<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 30, 1997
MetLife Capital Funding Corp. III
(originator of the MetLife Capital Equipment Loan Trust Series 1997-A)
on behalf of MetLife Capital Equipment Loan Trust Series 1997-A
----------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
United States 333-23405 91-1788640
- ---------------------------- ---------------------- ------------
(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification Number)
</TABLE>
10900 NE 4th Street, Suite 550
Bellevue, Washington 98004
-------------------------------------- ----------
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (206) 450-3590
N/A
-------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Items 1-4. Not Applicable
Item 5. On May 30, 1997 the MetLife Capital Equipment Loan Trust Series
1997-A (the "Issuer") issued $304,203,000 principal amount of
Class A 6.85% Asset Backed Notes and $26,452,783 principal
amount of Class B 6.85% Class B Asset Backed Notes.
Item 6. Not Applicable.
Item 7. Exhibits.
The following are filed as Exhibits to this Report under Exhibits 1.1,
4.1 and 4.2.
Exhibit 1.1 Class A Note Underwriting Agreement dated as of May 22,
1997 among MetLife Capital Corporation ("MCC"), MetLife
Capital Funding Corp. III ("Funding III") and Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch").
Exhibit 4.1 Indenture dated as of May 1, 1997 between MetLife
Capital Equipment Loan Trust 1997-A and The Chase
Manhattan Bank, as Indenture Trustee.
Exhibit 4.2 The Transfer and Servicing Agreement dated as of May 1,
1997 among MCC as servicer, Funding III as transferor
and the Issuer.
Exhibit 4.3 The Trust Agreement dated as of May 1, 1997 between
MCC, Funding III and Wilmington Trust Company, as owner
trustee (the "Owner Trustee").
Exhibit 10.1 The Administration Agreement dated as of May 1, 1997
among MCC, Funding III and the Owner Trustee.
Exhibit 10.2 The Contribution and Sale Agreement date as of May 1,
1997 between MCC and Funding III.
Items 8-9. Not Applicable
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
METLIFE CAPITAL
FUNDING CORP. III
By: /s/ Joseph G. Rooney
-----------------------
Name: Joseph G. Rooney
Title: President
3
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
Exhibit 1.1 Class A Note Underwriting Agreement dated as of May 22, 1997
among MCC, Funding and Merrill Lynch.
Exhibit 4.1 Indenture dated as of May 1, 1997 between the Issuer and the
Indenture Trustee.
Exhibit 4.2 The Transfer and Servicing Agreement dated as of May 1, 1997
among MCC as servicer, Funding III as transferor and the Issuer.
Exhibit 4.3 The Trust Agreement dated as of May 1, 1997 between MCC, Funding
III and the Owner Trustee.
Exhibit 10.1 The Administration Agreement dated as of May 1, 1997 among MCC,
Funding III and the Owner Trustee.
Exhibit 10.2 The Contribution and Sale Agreement date as of May 1, 1997
between MCC and Funding III.
4
<PAGE>
Exhibit 1.1
METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A
6.85% CLASS A NOTES
METLIFE CAPITAL FUNDING CORP. III
CLASS A NOTE UNDERWRITING AGREEMENT
-----------------------------------
May 22, 1997
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
250 Vesey Street
World Financial Center
North Tower
New York, New York 10281-1310
Ladies and Gentlemen:
1. Introductory. MetLife Capital Funding Corp. III, a Delaware
corporation (the "Transferor"), proposes to cause MetLife Capital Equipment Loan
Trust 1997-A (the "Trust") to issue and sell $304,203,000 aggregate principal
amount of 6.85% Class A Notes (the "Class A Notes") to Merrill Lynch, Pierce,
Fenner & Smith Incorporated (the "Underwriter"). The assets of the Trust will
include, among other things, a pool of fixed rate commercial loan contracts
and/or equipment finance lease contracts (the "Receivables") secured by one or
more pieces of commercial and/or industrial equipment that were directly or
indirectly acquired with the proceeds of, or leased pursuant to, such contracts
(the "Financed Equipment"). The Receivables will be transferred to the Trust by
the Transferor. The Receivables will be serviced for the Trust by MetLife
Capital Corporation, a Delaware corporation (the "Servicer" or "MCC"). The
Class A Notes will be issued pursuant to the Indenture to be dated as of May 1
1997 (as amended and supplemented from time to time, the "Indenture"), between
the Trust and The Chase Manhattan Bank (the "Indenture Trustee").
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in the Transfer and Servicing Agreement to be dated as
of May 1, 1997 (as amended and supplemented from time to time, the "Transfer and
Servicing Agreement"), among the Trust, the Transferor and the Servicer or, if
not defined therein, in the Indenture or the Trust Agreement to be dated as of
May 1, 1997 (as amended and supplemented from time to time, the "Trust
Agreement"), between the Transferor and Wilmington Trust Company, a Delaware
banking corporation as owner trustee under the Trust Agreement (the "Owner
Trustee").
<PAGE>
2. Representations and Warranties of MCC and the Transferor. MCC
and the Transferor represent and warrant to and agree with the Underwriter that:
(a) The Transferor meets the requirements for use of Form S-3 under
the Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") a registration statement
(Registration No. 333-23405) on such Form, including a prospectus and a form of
prospectus supplement, for registration under the Act of the offering and sale
of the Class A Notes. The Transferor may have filed one or more amendments
thereto, each of which amendments has previously been furnished to the
Underwriter. The Transferor will also file with the Commission a prospectus
supplement in accordance with Rule 424(b) under the Act. The Transferor has
included in the Registration Statement, as amended at the Effective Date (as
hereinafter defined), all information required by the Act and the rules
thereunder to be included in the Prospectus with respect to the Class A Notes
and the offering thereof. As filed, the registration statement as amended, the
form of prospectus supplement, and any prospectuses or prospectus supplements
filed pursuant to Rule 424(b) under the Act relating to the Class A Notes shall,
except to the extent that the Underwriter shall agree in writing to a
modification, be in all substantive respects in the form furnished to the
Underwriter prior to the Execution Time (as hereinafter defined) or, to the
extent not completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the latest
preliminary prospectus supplement which has previously been furnished to the
Underwriter) as the Transferor has advised the Underwriter, prior to the
Execution Time, will be included or made therein.
For purposes of this Agreement, "Effective Time", means the date and
time as of which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission, and
"Effective Date" means the date of the Effective Time. "Execution Time" shall
mean the date and time that this Agreement is executed and delivered by the
parties hereto. Such registration statement, as amended at the Effective Time
and including the exhibits thereto and any material incorporated by reference
therein (including any Computational Materials, ABS Term Sheets, Structural Term
Sheets and Collateral Term Sheets (as defined in Section 4(b) of this Agreement)
filed on Form 8-K), is hereinafter referred to as the "Registration Statement"
and any prospectus supplement (the "Prospectus Supplement") relating to the
Class A Notes, as filed with the Commission pursuant to and in accordance with
Rule 424(b) under the Act is, together with the prospectus filed as part of the
Registration Statement (such prospectus, in the form it appears in the
Registration Statement or in the form most recently revised and filed with the
Commission pursuant to Rule 424(b) being hereinafter referred to as the "Basic
Prospectus"), hereinafter referred to as the "Prospectus". "Preliminary
Prospectus" means any preliminary prospectus to the Prospectus
2
<PAGE>
which describes the Class A Notes and the offering thereof and which is used
prior to the filing of the Prospectus. "Rule 424" refers to such rule under the
Act. Any reference herein to the Registration Statement, the Prospectus or any
Prospectus Supplement shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or before the Effective Date of the Registration Statement or the
issue date of the Prospectus or any Prospectus Supplement, as the case may be;
and any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Prospectus or any Prospectus
Supplement shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the Registration Statement,
or the issue date of the Prospectus or any Prospectus Supplement, as the case
may be, deemed to be incorporated therein by reference.
(b) On the Effective Date and on the date of this Agreement, the
Registration Statement did or will, and, when the Prospectus was first filed and
on the Closing Date (as defined below), the Prospectus and any Prospectus
Supplement did or will comply in all material respects with the applicable
requirements of the Act, the Exchange Act and the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and the respective rules and regulations
of the Commission thereunder (the "Rules and Regulations") and of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). On the Effective
Date, the Registration Statement did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not filed pursuant to
Rule 424(b), did not or will not, and on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Prospectus, together with any Prospectus
Supplement, did not or will not include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that MCC and the Transferor make no
representation or warranty as to the information contained in or omitted from
the Registration Statement or the Prospectus in reliance upon and in conformity
with information furnished in writing to MCC or the Transferor by the
Underwriter specifically for use in connection with preparation of the
Registration Statement or the Prospectus. As of the Closing Date, the
Transferor's representations and warranties in the Transfer and Servicing
Agreement and the Trust Agreement will be true and correct.
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus (i) there has not been any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, business, management,
financial
3
<PAGE>
condition, stockholders' equity, results of operations, regulatory status or
business prospects of the Transferor or MCC, and (ii) neither the Transferor nor
MCC has entered into any transaction or agreement (whether or not in the
ordinary course of business) material to it that, in either case, would
reasonably be expected to materially adversely affect the interests of the
holders of the Class A Notes, other than as set forth or contemplated in the
Prospectus.
(d) The computer tape of the Initial Receivables created as of May 1,
1997, and made available to the Underwriter by the Servicer, was complete and
accurate as of the date thereof and includes a description of the Initial
Receivables that are described in Schedule A to the Transfer and Servicing
Agreement.
(e) Each of the Transferor and MCC is duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and is qualified to transact business in and is in
good standing under the laws of each state in which the failure to so qualify
would render any Receivable unenforceable that would otherwise be enforceable by
the Transferor or the Owner Trustee, and has full power, authority and legal
right to own its properties and conduct its business as such properties are
presently owned and such business is presently conducted.
(f) This Agreement has been duly authorized, executed and delivered
by each of the Transferor and MCC.
(g) On the date of this Agreement and on the Closing Date, the
representations and warranties of MCC and the Transferor in the Contribution and
Sale Agreement and the Transfer and Servicing Agreement with respect to the
Receivables will be true and correct.
(h) MCC's assignment and delivery of the Receivables, to the
Transferor as of the Closing Date will vest in the Transferor all of MCC's
right, title and interest therein, subject to no prior lien, mortgage, security
interest, pledge, adverse claim, charge or other encumbrance.
(i) The Transferor's assignment and delivery of the Receivables to
the Trust as of the Closing Date will vest in the Trust either (x) all of the
Transferor's right, title and interest therein or (y) a first priority perfected
security interest therein, in each case, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance.
(j) The Trust's assignment of the Receivables to the Indenture
Trustee pursuant to the Indenture will vest in the Indenture Trustee, for the
benefit of the Noteholders, a first priority perfected security interest
therein, subject to no prior lien, mortgage, security interest, pledge, adverse
claim, charge or other encumbrance.
4
<PAGE>
3. Purchase, Sale, and Delivery of the Class A Notes. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Transferor agrees to cause the
Trust to sell to the Underwriter, and the Underwriter agrees to purchase from
the Trust, at a purchase price of 99.7157792% of the principal amount thereof,
$304,203,000 in principal amount of the Class A Notes. Delivery of and payment
for the Class A Notes shall be made at the office of Orrick, Herrington &
Sutcliffe LLP, 666 Fifth Avenue, New York, New York 10103, on May 30, 1997 (the
"Closing Date"). Delivery of the Class A Notes shall be made against payment of
the purchase price in immediately available funds drawn to the order of the
Transferor. The Class A Notes to be so delivered will be represented by one or
more Class A Notes in fully registered, certificated form.
4. Offering by Underwriter.(a) It is understood that the Underwriter
proposes to offer the Class A Notes for sale to the public (which may include
selected dealers), as set forth in the Prospectus.
(b) The Underwriter may prepare and provide to prospective investors
certain Computational Materials, ABS Term Sheets, Structural Term Sheets and
Collateral Term Sheets in connection with its offering of the Class A Notes,
subject to the following conditions:
(i) The Underwriter shall have complied with the requirements of
the no-action letter, dated May 20, 1994, issued by the Commission to Kidder,
Peabody Acceptance Corporation I, Kidder, Peabody & Co. Incorporated and Kidder
Structured Asset Corporation, as made applicable to other issuers and
underwriters by the Commission in the response to the request of the Public
Securities Association, dated May 24, 1994 (collectively, the "Kidder/PSA
Letter") and the requirements of the no-action letter, dated February 17, 1995,
issued by the Commission to the Public Securities Association (the "PSA Letter,"
and together with the Kidder/PSA Letter, the "No-Action Letters").
(ii) For purposes hereof, "Computational Materials" shall have
the meaning given such term in the No-Action Letters, but shall include only
those Computational Materials that have been prepared or delivered to
prospective investors by or at the direction of the Underwriter. For purposes
hereof, "ABS Term Sheets," "Structural Term Sheets" and "Collateral Term Sheets"
shall have the meanings given such terms in the PSA Letter but shall include
only those ABS Term Sheets, Structural Term Sheets or Collateral Term Sheets
that have been prepared or delivered to prospective investors by or at the
direction of the Underwriter.
(iii) All Computational Materials, ABS Term Sheets, Structural
Term Sheets and Collateral Term Sheets provided to prospective investors that
are required to be filed pursuant to the No-Action Letters shall bear a legend
5
<PAGE>
substantially in the form attached hereto as Exhibit A. The Transferor shall
have the right to require specific legends or notations to appear on any
Computational Materials, ABS Term Sheets, Structural Term Sheets and Collateral
Term Sheets, the right to require changes regarding the use of terminology and
the right to determine the types of information appearing therein.
Notwithstanding the foregoing, this subsection (iii) will be satisfied if all
Computational Materials, ABS Term Sheets, Structural Term Sheets and Collateral
Term Sheets referred to herein bear a legend in a form previously approved in
writing by the Transferor.
(iv) The Underwriter shall have provided the Transferor with
representative forms of all Computational Materials, ABS Term Sheets, Structural
Term Sheets and Collateral Term Sheets prior to their first use, to the extent
such forms have not previously been approved by the Transferor for use by the
Underwriter. The Underwriter shall have provided to the Transferor, for filing
on Form 8-K as provided in Section 5(n), copies (in such format as required by
the Transferor) of all Computational Materials, ABS Term Sheets, Structural Term
Sheets and Collateral Term Sheets that are required to be filed with the
Commission pursuant to the No-Action Letters. The Underwriter may provide
copies of the foregoing in a consolidated or aggregated form including all
information required to be filed. All Computational Materials, ABS Term Sheets,
Structural Term Sheets and Collateral Term Sheets described in this subsection
(iv) shall have been provided to the Transferor not later than 10:00 a.m. (New
York City time) not less than one business day before filing thereof is required
to be made with the Commission pursuant to the No-Action Letters. The
Underwriter shall not have provided to any investor or prospective investor in
the Class A Notes any Computational Materials, ABS Term Sheets, Structural Term
Sheets and Collateral Term Sheets on or after the day on which Computational
Materials, ABS Term Sheets, Structural Term Sheets and Collateral Term Sheets
are required to be provided to the Transferor pursuant to this subsection (iv)
(other than copies of Computational Materials, ABS Term Sheets, Structural Term
Sheets and Collateral Term Sheets previously submitted to the Transferor in
accordance with this subsection (iv) for filing pursuant to Section 5(n)),
unless such Computational Materials, ABS Term Sheets, Structural Term Sheets and
Collateral Term Sheets are preceded or accompanied by the delivery of a
Prospectus to such investor or prospective investor.
(v) All information included in the Computational Materials, ABS
Term Sheets, Structural Term Sheets and Collateral Term Sheets shall have been
generated based on substantially the same methodology and assumptions that are
used to generate the information in the Prospectus as set forth therein;
provided that the Computational Materials, ABS Term Sheets, Structural Term
Sheets and Collateral Term Sheets may have included information based on
alternative methodologies or assumptions if specified therein. If any
Computational Materials, ABS Term Sheets,
6
<PAGE>
Structural Term Sheets and Collateral Term Sheets that are required to be filed
were based on assumptions with respect to the Receivables that differ from the
final Receivables information in any material respect or on Class A Note
structuring terms that were revised in any material respect prior to the
printing of the Prospectus, the Underwriter shall have prepared revised
Computational Materials, ABS Term Sheets, Structural Term Sheets and Collateral
Term Sheets, as the case may be, based on the final Receivables information and
structuring assumptions, shall have circulated such revised Computational
Materials, ABS Term Sheets, Structural Term Sheets and Collateral Term Sheets to
all recipients of the preliminary versions thereof that indicated orally to the
Underwriter they would purchase all or any portion of the Class A Notes, and
shall have included such revised Computational Materials, ABS Term Sheets,
Structural Term Sheets and Collateral Term Sheets (marked, "as revised") in the
materials delivered to the Transferor pursuant to subsection (iv) above.
