Collection Period.
ARTICLE VI
REPORTS TO CERTIFICATEHOLDERS
Section 6.1 Statements to Certificateholders. (a) On each
Distribution Date, Comerica shall include with each distribution to each Holder
of a Series 1996-1 Certificate, the information required to be delivered
15
<PAGE> 19
pursuant to Section 6.4(b) of the Administrative Agency Agreement.
(b) In addition to the information delivered pursuant to
Section 6.1(a), the Administrative Agent shall provide to Comerica, and
Comerica shall provide to each Holder of a Series 1996-1 Certificate the
following information in connection with each Payment Date:
(i) the Series 1996-1 Credit Loss with respect to
the preceding Accrual Period;
(ii) the Series 1996-1 Residual Loss with respect to
the preceding Accrual Period; and
(iii) the amounts invested in Permitted Investments
of each of the banks listed in the definition thereof (separately
stated) as of the last day of each of the three Collection Periods
preceding such Payment Date.
ARTICLE VII
OPTIONAL PURCHASE
Section 7.1 Optional Purchase of Series 1996-1 Certificates.
On any Payment Date following the last day of a Collection Period as of which
the Series 1996-1 Asset Amount, as a percentage of the initial Series 1996-1
Asset Amount as of the Series 1996-1 Cut-Off Date, is less than 10%, the
Administrative Agent shall have the option to purchase the Series 1996-1
Certificates; provided, however, that the Administrative Agent may not effect
any such purchase (i) so long as the rating on the Administrative Agent's
long-term debt obligations is less than Baa3 by Moody's Investors Service Inc.
unless Comerica shall have received an Opinion of Counsel to the effect that
such purchase would not constitute a fraudulent conveyance and (ii) unless the
Series 1996-1 Asset Amount is equal to or greater than the sum of the
Outstanding Amount of the Senior Notes, the Outstanding Amount of the
Subordinated Notes and the Aggregate Certificate Balance of the Lease Trust
Certificates plus accrued interest and interest on any overdue interest in each
case to the Payment Date of redemption or prepayment, as applicable. To
exercise such option, the Administrative Agent shall give Comerica and the
Holders of
16
<PAGE> 20
the Series 1996-1 Certificates (which for such purposes shall be the Lease
Trustee, and prior to the Payment Date on which the Outstanding Amount of the
Senior Notes has been reduced to zero, the Indenture Trustee) at least
forty-five days prior written notice of the Payment Date on which the
Administrative Agent intends to exercise such option, and shall, on the
Business Day preceding such Payment Date, deposit to the Series 1996-1
Collection Account an amount in immediately available funds equal to the Series
1996-1 Asset Amount as of the last day of the Related Collection Period plus
one month's interest thereon calculated at the weighted average Retail
Operating Lease Factor of such Series 1996-1 Assets. Following such optional
purchase, the Administrative Agent shall be the Holder of the Series 1996-1
Certificates. At the request of the Administrative Agent, Ford Credit Leasing
shall purchase a 2% share of the Series 1996-1 Certificates and thereupon shall
be a Holder thereof.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Provision of Information. The Administrative
Agent shall provide such information, reports, certificates and instructions as
is required pursuant to the Basic Documents requested from time to time by the
Holders of the Series 1996-1 Certificates for the purpose of making
distributions with respect to such Series 1996-1 Certificates or with respect
to payment on any securities based on such Series 1996-1 Certificates.
Section 8.2 Ratification of Administrative Agency Agreement.
As supplemented by this Supplement, the Administrative Agency Agreement is in
all respects ratified and confirmed and the Administrative Agency Agreement as
so supplemented by this Supplement shall be read, taken and construed as one
and the same instrument.
Section 8.3 Actions on Behalf of the Lease Trust. The
Administrative Agent shall maintain the books and records required by Section
11.2 of the Lease Trust Agreement and, so long as the lien of the Indenture is
outstanding, shall forward to the Indenture Trustee all notices, documents or
reports to be delivered to the Lease Trustee.
17
<PAGE> 21
Section 8.4 Insurance Policies. So long as any Series 1996-1
Certificates are outstanding, the Administrative Agent will maintain insurance
(including self-insurance provided by Ford Credit or any of its Affiliates)
with respect to third party claims which may be raised with respect to the
Series 1996-1 Leased Vehicles, FCTT or Comerica, in such amounts as it deems
reasonable and prudent. The Administrative Agent covenants and agrees to pay
when due any and all premiums for such insurance. The Administrative Agent
covenants and agrees that it shall not amend, terminate or cause the
termination of any of its contingent and excess liability Insurance Policies
unless (A) after giving effect to such amendment or termination, there remains
coverage in an aggregate amount of $25 million per claim (up to $5 million of
which may be self-insurance provided by Ford Credit or any of its Affiliates)
against third party claims that may be raised with respect to any Series 1996-1
Leased Vehicle or against FCTT or Comerica, such coverage being subject to an
annual aggregate cap for all claims in an amount of at least $50 million (which
coverage may be a blanket insurance policy or policies covering the
Administrative Agent and one or more of its Affiliates) or (B) each Rating
Agency has delivered a letter to the Indenture Trustee (for so long as the
Outstanding Amount of the Senior Notes is greater than zero) or to the Lease
Trustee (after the Outstanding Amount of the Senior Notes has been reduced to
zero) to the effect that the amendment or termination of any such Insurance
Policy, in and of itself, will not cause the rating of any of the Senior Notes
or Lease Trust Certificates to be reduced or withdrawn. The obligations of the
Administrative Agent pursuant to this Section 8.4 shall survive any termination
of the Administrative Agent's obligations with respect to the Series 1996-1
Leases and Series 1996-1 Leased Vehicles under this Supplement or the
Agreement.
Section 8.5 Third Party Beneficiary. Each of the Lease
Trust, the Lease Trustee, the Lease Trust Paying Agent, RCL Trust 1996-1, the
RCL Trustee and the Indenture Trustee shall be a third-party beneficiary of
this Supplement and shall be entitled to rely on the obligations of the
Administrative Agent set forth herein as if each of them was a party hereto.
18
<PAGE> 22
Section 8.6 Holders of the Series 1996-1 Certificates. (a)
Unless otherwise specified in this Section 8.6 or in the applicable Basic
Document, the Lease Trust and RCL Trust 1996-1 (and, following the execution of
the RCL Assignment Agreement, Ford Credit Leasing) shall each be the "Holder"
of the Series 1996-1 Certificates and the "Beneficiary" with respect to Series
1996-1. For purposes of Section 5.2(c) of the FCTT Agreement, the Lease Trust
and RCL Trust 1996-1 shall each be a Holder, but for so long as the Senior
Notes, the Subordinated Notes and Lease Trust Certificates are outstanding, all
amounts paid to "Holders" of the Series 1996-1 Certificates shall be deposited
in the Series 1996-1 Collection Account.
(b) The Holder of the Series 1996-1 Certificates and the
Beneficiary of Series 1996-1 shall be the Lease Trust for the purposes of (i)
with respect to the FCTT Agreement, Sections 3.5, 3.6(c), the third sentence of
Section 7.1(a), and Section 7.1(b) and (ii) with respect to the Administrative
Agency Agreement, Sections 4.4(g) (if the Administrative Agent has been
terminated under Section 7.1(a)), 4.7, the last paragraph of Section 7.1(a),
7.3(a) (if the Administrative Agent has been terminated under Section 7.1(a)),
7.6 and 8.2; provided, that with respect to the third sentence of Section
4.3(f), the third sentence of Section 7.1(a), Section 7.1(b) and the second
sentence of Section 9.1 and Section 7.1(b) of the FCTT Agreement and Section
8.2 of the Administrative Agency Agreement, the Indenture Trustee shall, until
the Outstanding Amount of the Senior Notes has been reduced to zero, have a
lien on the Certificates of Title of all Series 1996-1 Leased Vehicles
distributed pursuant to such Sections, and the Certificate of Title of each
such Series 1996-1 Leased Vehicle shall reflect such lien.
(c) The Holder of the Series 1996-1 Certificates and the
Beneficiary of Series 1996-1 shall be the Indenture Trustee, the Lease Trust
and RCL Trust 1996-1 (and, following the execution of the RCL Assignment
Agreement, Ford Credit Leasing) for the purposes of (i) Sections 6.11(a) of the
FCTT Agreement and (ii) Sections 2.2(c), 2.4, 4.1, 4.4(f), 4.6, 4.12,
7.1(a)(i), 7.1(a)(ii) and 7.2 of the Administrative Agency Agreement.
19
<PAGE> 23
(d) The Holder of the Series 1996-1 Certificates and the
Beneficiary of Series 1996-1 shall be the Lease Trust and the Indenture Trustee
for the purposes of (i) Section 9.8 of the FCTT Agreement and (ii) Section 8.9
and 7.1(a)(iii) of the Administrative Agency Agreement.
(e) For as long as the Senior Notes, Subordinated Notes and
Lease Trust Certificates are outstanding, each Holder of a Series 1996-1
Certificate or Beneficiary of Series 1996-1 shall exercise its respective
rights as Holder and Beneficiary only in accordance with the provisions of the
Basic Documents.
(f) To the extent that a "Holder" or "Beneficiary" is
deemed to refer to more than a single Person pursuant to this Section 8.6 or
any other provision of any Basic Document, actions or directions to be taken by
such Holder or Beneficiary shall be taken only by written directions delivered
by both such Persons.
Section 8.7 Demand Notes. In connection with the
capitalization of Ford Credit Leasing, RCL Trust 1996-1 and the Lease Trust,
Ford Credit has issued to each of Ford Credit Leasing and RCL Trust 1996-1
certain Demand Notes allowing the payees thereunder to receive certain sums
upon demand. Any such Demand Note may be cancelled or reduced in amount if an
Opinion of Counsel is delivered to the effect that such action would not cause
FCTT, RCL Trust 1996-1 or the Lease Trust to be classified as an association
(or publicly traded partnership) taxable as a corporation for federal income
tax purposes. Ford Credit hereby covenants to deliver prompt written notice to
each Rating Agency in the event that any such Demand Note is cancelled or
reduced in amount or any payment of principal is made to any holder of any such
Demand Notes
Section 8.8 Counterparts. This Supplement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.
Section 8.9 Notices. All directions, notices and
instructions to Comerica shall be in writing (which may be facsimile).
20
<PAGE> 24
Section 8.10 Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 8.11 GOVERNING LAW. THIS SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
21
<PAGE> 25
IN WITNESS WHEREOF, the parties hereto have caused this
Supplement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
COMERICA BANK, as trustee of Ford
Credit Titling Trust
By: /s/ Marilyn A. Karam
-------------------------------------
Name: Marilyn A. Karam
Title: Vice President
FORD MOTOR CREDIT COMPANY,
as Administrative Agent
and initial Beneficiary of
Ford Credit Titling Trust
By: /s/ Hurley D. Smith
-------------------------------------
Name: Hurley D. Smith
Title: Secretary
FORD CREDIT LEASING COMPANY, INC.,
as initial Beneficiary of Ford
Credit Titling Trust
By: /s/ R. P. Conrad
-------------------------------------
Name: R. P. Conrad
Title: Assistant Secretary
<PAGE> 26
EXHIBIT A
[SCHEDULE OF SERIES 1996-1 LEASES
AND SERIES 1996-1 LEASED VEHICLES]
(Same as Exhibit A to the Asset Contribution
Agreement (in microfiche form))
A-1
<PAGE> 27
EXHIBIT B
[FORM OF SERIES 1996-1 CERTIFICATE]
FORD CREDIT TITLING TRUST
SERIES 1996-1 SPECIFIED BENEFICIAL CERTIFICATE
No. __
evidencing a fractional undivided interest in the Series 1996-1 Assets (as
defined below).
(This Series 1996-1 Specified Beneficial Certificate does not represent an
interest in or obligation of Ford Motor Credit Company, Ford Credit Leasing
Company, Inc., or Comerica Bank or any of their respective affiliates, except
to the extent described below.)
THIS CERTIFIES THAT ______ is the registered owner of a
nonassessable, fully-paid, __% fractional undivided interest in the Series
1996-1 Assets deposited in Ford Credit Titling Trust ("FCTT").
FCTT was created pursuant to an Amended and Restated Trust
Agreement, dated as of January 31, 1994 (as amended and supplemented from time
to time, the "FCTT Agreement"), by and among Ford Motor Credit Company ("Ford
Credit") and Ford Credit Leasing Company, Inc. ("Ford Credit Leasing") as
grantors and initial beneficiaries (in their capacities as grantors, each a
"Grantor" and collectively, the "Grantors" and in their capacity as
beneficiaries, each a "Beneficiary" and collectively, the "Beneficiaries") and
Comerica Bank, as trustee ("Comerica"). A summary of certain of the pertinent
provisions of the FCTT Agreement is set forth below.
This Certificate is one of a duly authorized Series of
Specified Beneficial Certificates (as defined below). This Certificate is
issued under and is subject to the terms, provisions and conditions of the FCTT
Agreement, the Administrative Agency Agreement, dated January 31, 1994 (the
"Administrative Agency Agreement") and the Series 1996-1 Supplement, dated as
of November 26, 1996, among Ford Credit and Ford Credit Leasing, and RCL Trust
1996-1 (the
B-1
<PAGE> 28
"Supplement"), to which FCTT Agreement, Administrative Agency Agreement and
Supplement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. To the extent not otherwise defined
herein, the capitalized terms used herein have the meanings assigned to them in
the Supplement.
The property of FCTT consists of the FCTT Assets (the "FCTT
Assets"), which includes cash and any amounts on deposit in the FCTT Collection
Account, certain retail lease contracts for automobiles and light trucks
("Leases") and the proceeds thereof, the automobiles and light trucks (the
"Leased Vehicles") which are subject to the Leases and the proceeds thereof
including the proceeds from the sale of the Leased Vehicles to third parties,
certificates of title or other evidence of ownership of a Leased Vehicle, the
benefits of certain insurance policies, certain other properties and rights,
including, but not limited to, certain rights of recourse, relating to the
Leases and the Leased Vehicles and all proceeds of the foregoing, all as more
fully described in the FCTT Agreement. Ownership of the FCTT Assets was
initially represented by "Exchangeable Beneficial Certificates."
Under the FCTT Agreement from time to time the Holders of
Exchangeable Beneficial Certificates may direct Comerica to issue to such
Holders of the Exchangeable Beneficial Certificates a series of certificates
("Specified Beneficial Certificates") representing a beneficial interest in
certain specified Leased Vehicles, Leases and related FCTT Assets (such assets,
the "Series Specified Assets"). Upon the issuance of such Specified Beneficial
Certificates, the beneficial interest in FCTT and the FCTT Assets represented
by the Exchangeable Beneficial Certificate shall be reduced by the amount of
the FCTT Assets represented by such Specified Beneficial Certificates. This
Certificate was issued pursuant to the Supplement which identified certain
Series Specified Assets therein (the "Series 1996-1 Assets").
Under the Series 1996-1 Supplement, there shall be distributed
on each Business Day, or so long as each Monthly Remittance Condition has been
satisfied, on the 15th day of each month or, if such day is not a Business Day,
the next Business Day (each, a "Distribution Date")(or if such Distribution
Date is a Payment Date, on the Business Day preceding such Distribution Date),
commencing December 16, 1996
B-2
<PAGE> 29
to the Person in whose name this Certificate is registered such Holder's
fractional undivided interest in the amount on deposit in the Series 1996-1
Collection Account. Distributions on this Certificate shall be made as
provided in the FCTT Agreement and the Supplement.
The FCTT Agreement may be amended by the Holders of the
Exchangeable Beneficial Certificates and Comerica without the consent of any
Holder of any Specified Beneficial Certificates at any time; provided, however,
that such action shall not, (w) amend Section 4.3(c)(x) of the FCTT Agreement
to reduce the percentage of the Aggregate FCTT Asset Amount that is required to
consist of Non-Specified Assets or Section 4.3(g) of the FCTT Agreement to
reduce the percentage of FCTT required to consist of Non-Specified Assets, (x)
as evidenced by an Opinion of Counsel, materially and adversely affect the
interests of any Holder of an outstanding Specified Beneficial Certificate
(unless each such Holder has consented thereto), (y) as confirmed by each
nationally recognized statistical rating agency which is then rating securities
based on such Specified Beneficial Certificates, cause the then current rating
assigned to such securities to be withdrawn or reduced or (z) as evidenced by
an Opinion of Counsel, cause FCTT to be classified as an association (or
publicly traded partnership) taxable as a corporation for federal income tax
purposes.
Each Beneficiary, by acceptance of a Certificate, covenants
that for a period of one year and one day after payment in full of all
distributions to all Beneficiaries of Specified Beneficial Certificates
pursuant to the terms of the FCTT Agreement, it will not institute against, or
join any Person in instituting against, Ford Credit Leasing or FCTT any
bankruptcy, reorganization, insolvency or liquidation proceeding, or other
similar proceeding, under the laws of the United States without the consent of
100% of the Holders of Specified Beneficial Certificates (excluding Ford Credit
Leasing, RCL Trust 1996-1, or any of their Affiliates).
Comerica shall keep the certificate register with respect to
this Certificate, and the Holder of this Certificate shall notify Comerica of
any change of address or instructions on the distribution of funds.
The FCTT Agreement (other than Section 2.6) and FCTT shall
terminate and be of no further force or effect on
B-3
<PAGE> 30
the earlier of: (i) the final distribution by Comerica of all moneys or other
property constituting FCTT Assets; (ii) the Bankruptcy, insolvency or
termination of Ford Credit Leasing. With respect to Series Specified Assets,
FCTT shall be deemed terminated solely with respect to such assets upon the
Bankruptcy, insolvency or termination any Holder of the related Specified
Beneficial Certificates or the Bankruptcy, insolvency or termination of any
initial transferee of any Specified Beneficial Certificates from the Holders of
the Exchangeable Beneficial Certificates or upon the occurrence of such other
events as may be specified in the related Supplement. Upon such termination of
FCTT with respect to any Series Specified Assets, Comerica shall distribute to
Holders of the related Specified Beneficial Certificates all related Series
Specified Assets by causing the Certificates of Title of the related Specified
Leased Vehicles to be reregistered in the name of, or at the direction of, such
Holders. The FCTT Agreement and FCTT may also terminate at the express written
direction of the Holders of the Exchangeable Beneficial Certificates so long as
no Series of Specified Beneficial Certificates are outstanding.
Notwithstanding the foregoing, in no event, however, shall FCTT continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Hurley David Smith, currently residing in Clarkston, Michigan,
living on the date of the FCTT Agreement. Upon termination of FCTT, Comerica
shall distribute (i) to each Holder of a Specified Beneficial Certificate its
interest in the related Series Specified Assets and (ii) to the Holders of the
Exchangeable Beneficial Certificates their respective interests in the
Non-Specified Assets by causing the Certificates of Title to be reregistered in
the name of, or at the direction of, the Holder.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF MICHIGAN, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless this Certificate shall have been executed by a
Responsible Officer, this Certificate shall not entitle the Holder thereof to
any benefit under the FCTT Agreement or be valid for any purpose.
B-4
<PAGE> 31
IN WITNESS WHEREOF, Comerica, on behalf of FCTT and not in its
individual capacity, has caused this Series 1996-1 Specified Beneficial
Certificate to be duly executed.
FORD CREDIT TITLING TRUST
COMERICA BANK,
not in its individual
capacity but solely as
trustee
Dated: November 26, 1996 By:___________________________________
NAME:
TITLE:
B-5
<PAGE> 32
FOR VALUE RECEIVED, the undersigned hereby sells, transfers and assigns unto
__________ the within Series 1996-1 Certificate, and all rights thereunder,
hereby irrevocably constituting and appointing ___________ as Attorney to
transfer said Series 1996-1 Certificate on the books of the FCTT Registrar,
with full power of substitution in the premises.
Dated: By: _________________________
B-6
<PAGE> 33
EXHIBIT C
[Form of Lease]
C-1
<PAGE> 1
EXHIBIT 4.6
[RCL 1996-1 TRUST AGREEMENT]
AMENDED AND RESTATED TRUST AGREEMENT
dated as of November 19, 1996
among
FORD MOTOR CREDIT COMPANY
and
FORD CREDIT LEASING COMPANY, INC.
As Grantors and RCL Beneficiaries
and
FIRST UNION BANK OF DELAWARE
As RCL Trustee
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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<S> <C> <C>
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . 2
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
ORGANIZATION . . . . . . . . . . . . . . . 3
Section 2.1 Organization and Name . . . . . . . . . . . . . . . . . . . . 3
Section 2.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.3 Purposes and Powers . . . . . . . . . . . . . . . . . . . . . 4
Section 2.4 Confirmation of Appointment of Trustee . . . . . . . . . . . 4
Section 2.5 RCL Assets . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.6 Declaration of Trust . . . . . . . . . . . . . . . . . . . . 5
Section 2.7 Liability and Indemnification . . . . . . . . . . . . . . . . 6
Section 2.8 Title to Trust Property . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
THE RCL BENEFICIARIES . . . . . . . . . . . . . 7
Section 3.1 Restrictions on Transfer . . . . . . . . . . . . . . . . . . 7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 8
Section 4.1 Representations and Warranties of the Grantors . . . . . . . 8
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES . . . . . . . 9
Section 5.1 Establishment of RCL Account . . . . . . . . . . . . . . . . 9
Section 5.2 Application of RCL Assets . . . . . . . . . . . . . . . . . . 9
Section 5.3 Accounting and Reports to RCL Beneficiaries, the Internal Reve-
nue Service and Others . . . . . . . . . . . . . . . . . . . 10
Section 5.4 Signature on Returns; Tax Matters Partner . . . . . . . . . . 11
ARTICLE VI
RCL TRUSTEE . . . . . . . . . . . . . . . 11
Section 6.1 Duties of RCL Trustee . . . . . . . . . . . . . . . . . . . . 12
Section 6.2 Rights of RCL Trustee . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
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----
<S> <C> <C>
Section 6.3 Acceptance of Trusts and Duties . . . . . . . . . . . . . . . 13
Section 6.4 Action upon Instruction by RCL Beneficiaries . . . . . . . . 14
Section 6.5 Furnishing of Documents . . . . . . . . . . . . . . . . . . . 15
Section 6.6 Representations and Warranties of RCL Trustee . . . . . . . . 15
Section 6.7 Reliance; Advice of Counsel . . . . . . . . . . . . . . . . . 16
Section 6.8 RCL Trustee May Own Lease Trust Certificates and Senior Notes 17
Section 6.9 Compensation . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.10 Resignation or Removal of RCL Trustee . . . . . . . . . . . . 18
Section 6.11 Merger or Consolidation of RCL Trustee . . . . . . . . . . . 20
Section 6.12 Appointment of Co-Trustee or Separate Trustee . . . . . . . . 20
Section 6.13 Eligibility Requirements for RCL Trustee . . . . . . . . . . 22
ARTICLE VII
TERMINATION OF TRUST AGREEMENT . . . . . . . . . . 23
Section 7.1 Termination of Trust Agreement . . . . . . . . . . . . . . . 23
ARTICLE VIII
AMENDMENTS . . . . . . . . . . . . . . . 23
Section 8.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IX
TAX MATTERS . . . . . . . . . . . . . . . 24
Section 9.1 Tax Characterization . . . . . . . . . . . . . . . . . . . . 24
ARTICLE X
MISCELLANEOUS . . . . . . . . . . . . . . . 24
Section 10.1 No Legal Title to RCL Assets; Direction of RCL Trustee Actions 24
Section 10.2 Limitations on Rights of Others . . . . . . . . . . . . . . . 24
Section 10.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 10.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 10.6 Successors and Assigns . . . . . . . . . . . . . . . . . . . 26
Section 10.7 No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 10.8 No Petition . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 10.9 Covenant of Ford Credit Leasing . . . . . . . . . . . . . . . 27
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
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<S> <C> <C>
Section 10.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 10.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 27
Exhibit A Form of RCL Assignment Agreement . . . . . . . . . . . . . . A-1
Schedule I Demand Notes
</TABLE>
iii
<PAGE> 5
AMENDED AND RESTATED TRUST AGREEMENT, dated and effective as
of November 19, 1996 (as modified, supplemented or amended from time to time,
this "Agreement") among (i) FORD MOTOR CREDIT COMPANY, a Delaware corporation
("Ford Credit") as a Grantor and as a RCL Beneficiary, (ii) FORD CREDIT LEASING
COMPANY, INC., a Delaware corporation ("Ford Credit Leasing") as a Grantor and
a RCL Beneficiary and (iii) FIRST UNION BANK OF DELAWARE, a Delaware banking
corporation, as RCL Trustee.
WHEREAS, the parties hereto intend to amend and restate, on
the terms and conditions set forth herein, that certain Trust Agreement, dated
as of November 1, 1996, among Ford Credit, Ford Credit Leasing and the RCL
Trustee (the "Original Agreement"), pursuant to which this trust was created;
WHEREAS, Ford Credit and Ford Credit Leasing intend to
transfer their respective Series 1996-1 Certificates to RCL pursuant to the
terms of the Asset Contribution Agreement;
WHEREAS, it is intended that RCL transfer the Series 1996-1
Certificates to the Lease Trust pursuant to the Transfer Agreement and,
immediately thereafter, that an interest in the Series 1996-1 Certificates be
acquired from the Lease Trust pursuant to the terms of the Program Operating
Lease; and
WHEREAS, it is intended that Ford Credit Leasing acquire from
RCL a 1% interest in (i) all assets, rights, and obligations of RCL, including,
but not limited to, the Cash Collateral Account, and each other asset of RCL
(other than certain Demand Notes listed on Schedule I hereto upon which Ford
Credit is maker and RCL or Ford Credit Leasing is payee) and (ii) the
obligations of RCL under the Program Operating Lease, in accordance with the
terms of the RCL Assignment Agreement.
NOW THEREFORE, Ford Credit, Ford Credit Leasing and the RCL
Trustee hereby agree as follows:
<PAGE> 6
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement
capitalized terms have the meanings assigned to them herein or, if not defined
herein, as defined in Appendix A attached hereto. To the extent that the
definitions set forth herein conflict with the definitions set forth in
Appendix A, or incorporated by reference therein, the definitions set forth
herein shall be controlling. All references herein to "this Agreement" are to
this Amended and Restated Trust Agreement, and all references herein to
Articles, Sections and subsections are to Articles, Sections and subsections of
this Agreement unless otherwise specified.
"Grantors" means Ford Credit and Ford Credit Leasing in their
capacities as grantors of the RCL Assets to RCL.
"Liabilities" has the meaning set forth in Section 2.7.
"Percentage Interest" means, (i) when used with respect to Ford
Credit, (x) prior to the effective date of the RCL Assignment Agreement, 98%
and (y) after the effective date of the RCL Assignment Agreement, the
percentage equivalent of a fraction, the numerator of which is 98 and the
denominator of which is 99, and (ii) when used with respect to Ford Credit
Leasing, (x) prior to the effective date of the RCL Assignment Agreement, 2%
and (y) after the effective date of the RCL Assignment Agreement, the
percentage equivalent of a fraction, the numerator of which is 1 and the
denominator of which is 99.
"RCL" means the trust created pursuant to and named "RCL Trust 1996-1"
in the Original Agreement.
"RCL Assets" means (i) cash and any amounts on deposit in or credited
to the RCL Account from time to time, (ii) the interest of RCL from time to
time in the Series 1996-1 Certificates and all proceeds thereof, (iii) the
Subordinated Notes and $311,533.09 initial principal balance of Lease Trust
Certificates and (iv) the Cash Collateral Account and all amounts deposited
therein.
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"RCL Assignment Agreement" means the assignment made by RCL to Ford
Credit Leasing in the form attached hereto as Exhibit A.
"RCL Beneficiaries" means Ford Credit and Ford Credit Leasing.
"RCL Trustee" means First Union Bank of Delaware, in its capacity as
trustee under this Agreement, together with its successors and any permitted
assigns.
"RCL Trustee Office" means the office of the RCL Trustee at which any
particular time its corporate trust business shall be administered, which at
the date hereof is One Rodney Square, 920 King Street, Wilmington, Delaware
19801.
"Responsible Officer" means, when used with respect to the RCL
Trustee, any officer assigned to the corporate trust department who has direct
responsibility for the administration of this Agreement, including any Vice
President, any Assistant Vice President, any Trust Officer or any other officer
of the RCL Trustee customarily performing functions similar to those performed
by any of the above designated officers and having direct responsibility for
the administration of this Agreement, as the case may be, and also, with
respect to a particular matter relating to RCL, any other officer of the RCL
Trustee to whom such matter is referred because of such officer's knowledge of
and familiarity with such matter.
"Trust Statute" means 12 Del. Code Section Section 3801 et. seq., as
amended or supplemented from time to time.
ARTICLE II
ORGANIZATION
Section 2.1 Organization and Name. The trust created
pursuant to this Agreement shall be known as "RCL Trust 1996-1" in which name
the RCL Trustee may conduct the activities of RCL. It is the intention of the
parties hereto that RCL shall constitute a trust under the Trust Statute and
that this Agreement constitute the governing instrument of such trust.
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Section 2.2 Office. The office of RCL shall be in care of
RCL Trustee at the RCL Trustee Office or at such other address as the RCL
Trustee may designate by written notice to the Grantors and the RCL
Beneficiaries.
Section 2.3 Purposes and Powers. The purpose of RCL is to
engage solely in the following activities, all in accordance with the terms of
this Agreement:
(a) to pay the organizational, start-up and transactional
expenses of RCL;
(b) to acquire the Series 1996-1 Certificates pursuant to the
Asset Contribution Agreement, transfer the Series 1996-1 Certificates
to the Lease Trust pursuant to the Transfer Agreement and acquire an
interest in the Series 1996-1 Certificates from the Lease Trust
pursuant to the Program Operating Lease;
(c) to assign, pursuant to the RCL Assignment Agreement, a 1%
interest to Ford Credit Leasing in the RCL Assets and the obligations
of RCL;
(d) to execute, deliver and perform its obligations under
agreements, instruments or other documents to which it is to be a
party, including but not limited to the Asset Contribution Agreement,
the RCL Assignment Agreement, the Transfer Agreement, the Program
Operating Lease and the Lease Trust Agreement;
(e) to hold the Subordinated Notes and a portion of the Lease
Trust Certificates (other than the portion of the Subordinated Notes
and Lease Trust Certificates assigned to Ford Credit Leasing);
(f) to establish the RCL Account and the Cash Collateral
Account; and
(g) to engage in those activities, including making
distributions to RCL Beneficiaries, executing agreements, and
executing and filing documents with regulatory agencies relating to
the issuance of securities by the Lease Trust that are necessary,
suitable or convenient to accomplish the foregoing or are incidental
thereto or connected therewith.
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Section 2.4 Confirmation of Appointment of Trustee. The RCL
Beneficiaries hereby confirm their appointment of First Union Bank of Delaware
as trustee of RCL and First Union Bank of Delaware hereby confirms its
acceptance of such appointment. Effective as of the date hereof, the RCL
Trustee shall have all the rights, powers and duties set forth herein.
Section 2.5 RCL Assets. (a) As of the date hereof, Ford
Credit as a Grantor hereby sells, assigns, transfers, conveys and sets over to
RCL the sum of $9800. Ford Credit Leasing as a Grantor hereby sells, assigns,
transfers, conveys and sets over to RCL the sum of $200. The RCL Trustee
hereby acknowledges receipt in trust from each Grantor, as of the date hereof,
of the foregoing contributions, which constitute the initial RCL Assets. The
RCL Trustee shall deposit such contributions in the RCL Account upon receipt
thereof.
(b) On the Closing Date, each of Ford Credit and Ford Credit
Leasing, as Grantors, shall contribute and transfer the Series 1996-1
Certificates to RCL pursuant to the Asset Contribution Agreement, and then RCL
shall transfer the Series 1996-1 Certificates to the Lease Trust pursuant to
the Transfer Agreement and then, pursuant to the Program Operating Lease, the
Lease Trust shall lease the Series 1996-1 Certificates to RCL and then,
pursuant to the RCL Assignment Agreement, RCL shall assign to Ford Credit
Leasing, and Ford Credit Leasing shall accept, 1% of the assets and obligations
of RCL. For purposes of Section 7.1 of the FCTT Agreement, RCL and Ford Credit
Leasing (after the assignment) shall be the "initial transferees" of the Series
1996-1 Certificates.
(c) Certain organizational expenses of RCL have been paid by
the grantors of RCL. The Grantors shall capitalize RCL with an amount
sufficient to pay administrative expenses of RCL, including expenses of the RCL
Trustee incurred on behalf of RCL, as they may arise.
Section 2.6 Declaration of Trust. The RCL Trustee hereby
declares that it shall hold all the RCL Assets, including all monies and
proceeds of such RCL Assets, in trust for the benefit of the RCL Beneficiaries
in accordance with their respective Percentage Interests from time to time.
Effective as of the date hereof, the
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RCL Trustee shall have all rights, powers and duties set forth herein with
respect to accomplishing the purposes of RCL set forth in Section 2.3.
Section 2.7 Liability and Indemnification. (a)
Notwithstanding Section 3803 of the Trust Statute, Ford Credit Leasing shall be
directly liable to any claimant for all losses, claims, damages, liabilities
and expenses ("Liabilities") of RCL, or incurred in connection with RCL Assets
and this Agreement and the Basic Documents to the extent that Ford Credit
Leasing would be liable if RCL were a partnership under the Delaware Revised
Uniform Limited Partnership Act or the Delaware Uniform Partnership Law and
Ford Credit Leasing were a general partner thereof, and Ford Credit Leasing
hereby covenants and agrees that it will maintain net worth in an amount
sufficient to maintain its status as a "general partner" of RCL and the Lease
Trust for federal income tax purposes. Any third party creditors of RCL shall
be deemed to be third party beneficiaries for purposes of this Section 2.7.
(b) The RCL Beneficiaries shall indemnify, defend and hold
harmless the RCL Trustee, including its successors, assigns, officers,
directors, shareholders, employees and agents for all Liabilities, penalties
and taxes (other than income taxes relating to the fees paid to it hereunder)
incurred by it in connection with the administration of RCL (including
attorneys' fees) and the performance of its duties hereunder; provided,
however, that in no event shall the RCL Trustee be indemnified or held harmless
for any Liabilities incurred (i) by reason of the RCL Trustee's willful
misconduct, bad faith or negligence or (ii) incurred by reason of the RCL
Trustee's breach of its representations and warranties set forth in Section
6.6. The RCL Trustee shall notify the RCL Beneficiaries promptly of any claim
for which the RCL Trustee may seek indemnity. Failure by the RCL Trustee to so
notify the RCL Beneficiaries shall not relieve the RCL Beneficiaries of their
obligations hereunder. If necessary, to the extent not otherwise reimbursed,
the RCL Trustee shall be entitled to indemnification from amounts on deposit in
the RCL Account for any claims against the RCL Trustee the indemnification for
which is provided pursuant to this Section 2.7. Any claim against the RCL
Trustee shall be defended by the RCL Beneficiaries and the RCL Trustee shall be
entitled to separate
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counsel, the fees and expenses of which shall be paid by such RCL
Beneficiaries. The indemnities contained in this Section 2.7 shall survive the
resignation, removal or termination of the RCL Trustee or the termination of
this Agreement. Any amounts paid to the RCL Trustee pursuant to this Section
2.7 shall be deemed not to be RCL Assets immediately after such payment. The
RCL Trustee acknowledges that funds may be deposited in the RCL Account only as
specifically provided in the Basic Documents, and that certain funds paid to
RCL in respect of the Series 1996-1 Certificates and funds paid to RCL as
holder of the Subordinated Notes and deposited in the Cash Collateral Account
have been pledged to the Lease Trustee on behalf of the Lease Trust and the
Indenture Trustee on behalf of Senior Noteholders in accordance with the terms
of the Basic Documents.
Section 2.8 Title to Trust Property. Legal title to all the
RCL Assets shall be vested at all times in RCL or, if required by applicable
law, the RCL Trustee or a co-trustee and/or a separate trustee, as the case may
be. The RCL Trustee or any such co-trustee and/or separate trustee shall at
all times hold the RCL Assets on behalf of the RCL Beneficiaries.
ARTICLE III
THE RCL BENEFICIARIES
Section 3.1 Restrictions on Transfer. Neither Ford Credit
nor Ford Credit Leasing may sell, transfer, assign, hypothecate, pledge or
otherwise convey its beneficial interest in RCL to any Person. There shall be
no restriction on the ability of RCL, acting upon the joint instructions of the
RCL Beneficiaries, to transfer, convey, assign, lease and otherwise enter into
agreements with respect to any or all of the RCL Assets as contemplated by the
Basic Documents; provided however, that except pursuant to, or as specifically
contemplated by, the Basic Documents, RCL (and Ford Credit Leasing, after the
assignment) shall not transfer, convey, assign, lease or otherwise enter into
agreements with respect to the RCL Assets.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of the Grantors.
Ford Credit and Ford Credit Leasing (each only as to itself) as Grantors
hereunder hereby each represent and warrant to the RCL Trustee that:
(a) 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 presently owned and such business is presently conducted;
(b) 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 property or
the conduct of its business requires such qualifications;
(c) it has the full power and authority to execute and
deliver this Agreement, to carry out its terms and to transfer, convey and
deposit the RCL Assets to be deposited with the RCL Trustee as part of RCL and
has duly authorized such acts by all necessary corporate action;
(d) the consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms of this Agreement do 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, its
certificate of incorporation or by-laws, or any indenture, agreement 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 or other instrument, or violate any law
or, to the best of its knowledge, any order, rule or regulation applicable to
it of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over it or any
of its properties; and
(e) this Agreement has been duly authorized, executed and
delivered by it and constitutes the legal,
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valid and binding agreement of it, 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 in general and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.1 Establishment of RCL Account.
(a) The RCL Trustee, for the benefit of RCL, shall establish
and maintain in the name of the RCL Trustee an account known as the RCL Account
(the "RCL Account") in an office of the RCL Trustee, bearing an additional
designation clearly indicating that the funds deposited therein are held for
the benefit of RCL and Ford Credit Leasing as assignee under the RCL Assignment
Agreement.
(b) RCL and Ford Credit Leasing as assignee under the RCL
Assignment Agreement shall possess all right, title and interest in and to all
funds on deposit from time to time in the RCL Account and in all proceeds
thereof. The RCL Account shall be under the sole dominion and control of the
RCL Trustee for the benefit of the RCL Beneficiaries.
Section 5.2 Application of RCL Assets.
(a) All investment earnings (net of losses and investment
expenses) on amounts deposited in the Series 1996-1 Payahead Account pursuant
to Section 5.2(b) of the Series 1996-1 Supplement and any Transferor Purchase
Option Net Proceeds not required to be deposited into the Cash Collateral
Account pursuant to Section 9.2 of the Program Operating Lease shall, to the
extent actually received by the RCL Trustee, be deposited into the RCL Account.
The RCL Trustee shall not invest any amounts deposited in the RCL Account. The
RCL Trustee shall have no liability for (i) the failure to invest amounts
deposited in the RCL Account, or (ii) for failing to take any action or to
refrain from taking any action for the reasons described in Sections 6.4(b) and
6.4(c).
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(b) On each Distribution Date, the RCL Trustee shall
withdraw all amounts on deposit in the RCL Account and apply such amounts in
the following order of priority:
(i) to the RCL Trustee an amount equal to the sum of
(x) the fees payable to the RCL Trustee for its services hereunder and
(y) its reasonable expenses incurred in connection with the exercise
and performance of its rights and duties hereunder;
(ii) to pay any other amounts then owing by RCL to
any Person;
(iii) to Ford Credit Leasing, pursuant to the RCL
Assignment Agreement, 1% of the amount remaining after giving effect
to the payment of items (i) and (ii) above; and
(iv) to the RCL Beneficiaries in accordance with
their respective Percentage Interests in RCL, the amount remaining
after giving effect to the payment of items (i), (ii) and (iii).
(c) In connection with each distribution of funds, the
RCL Trustee shall deliver to each RCL Beneficiary and Ford Credit Leasing as
assignee under the RCL Assignment Agreement a report setting forth the amounts
distributed pursuant to Section 5.2(b).
Section 5.3 Accounting and Reports to RCL Beneficiaries, the
Internal Revenue Service and Others. The RCL Trustee shall (a) maintain (or
cause to be maintained) the books of RCL on a calendar year basis on the
accrual method of accounting, (b) deliver or cause to be delivered to each RCL
Beneficiary such information as may be required by the Code and applicable
Treasury Regulations or otherwise, including such information as may be
required to enable each RCL Beneficiary to prepare its federal income tax
returns, (c) file or cause to be filed any tax returns prepared by the RCL
Beneficiaries on behalf of RCL and make such elections as may from time to time
be directed by the RCL Beneficiaries under any applicable state or federal
statute or rule or regulation thereunder in accordance with Section 9.1 and (d)
cause such tax returns to be signed in the manner required by law.
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Section 5.4 Signature on Returns; Tax Matters Partner. The
RCL Trustee shall sign on behalf of RCL any and all tax returns of RCL, unless
applicable law requires a RCL Beneficiary to sign such documents, in which case
such documents shall be signed by Ford Credit Leasing. To the extent one may
be required, Ford Credit Leasing shall be the "tax matters partner" of RCL
pursuant to the Code.
ARTICLE VI
RCL TRUSTEE
Section 6.1 Duties of RCL Trustee. (a) The RCL Trustee
shall perform such duties, and only such duties, as are specifically set forth
in this Agreement, including the conservation of RCL and the RCL Assets in the
interest of the RCL Beneficiaries. No implied covenants or obligations shall
be read into this Agreement.
(b) In the absence of bad faith on its part, the RCL Trustee
may conclusively rely upon certificates or opinions furnished to the RCL
Trustee and conforming to the requirements of this Agreement in determining the
truth of the statements and the correctness of the opinions contained therein;
provided, however, that the RCL Trustee shall have examined such certificates
or opinions so as to determine only whether on their face they comply with the
requirements of this Agreement.
(c) The RCL 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 Section 6.1(c) shall not limit the effect of
Sections 6.1(a) or (b);
(ii) the RCL Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is
proved that the RCL Trustee was grossly negligent in ascertaining the
pertinent facts; and
(iii) the RCL 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 6.4.
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(d) Subject to Sections 5.1 and 5.2, the RCL Trustee need not
segregate funds received hereunder in any manner except to the extent required
by law and may deposit such funds under such general conditions as may be
prescribed by law, and the RCL Trustee shall not be liable for any interest
thereon.
(e) No RCL Beneficiary shall direct the RCL Trustee to take
any action that (i) is inconsistent with the purposes of RCL set forth in
Section 2.3 or (ii) would result in RCL becoming taxable as an "association"
for federal income tax or state income or franchise tax purposes. The RCL
Trustee shall not take any action that (i) is, to the actual knowledge of a
Responsible Officer of the RCL Trustee, inconsistent with the purposes of RCL
set forth in Section 2.3 or (ii) would, to the actual knowledge of a
Responsible Officer of the RCL Trustee, result in RCL's becoming taxable as an
"association" for federal income tax or state income or franchise tax purposes.
Section 6.2 Rights of RCL Trustee. The RCL Trustee is
authorized and directed to execute and deliver this Agreement, the Underwriting
Agreement dated as of November 19, 1996 (the "Underwriting Agreement") among
J.P. Morgan Securities Inc., RCL, Ford Credit and Ford Credit Leasing, the
Certificate Purchase Agreement dated as of November 19, 1996 (the "Purchase
Agreement") among J.P. Morgan Securities Inc., RCL, Ford Credit and Ford Credit
Leasing, and each certificate or other document attached as an exhibit to or
contemplated by this Agreement or the Basic Documents to which RCL is to be a
party, in such form as the RCL Beneficiaries shall approve as evidenced
conclusively by the RCL Trustee's execution thereof. The RCL Beneficiaries
shall be responsible for causing RCL to comply with its covenants under the
Underwriting Agreement and the Purchase Agreement. The RCL Beneficiaries shall
not direct the RCL Trustee to take or refrain from taking any action if such
action or inaction would be contrary to any obligation of RCL or the RCL
Trustee under this Agreement or the Basic Documents or would be contrary to
Section 2.3, nor shall the RCL Trustee be obligated to follow any such
direction, if given, or have any duty to inquire or determine whether any
direction by the RCL Beneficiaries violates or complies with this provision.
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Section 6.3 Acceptance of Trusts and Duties. Except as
otherwise expressly stated in this Article VI, in accepting the trusts hereby
created, First Union Bank of Delaware acts solely as the RCL Trustee hereunder
and not in its individual capacity and all Persons having any claim against the
RCL Trustee by reason of the transactions contemplated by this Agreement or the
Basic Documents shall look only to the RCL Assets available for payment or
satisfaction thereof. The RCL 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 RCL Trustee also agrees to disburse all
moneys actually received by it constituting part of the RCL Assets upon the
terms of this Agreement. The RCL Trustee shall not be liable or accountable
hereunder under any circumstances, except (i) subject to this Article VI, for
its own negligent action, its own negligent failure to act or its own willful
misconduct or (ii) in the case of the inaccuracy of its representations or
warranties contained in Section 6.6. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding sentence):
(a) the RCL Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the
instructions of any RCL Beneficiary;
(b) no provision of this Agreement shall require the RCL
Trustee to expend or risk funds or otherwise incur any financial
liability in the performance of any of its rights or powers hereunder,
if the RCL 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;
(c) the RCL Trustee shall not be responsible for or in
respect of and makes no representation as to the validity or
sufficiency of any provision of this Agreement or for the due
execution hereof by Ford Credit and Ford Credit Leasing or for the
form, character, genuineness, sufficiency, value or validity of any of
the RCL Assets or any related documents, and the RCL Trustee shall in
no event assume or incur any liability, duty or obligation to any
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RCL Beneficiary, other than as expressly provided for herein; and
(d) the RCL 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, at the request, order or
direction of any RCL Beneficiary, unless such RCL Beneficiary has
offered to the RCL Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities that may be incurred by
the RCL Trustee therein or thereby. The right of the RCL Trustee to
perform any discretionary act enumerated in this Agreement shall not
be construed as a duty, and the RCL Trustee shall not be answerable
for other than its negligence or willful misconduct in the performance
of any such act.
Section 6.4 Action upon Instruction by RCL Beneficiaries.
(a) The RCL Beneficiaries may direct the RCL Trustee to take
action or refrain from taking action permitted hereunder and under the other
Basic Documents with respect to the RCL Assets in which they have a beneficial
interest except to the extent that such action or inaction would conflict with
any provision hereof or of the Basic Documents (including, without limitation,
Section 3.1 and Section 7.1(b) hereof). Such direction may be exercised at any
time by written instructions of the RCL Beneficiaries holding a 100% beneficial
interest in RCL.
(b) Notwithstanding the foregoing, the RCL Trustee shall not
be required to take any action or refrain from taking any action hereunder if
the RCL Trustee shall have reasonably determined, or shall have been advised by
counsel, that such action is likely to result in liability on the part of the
RCL Trustee or is contrary to the terms hereof or is otherwise contrary to law.
(c) Whenever the RCL Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement, or is unsure as
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to the application, intent, interpretation or meaning of any provision of this
Agreement, the RCL Trustee may request an Opinion of Counsel as to such
application, intent, interpretation or meaning, or may give notice (in such
form as shall be appropriate under the circumstances) to the RCL Beneficiaries
requesting instruction as to the course of action to be adopted, and, to the
extent the RCL Trustee acts in good faith in accordance with such Opinion of
Counsel or any such instruction received from such RCL Beneficiaries, as the
case may be, the RCL Trustee shall not be liable on account of such action to
any Person. If the RCL Trustee shall not have received an Opinion of Counsel
or appropriate instructions within ten days of such notice (or within such
shorter period of time as 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 which it shall deem to be in the best interests of the
RCL Beneficiaries, and the RCL Trustee shall have no liability to any Person
for any such action or inaction.
Section 6.5 Furnishing of Documents. The RCL Trustee shall
furnish to the RCL Beneficiaries, 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
RCL Trustee by the Administrative Agent or otherwise.
Section 6.6 Representations and Warranties of RCL Trustee.
The RCL Trustee hereby represents and warrants to the RCL Beneficiaries that:
(a) it is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation;
(b) it has full power, authority and legal right to execute,
deliver and perform this Agreement, and has taken all necessary action to
authorize the execution, delivery and performance by it of this Agreement;
(c) the execution, delivery and performance by it of this
Agreement (i) does not violate any provision of any Delaware or United States
law or regulation governing the banking and trust powers of the RCL Trustee or
any order, writ, judgment or decree of any court, arbi-
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trator or governmental authority applicable to the RCL Trustee or any of its
assets, (ii) shall not violate any provision of the corporate charter or
by-laws of the RCL Trustee, and (iii) shall not violate any provision of, or
constitute, with or without notice or lapse of time or both, a default under,
any mortgage, indenture, contract, agreement or other undertaking to which the
RCL Trustee is a party;
(d) the execution, delivery and performance by the RCL
Trustee of this Agreement shall not require the authorization, consent or
approval of, the giving of notice to, the filing or registration with, or the
taking of any other action in respect of, any governmental authority or agency
regulating the banking and corporate trust activities of banks or trust
companies in the jurisdiction in which RCL was formed;
(e) this Agreement has been duly executed and delivered by
the RCL Trustee and constitutes the legal, valid and binding agreement of the
RCL Trustee, 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 in general and by general
principles of equity, regardless of whether such enforceability is considered
in a proceeding in equity or at law; and
(f) no legal or governmental proceedings are pending to
which the RCL Trustee is a party or of which any property of the RCL Trustee is
the subject, and no such proceedings are threatened or, to its knowledge,
contemplated by governmental authorities or threatened by others, other than
such proceedings which will not have a material adverse effect upon the general
affairs, financial position, net worth or results of operations (on an annual
basis) of the RCL Trustee and will not materially and adversely affect the
performance by the RCL Trustee of its obligations under, or the validity and
enforceability of this Agreement.
Section 6.7 Reliance; Advice of Counsel.
(a) The RCL Trustee shall incur no liability to anyone in
acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper believed
by it
16
<PAGE> 21
to be genuine and believed by it to be signed by the proper party or parties
and need not investigate any fact or matter in any such document. The RCL
Trustee may accept a certified copy of a resolution of the board of directors
or other governing body of any corporate or other 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 RCL Trustee
may for all purposes hereof rely on a certificate, signed by the president or
any vice president or by the treasurer or other authorized officers of the
relevant party, as to such fact or matter, and such certificate shall
constitute full protection to the RCL 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, the
RCL Trustee: (i) may act directly or through its agents, attorneys, custodians
or nominees pursuant to agreements entered into with any of them, and the RCL
Trustee shall not be liable for the conduct or misconduct of such agents,
attorneys, custodians or nominees if such agents, attorneys, custodians or
nominees shall have been selected by the RCL Trustee with reasonable care and
(ii) may consult with counsel, accountants and other skilled professionals to
be selected with reasonable care and employed by it. The RCL Trustee shall not
be liable for anything done, suffered or omitted in good faith by it in
accordance with any Opinion of Counsel or advice of any accountants or other
such skilled professionals and not contrary to this Agreement.
Section 6.8 RCL Trustee May Own Lease Trust Certificates and
Senior Notes. The RCL Trustee in its individual or any other capacity may
become the owner or pledgee of Lease Trust Certificates or Senior Notes and may
deal with the RCL Beneficiaries, the Administrative Agent, the Lease Trustee
and the Indenture Trustee in transactions in the same manner as it would have
if it were not the RCL Trustee.
Section 6.9 Compensation. The RCL Trustee shall receive as
compensation for its services hereunder such fees as shall be separately agreed
upon from time to
17
<PAGE> 22
time between the RCL Beneficiaries and the RCL Trustee. The RCL Trustee shall
be entitled at all times to be reimbursed for its reasonable expenses
hereunder, including the reasonable compensation, expenses and disbursements of
such agents, custodians, nominees, representatives, experts and counsel as the
RCL Trustee may employ in connection with the exercise and performance of its
rights and its duties hereunder. Such fees and reimbursements shall be paid
first, from the RCL Account in accordance with Section 5.2(b) (which amounts,
following the execution of the RCL Assignment Agreement, shall be charged 99%
to amounts beneficially owned by RCL and 1% to amounts beneficially owned by
Ford Credit Leasing), and second, to the extent of any shortfall, directly by
the RCL Beneficiaries in accordance with their respective Percentage Interests.