(vi) The Transferor shall not be obligated to file any
Computational Materials, ABS Term Sheets, Structural Term Sheets and Collateral
Term Sheets that have been determined to contain any material error or omission,
provided that, at the request of the Underwriter, the Transferor will file
Computational Materials, ABS Term Sheets, Structural Term Sheets and Collateral
Term Sheets that contain a material error or omission if clearly marked
"superseded by materials dated __________" and accompanied by corrected ABS Term
Sheets that are marked, "supersedes material previously dated __________, as
corrected." If, within the period during which the Prospectus relating to the
Class A Notes is required to be delivered under the Act, any Computational
Materials, ABS Term Sheets, Structural Term Sheets and Collateral Term Sheets
are determined, in the reasonable judgment of the Transferor or the Underwriter,
to contain a material error or omission, the Underwriter shall prepare a
corrected version of such Computational Materials, ABS Term Sheets, Structural
Term Sheets and Collateral Term Sheets, shall circulate such corrected
Computational Materials, ABS Term Sheets, Structural Term Sheets and Collateral
Term Sheets, as the case may be, to all recipients of the prior versions thereof
that either indicated orally to the Underwriter they would purchase all or any
portion of the Class A Notes, or actually purchased all or any portion thereof,
and shall deliver copies of such corrected Computational Materials, ABS Term
Sheets, Structural Term Sheets and Collateral Term Sheets (marked, "as
corrected") to the Transferor for filing with the Commission in a subsequent
Form 8-K submission (subject to the Transferor's obtaining an accountant's
comfort letter in respect of such corrected Computational Materials, ABS Term
Sheets, Structural Term Sheets and Collateral Term Sheets, which shall be at the
expense of the Transferor).
(vii) The Underwriter shall be deemed to have represented as of
the Closing Date, that, except for Computational Materials, ABS Term Sheets,
Structural Term Sheets
7
<PAGE>
and Collateral Term Sheets provided to the Transferor pursuant to subsection
(iv) above, the Underwriter did not provide any prospective investors with any
information in written or electronic form in connection with the offering of the
Class A Notes that is required to be filed with the Commission in accordance
with the No-Action Letters.
(viii) In the event of any delay in the delivery by the
Underwriter to the Transferor of all Computational Materials, ABS Term Sheets,
Structural Term Sheets and Collateral Term Sheets required to be delivered in
accordance with subsection (iv) above, or in the delivery of the accountant's
comfort letter in respect thereof pursuant to Section 5(n), the Transferor shall
have the right to delay the release of the Prospectus to investors or to the
Underwriter, to delay the Closing Date and to take other appropriate actions in
each case as necessary in order to allow the Transferor to comply with its
agreement set forth in Section 5(n) to file the Computational Materials, ABS
Term Sheets, Structural Term Sheets and Collateral Term Sheets by the time
specified therein.
5. Covenants of MCC and the Transferor. MCC and the Transferor
covenant and agree with the Underwriter that:
(a) Immediately following the execution of this Agreement, the
Transferor will prepare a Prospectus Supplement setting forth the amount of
Class A Notes covered thereby and the terms thereof not otherwise specified in
the Basic Prospectus, the price at which such Class A Notes are to be purchased
by the Underwriter, the initial public offering price, the selling concessions
and allowances, and such other information as the Transferor deems appropriate
and shall furnish a copy to the Underwriter in accordance with Section 5(b) of
this Agreement. The Transferor will transmit the Prospectus including such
Prospectus Supplement to the Commission pursuant to Rule 424(b) by a means
reasonably calculated to result in filing that complies with all applicable
provisions of Rule 424(b). The Transferor will advise the Underwriter promptly
of any such filing pursuant to Rule 424(b).
(b) Prior to the termination of the offering of the Class A Notes,
the Transferor will not file any amendment of the Registration Statement or
supplement to the Prospectus unless the Transferor has furnished the Underwriter
with a copy for its review prior to filing and will not file any such proposed
amendment or supplement to which the Underwriter reasonably objects. Subject to
the foregoing sentence, if filing of the Prospectus is otherwise required under
Rule 424(b), the Transferor will file the Prospectus, properly completed, and
any supplement thereto, with the Commission pursuant to and in accordance with
the applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Underwriter of such timely filing.
8
<PAGE>
(c) The Transferor will advise the Underwriter promptly of any
proposal to amend or supplement the Registration Statement as filed, or the
Prospectus, and will not effect such amendment or supplement without the
Underwriter's consent, which consent will not unreasonably be withheld; the
Transferor will also advise the Underwriter promptly of any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for any additional information; and the Transferor will also
advise the Underwriter promptly of any amendment or supplement to the
Registration Statement or the Prospectus and of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
the institution or threat of any proceeding for that purpose, and the Transferor
will use its best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible the lifting of any issued stop order.
(d) If, at any time when a prospectus relating to the Class A Notes
is required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Registration Statement or supplement the Prospectus to comply with the Act or
the Exchange Act or the respective Rules and Regulations thereunder, the
Transferor promptly will notify the Underwriter and will prepare and file, or
cause to be prepared and filed, with the Commission, subject to the first
sentence of paragraph (b) of this Section 5, an amendment or supplement that
will correct such statement or omission, or effect such compliance. Any such
filing shall not operate as a waiver or limitation on any right of the
Underwriter hereunder.
(e) As soon as practicable, but not later than fourteen months after
the original effective date of the Registration Statement, the Transferor will
cause the Trust to make generally available to Class A Noteholders an earnings
statement of the Trust covering a period of at least twelve months beginning
after the Effective Date of the Registration Statement that will satisfy the
provisions of Section 11(a) of the Act.
(f) The Transferor will furnish to the Underwriter copies of the
Registration Statement (one of which will be conformed and will include all
exhibits), each related preliminary prospectus or prospectus supplement, the
Prospectus and all amendments and supplements to such documents, in each case as
soon as available and in such quantities as the Underwriter requests.
(g) The Transferor will assist the Underwriter in arranging for the
qualification of the Class A Notes for sale and determination of their
eligibility for investment under the laws of such jurisdictions in the United
States, or as necessary to
9
<PAGE>
qualify for the Euroclear System or Cedel Bank, societe anonyme, as the
Underwriter designates and will continue to assist the Underwriter in
maintaining such qualifications in effect so long as required for the
distribution; provided, however, that neither the Transferor nor MCC shall be
required to qualify to do business in any jurisdiction where it is now not
qualified or to take any action which would subject it to general or unlimited
service of process in any jurisdiction in which it is now not subject to service
of process.
(h) For a period from the date of this Agreement until the retirement
of the Class A Notes, or until such time as the Underwriter shall cease to
maintain a secondary market in the Class A Notes, whichever occurs first, the
Transferor will deliver to the Underwriter the annual statements of compliance
and the annual independent certified public accountants' reports furnished to
the Owner Trustee or the Indenture Trustee pursuant to the Transfer and
Servicing Agreement, as soon as such statements and reports are furnished to the
Owner Trustee or the Indenture Trustee.
(i) So long as any of the Class A Notes are outstanding, the
Transferor will furnish to the Underwriter (i) as soon as practicable after the
end of the fiscal year all documents required to be distributed to Class A
Noteholders or filed with the Commission pursuant to the Exchange Act or any
order of the Commission thereunder and (ii) from time to time, any other
information concerning the Transferor filed with any government or regulatory
authority which is otherwise publicly available, as the Underwriter may
reasonably request.
(j) On or before the Closing Date, the Transferor shall cause the
computer records of the Transferor and the Servicer relating to the Receivables
to be marked to show the Trust's absolute ownership of the Receivables, and from
and after the Closing Date neither the Transferor nor the Servicer shall take
any action inconsistent with the Trust's ownership of such Receivables, other
than as permitted by the Transfer and Servicing Agreement.
(k) To the extent, if any, that the rating provided with respect to
the Class A Notes by the rating agency or agencies that initially rate the Class
A Notes is conditional upon the furnishing of documents or the taking of any
other actions by the Transferor, the Transferor shall furnish such documents and
take any such other actions.
(l) For the period beginning on the date of this Agreement and ending
seven days after the Closing Date, unless waived by the Underwriter, none of the
Transferor, MCC or any trust originated, directly or indirectly, by the
Transferor or MCC will offer to sell or sell notes (other than the Class A
Notes) evidencing an ownership interest in, receivables generated pursuant to
fixed rate commercial loan and lease contracts secured by equipment similar to
the Financed Equipment.
10
<PAGE>
(m) The Transferor and MCC each will deliver to the Underwriter, all
opinions, certificates and other documents or information delivered to the Owner
Trustee and the Indenture Trustee at the time such opinions, certificates and
other documents or information are delivered to the Owner Trustee or the
Indenture Trustee pursuant to the Transfer and Servicing Agreement and the
Contribution and Sale Agreement with respect to perfection and priority of MCC's
interest in the Receivables.
(n) The Transferor will file with the Commission a report on Form 8-K
setting forth all Computational Materials, ABS Term Sheets, Structural Term
Sheets and Collateral Term Sheets provided to the Transferor by the Underwriter
and identified by it as such within the time period allotted for such filing
pursuant to the No-Action Letters. The Transferor shall file any corrected ABS
Term Sheets, Structural Term Sheets or Collateral Term Sheets described in
Subsection 4(b)(vi) as soon as practicable following receipt thereof.
6. Payment of Expenses. The Transferor will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the printing and filing of the Registration Statement as originally filed
and of each amendment thereto, (ii) the preparation, issuance and delivery of
the Class A Notes to the Underwriter, (iii) the fees and disbursements of MCC's
and the Transferor's counsel and accountants, (iv) the qualification of the
Class A Notes under securities laws in accordance with the provisions of Section
5(g), including filing fees and the fees and disbursements of counsel in
connection therewith and in connection with the preparation of any blue sky or
legal investment survey, (v) the printing and delivery to the Underwriter of
copies of the Registration Statement as originally filed and of each amendment
thereto, of the Preliminary Prospectus and of each amendment or supplement
thereto, (vi) the printing and delivery to the Underwriter of copies of any blue
sky or legal investment survey prepared in connection with the Class A Notes,
(vii) any fees charged by rating agencies for the rating of the Class A Notes,
(viii) the fees and expenses, if any, incurred with respect to any filing with
the National Association of Securities Dealers, Inc. and (ix) the fees and
expenses of Orrick, Herrington & Sutcliffe LLP.
7. Conditions of the Obligations of the Underwriter. The
obligations of the Underwriter to purchase and pay for the Class A Notes will be
subject to the accuracy of the representations and warranties on the part of MCC
and the Transferor herein, to the accuracy of the statements of officers of MCC
and the Transferor made pursuant to the provisions hereof, to the performance by
MCC and the Transferor of its obligations hereunder and to the following
additional conditions precedent:
(a) The Registration Statement shall have become effective prior to
the Execution Time, and prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings
11
<PAGE>
for that purpose shall have been instituted or, to the knowledge of the
Transferor or the Underwriter, shall be contemplated by the Commission or by any
authority administering any state securities or blue sky law.
(b) The Prospectus and any supplements thereto shall have been filed
(if required) with the Commission in accordance with the Rules and Regulations
and Section 5(a) hereof.
(c) On or prior to the date of this Agreement and on or prior to the
Closing Date, the Underwriter shall have received a letter or letters, dated as
of the date of this Agreement and as of the Closing Date, respectively, of
Deloitte & Touche LLP, independent public accountants, substantially in the form
of the drafts to which the Underwriter has previously agreed and otherwise in
form and substance satisfactory to the Underwriter and its counsel.
(d) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Trust, the Transferor or the Servicer which, in the judgment of the
Underwriter, materially impairs the investment quality of the Class A Notes or
makes it impractical or inadvisable to market the Class A Notes; (ii) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such exchange;
(iii) any suspension of trading of any securities of MCC on any exchange or in
the over-the-counter market; (iv) any banking moratorium declared by Federal,
Delaware or New York authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war by
Congress, or any other substantial national or international calamity or
emergency if, in the judgment of the Underwriter, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the sale of and payment for the Class
A Notes.
(e) The Underwriter shall have received opinions of Paul Graf, Senior
Vice President and General Counsel of MCC and Davis Wright Tremaine LLP, counsel
to MCC and the Transferor and such other counsel acceptable to the Underwriter,
the Owner Trustee and the Indenture Trustee, dated the Closing Date and
satisfactory in form and substance to the Underwriter and its counsel,
substantially to the effect that:
(i) MCC has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
full corporate power and authority to own its properties and conduct its
business, as presently owned and conducted by it, and to enter into and
perform its obligations under the Class A Note Underwriting Agreement, the
Administration Agreement, the Contribution and Sale Agreement and the
Transfer and Servicing Agreement
12
<PAGE>
and had at all times, and now has, the power, authority and legal right to
acquire, own and transfer the Receivables.
(ii) The Transferor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with full corporate power and authority to own its properties and conduct
its business, as presently owned and conducted by it, and to enter into and
perform its obligations under the Class A Note Underwriting Agreement, the
Contribution and Sale Agreement, the Trust Agreement and the Transfer and
Servicing Agreement and had at all times, and now has, the power, authority
and legal right to acquire, own and transfer the Receivables.
(iii) MCC is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render any Receivable unenforceable by the Transferor, the Owner Trustee or
the Indenture Trustee, except as may be required under state securities or
Blue Sky laws of various jurisdictions.
(iv) The Transferor is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such license or
approval would have a material adverse effect on the Receivables as a
whole, except as may be required under state securities or Blue Sky laws of
various jurisdictions.
(v) The direction by the Transferor to the Owner Trustee to
authenticate the Class A Notes has been duly authorized by the Transferor
and, when the Class A Notes have been duly executed, authenticated and
delivered by the Owner Trustee in accordance with the Trust Agreement and
delivered and paid for pursuant to this Class A Note Underwriting
Agreement, will be legally issued, fully paid and nonassessable obligations
of the Trust.
(vi) The direction by the Transferor to the Indenture Trustee to
authenticate the Class A Notes has been duly authorized by the Transferor,
and, when the Class A Notes have been duly executed and delivered by the
Owner Trustee, authenticated by the Indenture Trustee in accordance with
the Indenture and delivered and paid for pursuant to the Class A Note
Underwriting Agreement, the Class A Notes will be duly issued and entitled
to the benefits and security afforded by the Indenture, except as such
enforceability is subject to: (x) limitations imposed by bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance, arrangement
or other laws relating to or affecting the rights of creditors generally or
the rights of creditors of national banking associations; (y) rights to
indemnification and contribution which may be limited by
13
<PAGE>
applicable law or equity principles or otherwise unenforceable as against
public policy; and (z) general principles of equity, including without
limitation, the availability of specific performance, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
(vii) Each of the Contribution and Sale Agreement, the Trust Agreement
and the Transfer and Servicing Agreement has been duly authorized, executed
and delivered by the Transferor, and is a legal, valid and binding
obligation of the Transferor enforceable against the Transferor in
accordance with its terms, except (x) the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
(y) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(viii) The Class A Note Underwriting Agreement has been duly
authorized, executed and delivered by each of the Transferor and MCC.
(ix) Each of the Administration Agreement, the Contribution and Sale
Agreement and the Transfer and Servicing Agreement has been duly
authorized, executed and delivered by MCC and is a legal, valid and binding
obligation of MCC enforceable against MCC in accordance with its terms,
except (x) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (y) the remedy of
specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(x) Neither the transfer of the Receivables from MCC to the
Transferor, nor the transfer of the Receivables from the Transferor to the
Trust, nor the assignment of the Trust Estate to the Trust, nor the
assignment by the Transferor of its right, title and interest in the
Contribution and Sale Agreement to the Trust, nor the grant of the security
interest in the Collateral to the Indenture Trustee pursuant to the
Indenture, nor the execution and delivery of the Class A Note Underwriting
Agreement, the Contribution and Sale Agreement, the Trust Agreement or the
Transfer and Servicing Agreement by the Transferor, nor the execution of
the Class A Note Underwriting Agreement, the Administration Agreement, the
Contribution and Sale Agreement or the Transfer and Servicing Agreement by
MCC, nor the consummation of any transactions contemplated in the Class A
Note Underwriting Agreement, the Contribution and Sale
14
<PAGE>
Agreement, the Trust Agreement, the Indenture, the Administration Agreement
or the Transfer and Servicing Agreement (such agreements, excluding the
Class A Note Underwriting Agreement, being, collectively, the "Basic
Documents"), nor the fulfillment of the terms thereof by MCC, the
Transferor or the Trust, as the case may be, will (x) conflict with, or
result in a breach, violation or acceleration of, or constitute a default
under, any term or provision of the certificate of incorporation or by-laws
of MCC or the Transferor or, to the best knowledge of such counsel after
due inquiry, of any indenture or other agreement or instrument to which MCC
or the Transferor is a party or by which either of them is bound, or (y)
result in a violation of or contravene the terms of any statute, order or
regulation applicable to MCC or the Transferor of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
either of them.
(xi) There are no actions, proceedings or investigations pending or,
to the best knowledge of such counsel, threatened before any court,
administrative agency, or other tribunal (1) asserting the invalidity of
the Trust or any of the Basic Documents, (2) seeking to prevent the
consummation of any of the transactions contemplated by any of the Basic
Documents or the execution and delivery thereof, (3) that could reasonably
be expected to materially and adversely affect the performance (A) by MCC
of its obligations under, or the validity or enforceability of, the Class A
Note Underwriting Agreement, the Administration Agreement, the Contribution
and Sale Agreement or the Transfer and Servicing Agreement (B) by the
Transferor of its obligations under, or the validity or enforceability of,
the Class A Note Underwriting Agreement, the Contribution and Sale
Agreement, the Trust Agreement or the Transfer and Servicing Agreement or
(C) by the Servicer of its obligations under, or the validity or
enforceability of, the Transfer and Servicing Agreement.
(xii) To the best knowledge of such counsel after due inquiry, no
default exists and no event has occurred which, with notice, lapse of time
or both, would constitute a default in the due performance and observance
of any term, covenant or condition of any agreement to which MCC or the
Transferor is a party or by which either of them is bound, which default is
or would have a material adverse effect on the financial condition,
earnings, business or properties of MCC and its subsidiaries, taken as a
whole.
(xiii) Should MCC become the debtor in a case under the Bankruptcy
Code, if the matter were properly briefed and presented to a court, the
court should hold that (1) the transfer of the Receivables by MCC to the
Transferor in the manner set forth in the Contribution and Sale Agreement
would constitute an absolute sale of the Receivables, rather than a
borrowing by MCC secured by the Receivables, and thus
15
<PAGE>
(2) the Transferor's rights to the Receivables would not be impaired by the
operation of Section 362(a) of the Bankruptcy Code.
(xiv) Should MCC become the debtor in a case under the Bankruptcy
Code, and the Transferor would not otherwise properly be a debtor in a case
under the Bankruptcy Code, and if the matter were properly briefed and
presented to a court exercising bankruptcy jurisdiction, the court,
exercising reasonable judgment after full consideration of all relevant
factors, should not order, over the objection of the Noteholders, the
substantive consolidation of the assets and liabilities of the Transferor
with those of MCC based on any legal theories currently subscribed to by
federal courts exercising bankruptcy jurisdiction.
(xv) Such counsel is familiar with the Servicer's standard operating
procedures relating to the Servicer's acquisition of a perfected first
priority security interest in the equipment financed by the Servicer
pursuant to commercial loan and lease contracts in the ordinary course of
the Servicer's business. Assuming that the Servicer's standard procedures
have been followed with respect to the perfection of security interests in
the Financed Equipment (and such counsel has no reason to believe that such
procedures have not been followed), the Servicer has acquired or will
acquire a perfected first priority security interest in the Financed
Equipment.
(xvi) The Contribution and Sale Agreement grants to the Transferor a
valid security interest in MCC's rights in the Receivables and the proceeds
thereof. The Transfer and Servicing Agreement grants to the Trust a valid
security interest in the Transferor's rights in the Receivables and the
proceeds thereof. The Indenture grants to the Indenture Trustee a valid
security interest in the Trust's rights in the Receivables and the proceeds
thereof.
(xvii) The Receivables are chattel paper as defined in the UCC.
(xviii) Immediately prior to the transfer of the Receivables and the
proceeds thereof to the Trust, the Transferor had a first priority
perfected ownership interest in the Receivables and the proceeds thereof.
Immediately prior to the transfer of the Receivables and the proceeds
thereof to the Indenture Trustee, the Trust had a first priority perfected
security interest in the Receivables and the proceeds thereof. The
Indenture Trustee has a first priority perfected security interest in the
Receivables and the proceeds thereof. The opinion covered by this
paragraph (xviii) shall be subject to customary UCC exceptions and
qualifications.
16
<PAGE>
(xix) The Transfer and Servicing Agreement, the Trust Agreement, the
Indenture, the Administration Agreement and the Contribution and Sale
Agreement conform in all material respects with the description thereof
contained in the Prospectus and any supplement thereto.
(xx) The statements in the Prospectus under the headings "Risk
Factors--Risks Relating to Perfection of Interests in Receivables and in
Financed Equipment" and "Certain Legal Aspects of the Receivables--Security
Interest in Equipment" to the extent they constitute matters of law or
legal conclusions with respect thereto, are correct in all material
respects.
(xxi) The statements contained in the Prospectus and any supplement
thereto under the headings "Description of the Class A Notes" and
"Description of the Transfer and Servicing Agreements," insofar as such
statements constitute a summary of the Class A Notes, the Indenture, the
Administration Agreement, the Transfer and Servicing Agreement and the
Trust Agreement, are a fair and accurate summary of the matters referred to
therein.
(xxii) No consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the
consummation of the transactions contemplated in the Basic Documents,
except such filings with respect to the transfer of the Receivables to the
Transferor pursuant to the Contribution and Sale Agreement, the transfer of
the Receivables to the Trust pursuant to the Transfer and Servicing
Agreement, and such as may be required under state securities or Blue Sky
laws of various jurisdictions.
(xxiii) All actions required to be taken and all filings required to
be made under the Act prior to the sale of the Class A Notes have been duly
taken or made.
(xxiv) The Trust Agreement is not required to be qualified under the
Trust Indenture Act and the Trust is not required to be registered under
the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(xxv) The Indenture has been duly qualified under the Trust Indenture
Act.
(xxvi) The Transferor is not, and will not as a result of the offer
and sale of the Class A Notes as contemplated in the Prospectus and this
Class A Note Underwriting Agreement become, an "investment company" as
defined in the Investment Company Act or a company "controlled by" an
"investment company" within the meaning of the Investment Company Act.
17
<PAGE>
(xxvii) To the best knowledge of such counsel after due inquiry, there
are no legal or governmental proceedings pending or threatened which are
required to be disclosed in the Registration Statement, other than those
disclosed therein.
(xxviii) The Registration Statement has become effective under the
Act, any required filing of any Preliminary Prospectus and the Prospectus
and any supplements thereto pursuant to Rule 424(b) has been or will be
made in the manner and within the time period required by Rule 424(b), and,
to the best knowledge of such counsel after due inquiry, no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and the Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form in all material
respects with the requirements of the Act, the Exchange Act, the Trust
Indenture Act and the Rules and Regulations.
(xxix) Nothing has come to such counsel's attention that would lead
such counsel to believe that the Registration Statement or the Prospectus
or any amendment or supplement thereto as of the respective dates thereof
(other than the financial statements and other financial and statistical
information contained therein, as to which such counsel need not express
any view) contains an untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements therein not
misleading.
(xxx) The Trust has been duly formed and is validly existing as a
statutory business trust and is in good standing under the laws of the
State of Delaware, with full power and authority to execute, deliver and
perform its obligations under the Transfer and Servicing Agreement, the
Indenture, the Administration Agreement and the Notes.
(xxxi) The Indenture, the Transfer and Servicing Agreement and the
Administration Agreement have been duly authorized and, when duly executed
and delivered by the Owner Trustee on behalf of the Trust, will constitute
the legal, valid and binding obligations of the Trust, enforceable against
the Trust in accordance with their terms, except (x) the enforceability
thereof may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors, rights and (y) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding therefor may
be brought.
18
<PAGE>
(xxxii) The Servicer has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with full corporate power and authority to own its properties and
conduct its business, as presently conducted by it, and to enter into and
perform its obligations under the Transfer and Servicing Agreement, and had
at all relevant times, and now has, the power, authority and legal right to
acquire, own, sell and service the Receivables.
(xxxiii) The Servicer is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such license or
approval would render any Receivable unenforceable by the Transferor, the
Owner Trustee or the Indenture Trustee.
(xxxiv) The Transfer and Servicing Agreement has been duly authorized,
executed and delivered by the Servicer, and is the legal, valid and binding
obligation of the Servicer enforceable against the Servicer in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(xxxv) Neither the execution and delivery of the Transfer and
Servicing Agreement by the Servicer, nor the consummation of any
transactions contemplated in the Class A Note Underwriting Agreement or the
Basic Documents, nor the fulfillment of the terms thereof by the Servicer
will conflict with, or result in a breach, violation or acceleration of, or
constitute a default under, any term or provision of the certificate of
incorporation or by-laws of the Servicer or of any indenture or other
agreement or instrument to which the Servicer is a party or by which it is
bound, or result in a violation of or contravene the terms of any statute,
order or regulation applicable to the Servicer of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it.
(xxxvi) To the best knowledge of such counsel after due inquiry, no
default exists and no event has occurred which, with notice, lapse of time
or both, would constitute a default in the due performance and observance
of any term, covenant or condition of any agreement to which the Servicer
is a party or by which it is bound, which default is or would have a
material adverse effect on the financial condition, earnings, business or
properties of the Servicer and its subsidiaries, taken as a whole.
19
<PAGE>
Such counsel shall also opine as to such other matters as the
Underwriter may reasonably request. Certain opinions set forth above in this
Section 7(e) shall be given by Orrick, Herrington & Sutcliffe LLP or such other
outside counsel to MCC, the Transferor and the Trust as may be acceptable to the
Underwriter.
(f) The Underwriter shall have received an opinion addressed to it of
Orrick, Herrington & Sutcliffe LLP in its capacity as Special Tax Counsel for
the Trust, substantially to the effect that the statements in the Prospectus
under the headings "Summary of Terms--Tax Status" (to the extent relating to
Federal income tax consequences) and "Federal Income Tax Considerations"
accurately describe the material Federal income tax consequences to holders of
the Class A Notes, and the statements in the Prospectus under the heading "ERISA
Considerations," to the extent that they constitute statements of matters of law
or legal conclusions with respect thereto, have been prepared or reviewed by
such counsel and accurately describe the material consequences to holders of the
Class A Notes under ERISA.
(g) The Underwriter shall have received an opinion addressed to it of
Orrick, Herrington & Sutcliffe LLP, in its capacity as Special Counsel to the
Underwriter, dated the Closing Date, with respect to the validity of the Class A
Notes and such other related matters as the Underwriter shall require and the
Transferor shall have furnished or caused to be furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters.
(h) The Underwriter shall have received an opinion addressed to it,
the Transferor, the Servicer and the Indenture Trustee, and such other counsel
acceptable to the Underwriter and its counsel, dated the Closing Date and
satisfactory in form and substance to the Underwriter and its counsel,
substantially to the effect that:
(i) The Indenture Trustee is a New York banking corporation duly
organized and validly existing under the laws of the State of New York.
(ii) The Indenture Trustee has the full corporate trust power to
accept the office of trustee under the Indenture and to enter into and
perform its obligations under the Indenture, the Transfer and Servicing
Agreement and the Administration Agreement.
(iii) The execution and delivery of the Indenture and the
Administration Agreement and the acceptance of the Transfer and Servicing
Agreement and the performance by the Indenture Trustee of its obligations
under the Indenture, the Transfer and Servicing Agreement and the
Administration Agreement have been duly authorized by all necessary
20
<PAGE>
corporate action of the Indenture Trustee and each has been duly executed
and delivered by the Indenture Trustee.
(iv) The Indenture, the Transfer and Servicing Agreement and the
Administration Agreement constitute valid and binding obligations of the
Indenture Trustee enforceable against the Indenture Trustee in accordance
with their terms under the laws of the State of New York and the Federal
law of the United States of America.
(v) The execution and delivery by the Indenture Trustee of the
Indenture and the Administration Agreement and the acceptance of the
Transfer and Servicing Agreement do not require any consent, approval or
authorization of, or any registration or filing with, any New York or
United States Federal governmental authority, other than the filing of Form
T-1 under the Trust Indenture Act.
(vi) Each of the Notes has been duly authenticated by the Indenture
Trustee.
(vii) Neither the consummation by the Indenture Trustee of the
transactions contemplated in the Transfer and Servicing Agreement, the
Indenture or the Administration Agreement, nor the fulfillment of the terms
thereof by the Indenture Trustee, will conflict with, result in a breach or
violation of, or constitute a default under any law or the charter, by-laws
or other organizational documents of the Indenture Trustee or the terms of
any indenture or other agreement or instrument known to such counsel and to
which the Indenture Trustee is a party or is bound or any judgment, order
or decree known to such counsel to be applicable to the Indenture Trustee
of any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Indenture Trustee.
(viii) To the best knowledge of such counsel after due inquiry and
belief, there is no action, suit or proceeding pending or threatened
against the Indenture Trustee (as trustee under the Indenture or in its
individual capacity) before or by any governmental authority that if
adversely decided, would materially adversely affect the ability of the
Indenture Trustee to perform its obligations under the Indenture, the
Transfer and Servicing Agreement or the Administration Agreement.
(ix) The execution, delivery and performance by the Indenture Trustee
of the Transfer and Servicing Agreement, the Indenture and the
Administration Agreement will not subject any of the property or assets of
the Trust or any portion thereof, to any liens that are unrelated to the
transactions contemplated in such Agreements.
(i) The Underwriter shall have received an opinion addressed to it,
the Transferor and the Servicer of Richards,
21
<PAGE>
Layton & Finger, counsel to the Owner Trustee, and such other counsel acceptable
to the Underwriter and its counsel, dated the Closing Date and satisfactory in
form and substance to the Underwriter and its counsel, when taken together,
substantially to the effect that:
(i) The Owner Trustee has been duly incorporated and is validly
existing as a banking corporation in good standing under the laws of the
State of Delaware.
(ii) The Owner Trustee has full corporate trust power and authority to
enter into and perform its obligations under the Trust Agreement and, on
behalf of the Trust, under the Indenture, the Transfer and Servicing
Agreement and the Administration Agreement.
(iii) The execution and delivery of the Trust Agreement and, on behalf
of the Trust, of the Indenture, the Transfer and Servicing Agreement, the
Administration Agreement, the Notes and the performance by the Owner
Trustee of its obligations under the Trust Agreement, the Indenture, the
Transfer and Servicing Agreement and the Administration Agreement have been
duly authorized by all necessary corporate action of the Owner Trustee and
each has been duly executed and delivered by the Owner Trustee.
(iv) The Trust Agreement, the Transfer and Servicing Agreement, the
Indenture and the Administration Agreement constitute valid and binding
obligations of the Owner Trustee enforceable against the Owner Trustee in
accordance with their terms under the laws of the State of New York and the
State of Delaware and the Federal law of the United States of America.
(v) The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, of the Indenture, the Transfer and
Servicing Agreement and the Administration Agreement do not require any
consent, approval or authorization of, or any registration or filing with,
any Delaware or United States Federal governmental authority having
jurisdiction over the trust power of the Owner Trustee, other than those
consents, approvals or authorizations as have been obtained and the filing
of the Certificate of Trust with the Secretary of State of the State of
Delaware.
(vi) The Owner Trustee has duly executed, authenticated and delivered
the Notes issued on the Closing Date on behalf of the Trust.
(vii) The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, the Transfer and Servicing
Agreement, the Indenture and the Administration Agreement, and the
performance by the Owner Trustee of its obligations thereunder, do not
conflict with,
22
<PAGE>
result in a breach or violation of or constitute a default under, the
Articles of Association or By-laws of the Owner Trustee.
(j) The Underwriter shall have received certificates dated the
Closing Date of any two of the Chairman of the Board, the President, the
Executive Vice President, any Vice President, the Treasurer, any Assistant
Treasurer, the principal financial officer or the principal accounting officer
of each of the Transferor and the Servicer in which such officers shall state
that, to the best of their knowledge after due investigation, (i) the
representations and warranties of the Transferor or the Servicer, as the case
may be, contained in the Trust Agreement, the Contribution and Sale Agreement
and the Transfer and Servicing Agreement, as applicable, are true and correct,
that the Transferor or the Servicer, as the case may be, has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
under such agreements at or prior to the Closing Date, that no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are contemplated by the
Commission and (ii) no material adverse change in or affecting particularly the
business or properties of the Trust, the Transferor, or the Servicer has
occurred.
(k) The Underwriter shall have received evidence satisfactory to it
that, on or before the Closing Date, the Administrator, on behalf of the
Transferor, the Trust and the Indenture Trustee has taken possession of the
applicable Receivables reflecting the transfer of the interest of MCC in such
Receivables and the proceeds thereof to the Transferor, and the transfer of the
interest of the Transferor in such Receivables and the proceeds thereof to the
Trust and the grant of the security interest by the Trust in such Receivables
and the proceeds thereof to the Indenture Trustee.