Section 6.10 Resignation or Removal of RCL Trustee. (a) The
RCL Trustee shall not resign without the consent of the RCL Beneficiaries
unless (i) the RCL Trustee shall cease to be eligible in accordance with the
provisions of Section 6.13, (ii) the RCL Trustee shall be incapable of acting
or it shall be illegal for the RCL Trustee to act, or (iii) the RCL Trustee
shall have given at least 60 days' prior written notice to the RCL
Beneficiaries (who shall promptly notify the Lease Trustee and the Indenture
Trustee).
(b) The RCL Beneficiaries may remove the RCL Trustee (and
shall remove the RCL Trustee in the case of the occurrence of an event
described in clause (i) or (iv)):
(i) if the RCL Trustee shall cease to be eligible in
accordance with the provisions of Section 6.13 and shall fail to
resign after written request therefor by the RCL Beneficiaries;
(ii) if the RCL Trustee shall become bankrupt or insolvent;
(iii) if a receiver or other public officer shall be
appointed or takes charge or control of the RCL Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation; or
18
<PAGE> 23
(iv) if the RCL Trustee shall otherwise be incapable of
acting or it shall be illegal for the RCL Trustee to act.
(c) If the RCL Trustee is removed or if a vacancy exists in
the office of trustee for any reason, the RCL Beneficiaries shall promptly
appoint a successor trustee by written instrument, in duplicate (one copy of
which instrument shall be delivered to the outgoing trustee so removed and one
copy to the successor trustee). If a successor trustee shall not have been
appointed within 30 days after the giving of a written notice of resignation or
the delivery of the written instrument with respect to such removal, the RCL
Trustee or the RCL Beneficiaries may apply to any court of competent
jurisdiction to appoint a successor trustee to act until such time, if any, as
a successor trustee shall have been appointed as provided above. Any successor
trustee so appointed by such court shall upon 30 days written notice from the
RCL Beneficiaries be superseded by any successor trustee appointed as provided
above within one year from the date of the appointment by such court.
(d) Any resignation or removal of the RCL Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section 6.10 shall not become effective until a written acceptance of
appointment is delivered by the successor trustee. Any successor trustee
appointed pursuant to this Section 6.10 shall be eligible to act in such
capacity in accordance with Section 6.13 and, following compliance with the
preceding sentence, 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 trustee.
(e) The predecessor trustee shall upon payment of its fees
and expenses deliver to the successor trustee all books, records, accounts,
documents and statements and monies held by it under this Agreement. The
predecessor 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 trustee all such rights, powers, duties and
obligations. The predecessor trustee shall cooperate with the successor
trustee to ensure that the successor trustee has all books, records, accounts,
documents,
19
<PAGE> 24
statements and other relevant information relating to the RCL Assets.
Section 6.11 Merger or Consolidation of RCL Trustee. (a) Any
corporation or other Person into which the RCL 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 RCL Trustee shall be
a party, or any corporation or other Person succeeding to all or substantially
all of the corporate trust business of the RCL Trustee, shall be the successor
of the RCL Trustee hereunder, provided such corporation shall be eligible in
accordance with the provisions of Section 6.13, without, unless otherwise
required by law, the execution or filing of any instrument or any further act
on the part of any of the parties hereto.
(b) In the event that a national banking association with the
name "First Union Trust Company, National Association" or any other name
succeeds, as contemplated, to all or substantially all of the corporate trust
business of First Union Bank of Delaware, such successor entity shall
automatically be deemed to be the RCL Trustee, effective as of the consummation
of such succession, with the same effect as if it had executed this Agreement
on the Closing Date, upon delivery to the RCL Beneficiaries of an instrument in
which such successor entity accepts the responsibilities hereunder as RCL
Trustee and agrees to be bound by all of the provisions hereof applicable to
the RCL Trustee and provided that such successor entity shall be eligible in
accordance with the provisions of Section 6.13.
Section 6.12 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provision of this Agreement, at any time, for
the purpose of meeting any legal requirement of any jurisdiction in which any
RCL Assets may at the time be located, the RCL Beneficiaries acting jointly
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons approved by the RCL Beneficiaries to act as co-trustee,
jointly with the RCL Trustee, or as separate trustee or trustees, of all or any
part of RCL and the RCL Assets, and to vest in such Person, in such capacity,
such title to RCL, or any RCL Asset, and, subject to the other provisions of
this Section 6.12, such
20
<PAGE> 25
powers, duties, obligations, rights and trusts as the RCL Beneficiaries and the
RCL Trustee may consider necessary or desirable. No co-trustee or separate
trustee under this Agreement shall be required to be eligible in accordance
with the provisions of Section 6.13; provided that no co-trustee or separate
trustee under this Agreement may be a RCL Beneficiary or any Affiliate thereof.
(b) Each co-trustee and separate 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 RCL Trustee shall be conferred upon and exercised or
performed by the RCL Trustee and such co-trustee or separate trustee
jointly (it being understood that such co-trustee or separate trustee
is not authorized to act separately without the RCL 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 RCL
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 RCL or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such
co-trustee or separate trustee, but solely at the direction of the RCL
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 RCL Beneficiaries and the RCL Trustee acting
jointly may at any time accept the resignation of or remove any co-
trustee or separate trustee.
(c) Any notice, request or other writing given to the RCL
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 co-trustee or separate trustee shall refer to this
Agreement and the conditions of this Article. Each co-trustee and separate
trustee, upon its acceptance of the trusts conferred, shall be vested with
21
<PAGE> 26
the estates or property specified in its instrument of appointment, either
jointly with the RCL 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 RCL Trustee. Each such instrument shall be filed
with the RCL Trustee and a copy thereof given to each RCL Beneficiary.
(d) Any co-trustee or separate trustee may at any time
appoint the RCL Trustee as 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 co-trustee
or separate trustee shall 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 RCL Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.13 Eligibility Requirements for RCL Trustee. The
RCL Trustee or any successor trustee, as the case may be, shall at all times:
(a) be a corporation or a banking association organized under the laws of the
United States of America or any state thereof; (b) be authorized to exercise
corporate trust powers; (c) have its principal place of business in the State
of Delaware and (d) have (or shall have a parent that has) a long-term debt
rating of at least Baa3 by Moody Investors Service, Inc.
22
<PAGE> 27
ARTICLE VII
TERMINATION OF TRUST AGREEMENT
Section 7.1 Termination of Trust Agreement. (a) This
Agreement (other than Section 2.7) shall terminate and RCL shall dissolve and
be of no further force or effect on the earlier of: (i) the final distribution
by the RCL Trustee of all moneys or other property constituting RCL Assets; and
(ii) notwithstanding the provisions of Section 3808 of the Trust Statute, the
Bankruptcy or insolvency of Ford Credit Leasing. This Agreement may also
terminate and RCL shall dissolve at the express written direction of the RCL
Beneficiaries at such time as the Series 1996-1 Certificates are not
outstanding.
(b) Upon dissolution of RCL, (i) after satisfaction of all
creditors, if any, of RCL, the RCL Trustee shall distribute the RCL Assets to
the RCL Beneficiaries in accordance with Section 5.2(b) and (ii) after
completion of winding up of RCL, a certificate of cancellation shall be filed
with the Delaware Secretary of State pursuant to 12 Del. Code Section 3810(c).
ARTICLE VIII
AMENDMENTS
Section 8.1 Amendments. This Agreement may be amended by the
RCL Beneficiaries and the RCL Trustee at any time; provided, however, that such
action shall not, (x) as evidenced by an Opinion of Counsel, materially and
adversely affect the interests of any Holder of a Series 1996-1 Certificate
(unless each such Holder has consented thereto), (y) as confirmed by each
Rating Agency rating the Senior Notes and the Lease Trust Certificates, cause
the then current rating of any Class of Senior Notes or the Lease Trust
Certificates to be withdrawn or reduced, or (z) as evidenced by an Opinion of
Counsel, (i) affect the treatment of the Senior Notes as debt for federal
income tax purposes, (ii) be deemed to cause a taxable exchange of the Senior
Notes for federal income tax purposes or (iii) cause RCL, FCTT or the Lease
Trust to be classified as an association (or publicly traded partnership)
taxable as a corporation for federal income tax purposes.
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<PAGE> 28
Notwithstanding the foregoing, this Agreement may be amended
(with notice of such amendment being delivered to each Rating Agency) at any
time by the RCL Beneficiaries and the RCL Trustee to the extent reasonably
necessary to assure that none of FCTT, the Lease Trust, or RCL will be
classified as an association (or publicly traded partnership) taxable as a
corporation for federal income tax purposes.
ARTICLE IX
TAX MATTERS
Section 9.1 Tax Characterization. It is the intention of the
parties hereto that, for purposes of federal, state and local income taxes and
state franchise taxes, and the Michigan Single Business Tax, RCL shall be
treated as a grantor trust. The parties agree that, unless otherwise required
by appropriate tax authorities, RCL shall file or cause to be filed annual or
other necessary returns, reports and other forms consistent with the
characterization of RCL as a grantor trust for such tax purposes. If, however,
RCL is characterized as a separate entity for federal income tax or state
income or franchise tax purposes other than a grantor trust, it is the
intention of the parties hereto that it qualify as a partnership for such
purposes.
ARTICLE X
MISCELLANEOUS
Section 10.1 No Legal Title to RCL Assets; Direction of RCL
Trustee Actions. The RCL Beneficiaries shall not have legal title to any RCL
Assets. The RCL Beneficiaries shall be entitled to receive distributions with
respect to their undivided beneficial interest therein only in accordance with
Articles V and VII. Notwithstanding anything herein to the contrary, the RCL
Trustee shall take no action with respect to any RCL Asset except as provided
in this Agreement or upon direction of the RCL Beneficiaries.
Section 10.2 Limitations on Rights of Others. The provisions
of this Agreement are solely for the benefit of the RCL Trustee, the Grantors
and the RCL Beneficiaries and nothing in this Agreement, whether ex-
24
<PAGE> 29
press or implied, shall be construed to give to any other Person any legal or
equitable right, remedy or claim in RCL or the RCL Assets or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.
Section 10.3 Notices. All demands, notices and
communications upon or to the Grantors, the RCL Beneficiaries and the RCL
Trustee shall be in writing, and shall be personally delivered, sent by
electronic facsimile or overnight delivery service or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given to
the intended recipient upon receipt at the respective addresses listed below,
or at such other address as shall be designated by such Person in a written
notice to the other parties to this Agreement.
(i) In the case of Ford Credit Leasing:
Ford Credit Leasing Company, Inc.
The American Road
FMCC Building
Dearborn, Michigan 48121
Attention: Treasurer
Fax: 313-594-0735
Telephone: 313-248-6722
(ii) In the case of Ford Credit:
Ford Motor Credit Company
The American Road
FMCC Building
Dearborn, Michigan 48121
Attention: Secretary
Fax: 313-248-7613
Telephone: 313-594-7765
(iii) In the case of the RCL Trustee
First Union Bank of Delaware,
as Trustee of RCL Trust 1996-1
One Rodney Square
920 King Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
Fax: 302-888-7544
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<PAGE> 30
Telephone: 302-888-7537
with a copy to:
First Union National Bank of North Carolina
230 South Tryon Street CMC-9
Charlotte, North Carolina 28288
Attention: Pablo de la Canal
Any notice to be delivered to any RCL Beneficiary which is a
permitted assignee hereunder of either initial RCL Beneficiary, shall be
delivered at the address provided to the RCL Trustee by such Person.
Section 10.4 Severability. 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 the rights of
any RCL Beneficiaries.
Section 10.5 Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.
Section 10.6 Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of
the RCL Trustee and each RCL Beneficiary and their respective successors and
permitted assigns. Any request, notice, direction, consent, waiver or other
instrument or action by a RCL Beneficiary shall bind the successors and assigns
of such RCL Beneficiary.
Section 10.7 No Recourse. Each RCL Beneficiary, acknowledges
that such RCL Beneficiary holds a beneficial interest in RCL only and does not
have any other interest in the property or assets of RCL or the RCL Trustee.
Section 10.8 No Petition. The RCL Trustee shall not commence
a voluntary proceeding in bankruptcy
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<PAGE> 31
relating to RCL without having an independent reasonable good faith belief that
RCL is insolvent and having received the unanimous prior approval of all RCL
Beneficiaries and the delivery to the RCL Trustee by each such RCL Beneficiary
of a certificate certifying that such RCL Beneficiary reasonably believes that
RCL is insolvent. Notwithstanding the foregoing, the RCL Trustee and Ford
Credit each hereby covenants that for a period of one year and one day after
payment in full of the Series 1996-1 Certificates pursuant to the terms of this
Agreement, it will not institute against, or join any Person in instituting
against, FCTT or Ford Credit Leasing any bankruptcy, reorganization, insolvency
or liquidation proceeding, or other similar proceeding, under the laws of the
United States without the consent of 100% of the Holders of the Specified
Beneficial Certificates (excluding Ford Credit Leasing, RCL Trust 1996-1, or
any of their Affiliates).
Section 10.9 Covenant of Ford Credit Leasing. Ford Credit
Leasing covenants (for the benefit of Ford Credit, the Lease Trust, RCL and the
Indenture Trustee) to maintain at all times a net worth (exclusive of its
interest in RCL, the Lease Trust or FCTT or any other entity in which it may be
treated for federal income tax purposes as a "general partner") at least equal
to $15,000,000, unless an Opinion of Counsel is delivered to the effect that
not maintaining such net worth would not cause FCTT, RCL or the Lease Trust to
be classified as an association (or publicly traded partnership) taxable as a
corporation for federal income tax purposes.
Section 10.10 Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 10.11 GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
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<PAGE> 32
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
FIRST UNION BANK OF DELAWARE,
as trustee
By: /s/ Stephen J. Kaba
------------------------
Name: Stephen J. Kaba
Title: Vice President
FORD CREDIT LEASING COMPANY, INC.,
as a Grantor and RCL Beneficiary
By: /s/ R. P. Conrad
------------------------
Name: R. P. Conrad
Title: Assistant Secretary
FORD MOTOR CREDIT COMPANY,
as a Grantor and RCL Beneficiary
By: /s/ Hurley D. Smith
------------------------
Name: Hurley D. Smith
Title: Secretary
<PAGE> 33
EXHIBIT A
Form of RCL Assignment Agreement
Reference is made to RCL Trust 1996-1 ("RCL"), governed by the
Amended and Restated Trust Agreement, dated as of November 19, 1996 (the "RCL
Trust Agreement"), among Ford Motor Credit Company ("Ford Credit"), Ford Credit
Leasing Company, Inc. ("Ford Credit Leasing") and First Union Bank of Delaware,
as trustee (in such capacity, the "RCL Trustee"). Terms which are used in this
RCL Assignment Agreement but are not defined herein have the meanings assigned
to them in the RCL Trust Agreement.
As contemplated by Section 2.3 of the RCL Trust Agreement, RCL
hereby assigns, transfers and otherwise conveys to Ford Credit Leasing a 1%
interest in each asset, right, and liability of RCL, including without
limitation the Cash Collateral Account (subject to the pledge to the Lease
Trustee and the Indenture Trustee pursuant to the Program Operating Lease and
the Indenture) and the obligations of RCL under the Program Operating Lease and
Section 2.3(c) of the Transfer Agreement, but excluding those certain Demand
Notes listed on Schedule I to the RCL Trust Agreement and Ford Credit Leasing
hereby accepts such assignment, transfer and conveyance. Such assignment,
transfer and conveyance shall include the assignment of a Subordinated Note
evidencing 1% of the initial principal balance of the Subordinated Notes, a
Lease Trust Certificate evidencing 1% of the $311,533.09 initial principal
balance of Lease Trust Certificates initially acquired by RCL, and any amounts
payable to RCL pursuant to the Transfer Agreement. RCL and Ford Credit Leasing
hereby agree that following such assignment, Ford Credit Leasing shall be a
"Holder" of the Series 1996-1 Certificates to the same extent as RCL Trust
1996-1. Ford Credit and Ford Credit Leasing hereby agree that after giving
effect to such assignment, transfer and conveyance, Ford Credit Leasing's
percentage beneficial interest in RCL shall be reduced from 2% to the
percentage equivalent of a fraction, the numerator of which is 1 and the
denominator of which is 99, and Ford Credit's percentage beneficial interest in
RCL shall be increased from 98% to the percentage equivalent of a fraction, the
numerator of which is 98 and the denominator of which is 99. Accordingly, 1%
of all funds coming into the possession of RCL that are not required to be held
or paid over to the Lease Trust or deposited in the Cash Collateral Account
shall be the
A-1
<PAGE> 34
property of Ford Credit Leasing and shall be paid by RCL to Ford Credit
Leasing.
This RCL Assignment Agreement is made pursuant to and in
reliance upon the representations, warranties and agreements set forth in the
RCL Trust Agreement.
THIS RCL ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
A-2
<PAGE> 35
IN WITNESS WHEREOF, the parties hereto have caused this RCL
Assignment Agreement to be duly executed as of November 26, 1996.
RCL TRUST 1996-1,
assignor
By: FIRST UNION BANK OF DELAWARE,
not in its individual capacity
but solely as RCL Trustee,
By:
------------------------------
Name:
Title:
FORD CREDIT LEASING COMPANY, INC.,
as assignee and RCL Beneficiary,
By:
------------------------------
Name:
Title:
FORD MOTOR CREDIT COMPANY, as
RCL Beneficiary
By:
------------------------------
Name:
Title:
A-3
<PAGE> 36
Schedule I
1. Demand Note dated November 26, 1996 from Ford Credit as maker and Ford
Credit Leasing as payee in a principal amount of $133,000 and assigned
to RCL.
2. Demand Note dated November 26, 1996 from Ford Credit as maker and Ford
Credit Leasing as payee in a principal amount of $200,000 and assigned
to RCL.
3. Demand Note dated November 26, 1996 from Ford Credit as maker and RCL
as payee in a principal amount of $13,034,000.
4. Demand Note dated November 26, 1996 from Ford Credit as maker and RCL
as payee in a principal amount of $19,600,000.
<PAGE> 1
EXHIBIT 4.7
ASSET CONTRIBUTION AGREEMENT
dated as of
November 26, 1996
among
FORD MOTOR CREDIT COMPANY
and
FORD CREDIT LEASING COMPANY, INC.,
as Contributors,
and
RCL TRUST 1996-1
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
CONTRIBUTION OF SERIES 1996-1
CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.1 Contribution of Series 1996-1 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.2 The Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.1 Warranties of RCL Trust 1996-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.2 Representations and Warranties of the Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.3 Repurchase upon Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV
CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.1 Conditions to Obligation of RCL Trust 1996-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.2 Conditions to Obligation of the Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE V
COVENANTS OF THE CONTRIBUTORS . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.1 Protection of Right, Title and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.2 Other Liens or Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.3 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.5 Absolute Transfer; Sale or Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VI
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6.1 Obligations of Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6.2 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 6.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.4 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.5 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.6 Representations of the Contributors and RCL Trust 1996-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.7 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 6.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 6.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.11 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Exhibit A-- Schedule of Series 1996-1 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B-- Form of Series 1996-1 Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
</TABLE>
ii
<PAGE> 4
ASSET CONTRIBUTION AGREEMENT, dated and effective as of
November 26, 1996, among (i) FORD MOTOR CREDIT COMPANY, a Delaware corporation,
as a contributor ("Ford Credit"), (ii) FORD CREDIT LEASING COMPANY, INC., a
Delaware corporation, as a contributor ("Ford Credit Leasing" and, collectively
with Ford Credit, in their capacities as contributors hereunder, the
"Contributors"), and (iii) RCL TRUST 1996-1, a Delaware business trust ("RCL
Trust 1996-1").
WHEREAS, Ford Credit, Ford Credit Leasing and Comerica Bank,
as trustee, pursuant to the FCTT Agreement, have created Ford Credit Titling
Trust ("FCTT") for the purpose of holding Leases and Leased Vehicles and other
FCTT Assets;
WHEREAS, pursuant to the FCTT Agreement, Ford Credit and Ford
Credit Leasing, as holders of the Exchangeable Beneficial Certificates, have
directed Comerica Bank to issue to each of them the Series 1996-1 Certificates
representing a beneficial interest in FCTT and the Series 1996-1 Assets;
WHEREAS, Ford Credit, Ford Credit Leasing and RCL Trust 1996-1
wish to set forth the terms pursuant to which the Series 1996-1 Certificates
are to be contributed by Ford Credit and Ford Credit Leasing to RCL Trust
1996-1; and
WHEREAS, Ford Credit, Ford Credit Leasing and RCL Trust 1996-1
intend to engage in the other transactions contemplated by the Basic Documents.
NOW, THEREFORE, Ford Credit, Ford Credit Leasing and RCL Trust
1996-1 hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement capitalized
terms have the meanings assigned to them herein or, if not defined herein, as
defined in Appendix A attached hereto. To the extent that the definitions set
forth herein conflict with the definitions set forth in Appendix A, or
incorporated by reference therein, the definitions set forth herein shall be
<PAGE> 5
controlling. All references herein to "this Agreement" are to this Asset
Contribution Agreement, and all references herein to Articles, Sections and
subsections are to Articles, Sections and subsections of this Agreement unless
otherwise specified.
"RCL Trustee" means First Union Bank of Delaware not in its
individual capacity but solely as trustee of RCL Trust 1996-1.
"Removal Event" has the meaning set forth in Section 3.3.
"Schedule of Series 1996-1 Assets" means the list of Series
1996-1 Leased Vehicles and Series 1996-1 Leases annexed hereto as Exhibit A,
which may be in the form of microfiche or a computer tape.
ARTICLE II
CONTRIBUTION OF SERIES 1996-1
CERTIFICATES
Section 2.1 Contribution of Series 1996-1 Certificates. On
the Closing Date, subject to the terms and conditions of this Agreement, each
of the Contributors agrees to contribute to RCL Trust 1996-1, and RCL Trust
1996-1 agrees to accept from the Contributors, the Series 1996-1 Certificates
and the other property relating thereto, as specified in the following
paragraph.
Effective as of the Closing Date and immediately preceding the
transactions contemplated by the Transfer Agreement, the Contributors hereby
contribute, transfer, assign and otherwise convey to RCL Trust 1996-1, without
recourse, all right, title and interest of the Contributors, whether now owned
or hereafter acquired, in and to the following: (i) the Series 1996-1
Certificates, including all monies paid thereon and due thereon on or after the
Series 1996-1 Cut-Off Date (including any monies received prior to the Series
1996-1 Cut-Off Date that are due on or after the Series 1996-1 Cut-Off Date and
were not used to reduce the principal balance of the Series 1996-1
Certificates) and (ii) their respective rights and obligations under the
Administrative Agency Agreement and the Series 1996-1 Supplement. The Series
1996-1 Certificates shall become property of RCL Trust
2
<PAGE> 6
1996-1 and the interests of the Contributors as beneficiaries of RCL Trust
1996-1 shall reflect such additions.
Section 2.2 The Closing. The contribution of the Series
1996-1 Certificates shall take place at a closing at the offices of Skadden,
Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New York 10022 on the
Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Warranties of RCL Trust 1996-1. RCL Trust 1996-1
hereby represents and warrants to each of the Contributors as of the date
hereof and as of the Closing Date:
(a) Organization and Good Standing. RCL Trust
1996-1 is a statutory business trust duly organized, validly existing and in
good standing under the laws of the State of Delaware.
(b) Power and Authority. RCL Trust 1996-1 has full
power, authority and legal right to execute, deliver and perform this
Agreement, and has taken all necessary action to authorize the execution,
delivery and performance by it of this Agreement.
(c) No Violation. The execution, delivery and
performance by it of this Agreement (i) shall not violate any provision of any
law or regulation or any order, writ, judgment or decree of any court,
arbitrator or governmental authority applicable to RCL Trust 1996-1 or any of
its assets, (ii) shall not violate any provision of the RCL Trust Agreement,
and (iii) shall not violate any provision of, or constitute, with or without
notice or lapse of time, a default under, any mortgage, indenture, contract,
agreement or other undertaking to which RCL Trust 1996-1 is a party.
(d) Governmental Approvals. The execution,
delivery and performance by RCL Trust 1996-1 of this Agreement shall not
require the authorization, consent or approval of, the giving of notice to, the
filing or registration with, or the taking of any other action in respect of,
any governmental authority or
3
<PAGE> 7
agency in the jurisdiction in which RCL Trust 1996-1 was formed.
(e) Validity; Binding Obligation. This Agreement
has been duly executed and delivered by RCL Trust 1996-1 and constitutes the
legal, valid and binding agreement of RCL Trust 1996-1 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 in general and by general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law.
(f) No Litigation. No legal or governmental
proceedings are pending to which RCL Trust 1996-1 is a party or of which any
property of RCL Trust 1996-1 is the subject, and no such proceedings are
threatened or contemplated by governmental authorities or threatened by others,
other than such proceedings which will not have a material adverse effect upon
the general affairs, financial position, net worth or results of operations (on
an annual basis) of RCL Trust 1996-1 and will not materially and adversely
affect the performance by RCL Trust 1996-1 of its obligations under, or the
validity and enforceability of this Agreement.
Section 3.2 Representations and Warranties of the
Contributors. (a) Ford Credit and Ford Credit Leasing each hereby represents
and warrants, as to itself, to RCL Trust 1996-1 as of the date hereof and as of
the Closing Date:
(i) Organization. Such Contributor 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
presently owned and such business is presently conducted.
(ii) Good Standing. Such Contributor 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 property or the conduct of its business requires
such qualifications.
4
<PAGE> 8
(iii) Power and Authority. Such Contributor has the full
power and authority to execute and deliver this Agreement, to carry
out its terms, and to contribute and assign the property contributed
and assigned by it to RCL Trust 1996-1 hereunder and has duly
authorized such contribution and assignment by all necessary corporate
action.
(iv) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms of
this Agreement do 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) a default under, such Contributor's certificate of
incorporation or by-laws, or any indenture, agreement 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 or other
instrument, or violate any law or, to the best of such Contributor's
knowledge, any order, rule or regulation applicable to it of any court
or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over it or any
of its properties.
(v) Validity; Binding Obligation. This Agreement has been
duly authorized, executed and delivered by it and constitutes the
legal, valid and binding agreement of such Contributor, 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 in general and by
general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(vi) No Proceedings. No legal or governmental proceedings
are pending to which such Contributor is a party or of which any
property of such Contributor is the subject, and no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others, other than such proceedings which will not have
a material adverse effect upon the general affairs, financial
position, net worth
5
<PAGE> 9
or results of operations (on an annual basis) of such Contributor and
its subsidiaries considered as a whole and will not materially and
adversely affect the performance by such Contributor of its
obligations under, or the validity and enforceability of, this
Agreement.