(l) The Class A Notes shall have been rated at least "AAA" by
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc., and at least "Aaa" by Moody's Investors Service, Inc.
(m) The issuance of the Class A Notes shall not have resulted in a
reduction or withdrawal by any Rating Agency of the current rating of any
outstanding securities issued by the Transferor or any of its affiliates or by
any trust established by the Transferor or any of its affiliates.
(n) On the Closing Date, $304,203,000 aggregate principal amount of
Class A 6.85% Asset Backed Notes shall have been issued and sold.
The Transferor will provide or cause to be provided to the Underwriter
such conformed copies of such opinions, certificates, letters and documents as
the Underwriter reasonably requests.
23
<PAGE>
8. Indemnification and Contribution.
(a) The Transferor and MCC will jointly and severally, indemnify and
hold harmless the Underwriter and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Act as follows: against any
losses, claims, damages, liabilities or expenses, joint or several, to which the
Underwriter or any such person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
if such settlement is effected with the written consent of the Transferor or
MCC; and will reimburse the Underwriter for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any such
action or claim; provided, however, that the Transferor and MCC shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Class A Notes or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to MCC or the Transferor by the Underwriter expressly for
use in the Prospectus as amended or supplemented relating to such Class A Notes;
and provided further, that the Transferor and MCC shall not be liable to the
Underwriter under the indemnity agreement in this subsection (a) with respect to
any Preliminary Prospectus or Prospectus Supplement to the extent that any such
loss, claim, damage, liability or expense results from the fact that the
Underwriter sold Class A Notes to a person to whom there was not sent or given,
at or prior to the written confirmation of such sale, a copy of the Prospectus
or Prospectus Supplement (excluding documents incorporated by reference) or of
the Prospectus as then amended or supplemented (excluding documents incorporated
by reference) if the Transferor has previously furnished copies thereof to the
Underwriter.
24
<PAGE>
(b) The Underwriter agrees to indemnify and hold harmless the
Transferor and MCC against any losses, claims, damages, liabilities or expenses
to which the Transferor and MCC may become subject, under the Act or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Prospectus as amended or supplemented and any other prospectus relating to the
Class A Notes, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, the Prospectus as amended or supplemented and any
other prospectus relating to the Class A Notes, or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Transferor or MCC by the Underwriter expressly for use therein; and will
reimburse the Transferor and MCC for any legal or other expenses reasonably
incurred by the Transferor and MCC in connection with investigating or defending
any such action or claim.
In addition, the Underwriter agrees to indemnify and hold harmless the
Transferor and MCC against any losses, claims, damages, liabilities or expenses
to which the Transferor and MCC may become subject, under the Act or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Computational Materials,
ABS Term Sheets, Structural Term Sheets and Collateral Term Sheets distributed
by the Underwriter and filed in a Form 8-K pursuant to Section 5(n) hereof;
provided, however, that the Underwriter shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or expense arises out
of, or is based upon, an untrue statement contained in any Computational
Materials, ABS Term Sheets, Structural Term Sheets and Collateral Term Sheets in
reliance upon and in conformity with (x) information furnished to the
Underwriter by the Transferor or (y) information contained in the Registration
Statement or any Preliminary Prospectus, the Prospectus as amended or
supplemented and any other prospectus relating to the Class A Notes, or any
amendment or supplement thereto other than written information furnished to the
Transferor or MCC by the Underwriter expressly for use therein, and will
reimburse the Transferor and MCC for any legal or other expenses reasonably
incurred by the Transferor and MCC in connection with investigating or defending
any such action or claim.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in
25
<PAGE>
respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) above in respect of any losses, claims, damages, liabilities or
expenses (or actions,in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Transferor and MCC on the one hand
and the Underwriter on the other from the offering of the Class A Notes to which
such loss, claim, damage, liability or expense (or action in respect thereof)
relates. If, however, the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (b) above in respect of any losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to therein or if the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Transferor and MCC on the one hand and the Underwriter on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Transferor and MCC on the one hand and the Underwriter on the
other shall be deemed to be in the same proportion as the total net proceeds
from the sale of Class A Notes (before deducting expenses) received by the
Transferor and MCC bear to the total commissions or discounts received by the
Underwriter in respect thereof. The relative fault shall be
26
<PAGE>
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading relates to information supplied by the
Transferor and MCC on the one hand or by the Underwriter on the other and the
parties, relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Transferor and MCC and the
Underwriter agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to above in
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Class A Notes
purchased by or through the Underwriter were sold exceeds the amount of any
damages which the Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) The obligations of the Transferor and MCC under this Section 8
shall be in addition to any liability which the Transferor and MCC may otherwise
have and shall extend, upon the same terms and conditions, to each person, if
any, who controls the Underwriter within the meaning of the Act; and the
Underwriter's obligations under this Section 8 shall be in addition to any
liability which the Underwriter may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Transferor and
MCC and to each person, if any, who controls the Transferor or MCC within the
meaning of the Act.
9. No Bankruptcy Petition. The Underwriter and MCC each covenants
and agrees that, prior to the date which is one year and one day after the
payment in full of all securities issued by the Transferor or by a trust for
which the Transferor was the depositor which securities were rated by any
nationally recognized statistical rating organization, it will not institute
against, or join any other person in instituting against, the Transferor any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other proceedings under any Federal or state bankruptcy or similar law.
10. Survival of Representations and Obligations. The respective
indemnities, agreements, representations, warranties
27
<PAGE>
and other statements of the Transferor or MCC or any of their officers and the
Underwriter set forth in or made pursuant to this Agreement or contained in
certificates of officers of the Transferor submitted pursuant hereto shall
remain operative and in full force and effect, regardless of (i) any termination
of this Agreement, (ii) any investigation or statement as to the results thereof
made by or on behalf of the Underwriter or of the Transferor or any of their
respective representatives, officers or directors or any controlling person, and
(iii) delivery of and payment for the Class A Notes. If for any reason the
purchase of the Class A Notes by the Underwriter is not consummated, the
Transferor shall remain responsible for the expenses to be paid or reimbursed by
the Transferor pursuant to Section 6 and the respective obligations of the
Transferor and the Underwriter pursuant to Section 8 shall remain in effect. If
for any reason the purchase of the Class A Notes by the Underwriter is not
consummated (other than because of a failure to satisfy the conditions set forth
in items (ii), (iv) or (v) of Section 7(d)), the Transferor will reimburse the
Underwriter, upon demand, for all reasonable out-of-pocket expenses (including
fees and disbursements of counsel) reasonably incurred by it in connection with
the offering of the Class A Notes.
11. Notices. All communications hereunder will be in
writing and, if sent to the Underwriter, will be mailed, delivered or
telegraphed and confirmed to it at 250 Vesey Street, World Financial Center,
North Tower, New York, New York 10281-1310, Attention: Ted Breck; if sent to
the Transferor, will be mailed, delivered or telegraphed, and confirmed to it at
MetLife Capital Funding Corp. III, 10900 N.E. 4th Street, Suite 550, Bellevue,
Washington 98004, Attention: Treasurer; if sent to MCC, will be mailed,
delivered or telegraphed, and confirmed to it at MetLife Capital Corporation,
10900 N.E. 4th Street, Suite 500, Bellevue, Washington 98004, Attention: Chief
Financial Officer. Any such notice will take effect at the time of receipt.
12. Successors. This Class A Note Underwriting Agreement will inure
to the benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons referred to in
Section 8, and no other person will have any right or obligations hereunder. No
purchaser of Class A Notes from the Underwriter shall be deemed to be a
successor of the Underwriter merely because of such purchase.
13. Counterparts. This Class A Note Underwriting Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
Agreement.
14. Applicable Law. This Class A Note Underwriting Agreement will be
governed by, and construed in accordance with, the laws of the State of New
York.
28
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement among the Transferor, MCC and the Underwriter
in accordance with its terms.
Very truly yours,
METLIFE CAPITAL FUNDING CORP. III
By: ----------------------------------
Name:
Title:
METLIFE CAPITAL CORPORATION
By: ------------------------------------
Name:
Title:
the foregoing Class A Note
Underwriting Agreement is hereby
confirmed and accepted as of the
date first written above.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: -----------------------------------
Name:
Title:
[Signature Page to Class A Note Underwriting Agreement]
<PAGE>
EXHIBIT A
THIS TERM SHEET CONTAINS STRUCTURAL AND COLLATERAL INFORMATION WITH RESPECT
TO THE CLASS A NOTES; HOWEVER, THIS TERM SHEET DOES NOT CONTAIN COMPLETE
INFORMATION WITH RESPECT TO THE OFFERING OF THE CLASS A NOTES. THE INFORMATION
HEREIN IS PRELIMINARY AND WILL BE SUPERSEDED BY THE INFORMATION CONTAINED IN THE
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. ADDITIONAL INFORMATION WILL BE
CONTAINED IN THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. PURCHASERS ARE URGED
TO READ BOTH THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
THIS TERM SHEET SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE CLASS A NOTES IN ANY
STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SALES OF THE CLASS A NOTES MAY NOT BE CONSUMMATED UNLESS THE PURCHASER HAS
RECEIVED BOTH THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
<PAGE>
EXHIBIT 4.1
EXECUTION COPY
______________________________________________________________________________
METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A
Class A 6.85% Asset Backed Notes and
Class B 6.85% Asset Backed Notes
______________________________
INDENTURE
Dated as of May 1, 1997
_______________________________
THE CHASE MANHATTAN BANK
INDENTURE TRUSTEE
______________________________________________________________________________
<PAGE>
_______________________________
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS*
<TABLE>
<CAPTION>
TRUST
INDENTURE
ACT SECTION INDENTURE SECTION
- -------------- ---------------------
<S> <C>
310(a)(1) .................................... 6.11
(a)(2) .................................... 6.11
(a)(3) .................................... 6.10
(a)(4) .................................... Not Applicable
(b) .................................... 6.08(a)(1)
(c) .................................... Not Applicable
311(a) .................................... 6.12
(b) .................................... 6.12
312(a) .................................... 7.01(a)
(b) .................................... 7.02(b)
(c) .................................... 7.02(c)
313(a) .................................... 7.04
(b) .................................... 7.04
(c) .................................... 7.04
(d) .................................... 7.04
314(a) .................................... 3.09, 7.03(a)
(b) .................................... 3.06
(c)(1) .................................... 2.09, 8.04(b)
(c)(2) .................................... 2.09, 8.04(b),11.01(a)
(c)(3) .................................... 2.09, 8.04(b),11.01(a)
(d)(1) .................................... 2.09, 8.04(b),11.01(a)
(d)(2) .................................... Not Applicable
(d)(3) .................................... Not Applicable
(e) .................................... 11.01(a)
315(a) .................................... 6.01(b)
(b) .................................... 6.05
(c) .................................... 6.01(b)
(d) .................................... 6.01(b)
(d)(1) .................................... 6.01(b)
(d)(2) .................................... 6.01(c)
(d)(3) .................................... 6.01(c)
(e) .................................... 5.13
316(a) (A) .................................... 5.11
316(a) (B) .................................... 5.12
316(a)(2) .................................... Not Applicable
316(b) .................................... 5.07
317(a)(1) .................................... 5.03
317(a)(2) .................................... 5.03
317(b) .................................... 5.03
318(a) .................................... 11.07
</TABLE>
- ------------------------
* This reconciliation and tie shall not, for any purpose, be deemed to be part
of the within indenture.
i
<PAGE>
TABLE OF CONTENTS
Page
GRANTING CLAUSE
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. (a) Definitions................................... 2
(b) Other Definitional Provisions................. 9
SECTION 1.02. Incorporation by Reference of Trust Indenture
Act............................................ 9
SECTION 1.03. Calculations of Interest.......................... 10
ARTICLE II
THE NOTES
SECTION 2.01. Form.............................................. 10
SECTION 2.02. Execution, Authentication and Delivery............ 10
SECTION 2.03. Temporary Notes................................... 11
SECTION 2.04. Registration; Registration of Transfer and
Exchange....................................... 11
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes........ 12
SECTION 2.06. Persons Deemed Owner.............................. 13
SECTION 2.07. Payment of Principal and Interest; Defaulted
Interest....................................... 13
SECTION 2.08. Cancellation...................................... 14
SECTION 2.09. Release of Collateral............................. 15
SECTION 2.10. Book-Entry Notes.................................. 15
SECTION 2.11. Notices to Clearing Agency........................ 16
SECTION 2.12. Definitive Notes.................................. 16
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal and Interest................. 16
SECTION 3.02. Maintenance of Office or Agency................... 16
SECTION 3.03. Money for Payments To Be Held in Trust............ 17
SECTION 3.04. Existence......................................... 18
SECTION 3.05. Protection of Trust Estate........................ 18
SECTION 3.06. Opinions as to Trust Estate....................... 19
SECTION 3.07. Performance of Obligations; Servicing of
Receivables.................................... 19
i
<PAGE>
Page
SECTION 3.08. Negative Covenants................................ 21
SECTION 3.09. Statements as to Compliance....................... 22
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain
Terms.......................................... 22
SECTION 3.11. Successor or Transferee........................... 24
SECTION 3.12. No Other Business................................. 24
SECTION 3.13. No Borrowing...................................... 24
SECTION 3.14. Servicer's Obligations............................ 24
SECTION 3.15. Guarantees, Loans, Advances and Other
Liabilities.................................... 24
SECTION 3.16. Capital Expenditures.............................. 25
SECTION 3.17. Removal of Administrator.......................... 25
SECTION 3.18. Restricted Payments............................... 25
SECTION 3.19. Notice of Events of Default....................... 25
SECTION 3.20. Further Instruments and Acts...................... 25
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture........... 25
SECTION 4.02. Application of Trust Money........................ 27
SECTION 4.03. Repayment of Moneys Held by Paying Agent.......... 27
ARTICLE V
REMEDIES
SECTION 5.01. Events of Default................................. 27
SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment...................................... 28
SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee............... 29
SECTION 5.04. Remedies; Priorities.............................. 31
SECTION 5.05. Optional Preservation of the Receivables.......... 32
SECTION 5.06. Limitation of Suits............................... 33
SECTION 5.07. Unconditional Rights of Noteholders to Receive
Principal and Interest......................... 33
SECTION 5.08. Restoration of Rights and Remedies................ 34
SECTION 5.09. Rights and Remedies Cumulative.................... 34
SECTION 5.10. Delay or Omission Not a Waiver.................... 34
SECTION 5.11. Control by Noteholders............................ 34
SECTION 5.12. Waiver of Past Defaults........................... 35
SECTION 5.13. Undertaking for Costs............................. 35
SECTION 5.14. Waiver of Stay or Extension Laws.................. 35
SECTION 5.15. Action on Notes................................... 35
ii
<PAGE>
Page
SECTION 5.16. Performance and Enforcement of Certain
Obligations.................................... 36
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Duties of Indenture Trustee....................... 37
SECTION 6.02. Rights of Indenture Trustee....................... 38
SECTION 6.03. Individual Rights of Indenture Trustee............ 39
SECTION 6.04. Indenture Trustee's Disclaimer.................... 39
SECTION 6.05. Notice of Defaults................................ 39
SECTION 6.06. Reports by Indenture Trustee to Holders........... 39
SECTION 6.07. Compensation and Indemnity........................ 39
SECTION 6.08. Replacement of Indenture Trustee.................. 40
SECTION 6.09. Successor Indenture Trustee by Merger............. 41
SECTION 6.10. Appointment of Co-Trustee or Separate Indenture
Trustee........................................ 42
SECTION 6.11. Eligibility; Disqualification..................... 43
SECTION 6.12. Preferential Collection of Claims Against
Issuer......................................... 43
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders....................... 43
SECTION 7.02. Preservation of Information; Communications to
Noteholders.................................... 43
SECTION 7.03. Reports by Issuer................................. 44
SECTION 7.04. Reports by Indenture Trustee...................... 44
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. Collection of Money............................... 44
SECTION 8.02. Trust Accounts.................................... 45
SECTION 8.03. General Provisions Regarding Accounts............. 46
SECTION 8.04. Release of Trust Estate........................... 47
SECTION 8.05. Opinion of Counsel................................ 47
iii
<PAGE>
Page
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of
Noteholders.................................... 48
SECTION 9.02. Supplemental Indentures with Consent of
Noteholders.................................... 49
SECTION 9.03. Execution of Supplemental Indentures.............. 50
SECTION 9.04. Effect of Supplemental Indenture.................. 51
SECTION 9.05. Conformity With Trust Indenture Act............... 51
SECTION 9.06. Reference in Notes to Supplemental Indentures..... 51
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Redemption........................................ 51
SECTION 10.02. Form of Redemption Notice......................... 52
SECTION 10.03. Notes Payable on Redemption Date.................. 52
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Compliance Certificates and Opinions etc.......... 52
SECTION 11.02. Form of Documents Delivered to Indenture
Trustee........................................ 54
SECTION 11.03. Acts of Noteholders............................... 55
SECTION 11.04. Notices, etc. to Indenture Trustee, Issuer and
Rating Agencies................................ 55
SECTION 11.05. Notices to Noteholders; Waiver.................... 56
SECTION 11.06. Alternate Payment and Notice Provisions........... 56
SECTION 11.07. Conflict with Trust Indenture Act................. 57
SECTION 11.08. Effect of Headings and Table of Contents.......... 57
SECTION 11.09. Successors and Assigns............................ 57
SECTION 11.10. Separability...................................... 57
SECTION 11.11. Benefits of Indenture............................. 57
SECTION 11.12. Legal Holidays.................................... 57
SECTION 11.13. GOVERNING LAW..................................... 57
SECTION 11.14. Counterparts...................................... 58
SECTION 11.15. Recording of Indenture............................ 58
SECTION 11.16. Trust Obligation.................................. 58
SECTION 11.17. No Petition....................................... 58
SECTION 11.18. Inspection........................................ 58
SECTION 11.19. Restrictions on Transfer of Class B Notes......... 59
iv
<PAGE>
SECTION 11.20. Tax Treatment..............................................59
EXHIBITS
EXHIBIT A - Schedule of Receivables [Deemed Incorporated]....................A-1
EXHIBIT B - Form of Transfer and Servicing Agreement.........................B-1
EXHIBIT C - Form of Depository Agreement.....................................C-1
EXHIBIT D - Form of Note.....................................................D-1
EXHIBIT E - Form of Class B Note Transferee Certificate......................E-1
v
<PAGE>
This INDENTURE dated as of May 1, 1997 is hereby executed by and
between METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A, a Delaware business trust
(the "Issuer" or the "Trust"), and The Chase Manhattan Bank (the "Indenture
Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Issuer's Class A 6.85% Asset
Backed Notes and Class B 6.85% Asset Backed Notes (the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
Indenture Trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest, whether now owned or hereafter acquired,
in, to and under all accounts, money, chattel paper, securities, instruments,
documents, deposit accounts, certificates of deposit, letters of credit,
advices of credit, banker's acceptances, uncertificated securities, general
intangibles, contract rights, goods and other property consisting of, arising
from or relating to (a) the Receivables and all obligations of the Obligors
thereunder, including all moneys (including accrued interest) due or to
become due thereon on or after the Cut-off Date; (b) the Financed Equipment;
(c) any proceeds with respect to the Receivables from claims on any physical
damage, credit life and/or disability insurance policies covering Financed
Equipment or Obligors with respect to Financed Equipment; (d) all rights,
remedies, powers, privileges and claims of the Issuer under or with respect
to the Contribution and Sale Agreement (whether arising pursuant to the terms
of the Contribution and Sale Agreement or otherwise available to the Issuer
at law or in equity), including, without limitation, the rights of the Issuer
to enforce the Contribution and Sale Agreement, to cause MCC to repurchase
Receivables from the Transferor under certain circumstances described
therein, and to give or withhold any and all consents, requests, notices,
directions, approvals, extensions or waivers under or with respect to the
Contribution and Sale Agreement to the same extent as the Issuer could but
for the assignment and security interest granted to the Indenture Trustee for
the benefit of the Noteholders; (e) all money, securities, investments,
documents and other property on deposit from time to time in or related to
the Trust Accounts, including the Reserve Account Initial Deposit, and in all
interest, dividends, earnings, income and other distributions from time to
time received, receivable or otherwise distributed to or in respect thereto;
(including any accrued discount realized on liquidation of any investment
purchased at a discount); (f) all rights, remedies, powers, privileges and
claims of the Issuer under or with respect to the Transfer and Servicing
Agreement (including all rights of the Transferor under the Contribution and
Sale Agreement assigned to the Issuer under the Transfer and Servicing
Agreement (whether arising pursuant to the terms of the Transfer and
Servicing Agreement or otherwise available to the Issuer at law or in
equity), including, without limitation, the rights of the Issuer to enforce
the Transfer and Servicing Agreement, and to give or withhold any and all
consents, requests, notices, directions, approvals, extensions or waivers
under or with respect to the Transfer and Servicing Agreement to the same
extent as the Issuer could but for the assignment and security interest
granted to the Indenture Trustee for the benefit of the Noteholders; and (g)
all present and future claims, demands, causes and chose in action in respect
of any or all of the foregoing and all payments on or under and all proceeds
of every
<PAGE>
kind and nature whatsoever in respect of any or all of the foregoing, including
all proceeds, products, rents, receipts or profits of the conversion,voluntary
or involuntary, into cash or other property, all cash and non-cash proceeds, and
other property consisting of, arising from or relating to all or any part of any
of the foregoing or any proceeds thereof (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 Notes and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture. This Indenture shall be deemed to be and hereby is a security
agreement within the meaning of the UCC.
The Indenture Trustee, as Indenture Trustee on behalf of the Holders of the
Notes, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties as required in this Indenture.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. (a) Definitions. Except as otherwise specified herein or as
the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Indenture.
"Act" has the meaning specified in Section 11.03(a).
"Administration Agreement" means the Administration Agreement dated as of
May 1, 1997 among the Administrator, the Issuer and the Transferor.
"Administrator" means MCC or any successor Administrator under the
Administration Agreement.
"Affiliate" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized
Officers, containing the specimen signature of each such Person, delivered by
the Owner Trustee to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter) and, so long as
the Administration Agreement is in effect, any Vice President or more senior
officer of the Administrator who is authorized to act for the Administrator
in matters relating to the Issuer and
2
<PAGE>
to be acted upon by the Administrator pursuant to the Administration Agreement
and who is identified on the list of Authorized Officers (containing the
specimen signatures of such officers) delivered by the Administrator 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 3.09 such officer of the Administrator must be any of the chief
executive officer, chief financial officer or chief accounting officer.
"Basic Documents" means the Certificate of Trust, the Trust Agreement, the
Contribution and Sale Agreement, the Transfer and Servicing Agreement, the
Administration Agreement, the Depository Agreement, the Underwriting Agreement
and other documents and certificates delivered in connection therewith.
"Book-Entry Notes" means a beneficial interest in the Class A Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.10.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in The City of New York and
Seattle, Washington or in such other location as the Corporate Trust Office may
be located are authorized or obligated by law, regulation or executive order to
remain closed.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"Class A Note" means any Note, substantially in the form of Exhibit D,
designated therein as a Class A 6.85% Asset Backed Note.
"Class A Note Interest Rate" means 6.85% per annum.
"Class A Note Owner" means, with respect to a Book-Entry Note, the Person
who is the owner of such Book-Entry 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).
"Class A Noteholder" means any Holder of a Class A Note.
"Class A Noteholders' Principal Distributable Amount" with respect to any
Distribution Date has the meaning specified in the Transfer and Servicing
Agreement.
"Class B Note" means any Note, substantially in the form of Exhibit D,
designated therein as a Class B 6.85% Asset Backed Note.
"Class B Note Interest Rate" means 6.85% per annum.
"Class B Noteholder" means the Holder of any Class B Note.
3
<PAGE>
"Class B Noteholders' Principal Distributable Amount" with respect to any
Distribution Date has the meaning specified in the Transfer and Servicing
Agreement.
"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.
"Closing Date" means May 30, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"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 date of the execution of this Agreement is located
at 450 West 33rd Street, 15th Floor, New York, NY 10001, Attention: Structured
Finance Services, except that for purposes of Section 3.02, such term shall mean
the office or agency of the Indenture Trustee in the Borough of Manhattan, the
City of New York, which office at the date hereof is located at 450 West 33rd
Street, 15th Floor, New York, NY 10001, or at such other address as the
Indenture Trustee may designate from time to time by notice to the Noteholders
and the Transferor, or the principal corporate trust office of any successor
Indenture Trustee (the address of which the successor Indenture Trustee will
notify the Noteholders and the Transferor); provided, that for the purposes of
Section 3.02, the address of any such office shall be in the Borough of
Manhattan of the City of New York.
"Default" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.10.
"Depository Agreement" means the agreement among the Issuer, the Indenture
Trustee, the Administrator and The Depository Trust Company, as the initial
Clearing Agency, dated as of the Closing Date, substantially in the form of
Exhibit C.
"Distribution Date" means the 20th day of each calendar month, or, if any
such date is not a Business Day, the next succeeding Business Day, commencing
June 20, 1997.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
4
<PAGE>
"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.
"Grant" means to mortgage, pledge, bargain, 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.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Indenture Trustee" means The Chase Manhattan Bank, a New York banking
corporation, as Indenture Trustee under this Indenture, or any successor
Indenture Trustee under this Indenture.
"Independent" means, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Transferor and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Transferor or any Affiliate
of any of the foregoing Persons and (c) is not connected with the Issuer, any
such other obligor, the Transferor 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 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Issuer" means MetLife Capital Equipment Loan Trust 1997-A or any successor
thereto and, for purposes of any provision contained herein and required by the
TIA, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
5
<PAGE>
"MCC" means MetLife Capital Corporation, a Delaware corporation, and its
successors.
"Net APR" means, with respect to a Receivable, its APR less the Servicing
Fee Rate.
"Note Interest Rate" means the per annum interest rate borne by a Note.
"Note Register" and "Note Registrar" have the respective meanings specified
in Section 2.04.
"Notes" means, collectively, the Class A Notes and the Class B Notes.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to
the Indenture 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 MCC and who shall be satisfactory to the Indenture Trustee, and which
opinion or opinions shall be addressed to the Indenture Trustee as Indenture
Trustee, shall comply with any applicable requirements of Section 11.01, and
shall be in form and substance reasonably satisfactory to the Indenture Trustee.
"Outstanding" means, as of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided, however, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor, satisfactory to the Indenture Trustee, has been made); and
(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
provided that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned
by the Issuer, any other obligor upon the Notes, the Transferor 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 Notes that the Indenture Trustee
knows to be so owned shall be so disregarded; provided, however, that at
anytime following an Event of Default, in determining whether the
6
<PAGE>
Holders of the requisite Outstanding Amount of the Notes have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder or under any Basic Document, Class B Notes shall be disregarded and
deemed not to be Outstanding. 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 Notes and that the pledgee is not the Issuer, any other
obligor upon the Notes, the Transferor or any Affiliate of any of the
foregoing Persons. In making any such determination, the Indenture Trustee
may rely on the representations of the pledgee and shall not be required to
undertake any independent investigation.
"Outstanding Amount" means the aggregate principal amount of all Notes, or
a class of Notes, as applicable, Outstanding at the date of determination.
"Owner Trustee" means Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, or any successor
Owner Trustee under the Trust Agreement.
"Paying Agent" means the Indenture Trustee or any Person that meets the
eligibility standards for the Indenture Trustee specified in Section 6.11 and is
authorized by the Issuer to make the payments to and distributions from the
Collection Account and the Note Distribution Account, including payment of
principal of or interest on the Notes on behalf of the Issuer.
"Person" means any individual, corporation, estate, partnership, limited
liability company, joint venture, association, joint stock company, business
trust, trust (including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Rating Agency" means Moody's and Standard & Poor's. 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 Owner Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have notified the Transferor, the Servicer and the Issuer in
writing that such action will not result in a reduction or withdrawal of the
then current rating of any Class of the Notes.
"Receivable" means any Contract listed on the Schedule of Receivables.
7
<PAGE>
"Record Date" means, with respect to a Distribution Date or Redemption
Date, (i) if the Notes are held in book-entry form, the close of business on the
calendar day (whether or not such day is a Business Day) immediately preceding
such Distribution Date or Redemption Date or (ii) if the Notes are held in
definitive form, the last calendar day (whether or not such day is a Business
Day) of the month preceding the month in which such Distribution Date or
Redemption Date occurs.
"Redemption Date" means the Distribution Date specified by the Servicer or
the Issuer pursuant to Section 10.01, as applicable.
"Redemption Price" means in the case of a redemption of the Notes pursuant
to Section 10.01, an amount equal to the principal amount of the Notes redeemed
plus accrued and unpaid interest thereon at the related Note Interest Rate to
but excluding the Redemption Date.
"Registered Holder" means the Person in whose name a Note is registered in
the Note Register on the applicable Record Date.
"Responsible Officer" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee assigned to
administer the Indenture Trustee's duties hereunder and under the Basic
Documents.
"Schedule of Receivables" means the listing of the Receivables set forth in
Exhibit A, as supplemented and/or amended from time to time (which Exhibit may
be in the form of microfiche) and incorporated into and made a part of this
Agreement.
"State" means any one of the 50 states of the United States of America or
the District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.07(e).
"Transfer and Servicing Agreement" means the Transfer and Servicing
Agreement dated as of May 1, 1997, among the Issuer, the Transferor and the
Servicer.
"Trust" means MetLife Capital Equipment Loan Trust 1997-A, a Delaware
business trust.
"Trust Agreement" means the Trust Agreement, dated as of May 1, 1997,
between the Transferor, MetLife Capital Corporation, and the Owner Trustee.
"Trust Estate" means all money, instruments, documents, securities,
contract rights, general intangibles 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 Noteholders (including, without limitation, all property and
interests Granted to the Indenture Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as in
force on the date hereof, unless otherwise specifically provided.
8
<PAGE>
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
(b) Other Definitional Provisions. (1) Capitalized terms used herein and
not otherwise defined have the meanings assigned to them in the Transfer and
Servicing Agreement or, if not defined therein, in the Trust Agreement.
(2) 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.
(3) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, 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.
(4) The words "hereof," "herein," "hereunder," and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation."
(5) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture Trustee.
9
<PAGE>
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
SECTION 1.03. Calculations of Interest. All calculations of interest made
hereunder shall be made on the basis of a year of 360 days of twelve 30-day
months.
ARTICLE II
THE NOTES
SECTION 2.01. Form. The Class A Notes and Class B Notes, in each case
together with the Indenture Trustee's certificate of authentication, shall be in
substantially the forms set forth in Exhibit D, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in Exhibit D are part of the terms of this Indenture.
SECTION 2.02. Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall, upon written order of the Transferor,
authenticate and deliver Notes for original issue in an aggregate principal
amount of $330,655,783. The aggregate principal amount of Notes outstanding at
any time may not exceed such amount except as provided in Section 2.05. The
Indenture Trustee shall be entitled to rely upon such written order as authority
to so authenticate and deliver the Notes without further inquiry of any Person.
10
<PAGE>
Each Note shall be dated the date of its authentication. The Notes shall
be issuable as registered Notes in the minimum denomination of $1,000 and in
integral multiples thereof provided, however, that a single Note of any Class
may be issued in a denomination of less than $1,000.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
SECTION 2.03. Temporary Notes. Pending the preparation of definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause definitive Notes to be
prepared without unreasonable delay. After the preparation of definitive Notes,
the temporary Notes shall be exchangeable for definitive Notes upon surrender of
the temporary Notes at the office or agency of the Issuer to be maintained as
provided in Section 3.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes, the Issuer shall execute, and
the Indenture Trustee shall authenticate and deliver in exchange therefor, a
like principal amount of definitive Notes of authorized denominations. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes.
SECTION 2.04. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee shall be the initial "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of Note
Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Indenture Trustee prompt written notice
of the appointment of such Note Registrar and of the location, and any change in
the location, of the Note Register, and the Indenture Trustee shall have the
right to inspect the 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 behalf of the Note Registrar by an Executive Officer
thereof as to the names and addresses of the Holders of the Notes and the
principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(1) of
11
<PAGE>
the UCC are met the Issuer shall execute, and upon receipt of such surrendered
Note the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes of the same Class in any authorized
denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of the
same class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, if the requirements of
Section 8-401(1) of the UCC are met, the Issuer shall execute, and upon receipt
of such surrendered Note the Indenture Trustee shall authenticate and the
Noteholder shall obtain from the Indenture Trustee, the Notes which the
Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee (or with respect to Class
B Notes, in the form of Exhibit E) duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing, with such signature guaranteed by
a commercial bank or trust company located, or having a correspondent located,
in The City of New York or the city in which the Corporate Trust Office is
located, or by a member firm of a national securities exchange, and such other
documents as the Indenture Trustee may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.03 or 9.06 not involving any transfer.
The preceding provisions of this section notwithstanding, the Issuer shall
not be required to make, and the Note Registrar need not register, transfers or
exchanges of Notes for a period of 20 days preceding the due date for any
payment with respect to the Note.