(b) Each of Ford Credit and Ford Credit Leasing makes the
following representations and warranties as to the Series 1996-1 Assets, on
which RCL Trust 1996-1 relies in accepting the Series 1996-1 Certificates.
Such representations and warranties speak as of the execution and delivery of
this Agreement, but shall survive the contribution, transfer, and assignment of
the Series 1996-1 Certificates to RCL Trust 1996-1 and any subsequent
assignment or transfer by RCL Trust 1996-1:
(i) New Vehicle. Each Series 1996-1 Leased Vehicle was a new
automobile or light truck at the inception of the related Series
1996-1 Lease.
(ii) Certificate of Title. Each Series 1996-1 Leased Vehicle
was titled in the name of "Ford Credit Titling Trust," "Ford Credit
Titling Trust, Comerica Bank [or applicable co-trustee or separate
trustee], Trustee" or such substantially similar words acceptable to
the relevant Governmental Authority.
(iii) Residual Value. The Residual Value of each Series
1996-1 Leased Vehicle does not exceed an amount established by the
Administrative Agent consistent with its policies and practices
regarding the setting of residual values as applied with respect to
closed-end retail automobile and light truck leases.
(iv) Pool Balance. At the Series 1996-1 Cut-Off Date the
Pool Balance was $948,354,864.22.
(v) Interest in Lease and Leased Vehicle. Each Series 1996-1
Lease was entered into by a Dealer located in the United States, as
lessor, and a Lessee with a billing address in an Eligible State, as
lessee, and all of the Dealer's right, title and interest in such
Series 1996-1 Lease and
6
<PAGE> 10
the related Series 1996-1 Leased Vehicle was validly assigned by such
Dealer to FCTT.
(vi) Customary and Enforceable Provisions. Each Series
1996-1 Lease (x) was originated by a Dealer in the ordinary course of
its business and in compliance with the Administrative Agent's normal
credit and collection policies and practices, (y) contains customary
and enforceable provisions and (z) is substantially in the form of
Exhibit B.
(vii) Total Monthly Payments. Each Series 1996-1 Lease
provides for Total Monthly Payments which include Constant Yield
Payments that fully amortize the Balance Subject to Lease Charges of
such Series 1996-1 Lease to a final payment equal to the Residual
Value of the related Series 1996-1 Leased Vehicle over the term of
such Series 1996-1 Lease.
(viii) Compliance with Law. At the time it was originated or
made, and as of the date of this Agreement, each Series 1996-1 Lease
complied in all material respects with all requirements of applicable
federal, state, and local laws, and regulations thereunder.
(ix) Binding Obligation. Each Series 1996-1 Lease represents
the genuine, legal, valid and binding payment obligation in writing of
the related Lessee, enforceable by the holder thereof in accordance
with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity.
(x) No Government Lessee. None of the Series 1996-1 Leases
is an obligation of the United States of America or any state or of
any agency, department, or instrumentality of the United States of
America or any state.
(xi) Leases in Force. As of the Series 1996-1 Issue Date, no
Series 1996-1 Lease had been satisfied, subordinated, rescinded,
cancelled or terminated.
7
<PAGE> 11
(xii) No Waiver. No provision (other than the assessment of
a Security Deposit or Reconditioning Reserve) of a Series 1996-1 Lease
has been waived.
(xiii) No Defenses. No right of rescission, setoff,
counterclaim, or defense has been asserted or threatened with respect
to any Series 1996-1 Lease.
(xiv) No Default. As of the Series 1996-1 Issue Date, no
default in payment by any Lessee of any payments due with respect to a
Series 1996-1 Lease had occurred and was continuing for a period of
more than thirty days; and no continuing condition that with notice or
the lapse of time or both would constitute a default, breach,
violation, or event permitting termination or cancellation under the
terms of any Series 1996-1 Lease had arisen.
(xv) No Credit-Related Recourse to Dealer. No Series 1996-1
Lease provides for credit-related recourse to the related Dealer.
(xvi) Insurance. Each Lessee, to the best knowledge of the
Administrative Agent, has obtained or agreed to obtain physical damage
insurance and liability insurance covering the related Series 1996-1
Leased Vehicle as required under the related Series 1996-1 Lease.
(xvii) Title. No Series 1996-1 Asset has been sold,
transferred, assigned, or pledged by any Dealer to any Person other
than FCTT. Comerica, as trustee for FCTT and for the benefit of the
Holders of Series 1996-1 Certificates, has good and marketable title
to each Series 1996-1 Lease and each Series 1996-1 Leased Vehicle,
free and clear of all Liens, encumbrances, security interests, and
rights of others, including liens or claims for work, labor or
material relating to such Series 1996-1 Leased Vehicle.
(xviii) Valid Assignment. No Series 1996-1 Lease was
originated in, or is subject to the laws of, any jurisdiction under
which the sale, transfer, and assignment of such Series 1996-1 Lease
to FCTT or of a beneficial interest in such Series 1996-1
8
<PAGE> 12
Lease pursuant to transfers of Series 1996-1 Certificates is unlawful,
void, or voidable. No Series 1996-1 Leased Vehicle is subject to the
laws of any jurisdiction under which the sale, transfer, and
assignment of such Series 1996-1 Leased Vehicle to FCTT or of a
beneficial interest in such Series 1996-1 Leased Vehicle pursuant to
transfers of Series 1996-1 Certificates is unlawful, void, or
voidable. No Dealer has entered into any agreement with any Lessee
that prohibits, restricts or conditions the assignment of any portion
of a Series 1996-1 Lease.
(xix) All Filings Made. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give
Comerica, on behalf of FCTT, a first perfected ownership interest in
each Series 1996-1 Lease have been made.
(xx) Chattel Paper. Each Series 1996-1 Lease constitutes
"chattel paper" as defined in the UCC.
(xxi) One Original. There is only one original of each
Series 1996-1 Lease, which is held by the Administrative Agent on
behalf of FCTT.
(xxii) No Excess Deferred Gross. No Series 1996-1 Lease is
subject to a holdback of Excess Deferred Gross.
(xxiii) Origination. Each Series 1996-1 Lease has an
origination date on or after February 22, 1995.
(xxiv) Maturity of Leases. Each Series 1996-1 Lease has a
Scheduled Lease End Date of not greater than 36 months from the date
on which it was entered into.
(xxv) Minimum Retail Operating Lease Factor. Each Series
1996-1 Lease has a Retail Operating Lease Factor equal to or greater
than 5.0%.
(xxvi) Location of Lease Files. The Lease Files relating to
each Series 1996-1 Lease are maintained at the offices of the
Administrative Agent.
9
<PAGE> 13
(xxvii) No Delinquency. No Series 1996-1 Lease has a Total
Monthly Payment that was more than 30 days overdue as of the Series
1996-1 Cut-Off Date.
(xxviii) No Extensions. No Term Extension or Payment
Extension had been granted to the Lessee under any Series 1996-1 Lease
prior to the Series 1996-1 Cut-Off Date.
(xxix) Advance Payment Plan. No Series 1996-1 Lease was
originated under the Advance Payment Plan.
(xxx) Other Data. The information relating to the Series
1996-1 Leases and Series 1996-1 Leased Vehicles contained in the
Schedule of Series 1996-1 Assets attached hereto as Exhibit A is true
and correct in all material respects and no selection procedures
believed to be adverse to the Holders of Series 1996-1 Certificates
were utilized in selecting the Series 1996-1 Assets.
(xxxi) Administrative Agency Agreement. The representations
and warranties made by the Administrative Agent in the Administrative
Agency Agreement are true and correct.
(xxxii) True Lease. Each Series 1996-1 Lease is a "true
lease" for federal income tax purposes.
Section 3.3 Repurchase upon Breach. Each of Ford Credit and
Ford Credit Leasing shall inform the parties to this Agreement promptly in
writing, upon the discovery of any breach or failure to be true of the
representations and warranties made by it in Section 3.2(b). Unless the breach
or failure to be true of the representations and warranties contained in
Section 3.2(b) shall have been cured by the last day of the Accrual Period in
which such breach or failure either occurred or was discovered by Ford Credit
(in its capacity as a Contributor or in its capacity as Administrative Agent)
or Ford Credit Leasing, each of the Contributors hereby agrees that such an
occurrence shall constitute an event (a "Removal Event") obligating the
Contributors to (i) instruct Comerica and the Administrative Agent, in the
manner set forth in Section 4.7 of the Administrative Agency Agreement, to
cause the Series 1996-1 Certificates
10
<PAGE> 14
to no longer represent a beneficial interest in such Series 1996-1 Lease and
Series 1996-1 Leased Vehicle and (ii) cause to be deposited in the Series
1996-1 Collection Account on behalf of RCL Trust 1996-1 an amount in exchange
therefor equal to the Administrative Purchase Amount. The removal and payment
obligation of the Contributors pursuant to this Section 3.3 shall constitute
the sole remedy of RCL Trust 1996-1 against the Contributors with respect to
any Removal Event. Upon payment to RCL Trust 1996-1 of such Administrative
Purchase Amount with respect to a Series 1996-1 Asset, the Series 1996-1
Certificates shall no longer represent an interest in such asset.
ARTICLE IV
CONDITIONS
Section 4.1 Conditions to Obligation of RCL Trust 1996-1.
The obligation of RCL Trust 1996-1 to accept the contribution of the Series
1996-1 Certificates is subject to the satisfaction of the following conditions:
(a) Representations and Warranties True. The
representations and warranties of each of the Contributors hereunder shall be
true and correct on the Closing Date with the same effect as if then made, and
each Contributor shall have performed all obligations to be performed by such
Contributor hereunder on or prior to the Closing Date.
(b) Delivery of Series 1996-1 Certificates and
Schedule of Series 1996-1 Assets. The Contributors shall deliver the Series
1996-1 Certificates registered in the name of RCL Trust 1996-1 and the Schedule
of Series 1996-1 Assets certified by an officer of the Administrative Agent to
be true, correct and complete.
(c) Documents to be delivered by the Contributors
at the Closing. (i) On or prior to the Closing Date, each Contributor shall
record and file, at its own expense, a UCC-1 financing statement in each
jurisdiction in which required by applicable law, executed by the Contributor,
as seller naming RCL Trust 1996-1, as purchaser, and naming the Series 1996-1
Certificates and the other property conveyed hereunder as the property
11
<PAGE> 15
sold, meeting the requirements of the laws of each such jurisdiction and in
such manner as is necessary to perfect the sale, transfer, assignment and
conveyance of such property to RCL Trust 1996-1. The Contributors shall
deliver a file-stamped copy of such filing, or other evidence satisfactory to
RCL Trust 1996-1, to RCL Trust 1996-1 on or prior to the Closing Date.
(ii) On or prior to the Closing Date,
the Contributors shall deliver to RCL Trust 1996-1 such other docu- ments as
RCL Trust 1996-1 may reasonably request.
(d) Other Transactions. On or prior to the
Closing Date (i) each of the Basic Documents shall have been executed and
delivered by the parties thereto, and (ii) each of the parties to the Basic
Documents shall have performed all of their respective obligations thereunder
required to be performed on or prior to the Closing Date.
Section 4.2 Conditions to Obligation of the Contributors.
The obligation of each of the Contributors to contribute the Series 1996-1
Certificates to RCL Trust 1996-1 is subject to each representation and warranty
of RCL Trust 1996-1 hereunder being true and correct on the Closing Date as if
such representation and warranty was then made, and each obligation to be
performed by RCL Trust 1996-1 by the Closing Date having been performed.
ARTICLE V
COVENANTS OF THE CONTRIBUTORS
Ford Credit and Ford Credit Leasing each hereby agrees with
RCL Trust 1996-1 as follows, provided, however, that to the extent that any
provision of this Article V conflicts with any provision of the Administrative
Agency Agreement, the Administrative Agency Agreement shall govern:
Section 5.1 Protection of Right, Title and Interest. (a)
Each Contributor shall execute and file such financing statements and cause to
be executed and filed such continuation statements, all in such manner and in
such places as may be required by law fully to preserve, maintain, and protect
the interest of RCL Trust 1996-1 in the Series 1996-1 Certificates and in the
12
<PAGE> 16
proceeds thereof. Each Contributor shall deliver (or cause to be delivered) to
RCL Trust 1996-1 file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) Each Contributor shall not 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 Contributor in
accordance with Section 5.1(a) seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given RCL Trust 1996-1 at
least five days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.
(c) Each Contributor shall give RCL Trust 1996-1
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 and shall
promptly file any such amendment or new financing statement. The Contributors
shall cause the Administrative Agent to at all times maintain each office from
which it shall service FCTT Assets, and its principal executive office, within
the United States of America.
(d) If at any time either of the Contributors
shall propose to sell, grant a security interest in, or otherwise transfer any
interest in any other Series of Specified Beneficial Certificates to any
prospective purchaser, lender, or other transferee, such Contributor shall give
to such prospective purchaser, lender, or other transferee computer tapes,
records, or print-outs (including any restored from back-up archives) that, if
they shall refer in any manner whatsoever to any Series 1996-1 Asset, shall
indicate clearly that such Series 1996-1 Asset is owned by Comerica as trustee
for FCTT and that the beneficial interest in such Series 1996-1 Asset has been
transferred to RCL Trust 1996-1.
(e) The Contributors shall cause the
Administrative Agent to permit RCL Trust 1996-1 and its agents (or any agents
of any assignee of RCL Trust 1996-1 contemplated by the Basic Documents) at any
time during
13
<PAGE> 17
normal business hours to inspect, audit, and make copies of and abstracts from
the Administrative Agent's records regarding any Series 1996-1 Asset.
(f) Upon request of RCL Trust 1996-1, the
Contributors shall cause the Administrative Agent to furnish to RCL Trust
1996-1, within twenty Business Days, a list of all Series 1996-1 Leases or
Series 1996-1 Leased Vehicles (by vehicle registration number and account
number), together with a reconciliation of such list to the Schedule of Series
1996-1 Leases.
Section 5.2 Other Liens or Interests. Except for the
conveyances hereunder and pursuant to the other Basic Documents, each of the
Contributors will not sell, pledge, assign or transfer the Series 1996-1
Certificates to any other Person, or grant, create, incur, assume or suffer to
exist any Lien on any interest therein, and each of the Contributors shall
defend the right, title, and interest of RCL Trust 1996-1 in, to and under such
Series 1996-1 Certificates against all claims of third parties claiming through
or under such Contributor; provided, however, that the Contributors'
obligations under this Section 5.2 shall terminate upon the termination of FCTT
pursuant to the FCTT Agreement.
Section 5.3 Costs and Expenses. The Contributors agree to
pay all reasonable costs and disbursements in connection with the perfection,
as against all third parties, of RCL Trust 1996-1's right, title and interest
in and to the Series 1996-1 Certificates.
Section 5.4 Indemnification. (a) Each Contributor shall
defend, indemnify, and hold harmless RCL Trust 1996-1 and the RCL Trustee from
and against any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from the failure of a Series 1996-1
Lease or Series 1996-1 Leased Vehicle to be originated in compliance with all
requirements of law and for any breach of any of the Contributors'
representations and warranties contained herein.
(b) Each Contributor shall defend, indemnify, and
hold harmless RCL Trust 1996-1 and the RCL Trustee from and against any and all
costs, expenses, losses, damages, claims, and liabilities, arising out of or
resulting from the use or operation by such Contribu-
14
<PAGE> 18
tors or any Affiliate of such Contributor or any Dealer of a Series 1996-1
Leased Vehicle.
(c) Each Contributor shall defend, indemnify, and
hold harmless RCL Trust 1996-1 and the RCL Trustee from and against any and all
taxes that may at any time be asserted against RCL Trust 1996-1 and the RCL
Trustee with respect to the transactions contemplated herein, including,
without limitation, any sales, use, gross receipts, general corporation,
tangible personal property, privilege, license or income taxes, taxes on or
measured by income, or any state or local taxes assessed on RCL Trust 1996-1
and the RCL Trustee resulting from the location of assets of RCL Trust 1996-1
or the presence of the RCL Trustee and costs and expenses in defending against
the same; provided, however, that the foregoing indemnity shall not include
income taxes on any fees payable to the RCL Trustee.
(d) Each Contributor shall defend, indemnify, and
hold harmless RCL Trust 1996-1 and the RCL Trustee 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 RCL Trust 1996-1 and the RCL Trustee through, the negligence,
willful misfeasance, or bad faith of the Contributors in the performance of
their duties under this Agreement or by reason of reckless disregard of the
Contributors' obligations and duties under this Agreement.
These indemnity obligations shall be in addition to any
obligation that each Contributor may otherwise have.
Section 5.5 Absolute Transfer; Sale or Exchange. Each
Contributor agrees to treat this conveyance for all purposes (including without
limitation tax and financial accounting purposes) as an absolute transfer;
which may be either a sale or exchange on all relevant books, records, tax
returns, financial statements and other applicable documents; provided that for
federal income tax purposes the Contributors will treat RCL Trust 1996-1 as a
grantor trust.
15
<PAGE> 19
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Obligations of Contributors. The obligations of
each of the Contributors under this Agreement shall not be affected by reason
of any invalidity, illegality or irregularity of any Series 1996-1 Asset.
Section 6.2 Acknowledgements. Each Contributor acknowledges
that: (a) Lease Trust. RCL Trust 1996-1 will, pursuant to the Transfer
Agreement, transfer the Series 1996-1 Certificates to the Lease Trust and
assign its rights under this Agreement to the Lease Trustee for the benefit of
the holders of the Senior Notes, the Subordinated Notes and the Lease Trust
Certificates and that the representations and warranties contained in this
Agreement and the rights of RCL Trust 1996-1 under Sections 3.3 and 5.4 are
intended to benefit such Lease Trust, any holders of Senior Notes, Subordinated
Notes or Lease Trust Certificates and the Indenture Trustee as assignee of the
Lease Trustee pursuant to the terms of the Indenture.
(b) Assignment. RCL Trust 1996-1 will, pursuant to
the RCL Assignment Agreement, assign, transfer and convey to Ford Credit
Leasing a 1% interest in the RCL Assets (as defined in the RCL Trust Agreement)
and all of the obligations of RCL Trust 1996-1, including its rights and
obligations under the Program Operating Lease and the Subordinated Notes and
any amounts payable to RCL Trust 1996-1 pursuant to the Transfer Agreement.
After giving effect to such assignment, transfer and conveyance, Ford Credit
Leasing's percentage beneficial interest in RCL Trust 1996-1 will be reduced
from 2% to the percentage equivalent of a fraction the numerator of which is 1,
and the denominator of which is 99, and Ford Credit's percentage beneficial
interest in RCL Trust 1996-1 will be increased from 98% to the percentage
equivalent of a fraction, the numerator of which is 98, and the denominator of
which is 99.
(c) Distribution. After the effective date of the
RCL Assignment Agreement, any distribution of property of RCL Trust 1996-1 to
Ford Credit and Ford Credit Leasing, as beneficiaries of RCL Trust 1996-1,
shall give effect to the RCL Assignment Agreement as provided in Section 5.2(b)
of the RCL Trust Agreement,
16
<PAGE> 20
such that an amount equal to 1% of the aggregate amount of such distribution
shall be distributed to Ford Credit Leasing, and the remaining 99% of such
aggregate amount shall be distributed to Ford Credit and Ford Credit Leasing in
proportion to their respective percentage beneficial interests in RCL Trust
1996-1, after giving effect to the RCL Assignment Agreement, as set forth in
Section 6.2(b).
Section 6.3 Amendment. This Agreement may be amended by the
parties hereto at any time; provided, however, that such action shall not, (x)
as evidenced by an Opinion of Counsel, materially adversely affect the
interests of the Senior Noteholders or Lease Trust Certificateholders (unless
100% of the Senior Noteholders and Lease Trust Certificateholders materially
adversely affected thereby consent thereto), (y) as confirmed by each Rating
Agency rating the Senior Notes or the Lease Trust Certificates, cause the then
current rating of any Class of Senior Notes or the Lease Trust Certificates to
be withdrawn or reduced and (z) as evidenced by an Opinion of Counsel, cause
the Lease Trust, RCL Trust 1996-1 or FCTT to be classified as an association
(or publicly traded partnership) taxable as a corporation for federal income
tax purposes.
Section 6.4 Waivers. No failure or delay on the part of RCL
Trust 1996-1 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 further exercise thereof
or the exercise of any other power, right or remedy.
Section 6.5 Costs and Expenses. The Contributors will pay
all expenses incident to the performance of their obligations under this
Agreement and the Contributors agree to pay all reasonable out-of-pocket costs
and expenses of the RCL Trustee, including fees and expenses of counsel, in
connection with the perfection as against third parties of RCL Trust 1996-1's
right, title and interest in and to the Series 1996-1 Assets and the
enforcement of any obligation of the Contributors hereunder.
Section 6.6 Representations of the Contributors and RCL Trust
1996-1. The respective agreements,
17
<PAGE> 21
representations, warranties and other statements by each of the Contributors
and RCL Trust 1996-1 set forth in or made pursuant to this Agreement shall
remain in full force and effect and will survive the closing under Section 2.2.
Section 6.7 Confidential Information. RCL Trust 1996-1
agrees that it will neither use nor disclose to any person the names and
addresses of the Lessees, except in connection with the enforcement of RCL
Trust 1996-1's rights hereunder, under the Series 1996-1 Leases and Series
1996-1 Leased Vehicles, under the Administrative Agency Agreement or as
required by law.
Section 6.8 Notices. All demands, notices and communications
upon or to Ford Credit, Ford Credit Leasing and RCL Trust 1996- 1 shall be in
writing, and shall be personally delivered, sent by electronic facsimile or
overnight delivery service or mailed by certified mail-return receipt
requested, and shall be deemed to have been duly given to the intended
recipient upon receipt at the respective addresses listed below, or at such
other address as shall be designated by such Person in a written notice to the
other parties to this Agreement.
(i) In the case of Ford Credit:
Ford Motor Credit Company
The American Road
FMCC Building
Dearborn, Michigan 48121
Attention: Secretary
Fax: 313-248-7613
Telephone: 313-594-7765
(ii) In the case of Ford Credit Leasing:
Ford Credit Leasing Company, Inc.
The American Road
FMCC Building
Dearborn, Michigan 48121
Attention: Treasurer
Fax: 313-594-0735
Telephone: 313-248-6722
18
<PAGE> 22
(iii) In the case of RCL Trust 1996-1:
c/o First Union Bank of Delaware
One Rodney Square
920 King Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
Fax: 302-888-7544
Telephone: 302-888-7537
with a copy to:
First Union National Bank of North Carolina
230 South Tryon Street CMC-9
Charlotte, North Carolina 28288
Attention: Pablo de la Canal
Section 6.9 Severability. 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 Series
1996-1 Certificates or the rights of the holders thereof.
Section 6.10 Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.
Section 6.11 Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the parties hereto and their respective successors and permitted assigns, all
as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by a party hereto shall bind the successors and assigns of
such party.
Section 6.12 Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
19
<PAGE> 23
Section 6.13 Governing Law. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
20
<PAGE> 24
IN WITNESS WHEREOF, the parties hereby have caused this Asset
Contribution Agreement to be executed by their respective officers thereunto
duly authorized as of the date and year first above written.
FORD MOTOR CREDIT COMPANY,
as a Contributor
By: /s/ Hurley D. Smith
-----------------------------
Name: Hurley D. Smith
Title: Secretary
FORD CREDIT LEASING COMPANY,
INC., as a Contributor
By: /s/ R. P. Conrad
-----------------------------
Name: R. P. Conrad
Title: Assistant Secretary
RCL TRUST 1996-1
By: FIRST UNION BANK OF DELAWARE,
not in its individual capacity,
but solely as RCL Trustee
By: /s/ Stephen J. Kaba
-----------------------------
Name: Stephen J. Kaba
Title: Vice President
<PAGE> 25
Exhibit A
Schedule of Series 1996-1 Assets
(DELIVERED IN MICROFICHE FORM)
A-1
<PAGE> 26
Exhibit B
Form of Series 1996-1 Lease
B-1
<PAGE> 1
EXHIBIT 4.8
TRANSFER AGREEMENT
dated as of
November 26, 1996
between
RCL TRUST 1996-1,
as Transferor,
and
PNC BANK, DELAWARE,
as Trustee of Ford Credit Auto Lease Trust 1996-1,
as Transferee
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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Section 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Transfer of Series 1996-1 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3. Transferor's Warranty; Reservation of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4. Assignment of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 5. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 6. Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 7. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 8. Signature Constitutes Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 9. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 10. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
</TABLE>
<PAGE> 3
TRANSFER AGREEMENT, dated as of November 26, 1996, between RCL
TRUST 1996-1, as Transferor (the "Transferor"), and PNC BANK, DELAWARE, acting
not in its individual capacity but solely as trustee of Ford Credit Auto Lease
Trust 1996-1, as Transferee (the "Transferee").
WHEREAS, the Series 1996-1 Certificates have been contributed
to the Transferor;
WHEREAS, the Transferor and the Transferee wish to set forth
the terms pursuant to which the Series 1996-1 Certificates are to be
transferred by the Transferor to the Transferee;
WHEREAS, immediately following such transfer, the Transferee
intends first to grant to The Chase Manhattan Bank, in its capacity as
Indenture Trustee under the Indenture dated as of November 26, 1996 entered
into with the Transferee, a security interest in the Series 1996-1 Certificates
and then, subject to such security interest, grant to the Transferor the right
to the use of, and proceeds from, the Series 1996-1 Certificates for the term
set forth in, and pursuant to the terms and conditions of, the Program
Operating Lease between the Transferee and the Transferor;
NOW, THEREFORE, the Transferor and the Transferee agree as
follows:
Section 1. Definitions. Whenever used in this Agreement
capitalized terms have the meanings assigned to them herein or, if not defined
herein, as defined in Appendix A attached hereto. To the extent that the
definitions set forth herein conflict with the definitions set forth in
Appendix A, or incorporated by reference therein, the definitions set forth
herein shall be controlling.
"Agreement" means this Transfer Agreement.
"Transfer Price" means the Series 1996-1 Asset Amount net of
any purchase discount and underwriting commissions.
Section 2. Transfer of Series 1996-1 Certificates. (a) In
consideration of the Transfer Price paid
1
<PAGE> 4
by the Transferee to the Transferor, and other good and valuable consideration,
receipt of which is hereby acknowledged, the Transferor does hereby grant,
convey, bargain, assign, transfer, deliver, and set over to the Transferee, its
successors and assigns, all of the Transferor's right, title and interest in
and to the Series 1996-1 Certificates, to have and to hold the same unto the
Transferee, its successors and assigns, forever.