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of the same class; provided,
however, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have
12
<PAGE>
become or within twenty days shall be due and payable, or shall have been
called for redemption, instead of issuing a replacement Note, the Issuer may
pay such destroyed, lost or stolen Note when so due or payable or upon the
Redemption Date without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment
such original Note, the Issuer and the Indenture Trustee shall be entitled to
recover such replacement Note (or such payment) from the Person to whom it
was delivered or any Person taking such replacement Note from such Person to
whom such replacement Note was delivered or any assignee of such Person,
except a bona fide-purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage,
cost or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section, the Issuer
may require the payment by the Holder of such Note of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other reasonable expenses (including the fees and expenses of the Indenture
Trustee) connected therewith.
Except as set forth in the first paragraph of this Section 2.05, every
replacement Note issued pursuant to this Section in replacement of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and neither the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest.
(a) The Notes shall accrue interest as provided in the form of the Note set
forth in Exhibit D and such interest shall be payable on each Distribution
Date as specified therein, subject to Section 3.01. Any installment of
interest or principal, if any, or any other amount, payable on any Note which
is punctually paid or duly provided for by the Issuer on the applicable
Distribution Date shall be paid to the Person in whose name such Note (or one
or more Predecessor Notes) is registered on the Record Date, by check mailed
first-class, postage prepaid to such Person's address as it appears on the
Note Register on such Record Date, (i) except that with respect to Class A
Notes registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such
13
<PAGE>
nominee to be Cede & Co.), payment will be made by wire transfer in
immediately available funds to the account designated by such nominee, (ii)
except that with respect to Class B Notes registered in the name of the
Transferor, payment will be made by wire transfer in immediately available
funds to the account designated by the Transferor and (iii) except for (A)
the final installment of principal payable with respect to such Note on a
Distribution Date and (B) the Redemption Price for any Note called for
redemption pursuant to Section 10.01, in each case which shall be payable as
provided below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the form of Note set forth in Exhibit D.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable, if not previously paid, on the date on which an Event
of Default shall have occurred and be continuing, if the Indenture Trustee or
the Holders of the Notes representing a majority of the Outstanding Amount of
the Notes have declared the Notes to be immediately due and payable in the
manner provided in Section 5.02. All principal payments on each class of Notes
shall be made pro rata to the Noteholders of such Class entitled thereto. Upon
notice to the Indenture Trustee by the Issuer, the Indenture Trustee shall
notify the Person in whose name a Note is registered at the close of business on
the second Record Date preceding the Distribution Date on which the Issuer
expects that the final installment of principal of and interest on such Note
will be paid. Such notice shall be mailed no later than thirty days prior to
such final Distribution Date and shall specify that such final installment will
be payable only upon presentation and surrender of such Note and shall specify
the place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.02.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Note Interest Rate in any lawful manner.
The Issuer may pay such defaulted interest to the persons who are Noteholders on
a subsequent special record date, which date shall be fixed or caused to be
fixed by the Issuer and shall be at least five Business Days prior to the
payment date. The Issuer shall fix or cause to be fixed any such payment date,
and, at least 15 days before any such special record date, the Issuer shall mail
to each Noteholder a notice that states the special record date, the payment
date and the amount of defaulted interest to be paid.
SECTION 2.08. Cancellation. All 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, following its receipt thereof, be promptly cancelled by
the Indenture Trustee. The Issuer may at any time deliver to the Indenture
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Issuer may have acquired in any manner whatsoever, and
all Notes so delivered shall, following its receipt thereof, be promptly
cancelled by the Indenture Trustee. No Notes shall be authenticated in lieu
of or in exchange for any Notes cancelled as provided in this Section, except
as expressly permitted by this Indenture. All cancelled 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 Issuer shall
direct by an Issuer Order that they be destroyed or
14
<PAGE>
returned to it; provided that such Issuer Order is timely and the Notes have
not been previously disposed of by the Indenture Trustee.
SECTION 2.09. Release of Collateral. Subject to Section 11.01, the
Indenture Trustee shall release property from the lien of this Indenture only
upon receipt of an Issuer Request accompanied by an Officer's Certificate, an
Opinion of Counsel and Independent Certificates in accordance with TIA Sections
314(c) and 314 (d)(1) or an Opinion of Counsel in lieu of such Independent
Certificates to the effect that the TIA does not require any such Independent
Certificates.
SECTION 2.10. Book-Entry Notes. The Class A Notes, upon original
issuance, will be issued in the form of a typewritten Note or Notes representing
the Book-Entry Notes, to be delivered to The Depository Trust Company, the
initial Clearing Agency, by, or on behalf of, the Issuer. Such Notes shall
initially be registered on the Note Register in the name of Cede & Co., the
nominee of the initial Clearing Agency, and no Class A Note Owner will receive a
Definitive Note representing such Class A Note Owner's interest in such Note,
except as provided in Section 2.12. Unless and until definitive, fully
registered Notes (the "Definitive Notes") have been issued to Class A Note
Owners pursuant to Section 2.12:
(i) the provisions of this Section shall be in full force and effect;
(ii) the 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 Notes and the giving of
instructions or directions hereunder) as the sole holder of the Notes, and
shall have no obligation to the Class A Note Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this Section
shall control;
(iv) the rights of Class A Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Class A Note Owners and the Clearing Agency
and/or the Clearing Agency Participants pursuant to the Depository
Agreement. Unless and until Definitive 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 Notes to such Clearing Agency
Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes evidencing
a specified percentage of the Outstanding Amount of the Notes, the Clearing
Agency shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Class A Note Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has
delivered such instructions to the Indenture Trustee.
15
<PAGE>
SECTION 2.11. Notices to Clearing Agency. Whenever a notice or other
communication to the Holders of the Class A Notes is required under this
Indenture, unless and until Definitive Notes shall have been issued to Class A
Note Owners pursuant to Section 2.12, the Indenture Trustee shall give all such
notices and communications specified herein to be given to Holders of the
Class A Notes to the Clearing Agency, and shall have no obligation to the Class
A Note Owners.
SECTION 2.12. Definitive Notes. (a) The Class B Notes shall be issued in
definitive, fully-registered form and (b) if (i) the Administrator 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 Class A
Notes, and the Administrator is unable to locate a qualified successor, or (ii)
the Administrator 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 or a Servicer Default, Class A Note
Owners representing beneficial interests aggregating a majority of the
Outstanding Amount of the Class A 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 Class A Note Owners, then the Clearing
Agency shall notify all Class A Note Owners and the Indenture Trustee of the
occurrence of any such event and of the availability of Definitive Notes to
Class A Note Owners requesting the same. Upon surrender to the Indenture
Trustee of the typewritten Note or Notes representing the Book-Entry Notes by
the Clearing Agency, accompanied by registration instructions, the Issuer shall
execute and the Indenture Trustee shall authenticate the Definitive Notes in
accordance with the instructions of the Clearing Agency. None of the Issuer,
the 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
Notes to Class A Note Owners, the Indenture Trustee shall recognize the Holders
of such Definitive Notes as Noteholders.
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal and Interest. The Issuer will duly and
punctually pay the principal of and interest, if any, on the Notes in accordance
with the terms of the Notes and this Indenture. Without limiting the foregoing,
the Issuer will cause to be distributed all amounts on deposit in the Note
Distribution Account on a Distribution Date pursuant to Section 8.02(c).
Amounts properly withheld under the Code by any Person from a payment to any
Noteholder of interest and/or principal and/or premium shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will maintain
in the Borough of Manhattan, in the City of New York an office or agency where
Notes may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Corporate
Trust Office to serve as its agent for the foregoing purposes. The Issuer
16
<PAGE>
will give prompt written notice to the Indenture Trustee of the location, and
of any change in the location, of any such office or agency. If at any time
the Issuer shall fail to maintain any such office or agency or shall fail to
furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office, the
Indenture Trustee shall be entitled to rely upon, and the Issuer hereby
appoints the Indenture Trustee as its agent to receive, all such surrenders,
notices and demands.
SECTION 3.03. Money for Payments To Be Held in Trust. As provided in
Section 8.02(a) and (b), all payments of amounts due and payable with respect to
any Notes that are to be made from amounts withdrawn from the Collection Account
and the Note Distribution Account pursuant to Section 8.02(c) shall be made on
behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no
amounts so withdrawn from the Collection Account and the Note Distribution
Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section.
On or before 12:00 noon (New York time) on each Distribution Date and the
Redemption Date, the Issuer shall deposit or cause to be deposited in the Note
Distribution Account an aggregate sum sufficient to pay the amounts then
becoming due under the 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 Issuer will cause each Paying Agent other than the Indenture Trustee to
execute and deliver to the Indenture Trustee an instrument in which such Paying
Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts
as Paying Agent, it hereby so agrees), subject to the provisions of this
Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer of
which it has actual knowledge (or any other obligor upon the Notes) in the
making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the 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 Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed
17
<PAGE>
thereon and with respect to any applicable reporting requirements in
connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Order direct any
Paying Agent to pay to the 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 Indenture 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 Note and remaining unclaimed for two years after
such amount has become due and payable shall be discharged from such trust, and
the Indenture Trustee or such Paying Agent, as the case may be, shall give
prompt notice of such occurrence to the Issuer and shall release such money to
the Issuer on Issuer Request; and the Holder of such Note shall thereafter, as
an unsecured general creditor, look only to the Issuer (and then only to the
extent of the amounts so paid to the Issuer) for payment thereof, 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, shall at
the expense and direction of the Issuer cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer. The
Indenture Trustee shall also adopt and employ, at the expense of the Issuer, any
other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose Notes have been
called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Holder).
SECTION 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.05. Protection of Trust Estate. The Issuer will from time to
time take all actions necessary (other than taking possession of the original
Contracts), including without limitation preparing, executing, delivering and
filing all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further
18
<PAGE>
assurance and other instruments, if applicable, 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 Trust Estate and the rights of
the Indenture Trustee and the Noteholders in such Trust Estate against the
claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument pursuant to this Section.
SECTION 3.06. Opinions as to Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken to
perfect the lien and security interest of this Indenture, including without
limitation with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are so necessary and reciting the details of such action, or
stating that, in the opinion of such counsel, no such action is necessary to
maintain the perfection of such lien and security interest.
(b) On or before May 30 in each calendar year, beginning in 1998, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken to
perfect the lien and security interest of this Indenture, including without
limitation with respect to the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and with respect to the execution and filing of any financing
statements and continuation statements as is so necessary and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain the perfection of 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 perfection of the lien and security
interest of this Indenture until May 30 in the following calendar year.
SECTION 3.07. Performance of Obligations; Servicing of Receivables. (a)
The Issuer will not take any action and will use its best efforts not to
permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument
or agreement included in the Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or
19
<PAGE>
effectiveness of, any such instrument or agreement, except as expressly
provided in this Indenture, the Transfer and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Servicer and the Administrator to assist the Issuer in
performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Basic Documents and in the
instruments and agreements included in the Trust Estate, including but not
limited to filing or causing to be filed all UCC financing statements and
continuation statements required to be filed by the terms of this Indenture and
the Transfer and Servicing Agreement in accordance with and within the time
periods provided for herein and therein. Except as otherwise expressly provided
therein, the Issuer shall not waive, amend, modify, supplement or terminate any
Basic Document or any provision thereof without the consent of the Indenture
Trustee or the Holders of a majority of the Outstanding Amount of the Notes;
provided that the consent of the Indenture Trustee shall be required for any
amendment which increases the obligations of the Servicer.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Transfer and Servicing Agreement, the Issuer shall promptly
notify the Indenture Trustee and the Rating Agencies thereof, and shall specify
in such notice the action, if any, the Issuer is taking with respect to such
default. If a Servicer Default shall arise from the failure of the Servicer to
perform any of its duties or obligations under the Transfer and Servicing
Agreement with respect to the Receivables, the Issuer shall take all reasonable
steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination to
the Servicer of the Servicer's rights and powers pursuant to Section 8.01 of the
Transfer and Servicing Agreement, the Issuer shall appoint a successor servicer
(the "Successor Servicer"), and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed and
accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. The Indenture Trustee may resign as the
Servicer by giving written notice of such resignation to the Issuer and in such
event will be released from such duties and obligations, such release not to be
effective until the date a new servicer enters into a servicing agreement with
the Issuer as provided below. Upon delivery of any such notice to the Issuer,
the Issuer shall obtain a new servicer as the Successor Servicer under the
Transfer and Servicing Agreement. Any Successor Servicer other than the
Indenture Trustee shall (i) be an established financial institution having a net
worth of not less than $50,000,000 and whose regular business includes the
servicing of equipment receivables and (ii) enter into a servicing agreement
with the Issuer having substantially the same provisions as the provisions of
the Transfer and Servicing Agreement applicable to the Servicer. If within 30
days after the delivery of the notice referred to above, the Issuer shall not
have obtained such a new servicer, the Indenture Trustee may appoint, or
20
<PAGE>
may petition a court of competent jurisdiction to appoint, a Successor
Servicer. In connection with any such appointment, the Indenture Trustee may
make such arrangements for the compensation of such successor as it and such
successor shall agree, subject to the limitations set forth below and in the
Transfer and Servicing Agreement, and in accordance with Section 8.02 of the
Transfer and Servicing Agreement, the Issuer shall enter into an agreement
with such successor for the servicing of the Receivables (such agreement to
be in form and substance reasonably satisfactory to the Indenture Trustee).
If the Indenture Trustee shall succeed to the Servicer's duties as servicer
of the Receivables as provided herein, it shall do so in its individual
capacity and not in its capacity as Indenture Trustee and, accordingly, the
provisions of Article VI hereof shall be inapplicable to the Indenture
Trustee in its duties as the successor to the Servicer and the servicing of
the Receivables. In case the Indenture Trustee shall become successor to the
Servicer under the Transfer and Servicing Agreement, the Indenture Trustee
shall be entitled to appoint any one of its Affiliates to carry out its
functions as Servicer (pending appointment of a Successor Servicer), provided
that it shall be fully liable for the actions and omissions of such Affiliate
in such capacity as Successor Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant to
the Transfer and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee. As soon as a Successor Servicer is appointed, the Issuer
shall notify the Indenture Trustee of such appointment, specifying in such
notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees that it will not, without the prior written
consent of the Indenture Trustee or the Holders of a majority in Outstanding
Amount of the Notes, amend, modify, waive, supplement, terminate or surrender,
or agree to any amendment, modification, supplement, termination, waiver or
surrender of, the terms of any Collateral (except to the extent otherwise
permitted pursuant to the terms of the Transfer and Servicing Agreement) or the
Basic Documents, or waive timely performance or observance by the Servicer or
the Transferor under the Transfer and Servicing Agreement or by MCC under the
Contribution and Sale Agreement; provided, however, that no such amendment shall
(i) except to the extent otherwise provided in the Transfer and Servicing
Agreement, increase or reduce in any manner the amount of, or accelerate or
delay the timing of, collections of payments on Receivables or distributions
that are required to be made for the benefit of the Noteholders or (ii) reduce
the aforesaid percentage of the Notes which are required to consent to any such
amendment, without the consent of the holders of all the Outstanding Notes. If
any such amendment, modification, supplement or waiver shall be so consented to
by the Indenture Trustee or such Holders, the Issuer agrees, promptly following
a request by the Indenture Trustee to do so, to execute and deliver, in its own
name and at its own expense, such agreements, instruments, consents and other
documents as the Indenture Trustee may reasonably deem necessary or appropriate
under the circumstances.
SECTION 3.08. Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, the Contribution
and Sale Agreement or the Transfer and Servicing Agreement, sell, transfer,
exchange or
21
<PAGE>
otherwise dispose of any of the properties or assets of the Issuer,
including those included in the Trust Estate, unless directed to do so by
the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code or applicable state law) or
assert any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust Estate;
(iii) dissolve or liquidate in whole or in part; or
(iv) (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 with respect to the Notes 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 Trust Estate or any part thereof or any
interest therein or the proceeds thereof (other than tax liens, mechanics'
liens and other liens on a Financed Equipment arising solely as a result of
an action or omission of the related Obligor) or (C) permit the lien of
this Indenture not to constitute a valid first priority perfected security
interest in the Trust Estate (other than with respect to any such tax,
mechanics' or other lien).