(b) An amount equal to the Transfer Price payable by delivery
of (1) the Class A-1 5.45125% Asset Backed Senior Notes of the Transferee with
a principal balance of $150,000,000, (2) the Class A-2 5.80% Asset Backed
Senior Notes of the Transferee with a principal balance of $660,843,000, (y)
the 6.00% Asset Backed Subordinated Notes of the Transferee with a principal
balance of $106,690,331.13 and (z) the 6.10% Asset Backed Lease Trust
Certificates of the Transferee with a principal balance of $30,821,533.09,
shall be paid by the Transferee to the Transferor on the Closing Date.
(c) The Transferor agrees to pay on behalf of the Transferee
expenses consisting of accounting, printing and rating agency fees incurred in
connection with the offering of the Senior Notes and the Lease Trust
Certificates by the Transferee, such amounts to be treated as a contribution by
the Transferor to the Transferee.
Section 3. Transferor's Warranty; Reservation of Security
Interest. (a) The Transferor does hereby warrant to the Transferee, its
successors and assigns that (i) it is the true and lawful owner of the Series
1996-1 Certificates and has the legal right to transfer the Series 1996-1
Certificates; (ii) it has good and valid title to the Series 1996-1
Certificates and that the Series 1996-1 Certificates are on the date hereof
free and clear of all Liens; (iii) good, valid and indefeasible title to the
Series 1996-1 Certificates is hereby conveyed to the Transferee; and (iv) the
Transferor will warrant and defend such title against the claims of all
Persons.
(b) To the extent that the conveyance of the Series 1996-1
Certificates hereunder is characterized by a court or similar Governmental
Authority as a financing, it is intended by the Transferor and the Transferee
that the interest conveyed hereunder constitute a grant of a
2
<PAGE> 5
security interest under the UCC as in effect in the State of New York by the
Transferor to the Transferee to secure a loan by the Transferee of the Transfer
Price to the Transferor. The Transferor hereby grants to the Transferee a
first priority security interest in and against all of the Transferor's right,
title and interest in and to the Series 1996-1 Certificates. To the extent
that the conveyance of the Series 1996-1 Certificates hereunder is
characterized by a court or similar Governmental Authority of competent
jurisdiction as a financing, the parties hereto agree that this Agreement
constitutes a "security agreement" under all applicable laws.
Section 4. Assignment of Rights. The Transferor hereby
assigns, transfers and sets over unto the Transferee all of the Transferor's
right, title and interest in and to the Asset Contribution Agreement,
including, without limitation, all rights of the Transferor, as Holder of the
Series 1996-1 Certificates, under the Administrative Agency Agreement and the
Series 1996-1 Supplement. Such transfer and assignment includes, without
limitation, all rights, powers and remedies of the Transferor under the Asset
Contribution Agreement and as Holder of the Series 1996-1 Certificates,
including any rights to indemnity or other payments thereunder.
Section 5. Waivers. No failure or delay on the part of the
Transferee 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 further exercise thereof or
the exercise of any other power, right or remedy.
Section 6. Confidential Information. The Transferee agrees
that it will neither use nor disclose to any person the names and addresses of
the Lessees under the Series 1996-1 Leases and Series 1996-1 Leased Vehicles,
except in connection with the enforcement of the Transferee's rights hereunder,
under the Administrative Agency Agreement or as required by law.
Section 7. Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.
3
<PAGE> 6
Section 8. Signature Constitutes Acceptance. By signing this
Agreement, the Transferee hereby acknowledges receipt of and accepts the Series
1996-1 Certificates and the Transferor hereby acknowledges receipt of the
Transfer Price thereof.
Section 9. Headings. The headings of the various Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
Section 10. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
4
<PAGE> 7
IN WITNESS WHEREOF, the parties hereby have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date and year first above written.
RCL TRUST 1996-1
By: FIRST UNION BANK OF DELAWARE,
not in its individual capacity, but
solely as trustee of RCL Trust
1996-1, as Transferor
By: /s/ Stephen J. Kaba
------------------------------
Name: Stephen J. Kaba
Title: Vice President
PNC BANK, DELAWARE, not in its
individual capacity, but solely as
trustee of Ford Credit Auto Lease
Trust 1996-1, as Transferee
By: /s/ Michael B. McCarthy
------------------------------
Name: Michael B. McCarthy
Title: Vice President
<PAGE> 1
EXHIBIT 4.9
[PROGRAM OPERATING LEASE]
CERTAIN RIGHTS OF THE PROGRAM LESSOR UNDER THIS AGREEMENT AND
IN THE SERIES 1996-1 CERTIFICATES COVERED HEREBY HAVE BEEN ASSIGNED TO, AND ARE
SUBJECT TO A SECURITY INTEREST IN FAVOR OF, THE CHASE MANHATTAN BANK AS
INDENTURE TRUSTEE UNDER AN INDENTURE, DATED AS OF NOVEMBER 26, 1996. THIS
AGREEMENT HAS BEEN EXECUTED IN MULTIPLE COUNTERPARTS. NO SECURITY INTEREST IN
THE PROGRAM LESSOR'S RIGHT, TITLE AND INTEREST IN AND TO THIS AGREEMENT MAY BE
CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE
ORIGINAL COUNTERPART. THIS IS NOT THE ORIGINAL COUNTERPART UNLESS IT IS
SEPARATELY MARKED "ORIGINAL" AND BEARS THE MANUALLY-SIGNED RECEIPT OF THE
INDENTURE TRUSTEE.
- --------------------------------------------------------------------------------
AGREEMENT
dated as of November 26, 1996
between
RCL TRUST 1996-1,
as Program Lessee
and
PNC BANK, DELAWARE,
as trustee of Ford Credit Auto Lease Trust 1996-1,
as Program Lessor
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
LEASE OF CERTIFICATES
Section 2.1 Lease of Series 1996-1 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
TERM AND PAYMENTS
Section 3.1 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.2 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.3 Form of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.4 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.5 Cash Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.6 Release of Cash Collateral Account Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.7 Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV
UNCONDITIONAL OBLIGATION
Section 4.1 Unconditional Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V
RETURN OF THE SERIES 1996-1 CERTIFICATES
Section 5.1 Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.2 No Liens upon Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VI
WARRANTY OF THE PROGRAM LESSOR;
ASSIGNMENT AND PLEDGE OF SERIES 1996-1 CERTIFICATES,
RELATED ACCOUNTS AND SUBORDINATED NOTES
</TABLE>
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Section 6.1 Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.2 Program Lessee's Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.3 Assignment and Pledge of Series 1996-1 Certificates, Series 1996-1 Collection Account,
Series 1996-1 Payahead Account and Cash Collateral Account . . . . . . . . . . . . . . . . . . . 10
Section 6.4 Assignment and Pledge of Subordinated Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.5 Deposits to Cash Collateral Account in Respect of Subordinated Notes . . . . . . . . . . . . . . 11
Section 6.6 Application of Subordinated Note Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VII
LIENS; LOCATION AND INSPECTION
Section 7.1 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.2 Change of Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.3 Inspection and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VIII
NO SUBLEASE OR RENEWAL
Section 8.1 No Rights to Sublease or Renew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE IX
PROGRAM LESSEE PURCHASE OPTION
Section 9.1 Program Lessee's Option to Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 9.2 Transferor Purchase Option Net Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE X
LEASE EVENTS OF DEFAULT
Section 10.1 Lease Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
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ARTICLE XI
REMEDIES
Section 11.1 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 11.2 No Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11.3 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11.4 Exercise of Other Rights or Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE XII
ASSIGNMENT OF LEASE
Section 12.1 Program Lessee's Consent to Assignment by Program Lessor . . . . . . . . . . . . . . . . . . . . 19
Section 12.2 Program Lessor's Consent to Assignment by Program Lessee . . . . . . . . . . . . . . . . . . . . 19
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 13.2 Distribution of Series 1996-1 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 13.3 Termination of Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 13.4 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 13.5 Right to Perform for Program Lessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 13.6 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 13.7 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 13.8 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 13.9 Original . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 13.10 Single Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 13.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 13.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 13.13 Counterpart Execution and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 13.14 Concerning the Program Lessor and the Program Lessee . . . . . . . . . . . . . . . . . . . . . . 23
Exhibit A Form of Letter to Lease Trust Paying Agent
</TABLE>
iii
<PAGE> 5
This agreement, dated as of November 26, 1996 (this "Program
Operating Lease"), between (i) PNC BANK, DELAWARE, a Delaware corporation, not
in its individual capacity but solely as trustee of Ford Credit Auto Lease
Trust 1996-1 (the "Program Lessor") and (ii) RCL TRUST 1996-1 (the "Program
Lessee").
W I T N E S S E T H :
WHEREAS, the Series 1996-1 Certificates (such term and other
capitalized terms used herein without definition having the meanings as
provided in Article I hereof) evidence the beneficial interest in the Series
1996-1 Assets, including the right to receive any lease payments in connection
with the Series 1996-1 Leases and any proceeds from the disposition of Series
1996-1 Leased Vehicles;
WHEREAS, pursuant to that certain Transfer Agreement between
RCL Trust 1996-1 and the Lease Trust, the Series 1996-1 Certificates have been
transferred to the Program Lessor;
WHEREAS, pursuant to the Indenture, the Program Lessor has
granted a security interest in the Series 1996-1 Certificates to The Chase
Manhattan Bank, as Indenture Trustee;
WHEREAS, the Program Lessee desires to obtain certain rights
in and to the Series 1996-1 Certificates from the Program Lessor, including all
rights to payment and distribution on the Series 1996-1 Certificates during the
term hereof, and the Program Lessor is willing to grant to the Program Lessee
such rights in and to the Series 1996-1 Certificates for the period specified
herein on the terms and conditions set forth herein; and
WHEREAS, the Program Lessee is willing to assign and pledge
certain rights in and to the Series 1996-1 Certificates, related accounts and
the Subordinated Notes to the Program Lessor to secure its obligations under
this Program Operating Lease.
NOW, THEREFORE, the Program Lessor and the Program Lessee
hereto agree as follows:
<PAGE> 6
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Program
Operating Lease capitalized terms have the meanings assigned to them herein or,
if not defined herein, as defined in Appendix A attached hereto. To the extent
that the definitions set forth herein conflict with the definitions set forth
in Appendix A, or incorporated by reference therein, the definitions set forth
herein shall be controlling.
"Lease Term" has the meaning set forth in Section 3.1.
"Notice of Lease Event of Default" has the meaning set forth
in Section 11.1.
"Permitted Liens" means the respective rights and interests of
the Program Lessor and the Indenture Trustee in the Series 1996-1 Certificates
and this Program Operating Lease pursuant to the terms of the Basic Documents,
including the rights of any permitted assignee of the Program Lessor or the
Indenture Trustee.
"Program Operating Lease Termination Date" means the
termination date of this Program Operating Lease, which shall be earlier of (i)
240 days after the latest Scheduled Lease End Date of any Series 1996-1 Lease
and (ii) the termination of the Program Operating Lease pursuant to Section
11.1(a). Notwithstanding the Program Operating Lease Termination Date, this
Program Operating Lease will expire with respect to any right to receive
payments on the Series 1996-1 Certificates relating to each Series 1996-1
Leased Vehicle immediately preceding the earlier of (i) the sale of such Series
1996-1 Leased Vehicle, but only if such sale occurs on or after the related
Scheduled Lease End Date and (ii) the date on which a Sale Proceeds Advance is
made with respect to such Series 1996-1 Leased Vehicle.
"Program Operating Lease Termination Value" means, as of any
Payment Date, an amount equal to the sum of (i) any interest due and payable on
the Senior Notes, the Subordinated Notes and the Lease Trust Certificates, (ii)
the Outstanding Amount of the Senior Notes and the Subordinated Notes and the
Aggregate Certificate Balance
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<PAGE> 7
of the Lease Trust Certificates and (iii) any other amounts payable by the
Program Lessor under the Basic Documents.
ARTICLE II
LEASE OF CERTIFICATES
Section 2.1 Lease of Series 1996-1 Certificates. Subject to
the terms and conditions hereof, the Program Lessor hereby agrees to lease to
the Program Lessee, and the Program Lessee hereby agrees to lease from the
Program Lessor, for the Lease Term referred to in Section 3.1, the Series
1996-1 Certificates, including all rights to payment of money on the Series
1996-1 Certificates during the Lease Term; provided, however, that this Program
Operating Lease is subject to the prior security interest granted pursuant to
the Indenture by the Program Lessor to The Chase Manhattan Bank, as Indenture
Trustee.
ARTICLE III
TERM AND PAYMENTS
Section 3.1 Term. The term of this Program Operating Lease
(the "Lease Term") shall begin on the Closing Date and shall end on the earlier
of the date on which (a) all assets of the Program Lessee have been applied to
pay its obligations under the Basic Documents and (b) the Lease Trust
Certificates and the Program Lessee's obligations under the Basic Documents are
paid in full.
Section 3.2 Payments. (a) On or before the Business Day
preceding each Payment Date during the Lease Term, the Program Lessee shall pay
the Required Interest Payment due with respect to such Payment Date to the
Program Lessor.
(b) In addition to the Required Interest Payment payable by
the Program Lessee to the Program Lessor pursuant to Section 3.2(a), the
Program Lessee shall pay the Additional Payment to the Program Lessor on or
before each Payment Date.
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<PAGE> 8
(c) On any Payment Date, the Required Interest Payment and
the Additional Payment shall be deemed to have been made by the Program Lessee
to the extent that an amount equal to such Required Interest Payment and
Additional Payment has been withdrawn by the Indenture Trustee or the Lease
Trustee from amounts deposited in the Cash Collateral Account.
Section 3.3 Form of Payment. All payments due under this
Program Operating Lease shall be made to the Program Lessor in immediately
available funds prior to 11:00 A.M., New York City time on the applicable
Payment Date.
Section 3.4 Tax Treatment. The Program Lessor and Program
Lessee agree to treat the Series 1996-1 Certificates as being owned by the
Program Lessee and, following the execution of the RCL Assignment Agreement,
Ford Credit Leasing for federal and State income and franchise tax purposes and
further agree that the Program Lessee and Ford Credit Leasing are intended to
be the owners of the Series 1996-1 Certificates for federal and State income
and franchise tax purposes.
Section 3.5 Cash Collateral Account. (a) The Program Lessee
shall establish and maintain an account (the "Cash Collateral Account") at an
Eligible Institution, which agrees to abide by the provisions of Section 3.7,
in the name of "RCL Trust 1996-1, subject to the security interest of The Chase
Manhattan Bank, as Indenture Trustee, and Ford Credit Auto Lease Trust 1996-1,
as secured parties" and which initially shall be The Chase Manhattan Bank. The
Cash Collateral Account shall be under the sole dominion and control of the
Indenture Trustee until the Outstanding Amount of the Senior Notes has been
reduced to zero, and thereafter, under the sole dominion and control of the
Lease Trustee. On the Closing Date, the Program Lessee shall deposit the
Initial Cash Collateral Deposit into the Cash Collateral Account. The Cash
Collateral Account shall not be property of the Program Lessor. All amounts on
deposit in and credited to the Cash Collateral Account, including the Initial
Cash Collateral Deposit and all proceeds thereof (such amounts, the "Cash
Collateral Account Property") shall be invested by the Indenture Trustee until
the Outstanding Amount of the Senior Notes has been reduced to zero, and
thereafter by the Lease Trustee, in Cash Collateral Ac-
4
<PAGE> 9
count Investments. All investment earnings on amounts deposited to the Cash
Collateral Account shall be credited to the Cash Collateral Account, and
losses, if any, and investment expenses resulting from Cash Collateral Account
Investments shall be charged to the Cash Collateral Account. All such
investment income shall be reported for federal income tax purposes as being
earned (i) 99% by RCL Trust 1996-1 and (ii) 1% by Ford Credit Leasing; the 99%
accruing to RCL Trust 1996-1 shall be reported by Ford Credit and Ford Credit
Leasing in accordance with their respective Percentage Interests in RCL Trust
1996-1. If the institution at which the Cash Collateral Account is maintained
ceases to be an Eligible Institution, then the Cash Collateral Account shall be
moved to an Eligible Institution within ten Business Days (or such longer
period not to exceed 30 calendar days as to which each Rating Agency may
consent). The Program Lessee hereby pledges, assigns and conveys all of its
right, title and interest in, to and under the Cash Collateral Account and all
securities or other property credited thereto from time to time to (i) the
Program Lessor, to secure the Program Lessee's obligations under this Program
Operating Lease and (ii) the Indenture Trustee, to secure the obligations of
the Program Lessor under the Indenture.
(b) The Program Lessor agrees that:
(i) pursuant to Section 5.2(e) of the Series 1996-1
Supplement, on or prior to the Business Day preceding each Payment
Date, the Administrative Agent shall deposit the Cash Collateral
Deposit Amount into the Cash Collateral Account;
(ii) pursuant to Section 8.2(d) of the Indenture, on
or prior to the Business Day preceding each Payment Date, the
Indenture Trustee until the Outstanding Amount of the Senior Notes has
been reduced to zero, and thereafter the Lease Trustee, shall deposit
all investment earnings, if any, on amounts deposited to the
Certificate Distribution Account, including any proceeds thereof, net
of losses, if any, and investment expenses resulting from Permitted
Investments in the Certificate Distribution Account, into the Cash
Collateral Account;
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<PAGE> 10
(iii) pursuant to Section 6.5 of this Program
Operating Lease, on each Payment Date, the Lease Trust Paying Agent
shall deposit any payments received on the Subordinated Notes into the
Cash Collateral Account; and
(iv) pursuant to Section 9.2 of this Program
Operating Lease, on the Business Day preceding each Payment Date, or
on each Business Day if each Monthly Remittance Condition has not been
satisfied, the Program Lessee shall deposit or cause to be deposited
any Transferor Purchase Option Net Proceeds into the Cash Collateral
Account until the aggregate cumulative amount deposited into the Cash
Collateral Account in respect of such proceeds equals $94,835,486.42.
All such amounts shall be considered Cash Collateral Account Property subject
to the security interests of the Program Lessor and the Indenture Trustee.
(c) The Program Lessor agrees that the Indenture Trustee
shall, (i) pursuant to Section 8.4(a) of the Indenture, on the Business Day
preceding each Payment Date withdraw from the Cash Collateral Account the Cash
Collateral Required Draw Amount and (ii) pursuant to Section 8.4(c) of the
Indenture, on each Payment Date withdraw from the Cash Collateral Account the
Cash Collateral Additional Draw Amount.
(d) In the event of a Lease Event of Default, any amounts on
deposit in the Cash Collateral Account shall be applied to pay any amounts due
and owing pursuant to Sections 11.1(c) and 11.1(d).
Section 3.6 Release of Cash Collateral Account Property. At
the close of business on the Payment Date on which the Lease Trust Certificates
and the Program Lessee's obligations under the Basic Documents have been paid
in full, including the Program Lessee's obligation under Section 5.4 of the
Series 1996-1 Supplement to reimburse the Administrative Agent for any
outstanding Monthly Payment Advances and Sales Proceeds Advances, the Program
Lessor shall release to the Program Lessee all of the Program Lessor's right,
title and interest in, to, and under any remaining Cash Collateral Account
Property and the Program Lessee shall have no obligation to make
6
<PAGE> 11
any further or past due Required Interest Payments or Additional Payments
hereunder.
Section 3.7 Control. Notwithstanding anything else contained
herein, the Cash Collateral Account shall only be established at an Eligible
Institution that agrees in writing that (i) all Cash Collateral Account
Investments shall be promptly credited to the Cash Collateral Account, (ii) all
securities, cash or other property credited to the Cash Collateral Account
shall be treated as a "financial asset" within the meaning of Section
8-102(a)(9) of the 1994 Official Text of Article 8 of the Uniform Commercial
Code ("Revised Article 8"), (iii) at all times prior to being notified in
writing by the Indenture Trustee that the Outstanding Amount of the Senior
Notes has been reduced to zero, it will comply with entitlement orders (as
defined in Section 8-102(a)(8) of Revised Article 8) originated by the
Indenture Trustee without further consent of the Program Lessee or any other
person, (iv) after being notified in writing by the Indenture Trustee that the
Outstanding Amount of the Senior Notes has been reduced to zero, it will comply
with entitlement orders (as defined in Section 8-102(a)(8) of Revised Article
8) originated by the Lease Trustee without further consent of the Program
Lessee or any other person and (v) the Cash Collateral Account shall be
governed by the law of the State of New York as the same may be amended from
time to time.
ARTICLE IV
UNCONDITIONAL OBLIGATION
Section 4.1 Unconditional Obligation. The Program Lessee
hereby acknowledges and agrees that the obligation of the Program Lessee to pay
all Required Interest Payments and Additional Payments due hereunder and any
required Program Operating Lease Termination Value, and the rights of the
Program Lessor in and to such Required Interest Payments and Additional
Payments and Program Operating Lease Termination Value, shall be absolute and
unconditional and shall not be affected by any circumstance of any character,
including, without limitation,
(a) any set-off, abatement, counterclaim, suspension,
recoupment, reduction, defense or other right or claim which the Program Lessee
may have against the
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<PAGE> 12
Program Lessor, the Indenture Trustee, in its individual capacity or as
Indenture Trustee, any holder of a Senior Note, Subordinated Note or Lease
Trust Certificate, or any other Person for any reason whatsoever;
(b) the breach or failure of any warranty or representation
made in, or the failure to perform or comply with any of the terms of, this
Program Operating Lease by the Program Lessor, the Indenture Trustee, any
holder (other than the Program Lessee) of a Senior Note, Subordinated Note or
Lease Trust Certificate or any other Person;
(c) any amendment or other change of, or any assignment of
rights under, this Program Operating Lease or any other Basic Document, or any
waiver, action or inaction under or in respect of this Program Operating Lease,
or any exercise or non-exercise of any right or remedy under this Program
Operating Lease, including, without limitation, the exercise of any foreclosure
or other remedy under the Indenture, this Program Operating Lease or the sale
of the Series 1996-1 Certificates, or any part thereof or any interest therein;
(d) any insolvency, bankruptcy or similar law affecting
creditors' rights generally;
(e) any claims as a result of any other business dealings by
the Program Lessor, the Program Lessee or any Affiliate thereof, or the
Indenture Trustee;
(f) any defect in or any Lien on the title to the Series
1996-1 Certificates or any part thereof;
(g) any change, waiver, extension, indulgence or other act or
omission in respect of any obligation or liability of the Program Lessor or the
Program Lessee;
(h) any alleged failure on the part of the Program Lessor to
perform or comply with any of the terms hereof or any other agreement;
(i) any invalidity or unenforceability or disaffirmance of
this Program Operating Lease or any provision hereof or any of the other Basic
Documents;
8
<PAGE> 13
(j) any assignment, novation, merger, consolidation, sale or
transfer of assets, leasing or other similar transaction of or affecting the
Program Lessee or Program Lessor, whether with or without the approval of the
Indenture Trustee except as expressly provided in this Program Operating Lease;
or
(k) any other circumstance or happening whatsoever whether or
not similar to any of the foregoing.
Each Required Interest Payment and Additional Payment made by
the Program Lessee hereunder shall be final and, absent manifest error, the
Program Lessee shall not seek to have any right to recover all or any part of
such payment from the Program Lessor or any other Person for any reason
whatsoever. The Program Lessee hereby waives, to the extent permitted by
Applicable Law, any and all rights which it may now have or which at any time
hereafter may be conferred upon it, by statute or otherwise, to terminate,
cancel, quit or surrender this Program Operating Lease except in accordance
with the express terms hereof.
ARTICLE V
RETURN OF THE SERIES 1996-1 CERTIFICATES
Section 5.1 Delivery. The Series 1996-1 Certificates will be
delivered to the Program Lessor in connection with the execution of the
Transfer Agreement and then immediately delivered to the Indenture Trustee.
Thereafter, until the lien of the Indenture is released, the Indenture Trustee
will maintain physical possession of the Series 1996-1 Certificates for the
benefit of the Senior Noteholders; provided that the Program Lessee will
continue to have all rights with respect to the Series 1996-1 Certificates set
forth in this Program Operating Lease. To the extent the Program Lessee has
physical possession of the Series 1996-1 Certificates, then at the end of the
Lease Term the Program Lessee shall deliver the Series 1996-1 Certificates to
the Program Lessor.
Section 5.2 No Liens upon Return. At the time of return of
the Series 1996-1 Certificates by the Program Lessee each Series 1996-1
Certificate shall, at the cost and expense of the Program Lessee, be free and
clear of all Liens (other than any Permitted Liens).
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<PAGE> 14
ARTICLE VI
WARRANTY OF THE PROGRAM LESSOR;
ASSIGNMENT AND PLEDGE OF SERIES 1996-1 CERTIFICATES,
RELATED ACCOUNTS AND SUBORDINATED NOTES
Section 6.1 Quiet Enjoyment. The Program Lessor warrants
that during the Lease Term, so long as no Lease Event of Default shall have
occurred and be continuing, the Program Lessee's receipt of the benefits of the
payments on the Series 1996-1 Certificates (subject to the pledge under this
Program Operating Lease and to the lien of the Indenture) shall not be
interrupted by the Program Lessor or any Person claiming by, through or under
the Program Lessor.
Section 6.2 Program Lessee's Rights. So long as no Lease
Event of Default shall have occurred and be continuing hereunder, the Program
Lessee shall enjoy all rights to the Series 1996-1 Certificates during the
Lease Term and, except as otherwise specifically provided in the Basic
Documents, shall have the exclusive claim (subject to the lien of the
Indenture) during the Lease Term to receive all distributions and proceeds with
respect to the Series 1996-1 Certificates. As provided in Section 8.6 of the
Series 1996-1 Supplement, (i) for purposes of Section 2.6(b) of the FCTT
Agreement, the Program Lessor and the Program Lessee and its permitted assigns
shall each be a "Holder", but the Program Lessee and its permitted assigns
shall indemnify the Program Lessor against any Liabilities pursuant to Section
2.6(b) of the FCTT Agreement, and (ii) for purposes of Section 7.1 of the FCTT
Agreement, the Program Lessor and the Program Lessee and its permitted assigns
shall each be a Holder. Upon the occurrence and during the continuance of a
Lease Event of Default, the Program Lessee will no longer have any right to
vote or direct actions with respect to any of the Basic Documents. For
purposes of Section 6.9(c) of the FCTT Agreement, the obligations to pay
expenses in connection with the removal of Comerica shall be borne by the
Program Lessee.
Section 6.3 Assignment and Pledge of Series 1996-1
Certificates, Series 1996-1 Collection Account, Series 1996-1 Payahead Account
and Cash Collateral Account. The Program Lessee acknowledges that its interest
in the Series 1996-1 Certificates and the related ac-
10
<PAGE> 15
counts under this Program Operating Lease is subject to the prior pledge by the
Program Lessor to the Indenture Trustee under the Indenture. The Program
Lessee hereby pledges, assigns and conveys its interest in the Series 1996-1
Certificates (i) to the Program Lessor to secure the Program Lessee's
obligations under this Program Operating Lease and (ii) to the Indenture
Trustee to secure the payment of the Senior Notes and the compliance by the
Program Lessor with the provisions of the Indenture. In addition, the Program
Lessee hereby pledges, assigns and conveys all of its right, title and interest
in, to and under the Series 1996-1 Collection Account, the Series 1996-1
Payahead Account and the Cash Collateral Account to (i) the Program Lessor to
secure the Program Lessee's obligations under this Program Operating Lease and
(ii) to the Indenture Trustee to secure the obligations of the Program Lessor
under the Indenture.
Section 6.4 Assignment and Pledge of Subordinated Notes.
Pursuant to Section 2 of the Transfer Agreement, the Program Lessor has issued
the Subordinated Notes to the Program Lessee as partial payment for the Series
1996-1 Certificates. The Program Lessee hereby pledges, assigns and conveys
all of its right, title and interest in, to and under the Subordinated Notes to
(i) the Program Lessor to secure the Program Lessee's obligations under this
Program Operating Lease and (ii) to the Indenture Trustee to secure the
obligations of the Program Lessor under the Indenture. Pursuant to Section 8.6
of the Indenture, the Indenture Trustee will deliver the Subordinated Notes to
the Program Lessor at such time as there are no Senior Notes Outstanding and
all sums due the Indenture Trustee pursuant to Section 6.7 of the Indenture
have been paid. Upon such delivery, the Program Lessor shall hold the
Subordinated Notes to perfect the pledge thereof by the Program Lessee pursuant
to this Section 6.4.
Section 6.5 Deposits to Cash Collateral Account in Respect of
Subordinated Notes. On each Payment Date, the Program Lessee agrees to deposit
or cause to be deposited into the Cash Collateral Account all payments on the
Subordinated Notes made to it on such date. In furtherance of the foregoing,
on the date hereof the Program Lessee shall deliver a letter to the Lease Trust
Paying Agent in substantially the form attached hereto as Exhibit A, which
letter shall direct the Lease Trust
11
<PAGE> 16
Paying Agent to deposit into the Cash Collateral Account all payments received
with respect to the Subordinated Notes on each Payment Date.
Section 6.6 Application of Subordinated Note Payments. The
Program Lessee and the Program Lessor agree that amounts payable in respect of
the Additional Payment payable by the Program Lessee to the Program Lessor and
the amount payable by the Program Lessor, as obligor on the Subordinated Notes,
to the Program Lessee, may be paid on a net basis. The Program Lessor and the
Program Lessee agree that (i) the Subordinated Notes shall remain outstanding
and (ii) the Program Lessor's obligations under the Subordinated Notes and the
Program Lessee's obligation to make Additional Payments hereunder shall
continue to be in full force and effect notwithstanding the agreement of the
Program Lessor and the Program Lessee to make payments of principal and
interest on the Subordinated Notes and Additional Payments under this Program
Operating Lease on a net basis. Accordingly, the Program Lessor and the
Program Lessee each agree to account for all Additional Payments under this
Program Operating Lease and all payments of principal and interest on the
Subordinated Notes as if such amounts were paid separately.
ARTICLE VII
LIENS; LOCATION AND INSPECTION
Section 7.1 Liens. The Program Lessee will not directly or
indirectly create, assume or suffer to exist any Lien on or with respect to,
among other things, the Series 1996-1 Certificates, any title thereto or any
interest therein (including any rights to payment) other than Permitted Liens.
The Program Lessee will promptly, at its own expense, take such action as may
be necessary to duly discharge any such Lien other than a Permitted Lien.
Section 7.2 Change of Location. If following the payment in
full of the Senior Notes and the release of the lien of the Indenture, the
Program Lessee shall have obtained possession of the Series 1996-1
Certificates, then the Program Lessee shall provide the Program Lessor with
written notice of its intention to relocate any Series 1996-1 Certificates in
accordance with the
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<PAGE> 17
terms hereof at least one month prior to the date such relocation is commenced.
Notwithstanding the previous sentence, no relocation of any Series 1996-1
Certificates by the Program Lessee shall be commenced or made if a Lease Event
of Default shall have occurred and be continuing.
Section 7.3 Inspection and Information. At reasonable
intervals during the Lease Term and at any time a Lease Event of Default has
occurred and is continuing, the Program Lessor and its representatives shall
have the right, but not the duty, to inspect the Series 1996-1 Certificates and
all records related thereto, including all records relating to the receipt or
distribution of funds with respect to the Series 1996-1 Certificates.
ARTICLE VIII
NO SUBLEASE OR RENEWAL
Section 8.1 No Rights to Sublease or Renew. Except as set
forth in Sections 12.1 and 12.2, the Program Lessee shall not assign, pledge,
sell, transfer, sublease or otherwise dispose of its interest under this
Program Operating Lease at any time. Except as provided pursuant to the Basic
Documents, the Program Lessee will not transfer possession or relinquish
control of any Series 1996-1 Certificates. The Program Lessee may not renew
the term of this Program Operating Lease.
ARTICLE IX
PROGRAM LESSEE PURCHASE OPTION
Section 9.1 Program Lessee's Option to Purchase. Upon the
occurrence of the Program Operating Lease Termination Date with respect to any
payments attributable to each Series 1996-1 Leased Vehicle, the Program Lessee
may, in the circumstances set forth in the next succeeding sentence, acquire
the Program Lessor's beneficial interest in such Series 1996-1 Leased Vehicle
by paying to the Program Lessor an amount equal to the RCL Purchase Option
Price of such Series 1996-1 Leased Vehicle. The Program Lessee shall acquire
the beneficial interest in a Series 1996-1 Leased Vehicle only if (A) (i) the
proceeds from the sale or disposition of such
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<PAGE> 18
Series 1996-1 Leased Vehicle (including any Insurance Proceeds available to the
Program Lessor relating to loss or damage to such Series 1996-1 Leased
Vehicle), plus (ii) any amounts collected in connection with Excess Wear and
Tear and Excess Mileage with respect to such Series 1996-1 Leased Vehicle,
including by application of any Security Deposit or Reconditioning Reserve, in
each case net of sales or use taxes and minus (iii) amounts refunded pursuant
to the related Series 1996-1 Lease to the related Lessee for prepaid Excess
Mileage and prepaid Excess Wear and Tear, is greater than (B) the RCL Purchase
Option Price. Upon payment by the Program Lessee of the RCL Purchase Option
Price to the Program Lessor, such Series 1996-1 Leased Vehicle shall no longer
be a Series 1996-1 Asset, effective as of the date of such payment, and the
Program Lessor shall instruct the Administrative Agent to change its records
accordingly and deliver the Certificate of Title for such Series 1996-1 Leased
Vehicle to the Program Lessee or its designee. To the extent that the Program
Lessor exercises its option to purchase the beneficial interest in a Series
1996-1 Leased Vehicle as described herein, it shall pay or cause to be paid the
related RCL Purchase Option Price to the Program Lessor either by depositing
such amount in the Series 1996-1 Collection Account or by repaying the related
Sale Proceeds Advance, if any, to the Administrative Agent. The Program Lessor
and the Program Lessee each intend that the Program Lessee shall exercise its
option to purchase a Series 1996-1 Leased Vehicle in each instance where the
amount in clause (A) of the third preceding sentence exceeds the amount in
clause (B) of such sentence (such excess, the "Transferor Purchase Option Net
Proceeds").
Section 9.2 Transferor Purchase Option Net Proceeds. As
additional security for its obligations hereunder, on the Business Day
preceding each Payment Date, or on each Business Day if each Monthly Remittance
Condition has not been satisfied, the Program Lessee shall deposit or cause to
be deposited all Transferor Purchase Option Net Proceeds into the Cash
Collateral Account until the aggregate cumulative amount deposited in the Cash
Collateral Account in respect of Transferor Purchase Option Net Proceeds equals
$94,835,486.42. Once the aggregate cumulative amount deposited in the Cash
Collateral Account in respect of Transferor Purchase Option Net Proceeds equals
$94,835,486.42, any Transferor
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<PAGE> 19
Purchase Option Net Proceeds shall be deposited in the RCL Account and any
Transferor Purchase Option Net Proceeds so deposited shall be property of the
Program Lessee.
ARTICLE X
LEASE EVENTS OF DEFAULT
Section 10.1 Lease Events of Default. The term "Lease Event
of Default," means any of the following events:
(a) on any Payment Date, the Program Lessee shall have failed
to make, or cause to be made, the Required Interest Payment due on such Payment
Date;
(b) the Program Lessee shall fail to perform or observe any
covenant contained in Articles V or VII;
(c) the Program Lessee shall fail to perform or observe any
other material covenant, condition or agreement to be performed or observed by
it under this Program Operating Lease and such failure shall continue for a
period of 30 days after there shall have been given to the Program Lessee by
the Program Lessor a notice thereof;
(d) any representation or warranty made by the Program Lessee
in this Program Operating Lease or any other Basic Document, or any other
agreement, document or certificate to which the Program Lessee is a party or
which is delivered by the Program Lessee in connection herewith or therewith
shall prove to have been false or incorrect in any material respect when any
such representation or warranty was made or given and shall remain a
misrepresentation or breach of warranty which is material and adverse to the
Program Lessor or its interest in the Series 1996-1 Certificates at the time at
which such misrepresentation or breach of warranty is brought to the attention
of the Program Lessee; provided, however, that no such misrepresentation or
breach of warranty shall constitute a Lease Event of Default if such
misrepresentation or breach is curable and the Program Lessee is diligently
pursuing the cure of such breach or misrepresentation and has cured it within
30 days;
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<PAGE> 20
(e) a Bankruptcy, insolvency or termination shall have
occurred with respect to the Program Lessee or a Bankruptcy shall have occurred
with respect to Ford Credit Leasing; or
(f) there shall have occurred an Indenture Event of Default.
ARTICLE XI
REMEDIES
Section 11.1 Remedies. Upon the occurrence of any Lease
Event of Default and at any time thereafter so long as the same shall be
continuing, the Program Lessor (or, if the lien of the Indenture is
outstanding, the Indenture Trustee as assignee of the Program Lessor) may, with
respect to the Lease Events of Default set forth in Section 10.1 (a), (b), (c),
(d) and (f), at its option, declare this Program Operating Lease to be in
default by written notice to such effect given to the Program Lessee (a "Notice
of Lease Event of Default"), and upon the occurrence of a Lease Event of
Default described in Section 10.1(e), this Program Operating Lease shall
automatically be in default, and at any time thereafter the Program Lessor may,
to the extent permitted by law, exercise one or more of the following remedies,
as the Program Lessor in its sole discretion shall elect:
(a) the Program Lessor may, by notice to the Program Lessee,
rescind or terminate this Program Operating Lease;
(b) the Program Lessor may demand that (if the Program Lessee
has possession of the Series 1996-1 Certificates) the Program Lessee, and the
Program Lessee shall, upon the demand of the Program Lessor, re-deliver the
Series 1996-1 Certificates to the Program Lessor;
(c) subject to the terms of the Lease Trust Agreement and the
Indenture, the Program Lessor (or the Indenture Trustee (including the
requirement that an Opinion of Counsel be obtained that such sale will not
cause the Lease Trust, RCL Trust 1996-1, or FCTT to be classified for federal
income tax purposes as an association (or publicly traded partnership) taxable
as a corporation)) may sell the Series 1996-1 Certificates at
16
<PAGE> 21
public or private sale, as the Program Lessor may determine, in its sole
discretion free and clear of any rights of the Program Lessee in the Series
1996-1 Certificates and without any duty to account to the Program Lessee with
respect to such action or inaction or any proceeds with respect thereto;
provided, that the Program Lessee shall be entitled to receive any proceeds of
such sale remaining after payment in full of the Program Operating Lease
Termination Value plus the expenses of such sale and any expenses of the RCL
Trustee, the Lease Trustee, the Indenture Trustee or Comerica which have not
been otherwise paid;
(d) the Program Lessor may, whether or not the Program Lessor
shall have exercised or shall thereafter at any time exercise its rights under
Section 11.1(b) or (c), demand, by written notice to the Program Lessee, that
the Program Lessee pay to the Program Lessor, and the Program Lessee shall pay
to the Program Lessor, on the Payment Date next succeeding such notice, any
unpaid Required Interest Payments and Additional Payments (if any) due through
such Payment Date plus, as liquidated damages for loss of a bargain and not as
a penalty (in lieu of the Required Interest Payments and Additional Payments
(if any) due after such Payment Date), an amount equal to the Program Operating
Lease Termination Value as of such Payment Date in exchange for the transfer to
the Program Lessee of the Series 1996-1 Certificates; provided, however, that
if the Outstanding Amount of the Senior Notes is greater than zero, the Program
Lessor may exercise the remedy set forth in this Section 11.1(d) only in the
event that the Senior Notes have been declared immediately due and payable
pursuant to Section 5.2 of the Indenture, and such declaration has not been
rescinded and annulled; or
(e) the Program Lessor may, without notice to the Program
Lessee (any such notice being expressly waived by the Program Lessee), exercise
its right of setoff and apply any indebtedness (including on the Subordinated
Notes held by the Program Lessee and Ford Credit Leasing) at any time owing by
the Program Lessor to the Program Lessee and Ford Credit Leasing against any
and all of the obligations of the Program Lessee and Ford Credit Leasing now or
hereafter existing under this Program Operating Lease, irrespective of whether
or not the Program Lessor shall have made any demand under this
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<PAGE> 22
Program Operating Lease and although such obligations may be unmatured.
Section 11.2 No Release. No rescission or termination of
this Program Operating Lease, in whole or in part, or repossession of the
Series 1996-1 Certificates or exercise of any remedy under Section 11.1 shall,
except as specifically provided herein, relieve the Program Lessee of any of
its liabilities and obligations hereunder. In addition, the Program Lessee
shall be liable, except as otherwise provided herein, for any and all unpaid
Required Interest Payments and Additional Payments and payment of the Program
Operating Lease Termination Value, if any, due hereunder before, after or
during the exercise of the foregoing remedies, including all reasonable legal
fees and other costs and expenses incurred by the Program Lessor.
Section 11.3 Remedies Cumulative. No remedy under Section
11.1 is intended to be exclusive, but each shall, to the fullest extent
permitted by, but subject always to any mandatory requirements of, any
applicable law or government regulation, be cumulative and in addition to any
other remedy provided under Section 11.1 or otherwise available to the Program
Lessor at law or in equity. No express or implied waiver by the Program Lessor
of any Lease Event of Default hereunder shall in any way be, or be construed to
be, a waiver of any future or subsequent Lease Event of Default. The failure
or delay of the Program Lessor in exercising any rights granted it hereunder or
any other Basic Document upon any occurrence of any of the contingencies set
forth herein shall not constitute a waiver of any such right upon the
continuation or recurrence of any such contingencies or similar contingencies
and any single or partial exercise of any particular right by the Program
Lessor shall not exhaust the same or constitute a waiver of any other right
provided herein.
Section 11.4 Exercise of Other Rights or Remedies. In
addition to all other rights and remedies provided in this Article XI, the
Program Lessor may exercise any other rights or remedies that may be available
to it under applicable law or proceed by appropriate court action to enforce
the terms hereof or to recover damages for the breach hereof.
18
<PAGE> 23
ARTICLE XII
ASSIGNMENT OF LEASE
Section 12.1 Program Lessee's Consent to Assignment by
Program Lessor. (a) The Program Lessee hereby acknowledges, and consents in
all respects to, the assignment of the interest of the Program Lessor in the
Program Operating Lease by the Program Lessor to the Indenture Trustee under
and pursuant to the Indenture and agrees:
(i) to make each Required Interest Payment and
Additional Payment due or to become due hereunder directly to the
Indenture Trustee to the account specified by the Indenture Trustee,
so long as any Senior Notes shall be outstanding and unpaid and
thereafter to the Program Lessee, so long as any Subordinated Notes or
Lease Trust Certificates shall be outstanding and unpaid; and
(ii) not to seek to recover any payment (other than
a payment made in mistake) made to the Indenture Trustee in accordance
with the Indenture once such payment is made.
(b) The Program Lessee hereby consents to and
acknowledges the retention of possession by the Indenture Trustee of the Series
1996-1 Certificates until such time as the Senior Notes are satisfied in full,
the lien of the Indenture is released, and the Subordinated Notes and Lease
Trust Certificates have been paid in full.
Section 12.2 Program Lessor's Consent to Assignment by
Program Lessee. The Program Lessor hereby consents to the assignment by the
Program Lessee to Ford Credit Leasing Company, Inc. of an undivided 1% interest
in the Program Lessee's interest in this Program Operating Lease, including but
not limited to the right to receive distributions and proceeds with respect to
the Series 1996-1 Certificates, the right to receive amounts in the Cash
Collateral Account as provided herein and the obligation to make Required
Interest Payments, Additional Payments and any required payment of the Program
Operating Lease Termination Value.
19
<PAGE> 24
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Notices. All communications, notices and
consents provided for herein shall be in writing, including telecopy or other
electronic or wire transmission, and shall be effective upon delivery to the
Program Lessee at:
RCL Trust 1996-1
c/o First Union Bank of Delaware
One Rodney Square
920 King Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
with a copy to:
First Union National Bank of North Carolina
230 South Tryon Street CMC-9
Charlotte, North Carolina 28288
Attention: Pablo de la Canal
and to the Program Lessor at:
Ford Credit Auto Lease Trust 1996-1
c/o PNC Bank, Delaware
222 Delaware Avenue
Wilmington, Delaware 19801
Attention: Michael B. McCarthy
All communications (including reports), notices and consents
hereunder shall, so long as any of the Series 1996-1 Certificates is subject to
the lien of the Indenture, be given to the Indenture Trustee as well as to the
appropriate party hereunder.
Section 13.2 Distribution of Series 1996-1 Assets.
Consistent with Section 8.6 of the Series 1996-1 Supplement, Program Lessor and
Program Lessee agree that each shall be a "Holder" of the Series 1996-1
Certificates for purposes of Section 4.3(f) of the FCTT Agreement; and further
agree that, for so long as the Program Operating Lease is in effect, each shall
exercise their joint rights provided for in such Section only with the consent
of the other. In the event that the Program Lessee and the Program Lessor
exercise their joint rights
20
<PAGE> 25
pursuant to such Section 4.3(f) of the FCTT Agreement, the Series 1996-1
Vehicles shall be retitled in the name, or at the direction, of the Program
Lessor; provided that the Indenture Trustee shall, until the Outstanding Amount
of the Senior Notes has been reduced to zero, have a Lien on the Series 1996-1
Leased Vehicles distributed pursuant to such sections and the Certificate of
Title of each such Series 1996-1 Leased Vehicle shall reflect such lien. The
foregoing shall not be construed to require the consent of any party to any
distribution of assets of FCTT pursuant to Section 7.1 of the FCTT Agreement or
Section 9.2 of the Lease Trust Agreement.
Section 13.3 Termination of Administrative Agent. Consistent
with Section 8.6 of the Series 1996-1 Supplement, Program Lessor and Program
Lessee agree that each shall be a "Holder" of the Series 1996-1 Certificates
for purposes of Section 7.1(b) of the Administrative Agency Agreement and
Section 4.2 of the FCTT Agreement, (for purposes of terminating the
Administrative Agent and for appointing a successor Administrative Agent), and
shall act together in accordance with Section 8.6(f) of the Series 1996-1
Supplement and further agree that, for so long as this Program Operating Lease
is in effect, each shall exercise the rights provided for in such section only
with the consent of the other.
Section 13.4 Successors and Assigns. Neither the Program
Lessor nor the Program Lessee may assign its interest in this Program Operating
Lease except as permitted by Sections 12.1 and 12.2. This Program Operating
Lease, including all agreements, covenants, representations and warranties,
shall be binding upon and inure to the benefit of the Program Lessor and its
successors and permitted assigns, and the Program Lessee and its successors and
permitted assigns.
Section 13.5 Right to Perform for Program Lessee. If the
Program Lessee shall fail to make any Required Interest Payments or Additional
Payments to be made by it hereunder, or shall fail to perform or comply with
any of its other agreements contained herein or in any other Basic Document or
any other agreement entered into in connection therewith, the Program Lessor
may, but shall not be obligated to, make such payment or perform or comply with
such agreement, and the amount of such payment and the amount of all costs and
expenses (includ-
21
<PAGE> 26
ing, without limitation, reasonable attorneys' and other professionals' fees
and expenses) of the Program Lessor incurred in connection with such payment or
the performance of or compliance with such agreement, as the case may be,
together with interest thereon, at the weighted average interest rate of the
Senior Notes, shall be due and payable by the Program Lessee upon demand.
Section 13.6 Amendments. This Program Operating Lease may be
amended by the parties hereto at any time; provided, however, that such action
shall not, (x) as evidenced by an Opinion of Counsel, materially adversely
affect the interests of the Senior Noteholders or the Lease Trust
Certificateholders (unless 100% of the Senior Noteholders and the Lease Trust
Certificateholders materially adversely affected thereby consent thereto), (y)
as confirmed by each Rating Agency then rating the Senior Notes and the Lease
Trust Certificates, cause the then current rating of any Class of Senior Notes
or the Lease Trust Certificates to be withdrawn or reduced or (z) as evidenced
by an Opinion of Counsel, cause the Program Lessee, the Program Lessor, or FCTT
to be classified as an "association" (or publicly traded partnership) taxable
as a corporation for federal income tax purposes.
Section 13.7 Survival. All agreements, indemnities,
representations and warranties contained in this Program Operating Lease and
the other Basic Documents or any agreement, document or certificate delivered
pursuant hereto or thereto or in connection herewith or therewith shall survive
the execution and delivery of this Program Operating Lease and the expiration
or other termination thereof.
Section 13.8 Severability of Provisions. Any provisions of
this Program Operating Lease which may be determined by competent authority to
be prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction. To the
extent permitted by applicable law, the Program Lessee hereby waives any
provision of law which renders any provision hereof prohibited or unenforceable
in any respect.
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<PAGE> 27
Section 13.9 Original. The single executed original of this
Program Operating Lease marked "Original" and containing the receipt of the
Indenture Trustee thereon shall be the "Original" of this Program Operating
Lease. To the extent that this Program Operating Lease constitutes chattel
paper, as such term is defined in the UCC as in effect in any applicable
jurisdiction, no security interest in this Program Operating Lease may be
created through the transfer or possession of any counterpart other than the
"Original."
Section 13.10 Single Transaction. The Program Lessor and the
Program Lessee acknowledge and agree that the Basic Documents and any other
agreements of the Program Lessee entered into by the Program Lessee in
connection with the transactions contemplated by the Basic Documents are
intended to be construed and treated for all purposes as integral and
constitutive elements of a single transaction that cannot be separately
assigned, assumed or rejected under the United States bankruptcy code (Title 11
of the United States Code) or any other applicable bankruptcy, insolvency or
receivership laws.
Section 13.11 Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
Section 13.12 Governing Law. THIS PROGRAM OPERATING LEASE
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section 13.13 Counterpart Execution and Dating. This Program
Operating Lease may be executed in any number of counterparts and by each of
the parties hereto on separate counterparts, all such counterparts together
constituting but one and the same instrument, with the counterparts delivered
to the Indenture Trustee pursuant to the Indenture being deemed the "Original"
and all other counterparts being deemed duplicates.
Section 13.14 Concerning the Program Lessor and the Program
Lessee. (a) PNC Bank, Delaware is entering into this Program Operating Lease
solely in its
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<PAGE> 28
capacity as Lease Trustee and not in its individual capacity and in no case
shall PNC Bank, Delaware (or any entity acting as successor Lease Trustee) be
personally liable for or on account of any of the statements, representations,
warranties, covenants or obligations stated to be those of Program Lessor
hereunder or in the other Basic Documents and that nothing contained herein
shall be construed as creating any liability on PNC Bank, Delaware,
individually or personally, to perform any covenant either express or implied
contained herein, all such liability, if any, being expressly waived by the
Program Lessee and any person claiming by, through or under the Program Lessee.
(b) First Union Bank of Delaware is entering into this
Program Operating Lease solely in its capacity as Trustee of RCL Trust 1996-1
and not in its individual capacity and in no case shall First Union Bank of
Delaware (or any entity acting as successor RCL Trustee) be personally liable
for or on account of any of the statements, representations, warranties,
covenants or obligations stated to be those of Program Lessee hereunder or in
the other Basic Documents and that nothing contained herein shall be construed
as creating any liability on First Union Bank of Delaware, individually or
personally, to perform any covenant either express or implied contained herein,
all such liability, if any, being expressly waived by the Program Lessor, and
any person claiming by, through or under the Program Lessor.
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<PAGE> 29
IN WITNESS WHEREOF, the parties hereto have caused this
Program Operating Lease to be duly executed by their respective officers
hereunto duly authorized, as of the day and year first above written.
RCL TRUST 1996-1, as Program
Lessee
By: FIRST UNION BANK OF DELAWARE,
not in its individual
capacity, but solely as
trustee of RCL Trust 1996-1
By: /s/ Stephen J. Kaba
------------------------------
Name: Stephen J. Kaba
Title: Vice President
PNC BANK, DELAWARE, not in its
individual capacity, but solely as
trustee of Ford Credit Auto Lease
Trust 1996-1, as Program Lessor
By: /s/ Michael B. McCarthy
------------------------------
Name: Michael B. McCarthy
Title: Vice President
<PAGE> 30
Receipt of this original counterpart of this Program Operating
Lease is hereby acknowledged on this 26th day of November, 1996.