SECTION 3.09. Statements as to Compliance. (a) The Issuer will deliver
to the Indenture Trustee, within 120 days after the end of each fiscal year of
the Issuer (commencing within 120 days after the end of the fiscal year 1997),
an Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that
(i) a review of the activities of the Issuer during the 12-month
period ending at the end of such fiscal year (or in the case of the fiscal
year ending December 31, 1996, the period from the Closing Date to December
31, 1997) and of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a default in the
compliance of any such condition or covenant, specifying each such default
known to such Authorized Officer and the nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain
Terms. (a) The Issuer shall not consolidate or merge with or into any other
Person, unless
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any State and shall expressly
assume, by an indenture
22
<PAGE>
supplemental hereto, executed and delivered to the Indenture Trustee, in
form reasonably satisfactory to the Indenture Trustee and/or approved by
Holders of Notes representing more than 50% of the Outstanding Amount, the
due and punctual payment of the principal of and interest on all Notes and
the performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to any
Noteholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless
(i) the Person that acquires by conveyance or transfer the properties
and assets of the Issuer the conveyance or transfer of which is hereby
restricted shall (A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State, (B)
expressly assumes, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form reasonably satisfactory to the
Indenture Trustee, the due and punctual payment of the principal of and
interest on all Notes and the performance or observance of every agreement
and covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein, (C) expressly agrees by means of such
supplemental indenture that all right, title and interest so conveyed or
transferred shall be subject and subordinate to the rights of Holders of
the Notes, (D) unless otherwise provided in such supplemental indenture,
expressly agrees to indemnify, defend and hold harmless the Issuer against
and from any loss, liability or expense arising under or related to this
Indenture and the Notes and (E) expressly agrees by means of such
supplemental indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection with the
Notes;
23
<PAGE>
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing:
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to any
Noteholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.10(b), MetLife Capital Equipment Loan Trust 1997-A
will be released from every covenant and agreement of this Indenture to be
observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery to the Indenture Trustee of the Officer's
Certificate and Opinion of Counsel specified in Section 3.10(b)(vi) stating that
MetLife Capital Equipment Loan Trust 1997-A is to be so released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than the purposes and powers set forth in Section 2.03 of the
Trust Agreement.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except as expressly provided for pursuant to the terms of the Basic
Documents and the Notes.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the Servicer
to comply with all of its obligations under the Basic Documents, including
without limitation those set forth in Sections 4.09, 4.10, 4.11 and 5.06 of the
Transfer and Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by the Transfer and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument
24
<PAGE>
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. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Removal of Administrator. So long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause unless
the Rating Agency Condition shall have been satisfied in connection with such
removal.
SECTION 3.18. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, (x)
distributions to the Servicer and the Owner Trustee as permitted by, and to the
extent funds are available for such purpose under, the Transfer and Servicing
Agreement and the Trust Agreement and (y) payments to the Indenture Trustee
pursuant to Section 1(a)(ii) of the Administration Agreement. The Issuer will
not, directly or indirectly, make payments to or distributions from the
Collection Account except in accordance with this Indenture and the Basic
Documents.
SECTION 3.19. Notice of Events of Default. The Issuer agrees to give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and, immediately after obtaining knowledge of any of the
following occurrences, written notice of each default on the part of the
Servicer or the Transferor of its obligations under the Transfer and Servicing
Agreement and each default on the part of MCC of its obligations under the
Contribution and Sale Agreement.
SECTION 3.20. Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes (except as to
(i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of
25
<PAGE>
Noteholders to receive payments of principal thereof and interest thereon,
(iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 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 6.07 and the obligations of the
Indenture Trustee under Section 4.02) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them for a period of one year
after clauses (A), (B) and (C) below have occurred), and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than (i)
Notes that have been destroyed, lost or stolen and that have been replaced
or paid as provided in Section 2.05 and (ii) Notes for whose payment money
has theretofore been deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or discharged from such
trust, as provided in Section 3.03) have been delivered to the Indenture
Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation:
(i) have become due and payable;
(ii) will become due and payable at (A) the Class A Final Scheduled
Distribution Date with respect to the Class A Notes and (B) the Class B
Final Scheduled Distribution Date with respect to the Class B Notes; 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 Issuer;
and the Issuer, in the case of (i), (ii) or (iii) above, has 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 to pay and
discharge the entire indebtedness on such Notes not theretofore delivered
to the Indenture Trustee for cancellation when due to the Class A Final
Scheduled Distribution Date or Class B Final Scheduled Distribution Date or
the Redemption Date (if Notes shall have been called for redemption
pursuant to Section 10.01), as the case may be;
(B) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an Officer's
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
26
<PAGE>
11.01(a) and each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied
with.
SECTION 4.02. Application of Trust Money. All moneys deposited with the
Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular 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; provided such moneys need not be segregated from other funds except to
the extent required herein or in the Transfer and Servicing Agreement or
required by law.
SECTION 4.03. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.03, and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
ARTICLE V
REMEDIES
SECTION 5.01. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest on any Class A Note when
the same becomes due and payable (without regard to the provisos set forth
in Section 8.02(c)(i)), and such default shall continue for a period of
five days; or
(ii) default in the payment of the principal of or any installment of
the principal of any Note when the same becomes due and payable; or
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere
in this Section specifically dealt with), or any representation or warranty
of the Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have
been made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such representation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have
27
<PAGE>
been given, by registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the Holders of at
least 25% of the Outstanding Amount of the Notes, a written notice
specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the 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 for the Issuer or for
any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 90 consecutive days; or
(v) the commencement by the Issuer 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 Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator, conservator or
similar official of the Issuer or for any substantial part of the Trust
Estate, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay, or
admit in writing its inability to pay, its debts as such debts become due,
or the taking of action by the Issuer in furtherance of any of the
foregoing.
The Issuer shall deliver to the Indenture Trustee, within five days after
the occurrence thereof, written notice in the form of an Officer's Certificate
of any event which with the giving of notice and the lapse of time would become
an Event of Default under clause (iii) or clause (iv), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.02. 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 Holders of Notes representing not less than a majority
of the Outstanding Amount of the Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if declared by Noteholders), and upon any such declaration the
unpaid principal amount of the 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 in this Article V provided, the
Holders of Notes representing not less than a majority of the Outstanding Amount
of the Notes, by written notice to the Issuer and the Indenture Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay
28
<PAGE>
(A) all payments of principal of and interest on all Notes and
all other amounts that would then be due hereunder or upon such Notes
if the Event of Default giving rise to such acceleration had not
occurred; and
(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 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 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any 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 or any installment of the principal of any Note when
the same becomes due and payable, the Issuer will, upon demand of the Indenture
Trustee, pay to it, for the benefit of the Holders of the Notes, the whole
amount then due and payable on such Notes for principal and interest, with
interest upon the overdue principal, and, to the extent payment at such rate of
interest shall be legally enforceable, upon overdue installments of interest, at
the applicable Note Interest Rate borne by the Notes, and in addition thereto
will pay 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 and counsel.
(b) In case the Issuer 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 Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture Trustee
may, as more particularly provided in Section 5.04, in its discretion, proceed
to protect and enforce its rights and the rights of the 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.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy,
29
<PAGE>
insolvency or other similar law, or in case a receiver, assignee or trustee
in bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer or its
property or such other obligor or Person, or in case of any other comparable
judicial Proceedings relative to the Issuer or other obligor upon the Notes,
or to the creditors or property of the Issuer or such other obligor, the
Indenture Trustee, irrespective of whether the principal of any Notes shall
then be due and payable as therein expressed or by declaration or otherwise
and irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered,
by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the 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 made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the 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 Holders of Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such 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 made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad faith.
(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 Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
30
<PAGE>
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 Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the 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,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
benefit of the Holders of the Notes as provided herein.
(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 Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
SECTION 5.04. 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 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
or under this Indenture with respect thereto, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer and
any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Holders of the Notes; and
(iv) in the event that all the Notes have been declared due and
payable pursuant to Section 5.02, sell the Trust Estate or any portion
thereof or rights or interest therein, at one or more public or private
sales called and conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an Event of
Default described in Section 5.01(i) or (ii) unless (A) the Holders of 100% of
the Outstanding Amount of the Notes consent thereto, (B) the Indenture Trustee
determines that the proceeds of such sale or liquidation distributable to the
Noteholders are sufficient to discharge in full all amounts then due and unpaid
upon such Notes for principal and interest or (C) the Indenture Trustee
determines that the Trust Estate will not continue to provide sufficient funds
for the payment of principal of and interest on the Notes as they would have
become due if the Notes had not been declared due and payable, and the
31
<PAGE>
Indenture Trustee obtains the consent of Holders of at least 66-2/3% of the
Outstanding Amount of the Notes. In determining such sufficiency or
insufficiency with respect to clause (B) and (C), the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of
such proposed action and as to the sufficiency of the Trust Estate for such
purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V following the acceleration of the maturities of the Notes
pursuant to Section 5.02 (so long as such declaration shall not have been
rescinded or annulled), it shall pay out the money or property (other than the
Servicer's Yield, unpaid Servicing Fees and unpaid Administration Fees, which
may be retained by the Servicer free and clear of the lien of this Indenture in
accordance with Section 5.07 of the Transfer and Servicing Agreement) in the
following order:
FIRST: to the Indenture Trustee for amounts due pursuant to Section
6.07;
SECOND: to Holders of the Class A Notes for amounts due and unpaid on
the Class A Notes for interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class A Notes for
interest;
THIRD: to Holders of the Class A Notes for amounts due and unpaid on
the Class A Notes for principal, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class A Notes for
principal;
FOURTH: to Holders of the Class B Notes for amounts due and unpaid on
the Class B Notes for interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class B Notes for
interest;
FIFTH: to Holders of the Class B Notes for amounts due and unpaid on
the Class B Notes for principal, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class B Notes for
principal; and
SIXTH: to the Issuer for distribution pursuant to the Trust
Agreement.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date, the Issuer shall mail to each Noteholder and the Indenture Trustee
a notice that states the record date, the payment date and the amount to be
paid.
SECTION 5.05. Optional Preservation of the Receivables. If the Notes
have been declared to be due and payable under Section 5.02 following an
Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Trust Estate. It is the desire of the parties
hereto and the Noteholders that there be at all times sufficient funds for
the payment of principal of and interest on the Notes, and the Indenture
Trustee shall take such desire into account when determining whether or not
to maintain possession of the Trust Estate. In determining whether
32
<PAGE>
to maintain possession of the Trust Estate, the Indenture Trustee may, but
need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of
such proposed action and as to the sufficiency of the Trust Estate for such
purpose.
SECTION 5.06. Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount of the
Notes have made written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
an indemnity against the costs, expenses and liabilities to be incurred in
complying with such request in form and substance satisfactory to the
Indenture Trustee;
(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
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders of
a majority of the Outstanding Amount of the Notes;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the Outstanding Amount of the Notes,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.07. Unconditional Rights of Noteholders to Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture (or, in
the case of redemption, on or after the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
33
<PAGE>
SECTION 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted.
SECTION 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee or any Holder of any Note to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this
Article V or by law to the Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. The Holders of a majority of the
Outstanding Amount of the Notes shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the 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 5.04, any direction to
the Indenture Trustee to sell or liquidate the Trust Estate shall be by
the Holders of Notes representing not less than 100% of the Outstanding
Amount of the Notes;
(iii) if the conditions set forth in Section 5.05 have been satisfied
and the Indenture Trustee elects to retain the Trust Estate pursuant to
such Section, then any direction to the Indenture Trustee by Holders of
Notes representing less than 100% of the Outstanding Amount of the Notes
to sell or liquidate the 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;
34
<PAGE>
provided, however, that, subject to Section 6.01, the Indenture Trustee need
not take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to
such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the Outstanding Amount of the
Notes may waive any past Default or Event of Default and its consequences
except a Default (a) in payment of principal of or interest on any of the
Notes or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of each Note. In the
case of any such waiver, the Issuer, the Indenture Trustee and the Holders of
the Notes shall be restored to their former positions and rights hereunder,
respectively; provided that 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; provided that no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the 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;
provided that the provisions of this Section shall not apply to (a) any suit
instituted by the Indenture Trustee, (b) any suit instituted by any
Noteholder, or group of Noteholders, in each case holding in the aggregate
more than 10% of the Outstanding Amount of the Notes or (c) any suit
instituted by any Noteholder for the enforcement of the payment of principal
of or interest on any Note on or after the respective due dates expressed in
such Note and in this Indenture (or, in the case of redemption, on or after
the Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead or in any manner whatsoever, claim or take the benefit
or advantage of, any stay or extension law wherever enacted, now or at any
time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or 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 Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or
35
<PAGE>
application of any other relief under or with respect to this Indenture.
Neither the lien of this Indenture nor any rights or remedies of the
Indenture Trustee or the Noteholders shall be impaired by the recovery of any
judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon
any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.04(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Transferor's expense, the Issuer agrees to take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and
observance by (x) the Transferor and the Servicer, as applicable, of each of
their obligations to the Issuer under or in connection with the Transfer and
Servicing Agreement or (y) MCC of its obligations under or in connection with
the Contribution and Sale Agreement in accordance with the terms thereof, and
to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Transfer and
Servicing Agreement to the extent and in the manner directed by the Indenture
Trustee, including the transmission of notices of default on the part of the
Transferor or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Transferor or the Servicer of each of their obligations under the Transfer
and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and, at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Holders of at
least 66-2/3% of the Outstanding Amount of the Notes shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the
Transferor or the Servicer under or in connection with the Transfer and
Servicing Agreement, including the right or power to take any action to
compel or secure performance or observance by the Transferor or the Servicer
of each of their obligations to the Issuer thereunder and to give any
consent, request, notice, direction, approval, extension or waiver under the
Transfer and Servicing Agreement, and any right of the Issuer to take such
action shall be suspended.
(c) Promptly following a request from the Indenture Trustee to do so and
at the Transferor's expense, the Issuer agrees to take all such lawful action
as the Indenture Trustee may request to compel or secure the performance and
observance by MCC of each of its obligations to the Transferor under or in
connection with the Contribution and Sale Agreement in accordance with the
terms thereof, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with the
Contribution and Sale Agreement to the extent and in the manner directed by
the Indenture Trustee, including the transmission of notices of default on
the part of the Transferor thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by MCC
of each of its obligations under the Contribution and Sale Agreement.
(d) 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 the Holders of at
least 66-2/3% of the Outstanding Amount of the Notes shall, exercise all
rights, remedies, powers, privileges and claims of the Transferor against MCC
36
<PAGE>
under or in connection with the Contribution and Sale Agreement, including
the right or power to take any action to compel or secure performance or
observance by MCC of each of its obligations to the Transferor thereunder and
to give any consent, request, notice, direction, approval, extension or
waiver under the Contribution and Sale Agreement, and any right of the
Transferor to take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. 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 (including, without limitation, to
exercise any discretionary powers granted by this Indenture) 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 pursuant to the requirements
of this Indenture; provided, however, the Indenture Trustee shall examine
the certificates and opinions to determine whether or not they conform on
their face to the requirements of this Indenture.
The Indenture Trustee shall not be required to determine, confirm or
recalculate the information contained in the Servicer's Certificate delivered
to it pursuant to the Transfer and Servicing Agreement.
(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 subsection 6.01(b);
(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 the
direction of any requisite majority
37
<PAGE>
of Noteholders authorized to give direction to the Indenture Trustee
pursuant to this Indenture.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to subsections 6.01(a), (b) and (c);
(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
Issuer.
(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 Transfer and Servicing 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 and to the provisions of
the TIA.
SECTION 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee
may rely on any 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 the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's 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 Officer's 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, any 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 or
opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or
38
<PAGE>
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
SECTION 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuer or its affiliates
with the same rights it would have if it were not Indenture Trustee. Any
Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same
with like rights. However, the Indenture Trustee, in its capacity as
Indenture Trustee, must comply with Sections 6.11 and 6.12.
SECTION 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity
or adequacy of the Trust Estate, this Indenture or the Notes, it shall not be
accountable for the Issuer's use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Issuer in the Indenture or in any
document issued in connection with the sale of the Notes or in the Notes
other than the Indenture Trustee's certificate of authentication.
SECTION 6.05. Notice of Defaults. If a Default occurs and is continuing
and if it is known to a Responsible Officer of the Indenture Trustee, the
Indenture Trustee shall mail to each Noteholder notice of the Default within
90 days after it occurs. Except in the case of a Default in payment of
principal of or interest on any Note (including payments pursuant to the
mandatory redemption provisions of such Note), the Indenture Trustee may
withhold the notice if and so long as a committee of its Responsible Officers
in good faith determines that withholding the notice is in the interests of
Noteholders.
SECTION 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall, to the extent provided to it by the Servicer pursuant to
Section 5.06 of the Transfer and Servicing Agreement, deliver to each
Noteholder such information as may be required to enable such holder to
prepare its federal and state income tax returns, which shall include the
information required to be distributed pursuant to the second to last
paragraph of Section 5.06 of the Transfer and Servicing Agreement. The
Indenture Trustee shall not be required to determine, confirm or recompute
any such information provided to it.
SECTION 6.07. Compensation and Indemnity. Pursuant to the
Administration Agreement, the Issuer shall direct the Administrator to pay
and the Administrator shall pay to the Indenture Trustee from time to time
reasonable compensation for its services. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of
an express trust. Pursuant to the Administration Agreement, the Administrator
shall reimburse the Indenture Trustee for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition
to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. Pursuant to
the Administration Agreement, the Issuer shall direct the Administrator to
indemnify and the Administrator shall indemnify the Indenture Trustee against
any and all loss, liability or expense (including the fees of either in-house
counsel or outside counsel, but not both) incurred by it in connection with
the administration of this trust and the performance of its duties hereunder.