By: THE CHASE MANHATTAN BANK,
not in its individual
capacity but solely as
Indenture Trustee
By: /s/ Michael A. Smith
--------------------------------
Name: Michael A. Smith
Title: Vice President
<PAGE> 31
EXHIBIT A
DIRECTION
TO: [NAME OF LEASE TRUST PAYING AGENT]
[ADDRESS OF LEASE TRUST PAYING AGENT]
RE: Ford Credit Auto Lease Trust Series 1996-1
% Asset Backed Subordinated Notes
THIS DIRECTION WITNESSES THAT the undersigned hereby directs
you to deposit all payments with respect to the $106,690,331.13 initial
aggregate principal amount of Ford Credit Auto Lease Trust Series 1996-1 ___%
Asset Backed Subordinated Notes, into the Cash Collateral Account, account
number. ______________, ASA no. ________________, and this direction shall be
the undersigned's good and sufficient authority for so doing.
RCL TRUST 1996-1
By: FIRST UNION BANK OF DELAWARE, not in its
individual capacity, but solely as trustee of
RCL TRUST 1996-1
By_________________________________
Name:
Title:
A-1
<PAGE> 1
EXHIBIT 4.10
LEASE TRUST PAYING AGENT AGREEMENT
dated as of
November 26, 1996
between
FORD CREDIT AUTO LEASE TRUST 1996-1
and
THE CHASE MANHATTAN BANK,
as Lease Trust Paying Agent
<PAGE> 2
LEASE TRUST PAYING AGENT AGREEMENT, dated as of November 26,
1996 (this "Agreement"), between FORD CREDIT AUTO LEASE TRUST 1996-1 (the
"Lease Trust") and THE CHASE MANHATTAN BANK, as Lease Trust Paying Agent (the
"Lease Trust Paying Agent").
WHEREAS, the Lease Trust has issued the Subordinated Notes and
a portion of the Lease Trust Certificates to RCL Trust 1996-1 pursuant to the
Transfer Agreement and has issued the remaining Lease Trust Certificates to
certain institutional investors pursuant to the Lease Trust Agreement;
WHEREAS, RCL Trust 1996-1 has pledged the Subordinated Notes
to the Lease Trustee to secure its obligations to the Lease Trustee under the
Program Operating Lease and to the Indenture Trustee to secure the Lease
Trustee's obligations under the Indenture;
WHEREAS, pursuant to the Program Operating Lease, RCL Trust
1996-1 has agreed to deposit into the Cash Collateral Account all amounts paid
to it in respect of principal and interest on the Subordinated Notes (net of
amounts paid pursuant to Section 6.6 of the Program Operating Lease);
WHEREAS, The Chase Manhattan Bank has been appointed Lease
Trust Paying Agent pursuant to Section 3.9 of the Lease Trust Agreement; and
WHEREAS, the Lease Trustee and the Lease Trust Paying Agent
desire to set forth the terms pursuant to which the Lease Trust Paying Agent
shall deposit into the Cash Collateral Account any payments of principal and
interest on the Subordinated Notes and make payments to the Lease Trust
Certificateholders of interest and principal on the Lease Trust Certificates.
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. Definitions. Whenever used in this Agreement
capitalized terms have the meanings assigned to them herein or, if not defined
herein, as defined in the Lease Trust Agreement or in Appendix A attached
hereto. To the extent that the definitions set forth herein conflict with the
definitions set forth in the Lease
<PAGE> 3
Trust Agreement or in Appendix A, or incorporated by reference therein, the
definitions set forth herein shall be controlling.
"Cash Collateral Account Statement" has the meaning set forth
in Section 2(a).
"Disbursement and Payment Instructions" has the meaning set
forth in Section 2(b).
Section 2. Cash Collateral Account Certificate; Disbursement
and Payment Instructions. (a) On the second Business Day preceding each
Payment Date, the Lease Trustee shall cause the Administrative Agent, on behalf
of the Lease Trust, to deliver to the Lease Trustee and the Lease Trust Paying
Agent, a certificate (the "Cash Collateral Account Certificate") setting forth
the following information with respect to such Payment Date:
(i) the Series 1996-1 Administrative Fee for the
preceding Accrual Period;
(ii) the Required Interest Payment;
(iii) the Cash Collateral Amount on the Business Day
preceding such Payment Date; and
(iv) the Cash Collateral Required Draw Amount and
the Cash Collateral Additional Draw Amount.
(b) On the second Business Day preceding each Payment Date,
the Lease Trustee shall cause the Administrative Agent, on behalf of the Lease
Trust, to deliver to the Lease Trustee and the Lease Trust Paying Agent a
certificate (the "Disbursement and Payment Instructions") including the
following information with respect to such Payment Date, the related Accrual
Period and Series 1996-1:
(i) the Available Funds;
(ii) the Certificate Distribution Draw Amount;
(iii) the amount of interest accrued on the
Subordinated Notes during the preceding Interest
2
<PAGE> 4
Accrual Period, the amount of overdue interest and interest on any
overdue interest at the Subordinated Note Interest Rate, the amounts
payable with respect to such interest (net of amounts paid pursuant to
Section 6.6 of the Program Operating Lease), and any resulting
shortfall (separately stated);
(iv) the amount of interest accrued on the Lease
Trust Certificates during the preceding Interest Accrual Period, the
amount of overdue interest and interest on any overdue interest at the
Certificate Interest Rate, the amounts payable with respect to such
interest, and any resulting shortfall (separately stated);
(v) the Series 1996-1 Administrative Fee;
(vi) the amount, if any, to be distributed to the
Lease Trust Paying Agent for payment of principal of the Subordinated
Notes (net of any amounts paid pursuant to Section 6.6 of the Program
Operating Lease) in accordance with the terms thereof; and
(vii) the amount, if any, to be deposited into the
Certificate Distribution Account for payment in reduction of the
Aggregate Certificate Balance of the Lease Trust Certificates in
accordance with the terms thereof.
(c) Neither the Lease Trustee nor the Lease Trust Paying
Agent shall have any duty or obligation to verify or confirm the accuracy of
any of the information or numbers set forth in any of the certificates required
to be delivered to the Lease Trust Paying Agent in accordance with this Section
2 and each of the Lease Trustee and the Lease Trust Paying Agent shall be fully
protected in relying upon such certificates.
3
<PAGE> 5
Section 3. Application of Funds.
(a) Deposits to Series 1996-1 Payments Account.
(i) Pursuant to Section 5.2(e) of the Series 1996-1
Supplement, the Administrative Agent shall withdraw an amount equal to
the Available Sale Proceeds from the Series 1996-1 Collection Account
and deposit such amount in the Series 1996-1 Payments Account on the
Business Day preceding each Payment Date.
(ii) On the Payment Date on which the Outstanding
Amount of the Senior Notes has been reduced to zero, if such Payment
Date is not also a Semiannual Payment Date, the Lease Trustee shall
deposit into the Series 1996-1 Payments Account (after all other
deposits, withdrawals and payments thereto or therefrom have been made
with respect to such Payment Date) the amount, if any, distributed to
the Lease Trustee by the Indenture Trustee pursuant to the last
sentence of Section 8.4(b) of the Indenture and, if applicable, clause
EIGHTH of Section 5.4(b) of the Indenture.
(iii) On the Business Day preceding each Payment
Date after the Payment Date on which the Outstanding Amount of the
Senior Notes has been reduced to zero, the Lease Trustee shall
withdraw from the Cash Collateral Account and deposit in the Series
1996-1 Payments Account the Cash Collateral Required Draw Amount.
(b) Payments of Interest on Subordinated Notes while Senior
Notes are Outstanding. On each Payment Date on or before the Payment Date on
which the Outstanding Amount of the Senior Notes has been reduced to zero, the
Lease Trust Paying Agent shall, pursuant to Section 6.5 of the Program
Operating Lease, to the extent of the funds available, pay interest due on the
Subordinated Notes (net of amounts paid pursuant to Section 6.6 of the Program
Operating Lease) by depositing to the Cash Collateral Account, the amount, if
any, distributed to it by the Indenture Trustee pursuant to Section 8.4(b)(iii)
of the Indenture and, if applicable, clause FIFTH of Section 5.4(b) of the
Indenture.
4
<PAGE> 6
(c) Payments of Interest on Lease Trust Certificates while
Senior Notes are Outstanding. On each Semiannual Payment Date on or before the
Payment Date on which the Outstanding Amount of the Senior Notes has been
reduced to zero, the Lease Trustee (if other than the Lease Trust Paying Agent)
shall transfer the amounts deposited by the Indenture Trustee into the
Certificate Distribution Account pursuant to Section 8.4(b)(iv) of the
Indenture and, if applicable, clause SIXTH of Section 5.4(b) of the Indenture,
net of amounts, if any, withdrawn by the Indenture Trustee from the Certificate
Distribution Account pursuant to Section 8.4(d) of the Indenture, for the
payment of interest due on the Lease Trust Certificates, to the Lease Trust
Paying Agent, which shall pay such interest to Lease Trust Certificateholders,
on a pro rata basis.
(d) Distribution of Funds on Deposit in Certificate
Distribution Account by Lease Trust Paying Agent after the Senior Notes are
Retired. On each Semiannual Payment Date after the Payment Date on which the
Outstanding Amount of the Senior Notes has been reduced to zero and, if the
Outstanding Amount of the Senior Notes has been reduced to zero on a Semiannual
Payment Date, on such Semiannual Payment Date, the Lease Trustee (if other than
the Lease Trust Paying Agent) shall transfer the funds then on deposit in the
Certificate Distribution Account (after giving effect to any deposits or
withdrawals made on such Semiannual Payment Date) to the Lease Trust Paying
Agent for distribution to Lease Trust Certificateholders, to the extent of
funds available, in accordance with the following priorities:
(i) an amount equal to the interest due and unpaid
on the Lease Trust Certificates on such Semiannual Payment Date shall
be distributed to Lease Trust Certificateholders pro rata; and
(ii) any remaining funds shall be distributed to
Lease Trust Certificateholders pro rata in reduction of the Aggregate
Certificate Balance, until such Aggregate Certificate Balance has been
reduced to zero.
(e) Payments of Interest on Subordinated Notes and Lease
Trust Certificates after Senior Notes are Retired. On each Payment Date after
the Payment Date on
5
<PAGE> 7
which the Outstanding Amount of the Senior Notes has been reduced to zero, the
Lease Trustee shall, in accordance with the Disbursement and Payment
Instructions (as set forth in Section 2(b)), make the following withdrawals
from the Series 1996-1 Payments Account and make deposits, distributions and
payments, to the extent of funds then on deposit in the Series 1996-1 Payments
Account, in accordance with the following priorities:
(i) to the Administrative Agent, the Series 1996-1
Administrative Fee for the preceding Accrual Period;
(ii) to the Lease Trust Paying Agent, for payment
to the Subordinated Noteholders, pro rata, an amount equal to the
interest accrued on the Outstanding Amount of the Subordinated Notes
at the Subordinated Note Interest Rate plus any overdue interest and
interest on any overdue interest at the Subordinated Note Interest
Rate during the preceding Interest Accrual Period (net of amounts paid
pursuant to Section 6.6 of the Program Operating Lease); and
(iii) to the Certificate Distribution Account, an
amount equal to interest accrued on the Aggregate Certificate Balance
at the Certificate Interest Rate plus any overdue interest and
interest on any overdue interest at the Certificate Interest Rate
during the preceding Interest Accrual Period plus any Certificate
Distribution Draw Amount on such Payment Date.
Pursuant to Section 6.5 of the Program Operating Lease, on
each Payment Date, the Lease Trust Paying Agent shall deposit to the Cash
Collateral Account any amounts paid to it pursuant to clause (ii) of this
Section 3(e) on such Payment Date. After such deposit, on each Payment Date,
the Lease Trustee shall withdraw the Cash Collateral Additional Draw Amount
from the Cash Collateral Account and apply such amounts to pay each of the
items specified in clauses (ii) and (iii) of this Section 3(e) without
duplication of the amounts already paid on such Payment Date.
Following the Payment Date on which the Outstanding Amount of
the Senior Notes has been reduced to
6
<PAGE> 8
zero, on the Business Day preceding each Semiannual Payment Date for which the
Available Funds, as set forth in the Disbursement and Payment Instructions, is
less than the sum of the amounts specified in clauses (i) and (ii) of this
Section 3(e), the Lease Trustee shall withdraw the Certificate Distribution
Draw Amount, as set forth in the Disbursement and Payment Instructions, from
the Certificate Distribution Account and deposit such amount in the Series
1996-1 Payments Account. On the related Semiannual Payment Date the Lease
Trustee shall apply such amount to pay the amounts specified in clauses (i) and
(ii) of this Section 3(e) without duplication of the amounts already paid on
such Semiannual Payment Date.
(f) Payments of Principal of Subordinated Notes and Lease
Trust Certificates if Senior Notes are Retired on a Semiannual Payment Date.
Subject to Section 3(i), on the Payment Date on which the Outstanding Amount of
the Senior Notes has been reduced to zero, if such Payment Date is also a
Semiannual Payment Date, the Lease Trustee shall apply the amount, if any,
distributed to it by the Indenture Trustee pursuant to the last sentence of
Section 8.4(b) of the Indenture and, if applicable, clause EIGHTH of Section
5.4(b) of the Indenture, in accordance with the following priorities after
making the deposits, distributions and payments required pursuant to Sections
3(a), (b) and (c):
(i) to the Lease Trust Paying Agent for payment to
Subordinated Noteholders (net of amounts paid pursuant to
Section 6.6 of the Program Operating Lease) pro rata, as
payments of principal, until the Outstanding Amount of the
Subordinated Notes has been reduced to zero; and
(ii) to the Certificate Distribution Account, in
reduction of the Aggregate Certificate Balance of the Lease
Trust Certificates, until such Aggregate Certificate Balance
has been reduced to zero.
Pursuant to Section 6.5 of the Program Operating Lease, on
each Payment Date, the Lease Trust Paying Agent shall deposit to the Cash
Collateral Account any amounts paid to it pursuant to clause (i) of this
Section 3(f) on such Payment Date. After such deposit, on each
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<PAGE> 9
Payment Date, the Lease Trustee shall withdraw the Cash Collateral Additional
Draw Amount from the Cash Collateral Account and apply such amounts to pay each
of the items specified in clauses (i) and (ii) of this Section 3(f) without
duplication of the amounts already paid on such Payment Date.
(g) Distribution of Funds if Senior Notes are Retired on a
Payment Date which is not also a Semiannual Payment Date. On the Payment Date
on which the Outstanding Amount of the Senior Notes has been reduced to zero,
if such Payment Date is not also a Semiannual Payment Date, the Lease Trustee
shall apply the amount, if any, distributed to it by the Indenture Trustee
pursuant to the last sentence of Section 8.4(b) of the Indenture and, if
applicable, clause EIGHTH of Section 5.4(b) of the Indenture to make the
deposits, distributions and payments required pursuant to clauses (i), (ii) and
(iii) of Section 3(e) without duplication of the amounts already paid on such
Payment Date and shall deposit the remaining portion, if any, of the Available
Funds to the Series 1996-1 Payments Account and the remaining portion, if any,
of the Cash Collateral Additional Draw Amount to the Cash Collateral Account
for application on the following Semiannual Payment Date in accordance with the
terms and conditions of the Basic Documents.
(h) Payments of Principal of Subordinated Notes and Lease
Trust Certificates after Senior Notes are Retired. Subject to Section 3(i), on
each Semiannual Payment Date after the Payment Date on which the Outstanding
Amount of the Senior Notes has been reduced to zero, the Lease Trustee shall,
after making the deposits, distributions and payments required pursuant to
clauses (i), (ii) and (iii) of Section 3(e), make the following additional
deposits, distributions and payments to the extent of the remaining funds on
deposit in the Series 1996-1 Payments Account, in accordance with the following
priorities:
(i) to the Lease Trust Paying Agent for payment to
Subordinated Noteholders (net of amounts paid pursuant to
Section 6.6 of the Program Operating Lease) pro rata, as
payments of principal, until the Outstanding Amount of the
Subordinated Notes has been reduced to zero; and
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<PAGE> 10
(ii) to the Certificate Distribution Account, in
reduction of the Aggregate Certificate Balance of the Lease
Trust Certificates, until such Aggregate Certificate Balance
has been reduced to zero.
Pursuant to Section 6.5 of the Program Operating Lease, on
each Payment Date, the Lease Trust Paying Agent shall deposit to the Cash
Collateral Account any amounts paid to it pursuant to clause (i) of this
Section 3(h) on such Payment Date. After such deposit, on each Payment Date,
the Lease Trustee shall withdraw the Cash Collateral Additional Draw Amount
from the Cash Collateral Account and apply such amounts to pay each of the
items specified in clauses (i) and (ii) of this Section 3(h) without
duplication of the amounts already paid on such Payment Date.
(i) Distribution of Funds if Subordinated Notes and Lease
Trust Certificates Cannot Both be Retired on a Semiannual Payment Date. In the
event that on any Semiannual Payment Date, the Aggregate Certificate Balance of
the Lease Trust Certificates would be greater than zero after giving effect to
a payment to the Lease Trust Certificateholders pursuant to Section 3(f)(ii) or
Section 3(h)(ii), as applicable, and the application of the Cash Collateral
Additional Draw Amount, then the Lease Trustee shall not make any payments
pursuant to Section 3(f) or Section 3(h), as applicable, on such Semiannual
Payment Date. The Lease Trustee shall instead deposit the remaining portion,
if any, of the Available Funds to the Series 1996-1 Payments Account and the
remaining portion, if any, of the Cash Collateral Additional Draw Amount to the
Cash Collateral Account, and make such payments in accordance with Section 3(h)
on the earlier to occur of (x) the Semiannual Payment Date on which the
Aggregate Certificate Balance of the Lease Trust Certificates would be reduced
to zero after giving effect to the payment made pursuant to Section 3(h)(ii)
and the application of the Cash Collateral Additional Draw Amount and (y) the
Semiannual Payment Date following the Accrual Period during which the last
Series 1996-1 Lease terminated.
(j) Withholding Taxes. In the event that any withholding tax
is imposed on the Lease Trust's payment (or, if the Lease Trust is treated as a
partnership for
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<PAGE> 11
federal income tax purposes, allocations of income) to a Lease Trust
Certificateholder or a Subordinated Noteholder, such tax shall reduce the
amount otherwise distributable to such Lease Trust Certificateholder or
Subordinated Noteholder in accordance with this Section 3. The Lease Trust
Paying Agent is hereby authorized and directed to retain from amounts otherwise
distributable to such Lease Trust Certificateholder or Subordinated Noteholder
sufficient funds for the payment of any withholding tax that is legally owed by
the Lease Trust (but such authorization shall not prevent the Lease 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 a
Lease Trust Certificateholder or a Subordinated Noteholder shall be treated as
cash distributed to such Lease Trust Certificateholder or Subordinated
Noteholder, as the case may be, at the time it is withheld by the Lease Trust
for remittance to the appropriate taxing authority. If the Lease Trust Paying
Agent determines that there is a possibility that withholding tax is payable
with respect to a distribution, the Lease Trust Paying Agent may in its sole
discretion withhold such amounts in accordance with this Section 3(i). In the
event that a Lease Trust Certificateholder or Subordinated Noteholder wishes to
apply for a refund of any such withholding tax, the Lease Trustee shall
reasonably cooperate with such Lease Trust Certificateholder or Subordinated
Noteholder in making such claim so long as such Lease Trust Certificateholder
or Subordinated Noteholder agrees to reimburse the Lease Trust Paying Agent for
any out-of-pocket expenses incurred.
Section 4. Lease Trust Paying Agent's Fees and Expenses. The
Lease Trust Paying Agent shall receive as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof
between the Depositor and the Lease Trust Paying Agent. The Administrative
Agent (in exchange for receipt of the Series 1996-1 Administrative Fee) has
agreed pursuant to the Series 1996-1 Supplement to pay such fees of the Lease
Trust Paying Agent as are agreed upon by the Depositor and the Lease Trust
Paying Agent, and shall reimburse the Lease Trust Paying Agent for its other
reasonable expenses hereunder, including the reasonable compensation, expenses
and disbursements of such agents, repre-
10
<PAGE> 12
sentatives, experts and counsel as the Lease Trust Paying Agent may employ in
connection with the exercise and performance of its rights and its duties
hereunder. The Administrative Agent shall make no claim upon the Lease Trust
Estate for the payment or reimbursement of such fees and expenses.
Section 5. Supplements and Amendments.
(a) Without Consent of the Senior Noteholders, Subordinated
Noteholders or Lease Trust Certificateholders. This Agreement may be amended
by the Depositor, the Lease Trustee and the Lease Trust Paying Agent, with
prior written notice by the Depositor to the Rating Agencies, without the
consent of any of the Senior Noteholders, Subordinated Noteholders or Lease
Trust Certificateholders, to cure any ambiguity or defect, to correct or
supplement any provisions in this Agreement, to add any provisions to or change
in any manner or eliminate any of the provisions in this Agreement or to modify
in any manner the rights of the Senior Noteholders, Subordinated Noteholders or
Lease Trust Certificateholders; provided, however, that such action shall not,
(i) as evidenced by an Opinion of Counsel, materially adversely affect the
interests of the Indenture Trustee, any Senior Noteholder or Lease Trust
Certificateholder unless 100% of the holders of the Senior Notes and the Lease
Trust Certificates materially adversely affected thereby have consented to such
amendment, (ii) as confirmed by each Rating Agency then rating the Senior Notes
and the Lease Trust Certificates, cause the then current rating of either Class
of Senior Notes or the Lease Trust Certificates to be withdrawn or reduced or
(iii) cause the Lease Trust, the Depositor or FCTT to be taxable as an
"association" or publicly traded partnership taxable as a corporation for
federal income tax purposes.
(b) With Consent of the Senior Noteholders and Lease Trust
Certificateholders. This Agreement may also be amended from time to time by
the Depositor, the Lease Trustee and the Lease Trust Paying Agent, with prior
written notice to the Rating Agencies, with the consent of Senior Noteholders
holding not less than a majority of the Outstanding Amount of the Senior Notes
and, to the extent affected thereby, the consent of Lease Trust
Certificateholders holding not less than a majority of the Aggregate
Certificate Balance, for the purpose of adding
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<PAGE> 13
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
Senior Noteholders, Subordinated Noteholders or Lease Trust Certificateholders;
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of distributions that
are required to be made for the benefit of the Senior Noteholders or Lease
Trust Certificateholders, or (b) reduce the percentage of the Outstanding
Amount of the Senior Notes and the Aggregate Certificate Balance of the Lease
Trust Certificates required to consent to any such amendment, without the
consent of the holders of 100% of the Outstanding Amount of the Senior Notes or
of 100% of the Aggregate Certificate Balance, as the case may be, and provided,
further that an Opinion of Counsel shall be furnished to the Indenture Trustee
and the Lease Trustee to the effect that such amendment shall not (i) affect
the treatment of the Senior Notes as debt for federal income tax purposes, (ii)
be deemed to cause a taxable exchange of the Senior Notes for federal income
tax purposes or (iii) cause the Lease Trust, the Depositor or FCTT to be
classified as an association (or publicly traded partnership) taxable as a
corporation for federal income tax purposes.
(c) With Respect to Certain Tax Matters. Notwithstanding the
foregoing, this Agreement may be amended at any time by the Depositor (acting
at the direction of Ford Credit and Ford Credit Leasing), the Lease Trustee and
the Lease Trust Paying Agent to the extent reasonably necessary to assure that
none of FCTT, the Lease Trust or the Depositor will be classified as an
association (or publicly traded partnership) taxable as a corporation for
federal income tax purposes.
(d) General Matters Concerning Amendments and Consents. The
Lease Trustee and the Depositor shall provide prior written notice of any such
amendment to each Rating Agency, and promptly after the execution of any such
amendment or consent, the Lease Trustee shall furnish written notification of
the substance of such amendment or consent to each Lease Trust
Certificateholder and the Indenture Trustee.
It shall not be necessary for the consent of the Lease Trust
Certificateholders, the Senior
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<PAGE> 14
Noteholders or the Indenture Trustee pursuant to this Section 5 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 Lease Trust
Certificateholders provided for in this Agreement or in any other Basic
Document) and of evidencing the authorization of the execution thereof by Lease
Trust Certificateholders shall be subject to such reasonable requirements as
the Lease Trustee may prescribe.
Prior to the execution of any amendment to this Agreement,
each of the Lease Trustee and Lease Trust Paying Agent 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.
Each of the Lease Trustee and the Lease Trust Paying Agent may, but shall not
be obligated to, enter into any such amendment which affects its own rights,
duties or immunities under this Agreement or otherwise.
Section 6. Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.
Section 7. Headings. The headings of the various Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
Section 8. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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<PAGE> 15
IN WITNESS WHEREOF, the parties hereby have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date and year first above written.
FORD CREDIT AUTO LEASE TRUST 1996-1
By: PNC BANK, DELAWARE, not in its
individual capacity, but solely as
trustee of Ford Credit Auto Lease
Trust 1996-1
By: /s/ Michael B. McCarthy
--------------------------
Name: Michael B. McCarthy
Title: Vice President
THE CHASE MANHATTAN BANK, as Lease Trust
Paying Agent
By: /s/ Michael A. Smith
--------------------------------
Name: Michael A. Smith
Title: Vice President
<PAGE> 1
EXHIBIT 4.11
APPENDIX A
SERIES 1996-1 DEFINITIONS
Terms used herein and not otherwise defined have the meanings assigned
to such terms in Appendix I to the Administrative Agency Agreement. To the
extent that the definitions set forth herein conflict with the definitions set
forth in Appendix I, or incorporated by reference therein, the definitions set
forth herein shall be controlling.
"Accrual Period" shall mean, with respect to any Payment Date other
than the first Payment Date, the three Collection Periods preceding such
Payment Date, and with respect to the first Payment Date, the period from and
including the Series 1996-1 Cut-Off Date up to and including the last day of
the immediately preceding Collection Period.
"Additional Payment" shall mean, with respect to any Payment Date, the
lesser of (a) an amount equal to the Cash Collateral Amount (after giving
effect to the aggregate amounts required to be deposited to the Cash Collateral
Account pursuant to Section 6.5 of the Program Operating Lease without regard
to Section 6.6 thereof) minus the Required Cash Collateral Amount, in each
case, on such Payment Date and (b) an amount equal to the sum of the
Outstanding Amount of the Senior Notes, the Outstanding Amount of the
Subordinated Notes and the Aggregate Certificate Balance of the Lease Trust
Certificates, in each case, prior to any payments on such Payment Date minus
the sum of the Available Sale Proceeds for the related Accrual Period (and,
following the Payment Date on which the Outstanding Amount of the Senior Notes
has been reduced to zero, any Available Sale Proceeds from prior Accrual
Periods that remain on deposit in the Series 1996-1 Payments Account) and the
aggregate Residual Values of the Series 1996-1 Leased Vehicles the related
Series 1996-1 Leases of which have not terminated as of the end of the last day
of the preceding Accrual Period; provided that on any Payment Date on which the
Available Funds is less than the Required Interest Payment, the Additional
Payment shall equal the lesser of such shortfall or the aggregate amounts
required to be deposited to the Cash Collateral Account on such Payment
<PAGE> 2
Date pursuant to Section 6.5 of the Program Operating Lease without regard to
Section 6.6 thereof.
"Administrative Agency Agreement" shall mean the Administrative Agency
Agreement as supplemented by the Series 1996-1 Supplement, and as otherwise
amended, modified or supplemented from time to time.
"Aggregate Certificate Balance" shall mean, as of any date, the
aggregate Certificate Balances of the Lease Trust Certificates as of such date;
provided, that in determining whether the holders of Lease Trust Certificates
evidencing the requisite portion or percentage of the Aggregate Certificate
Balance have given any request, demand, authorization, direction, notice,
consent, or waiver under any Basic Document, Lease Trust Certificates owned by
the Issuer, the Depositor, the Administrative Agent or any Affiliate of any of
the foregoing Persons shall be disregarded and deemed to be excluded from the
Aggregate Certificate Balance, except that, in determining whether the
Indenture Trustee and Lease Trustee shall be protected in relying on any such
request, demand, authorization, direction, notice, consent, or waiver, only
Lease Trust Certificates that a Responsible Officer (as defined in the
Indenture) of the Indenture Trustee, if applicable, and a Responsible Officer
(as defined in the Lease Trust Agreement) of the Lease Trustee with direct
responsibility for the administration of the Lease Trust Agreement, if
applicable, knows to be so owned shall be so disregarded.
"Aggregate Net Monthly Payment Advances" shall mean, with respect to
any Accrual Period, an amount, which may be positive or negative, equal to the
aggregate Monthly Payment Advances made with respect to Series 1996-1 Leases in
accordance with Section 5.4(b) of the Series 1996- 1 Supplement during the
preceding Accrual Period minus the aggregate Monthly Payment Advances with
respect to Series 1996-1 Leases repaid to the Administrative Agent pursuant to
Section 6.3 of the Administrative Agency Agreement during such Accrual Period.
"Aggregate Net Sale Proceeds Advances" shall mean, with respect to any
Accrual Period, an amount, which may be positive or negative, equal to the
aggregate Sale Proceeds Advances with respect to Series 1996-1 Leased Vehicles
made by the Administrative Agent pursuant to
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<PAGE> 3
Section 5.4 of the Administrative Agency Agreement during the preceding Accrual
Period minus the aggregate Sales Proceeds Advances with respect to Series
1996-1 Leased Vehicles repaid to the Administrative Agent pursuant to Section
5.4 of the Administrative Agency Agreement during such Accrual Period.
"Applicable Law" shall mean all applicable laws, ordinances,
judgments, decrees, injunctions, writs and orders of any Governmental Authority
and rules, regulations, orders, interpretations, licenses and permits of any
Governmental Authority.
"Asset Contribution Agreement" shall mean the agreement dated as of
November 26, 1996 between Ford Credit and Ford Credit Leasing, as contributors,
and RCL Trust 1996-1, as contributee.
"Auction Proceeds" shall mean, with respect to any Series 1996-1
Leased Vehicle which is sold at auction or otherwise disposed of by the
Administrative Agent on behalf of FCTT, all amounts received by the
Administrative Agent in connection with such sale or disposition; provided,
that if RCL Trust 1996-1 exercises the purchase option pursuant to Section 9.1
of the Program Operating Lease, the "Auction Proceeds" shall mean the related
RCL Purchase Option Price.
"Available Funds" shall mean, with respect to any Payment Date, the
Available Sale Proceeds plus the Cash Collateral Required Draw Amount.
"Available Sale Proceeds" shall mean, with respect to any Payment
Date, the Sale Proceeds for all Series 1996-1 Leased Vehicles plus the
Aggregate Net Sale Proceeds Advances, in each case with respect to the related
Accrual Period.
"Basic Documents" shall mean the FCTT Agreement, the Administrative
Agency Agreement, the Series 1996-1 Supplement, the RCL Trust Agreement, the
Program Operating Lease, the Asset Contribution Agreement, the Transfer
Agreement, the Lease Trust Agreement, the Lease Trust Paying Agent Agreement,
the Indenture, each appendix and exhibit thereto, and each instrument and
certificate delivered in connection therewith.
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<PAGE> 4
"Cash Collateral Account" shall mean the account designated as such
pursuant to Section 3.5(a) of the Program Operating Lease.
"Cash Collateral Account Certificate" shall mean the certificate
designated as such pursuant to Section 8.3(a) of the Indenture.
"Cash Collateral Account Investments" shall mean the Vista 100% U.S.
Treasury Securities Fund; provided, than in the event the Vista 100% U.S.
Treasury Securities Fund is not available or is no longer rated in the highest
long-term rating category by each Rating Agency, all amounts on deposit in the
Cash Collateral Account shall be invested in the Vista Treasury Plus Fund;
provided, further, that if the Vista Treasury Plus Fund and the Vista 100% U.S.
Treasury Securities Fund both are not available, or are both no longer rated in
the highest long-term rating category by each Rating Agency, amounts on deposit
in the Cash Collateral Account shall be invested in the Fidelity U.S. Government
Reserve Fund, provided, that the Fidelity U.S. Government Reserve Fund is rated
in the highest long-term rating category by each Rating Agency.
"Cash Collateral Account Property" shall have the meaning set forth in
Section 3.5(a) of the Program Operating Lease.
"Cash Collateral Additional Draw Amount" shall mean, with respect to
any Payment Date, an amount equal to the Additional Payment for such Payment
Date less the portion of such Additional Payment to be applied to make payments
on the Subordinated Notes.
"Cash Collateral Amount" shall mean, with respect to any date of
determination, the amount on deposit in the Cash Collateral Account (including
any investment earnings (net of losses and investment expenses) accrued through
the last day of the Collection Period immediately preceding such date of
determination) at the opening of business on such date of determination unless
otherwise specified.
"Cash Collateral Deposit Amount" shall mean, with respect to any
Payment Date, the Series 1996-1 Collections (other than Sale Proceeds) plus the
Aggregate Net
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<PAGE> 5
Monthly Payment Advances plus all investment earnings (net of losses and
investment expenses) on amounts deposited in the Series 1996-1 Collection
Account, in each case with respect to the related Accrual Period.
"Cash Collateral Required Draw Amount" shall mean, with respect to any
Payment Date, the lesser of (a) the Required Interest Payment for such Payment
Date and (b) the Cash Collateral Amount on the Business Day preceding such
Payment Date (after giving effect to the addition of the Cash Collateral
Deposit Amount, any Transferor Purchase Option Net Proceeds required to be
deposited to the Cash Collateral Account and the investment earnings (net of
losses and investment expenses) on amounts deposited in the Certificate
Distribution Account during the related Accrual Period on such Business Day).
"Certificate Balance" shall mean, with respect to any Lease Trust
Certificate, initially, the principal balance of such Lease Trust Certificate
on the Series 1996-1 Issue Date, and thereafter, as of any date, such amount
minus all amounts distributed with respect to such Lease Trust Certificate as
principal pursuant to the Lease Trust Agreement on or before such date.
"Certificate Distribution Account" shall mean the account designated
as such pursuant to Section 5.1(a) of the Lease Trust Agreement.
"Certificate Distribution Draw Amount" shall mean, (i) with respect to
any Semiannual Payment Date on which the Available Funds for the Semiannual
Payment Date is less than the amount equal to the Required Interest Payment
less interest accrued on the Lease Trust Certificates, an amount equal to the
lesser of (x) such shortfall and (y) the amount on deposit in the Certificate
Distribution Account on the Business Day preceding such Semiannual Payment Date
and (ii) with respect any other Semiannual Payment Date or Payment Date, zero.
"Certificate Interest Rate" shall mean the per annum rate at which
interest accrues on the Lease Trust Certificates, which shall be 6.10%.
"Class" shall mean, with respect to the Senior Notes, all of the
Senior Notes having the same Senior Note Interest Rate and the same Stated
Maturity.
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<PAGE> 6
"Closing Date" shall mean November 26, 1996.
"Demand Notes" means, collectively, the demand notes, each dated
November 26 1996, (i) from Ford Credit as maker and Ford Credit Leasing as
payee in a principal amount of $43,167,000; (ii) from Ford Credit as maker and
RCL Trust 1996-1 as payee in a principal amount of $13,034,000; (iii) from Ford
Credit as maker and Ford Credit Leasing as payee in a principal amount of
$133,000 and assigned to RCL Trust; (iv) from Ford Credit as maker and RCL
Trust as payee in a principal amount of $19,600,000 and assigned to the Lease
Trust; (v) from Ford Credit as maker and Ford Credit Leasing as payee in a
principal amount of $200,000 and assigned to the Lease Trust; and (vi) from
Ford Credit as maker and Ford Credit Leasing as payee in a principal amount of
$200,000, assigned to RCL Trust 1996-1 and further assigned to the Lease Trust.
"Eligible Account" shall mean a segregated trust account at a
financial institution having a long-term debt rating by each Rating Agency of
at least "Baa3" or the equivalent.
"Eligible State" shall mean each of Arizona, Arkansas, California,
Colorado, Kansas, Minnesota, Nebraska, Nevada, New Mexico, New York, North
Dakota, Pennsylvania, South Dakota, Virginia, and Washington.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Indenture" shall mean the indenture dated as of November 26, 1996
between the Lease Trustee and the Indenture Trustee, as amended or supplemented
from time to time.
"Indenture Event of Default" shall mean any Event of Default (as
defined in the Indenture) set forth in Section 5.1 of the Indenture.
"Indenture Trustee" shall mean The Chase Manhattan Bank, a New York
corporation, not in its individual capacity but solely as trustee under the
Indenture, or any successor trustee thereunder.
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<PAGE> 7
"Initial Cash Collateral Deposit" shall mean $30,821,533.09.
"Interest Accrual Period" shall mean, with respect to any Payment Date
and (i) the Class A-1 Senior Notes, the period from and including the Closing
Date (in the case of the first Payment Date) or from and including the most
recent Payment Date on which interest has been paid to but excluding the
following Payment Date and (ii) the Class A-2 Senior Notes, the Subordinated
Notes and the Lease Trust Certificates, the period from and including the
Closing Date (in the case of the first Payment Date) or from and including the
15th day of the third calendar month preceding the calendar month in which such
Payment Date occurs, to but excluding the 15th day of the calendar month in
which such Payment Date occurs, in each case whether or not such day is a
Business Day.
"Lease Event of Default" shall mean each event of default set forth in
Section 10.1 of the Program Operating Lease.
"Lease Trust" shall mean Ford Credit Auto Lease Trust 1996-1 created
pursuant to the Lease Trust Agreement.
"Lease Trust Agreement" shall mean the trust agreement dated as of
November 26, 1996 between RCL Trust 1996-1 and the Lease Trustee, as amended or
supplemented from time to time.
"Lease Trust Certificate" shall mean a certificate evidencing an
interest in the Lease Trust substantially in the form attached to the Lease
Trust Agreement as Exhibit A.
"Lease Trust Certificateholder" shall mean, as of any date, the Person
in whose name a Lease Trust Certificate is registered on the Lease Trust
Register.
"Lease Trustee" shall mean PNC Bank, Delaware, not in its individual
capacity but solely as trustee under the Lease Trust Agreement, and any
successor trustee thereunder.
"Lease Trust Estate" shall mean (i) the rights of
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<PAGE> 8
the Lease Trust under Series 1996-1 Certificates, (ii) the rights of the Lease
Trust as lessor under the Program Operating Lease and amounts payable to the
Lease Trust thereunder, (iii) the Series 1996-1 Collection Account, the Series
1996-1 Payahead Account, the Series 1996-1 Payments Account, the Series 1996-1
Certificate Distribution Account and all funds on deposit from time to time in
the Series 1996-1 Collection Account, the Series 1996-1 Payahead Account, the
Series 1996-1 Payments Account, the Series 1996-1 Certificate Distribution
Account and in all investments and proceeds thereof (including all investment
earnings (net of losses and investment expenses) from amounts on deposit in the
Collection Account and the Certificate Distribution Account), (iv) the rights
of the Lease Trust as assignee of RCL Trust 1996-1 under the Asset Contribution
Agreement, (v) the rights of the Lease Trust as Holder of the Series 1996-1
Certificates under the Administrative Agency Agreement and the Series 1996-1
Supplement, (vi) the security interest of the Lease Trust in the Subordinated
Notes and in amounts credited to the Cash Collateral Account and the right to
make withdrawals from the Cash Collateral Account and (vii) all proceeds of the
foregoing.
"Lease Trust Paying Agent" shall mean any paying agent or
co-paying agent appointed pursuant to Section 3.9 of the Lease Trust Agreement
and shall initially be The Chase Manhattan Bank.
"Monthly Remittance Conditions" shall mean, with respect to Series
1996-1 Collections, (i) Ford Credit is the Administrative Agent, (ii) the
rating of Ford Credit's short-term unsecured debt is at least P-1 by Moody's
Investors Service, Inc. and A-1 by Standard & Poor's Ratings Services and (iii)
no Event of Default with respect to Series 1996-1 shall have occurred under the
Administrative Agency Agreement.
"Outstanding Amount" shall mean, as of any date with respect to (i)
any Class of Senior Notes, the aggregate principal amount of all Senior Notes
of the Class which are Outstanding (as defined in the Indenture) on such date
and with respect to all of the Senior Notes, the aggregate principal amount of
all Senior Notes which are Outstanding (as defined in the Indenture) on such
date, in each case as reduced by payments of principal previously made on such
Senior Notes and (ii) with respect to
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<PAGE> 9
the Subordinated Notes, the aggregate principal amount of all Subordinated
Notes which are outstanding on such date, in each case as reduced by payments
of principal previously made on the Subordinated Notes); provided, that in
determining whether the holders of Subordinated Notes evidencing the requisite
portion or percentage of the Outstanding Amount of the Subordinated Notes have
given any request, demand, authorization, direction, notice, consent, or waiver
under any Basic Document, Subordinated Notes owned by the Issuer, the
Depositor, the Administrative Agent or any Affiliate of any of the foregoing
Persons shall be disregarded and deemed to be excluded from the Outstanding
Amount of the Subordinated Notes, except that, in determining whether the
Indenture Trustee and Lease Trustee shall be protected in relying on any such
request, demand, authorization, direction, notice, consent, or waiver, only
Subordinated Notes that a Responsible Officer (as defined in the Indenture) of
the Indenture Trustee, if applicable, and a Responsible Officer (as defined in
the Lease Trust Agreement) of the Lease Trustee with direct responsibility for
the administration of the Lease Trust Agreement, if applicable, knows to be so
owned shall be so disregarded.
"Payment Date" shall mean February 15, May 15, August 15 and November
15 of each year or, if any such day is not a Business Day, the next succeeding
Business Day, commencing February 17, 1997.
"Permitted Investments" shall mean that amounts to be invested up to
the greater of (i) $25,000,000 or (ii) 25% of the amounts to be invested shall
be invested in U.S. dollar time deposits of one or more of the following banks,
as required, in the order of priority indicated so long as at the time of the
investment (or commitment to invest) therein, the commercial paper, other
short-term unsecured debt obligations or deposits of such bank shall be rated
at least P-1 by Moody's Investors Service, Inc. and A-1 by Standard and Poor's
Ratings Services: (1) The Bank of Tokyo-Mitsubishi, Ltd., (2) Societe Generale,
(3) The Hong Kong & Shanghai Bank, Ltd., (4) The Canadian Imperial Bank of
Commerce, (5) The Sumitomo Bank, Limited, (6) The Industrial Bank of Japan,
Ltd., (7) The Sanwa Bank, Limited, (8) Bank of Montreal, (9) National
Westminster Bank plc and (10) Kredietbank, N.V. For purposes of this
definition of "Permitted Investments," the amounts to be invested as of any
date of determination
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shall include amounts invested or to be invested on an aggregate basis as of
such date in the Series 1996-1 Collection Account, the Series 1996-1 Payahead
Account, the Series 1996-1 Payments Account and the Certificate Distribution
Account.
"Pool Balance" shall mean, with respect to any date, the Series
Specified Asset Amount with respect to Series 1996-1 Assets as of such date.
"Program Operating Lease" shall mean the agreement dated November 26,
1996 between RCL Trust 1996-1, as Program Lessee, and the Lease Trustee, as
Program Lessor, as amended from time to time.
"Qualified Institutional Buyer" or "QIB" shall mean a "qualified
institutional buyer" as such term is defined in paragraph (a)(1) of Rule 144A
of the Securities Act.
"Rating Agency" shall mean Moody's Investors Service, Inc. and
Standard & Poor's Ratings Services. If no such organization or successor is
any longer in existence, "Rating Agency" shall be a nationally recognized
statistical rating organization or other comparable Person designated by the
Issuer, notice of which designation shall be given to the Indenture Trustee,
the Lease Trustee and the Administrative Agent.
"RCL Account" shall mean the account designated as such pursuant to
Section 5.1 of the RCL Trust Agreement.
"RCL Assignment Agreement" shall mean the assignment agreement dated
as of November 26, 1996 between the RCL Trust 1996-1, as assignor, and Ford
Credit Leasing, as assignee, substantially in the form attached as Exhibit A to
the RCL Trust Agreement.
"RCL Purchase Option Price" shall mean, with respect to the beneficial
interest in any Series 1996-1 Leased Vehicle, the Residual Value of such Series
1996-1 Leased Vehicle minus any amounts due from the related Lessee with
respect to Excess Wear and Tear and Excess Mileage which were uncollected as of
the end of the Collection Period in which the related Auction Proceeds were
received.
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"RCL Trust 1996-1" shall mean RCL Trust 1996-1 established pursuant to
the RCL Trust Agreement.
"RCL Trust Agreement" shall mean the agreement dated as of November
19, 1996 among Ford Credit as Grantor and initial Beneficiary, Ford Credit
Leasing as Grantor and initial Beneficiary, and the RCL Trustee.
"RCL Trustee" shall mean First Union Bank of Delaware, a Delaware
banking corporation, not in its individual capacity but solely as trustee of
RCL Trust 1996-1.
"Required Cash Collateral Amount" shall mean, with respect to (i) any
Payment Date occurring prior to the earlier to occur of (a) the date on which
the last remaining Series 1996-1 Lease terminated and (b) the termination of
the Program Operating Lease pursuant to Section 11.1(a) thereof, the product of
3.25% and the Pool Balance on the Closing Date and (ii) any subsequent Payment
Date, zero.
"Required Interest Payment" shall mean, with respect to any Payment
Date, (i) the Series 1996-1 Administrative Fee plus (ii) the amount of interest
accrued during the preceding Interest Accrual Period on the Outstanding Amount
of each Class of Senior Notes at their respective Senior Note Interest Rates
together with any overdue interest plus interest on any overdue interest at the
applicable Senior Note Interest Rate, on the Outstanding Amount of the
Subordinated Notes at the Subordinated Note Interest Rate together with any
overdue interest plus interest on any overdue interest at the Subordinated Note
Interest Rate, and on the Aggregate Certificate Balance of the Lease Trust
Certificates at the Certificate Interest Rate together with any overdue
interest plus interest on any overdue interest at the Certificate Rate.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Semiannual Interest Accrual Period" shall mean the period from and
including the Closing Date (in the case of the first Semiannual Payment Date)
or from and including the 15th day of the sixth calendar month preceding the
calendar month in which such Semiannual Payment Date occurs, to but excluding
the 15th day of the calendar
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month in which such Semiannual Payment Date occurs, in each case whether or not
such day is a Business Day.
"Semiannual Payment Date" shall mean May 15 and November 15 of each
year or, if any such day is not a Business Day, the next succeeding Business
Day, commencing May 15, 1997.
"Senior Noteholder" shall mean, as of any date, the Person in whose
name a Senior Note is registered on the Senior Note Register. When used with
respect to any Note, the "related Senior Noteholder" shall mean, as of any
date, the Person registered on the Senior Note Register with respect to such
Senior Note.
"Senior Note Interest Rate" shall mean with respect to the Senior
Notes of any Class, the annual rate at which interest accrues on the Senior
Notes of the Class, as specified in Section 2.1 of the Indenture and in the
Senior Notes.
"Senior Notes" shall mean, the 5.45125% Class A-1 Asset Backed Notes
and the 5.80% Class A-2 Asset Backed Notes, each as issued by the Lease Trust
pursuant to the Indenture and each as defined therein.
"Series 1996-1" shall mean the Series of Specified Beneficial
Certificates designated as the Series 1996-1 Specified Beneficial Certificates.
"Series 1996-1 Administrative Fee" shall mean, with respect to any
Payment Date, the Specified Asset Administrative Fee payable to the
Administrative Agent for services rendered in connection with servicing the
Series 1996-1 Assets and administering the distributions of funds during such
Accrual Period (including the payment of the fees and expenses of Comerica, the
Lease Trustee and the Indenture Trustee) which shall be equal to the sum, for
each of the three Collection Periods preceding such Payment Date, of the
product of (i) one-twelfth of 1% and (ii) the Pool Balance as of the beginning
of each such Collection Period.
"Series 1996-1 Asset Amount" shall mean the Series Specified Asset
Amount with respect to Series 1996-1.
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"Series 1996-1 Assets" shall have the meaning set forth in Section 1.1
of the Series 1996-1 Supplement.
"Series 1996-1 Certificates" shall mean the Series of Specified
Beneficial Certificates issued by FCTT and designated as the "Series 1996-1
Specified Beneficial Certificates" representing in the aggregate a 100%
beneficial interest in the Series 1996-1 Assets.
"Series 1996-1 Collections" shall mean with respect to any Accrual
Period, the sum of the following amounts: (i) the Monthly Payments with respect
to Series 1996-1 Leases and Series 1996-1 Leased Vehicles received by the
Administrative Agent, including applied Payaheads; plus (ii) Administrative
Purchase Amounts deposited in the Series 1996-1 Collection Account pursuant to
Sections 4.5 and 4.7 of the Administrative Agency Agreement or Section 3.3 of
the Asset Contribution Agreement plus (iii) Sale Proceeds with respect to
Series 1996-1 Leased Vehicles received by the Administrative Agent; plus (iv)
Recoveries with respect to Series 1996-1; plus (v) Liquidation Proceeds with
respect to Series 1996-1; and plus (vi) Voluntary Early Termination Proceeds
with respect to Series 1996-1.
"Series 1996-1 Collection Account" shall mean the account designated
as such in Section 5.1(a) of the Series 1996-1 Supplement as the Series
Collection Account for Series 1996-1.
"Series 1996-1 Comerica Fee" shall mean the Specified Asset Comerica
Fee relating to the Series 1996-1 Assets, which shall be equal to the Series
1996-1 Percentage of the monthly fees and expenses of Comerica payable pursuant
to Section 6.8 of the FCTT Agreement.
"Series 1996-1 Credit Loss" shall mean, with respect to Series 1996-1
and any Collection Period, (i) the Specified Asset Charged-Off Amount with
respect to Series 1996-1 for the Collection Period minus (ii) Recoveries with
respect to Series 1996-1 received during the Collection Period.
"Series 1996-1 Cut-Off Date" shall mean the Series Cut-Off Date with
respect to the Series 1996-1 Assets and the Series 1996-1 Certificates, which
date is October 31, 1996.
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"Series 1996-1 Issue Date" shall mean the date designated by the
Administrative Agent, pursuant to Section 4.3 of the FCTT Agreement, as the
Series Issue Date with respect to the Series 1996-1 Assets and the Series
1996-1 Certificates, which date is November 26, 1996.
"Series 1996-1 Lease" shall mean each Specified Lease listed on
Schedule A to the Series 1996-1 Supplement.
"Series 1996-1 Leased Vehicle" shall mean each Specified Leased
Vehicle listed on Schedule A to the Series 1996-1 Supplement.
"Series 1996-1 Payahead Account" shall mean, the account designated as
such pursuant to Section 5.1(b) of the Series 1996-1 Supplement as the Series
Payahead Account for Series 1996-1.
"Series 1996-1 Payments Account" shall mean the account designated as
such pursuant to Section 5.1(c) of the Series 1996-1 Supplement.
"Series 1996-1 Percentage" shall mean, as of any date, the percentage
equivalent of a fraction, (i) the numerator of which is the Series 1996-1 Asset
Amount and (ii) the denominator of which is the Aggregate FCTT Asset Amount.
"Series 1996-1 Residual Loss" shall mean, with respect to Series
1996-1 and any Collection Period, the following amounts with respect to the
Collection Period: (i) the aggregate Residual Values of all Series 1996-1
Leased Vehicles with respect to which the Scheduled Lease End Dates has
occurred and the related Auction Proceeds have been received minus (ii) Auction
Proceeds of such Series 1996-1 Leased Vehicles and minus (iii) amounts with
respect to Excess Wear and Tear and Excess Mileage assessed in connection with
such Series 1996-1 Leased Vehicles.
"Series 1996-1 Specification Notice" shall mean the Series
Specification Notice relating to the Series 1996-1 Assets.
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"Series 1996-1 Supplement" shall mean the Series 1996-1 Supplement to
the Administrative Agency Agreement dated as of November 26, 1996 among Ford
Credit as Administrative Agent and initial Beneficiary, Ford Credit Leasing as
initial Beneficiary and Comerica Bank as trustee of FCTT.
"Subordinated Noteholder" shall mean, as of any date, the Person in
whose name a Subordinated Note is registered on the Subordinated Note Register.
When used with respect to any Subordinated Note, the "related Subordinated
Noteholder" shall mean, as of any date, the Person registered on the
Subordinated Note Register with respect to such Subordinated Note.
"Subordinated Note Interest Rate" shall mean the per annum rate at
which interest accrues on the Subordinated Notes, which shall be 6.00%.
"Subordinated Notes" shall mean the 6.00% Asset Backed Subordinated
Notes issued by the Lease Trust pursuant to the Lease Trust Agreement.
"Transfer Agreement" shall mean the agreement dated as of November 26,
1996 between RCL Trust 1996-1, as transferor, and Lease Trustee, as transferee.
"Transferor Purchase Option Net Proceeds" shall have the meaning set
forth in Section 9.1 of the Program Operating Lease.
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