The Indenture Trustee
39
<PAGE>
shall notify the Issuer and the Administrator promptly of any claim for which
it may seek indemnity. Failure by the Indenture Trustee to so notify the
Issuer and the Administrator shall not relieve the Issuer or the
Administrator of its obligations hereunder unless such loss, liability or
expense could have been avoided with such prompt notification and then only
to the extent of such loss, expense or liability which could have been so
avoided. Pursuant to the Administration Agreement, the Administrator shall
defend, any claim against the Indenture Trustee, the Indenture Trustee may
have separate counsel and, if it does, the Administrator to pay the fees and
expenses of such counsel. Neither the Issuer nor the Administrator 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 Administrator's payment obligations to the Indenture Trustee pursuant
to this Section shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of a Default specified
in Section 5.01(iv) or (v) with respect to the Issuer, the expenses are
intended to constitute expenses of administration under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.
Notwithstanding anything herein to the contrary, the Indenture Trustee's
right to enforce any of the Administrator's payment obligations pursuant to
this Section 6.07 shall be subject to the provisions of Section 11.17.
SECTION 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture
Trustee may resign at any time by so notifying the Issuer. The Holders of a
majority in Outstanding Amount of the Notes may remove the Indenture Trustee
by so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Indenture Trustee or all or substantially all of its
property, or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or
for the winding-up or liquidation of its affairs, shall have been entered
against the Indenture Trustee; or the Indenture Trustee shall admit in
writing its inability to pay its debts generally as they become due, file
a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or
(iii) the Indenture Trustee otherwise becomes incapable of acting.
40
<PAGE>
If the Indenture Trustee resigns or is removed 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 Issuer
shall promptly appoint a successor Indenture Trustee, which successor shall
be, if MCC is the Servicer, reasonably acceptable to the Transferor.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon
the resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to
Noteholders. The retiring Indenture Trustee shall promptly transfer all
property held by it as Indenture Trustee to the successor Indenture Trustee.
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 Issuer or the Holders of not less than a majority in
Outstanding Amount of the 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
Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's and the Administrator's obligations under Section 6.07
shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. 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 or banking association without any further act shall be the
successor Indenture Trustee. The Indenture Trustee shall provide the Rating
Agencies prior written notice of any such transaction; provided that such
corporation or banking association shall be otherwise qualified and eligible
under Section 6.11.
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 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
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may
authenticate such 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 Notes
or in this Indenture provided that the certificate of the Indenture Trustee
shall have.
41
<PAGE>
SECTION 6.10. Appointment of Co-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
part of the Trust 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 reasonably acceptable to the Issuer to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of
the Trust, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders, such title to the Trust, or any part hereof,
and, subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the 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 Noteholders of the appointment of any
co-trustee or separate trustee shall be required under Section 6.08 hereof.
(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 unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the 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
Indenture Trustee;
(ii) no 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 Agreement
and the conditions of this Article VI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the 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,
42
<PAGE>
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 Indenture
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
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 its long-term unsecured debt shall be rated at least Baa3 by
Moody's and BBB- by Standard & Poor's. The Indenture Trustee shall comply
with TIA Section 310(b), including the optional provision permitted by the
second sentence of TIA Section 310(b)(9); provided, however, that there shall
be excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities of the issuer are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Indenture Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of such Record Date, (b) at such other
times as the Indenture Trustee may request in writing, within 30 days after
receipt by the Issuer of any such request, a list of similar form and content
as of a date not more than 10 days prior to the time such list is furnished;
provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate, pursuant to TIA Section 312(b), with
other Noteholders with respect to their rights under this Indenture or under
the Notes.
43
<PAGE>
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
SECTION 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act;
(ii) file with the 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 Issuer with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA Section
313(c)) such summaries of any information, documents and reports required
to be filed by the Issuer pursuant to clauses (i) and (ii) of this
Section 7.03(a) as may be required by rules and regulations prescribed
from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
SECTION 7.04. Reports by Indenture Trustee. If required by TIA Section
313(a), within 60 days after each March 31 beginning with March 31, 1997, the
Indenture Trustee shall mail to each 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 Noteholders shall be
filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. 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
44
<PAGE>
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 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 8.02. Trust Accounts. (a) On or prior to the Closing Date, the
Issuer shall cause the Servicer to establish and maintain, in the name of the
Indenture Trustee, for the benefit of the Noteholders the Trust Accounts as
provided in Section 5.01 of the Transfer and Servicing Agreement.
(b) On or before the Business Day preceding each Distribution Date,
amounts with respect to the preceding Collection Period will be transferred
from the Principal Funding Account, the Interest Payment Account and/or the
Reserve Account, as applicable, to the Note Distribution Account as provided
in Sections 5.04 and 5.05 of the Transfer and Servicing Agreement.
(c) On each Distribution Date and Redemption Date, the Indenture Trustee
shall distribute all amounts on deposit in the Note Distribution Account to
Noteholders in respect of the Notes to the extent of amounts due and unpaid
on the Notes for principal and interest in the following amounts and in the
following order of priority (except as otherwise provided in Section 5.04(b)):
(i) during the Revolving Period, to the Holders of the Class A
Notes, accrued and unpaid interest on the Class A Notes; provided that if
there are not sufficient funds in the Note Distribution Account to pay
the entire amount of accrued and unpaid interest then due on the Class A
Notes, the amount in the Note Distribution Account shall be applied to
the payment of such interest on the Class A Notes pro rata on the basis
of the total of such interest due on the Class A Notes;
(ii) during the Revolving Period, to the Holders of the Class B
Notes, accrued and unpaid interest on the Class B Notes; provided that if
there are not sufficient funds remaining in the Note Distribution Account
to pay the entire amount of accrued and unpaid interest then due on the
Class B Notes after giving effect to the distribution in clause (i)
above, the amount in the Note Distribution Account shall be applied to
the payment of such interest on the Class B Notes pro rata on the basis
of the total of such interest due on the Class B Notes;
(iii) during the Amortization Period, to the Holders of the Class A
Notes, accrued and unpaid interest on the Class A Notes; provided that if
there are not sufficient funds in the Note Distribution Account to pay
the entire amount of accrued and unpaid interest then due on the Class A
Notes, the amount in the Note Distribution Account shall be applied to
the payment of such interest on the Class A Notes pro rata on the basis
of the total of such interest due on the Class A Notes;
45
<PAGE>
(iv) during the Amortization Period, to the Holders of the Class A
Notes principal in an amount equal to the Class A Noteholders' Principal
Distributable Amount with respect to such Distribution Date; provided
that if there are not sufficient funds remaining in the Note Distribution
Account to pay the entire amount of such Class A Noteholders' Principal
Distributable Amount after giving effect to the distribution in clause
(iii) above, the amount remaining in the Note Distribution Account shall
be applied to the payment of such Class A Noteholders' Principal
Distributable Amount pro rata on the basis to the total of such Class A
Noteholders' Principal Distributable Amount due on the Class A Notes;
(v) during the Amortization Period, to the Holders of the Class B
Notes, accrued and unpaid interest on the Class B Notes; provided that if
there are not sufficient funds remaining in the Note Distribution Account
to pay the entire amount of accrued and unpaid interest then due on the
Class B Notes after giving effect to the distribution in clause (iv)
above, the amount in the Note Distribution Account shall be applied to
the payment of such interest on the Class B Notes pro rata on the basis
to the total of such interest due on the Class B Notes;
(vi) during the Amortization Period, to the Holders of the Class B
Notes principal in an amount equal to the Class B Noteholders' Principal
Distributable Amount with respect to such Distribution Date; provided
that if there are not sufficient funds remaining in the Note Distribution
Account to pay the entire amount of such Class B Noteholders' Principal
Distributable Amount after giving effect to the distribution in clause
(v) above, the amount remaining in the Note Distribution Account shall be
applied to the payment of such Class B Noteholders' Principal
Distributable Amount pro rata on the basis to the total of such Class B
Noteholders' Principal Distributable Amount due on the Class B Notes.
SECTION 8.03. General Provisions Regarding Accounts. (a) So long as no
Default or Event of Default shall have occurred and be continuing, all or a
portion of the funds in the Trust Accounts shall be invested in Eligible
Investments and reinvested by the Indenture Trustee upon Issuer Order,
subject to the provisions of Section 5.01(b) of the Transfer and Servicing
Agreement (which Issuer Order may be upon direction of the Servicer). All
income or other gain from investments of moneys deposited in the Trust
Accounts shall be deposited by the Indenture Trustee in the Collection
Account, and any loss resulting from such investments shall be charged to
such account. The Issuer will not direct the Indenture Trustee to make any
investment of any funds or to sell any investment held in any of the Trust
Accounts unless the security interest granted and perfected in such account
will continue to be perfected in such investment or the proceeds of such
sale, and, in connection with any direction to the Indenture Trustee to make
any such investment or sale, if requested by the Indenture Trustee, the
Issuer shall deliver to the Indenture Trustee an Opinion of Counsel,
acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Trust
Accounts resulting from any loss on any Eligible Investment included therein
pursuant to the terms of the Basic Documents except for
46
<PAGE>
losses attributable to the Indenture Trustee's failure to make payments on
such Eligible Investments issued by the Indenture Trustee, in its commercial
capacity as principal obligor and not as trustee, in accordance with their
terms.
(c) If (i) the Issuer shall have failed to give investment directions
for any funds on deposit in the Trust Accounts to the Indenture Trustee by
12:00 noon New York Time (or such other time as may be agreed by the Issuer
and Indenture Trustee) on any Business Day; or (ii) a Default or Event of
Default shall have occurred and be continuing with respect to the Notes but
the Notes shall not have been declared due and payable pursuant to Section
5.02, or, if such Notes shall have been declared due and payable following an
Event of Default and amounts collected or receivable from the Trust Estate
are being applied in accordance with Section 5.05; then the Indenture Trustee
shall, to the fullest extent practicable, invest and reinvest funds in the
Trust Accounts in Eligible Investments of the same type as the Indenture
Trustee was most recently directed to invest such funds and maturing prior to
the succeeding Distribution Date in accordance with Section 5.01(b) of the
Transfer and Servicing Agreement.
SECTION 8.04. Release of Trust Estate. (a) Subject to the payment of
its fees and expenses pursuant to Section 6.07, the Indenture Trustee may,
and when required by the provisions of this Indenture shall, execute
instruments to release property from the lien of this Indenture, or convey
the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this
Indenture. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article VIII shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07
have been paid, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture and release to the Issuer
or any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and
(if required by the TIA) Independent Certificates in accordance with TIA
Sections 314(c) and 314(d)(1) meeting the applicable requirements of Section
11.01.
(c) Notwithstanding anything to the contrary in this Indenture, the
Transfer and Servicing Agreement and the Trust Agreement, immediately prior
to the release of any portion of the Trust Estate or any funds on deposit in
the Trust Accounts pursuant to this Indenture, the Indenture Trustee shall
remit to the Transferor for its own account any funds that, upon such
release, would otherwise be remitted to the Issuer.
SECTION 8.05. Opinion of Counsel. The Indenture Trustee shall receive
at least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.04(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, as a condition to
such action, an Opinion of Counsel, in form and substance reasonably
satisfactory to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to complete the same, and concluding
that all conditions precedent to the taking
47
<PAGE>
of such action have been complied with and such action will not materially
and adversely impair the security for the Notes or the rights of the
Noteholders in contravention of the provisions of this Indenture; provided,
however, that such Opinion of Counsel shall not be required to express an
opinion as to the fair value of the Trust Estate. The Indenture Trustee and
counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice to
the Rating Agencies, the Issuer and the Indenture Trustee, when authorized by
an Issuer Order, at any time and from time to time, may enter into one or
more indentures supplemental hereto (which shall conform to the provisions of
the TIA as in force at the date of the execution thereof), in form reasonably
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;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another Person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be 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; provided that such
action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to
or change any of the provisions of this Indenture as shall be necessary
to facilitate the administration of the
48
<PAGE>
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, as evidenced by an Opinion of
Counsel, 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 and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes but
with prior notice to the Rating Agencies, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to,
or changing in any manner or eliminating any of the provisions of, this
Indenture or of modifying in any manner the rights of the Holders of the
Notes under this Indenture; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Noteholder.
SECTION 9.02. Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with prior notice to the Rating Agencies and with the consent of the
Holders of not less than a majority of the Outstanding Amount of the Notes,
by Act of such Holders delivered to the Issuer 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
Holders of the Notes under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Redemption Price with respect thereto,
change the provisions of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Trust Estate to
payment of principal of or interest on the Notes, or change any place of
payment where, or the coin or currency in which, any Note or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the application
of funds available therefor, as provided in Article V, to the payment of
any such amount due on the Notes on or after the respective due dates
thereof (or, in the case of redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the Notes,
the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
49
<PAGE>
(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 Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section 9.02 except to increase
any percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified or
waived without the consent of the Holder of each Outstanding Note
affected thereby;
(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 Note on any Distribution Date (including the
calculation of any of the individual components of such calculation) or
to affect the rights of the Holders of Notes to the benefit of any
provisions for the mandatory redemption of the Notes contained herein; or
(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 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 the Holder of any Note of the security provided by the
lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, 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 Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture
Trustee to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to
receive, and subject to Sections 6.01 and 6.02, 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
50
<PAGE>
to, enter into any such supplemental indenture that affects the Indenture
Trustee's own rights, duties, liabilities or immunities under this Indenture
or otherwise.
SECTION 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Holders of the
Notes shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the
terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 9.05. Conformity With Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the TIA as then in effect so
long as this Indenture shall then be qualified under the TIA.
SECTION 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the 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 Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Redemption. The Notes are subject to redemption in
whole, but not in part, at the direction of the Transferor pursuant to
Section 9.02 of the Transfer and Servicing Agreement, on any Distribution
Date on which the Transferor exercises the option to purchase the Owner Trust
Estate pursuant to said Section 9.02 of the Transfer and Servicing Agreement;
provided, however, that such purchase is subject to such payment resulting in
the Issuer having available funds sufficient to pay the Redemption Price for
the Notes. The Servicer or the Issuer shall furnish the Rating Agencies
notice of such redemption. If the Notes are to be redeemed pursuant to this
Section 10.01, the Servicer or the Issuer shall furnish notice of such
election to the Indenture Trustee not later than 15 days prior to the
Redemption Date, and the Issuer shall deposit with the Indenture Trustee in
the Note Distribution Account the Redemption Price of the Notes to be
redeemed whereupon all such Notes shall be due and payable on the Redemption
Date upon the furnishing of a notice complying with Section 10.02 to each
Holder of the Notes.
51
<PAGE>
SECTION 10.02. Form of Redemption Notice. Notice of redemption under
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed not less than thirty days prior to the applicable
Redemption Date to each Holder of Notes, as of the close of business on the
Record Date preceding the applicable Redemption Date, at such Holder's
address appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency of the
Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture Trustee
in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair
or affect the validity of the redemption of any other Note.
SECTION 10.03. Notes Payable on Redemption Date. The Notes or portions
thereof to be redeemed shall, following notice of redemption as required by
Section 10.02 (in the case of redemption pursuant to Section 10.01), on the
Redemption Date become due and payable at the Redemption Price and (unless
the Issuer shall default in the payment of the Redemption Price) no interest
shall accrue on the Redemption Price for any period after the date to which
accrued interest is calculated for purposes of calculating the Redemption
Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Compliance Certificates and Opinions etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate
from a firm of certified public accountants meeting the applicable
requirements of this Section, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
52
<PAGE>
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any 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 Issuer shall, in addition to any obligation imposed in
Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value (within 90 days
of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (i) above, the
Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of
the 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 fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) above and this clause (ii), is 10% or
more of the Outstanding Amount of the Notes, but such a certificate need
not be furnished with respect to any securities so deposited if the fair
value thereof to the Issuer as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the
Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any Acquired
Receivables or Liquidated Receivables, whenever any property or
securities are to be released from the lien of this Indenture, the Issuer
shall also furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of each person signing such certificate
as to the fair value (within 90 days of such release) of the property or
securities proposed to be released and stating that in the opinion of
such person the proposed release will not impair the security under this
Indenture in contravention of the provisions hereof.
53
<PAGE>
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (iii) above, the
Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than Acquired Receivables and
Liquidated Receivables, or securities released from the lien of this
Indenture since the commencement of the then 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 Notes,
but such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.09 or any other provision of this
Section, the Issuer may (A) collect, liquidate, sell or otherwise dispose
of Receivables and Financed Equipment as and to the extent permitted or
required by the Basic Documents and (B) make cash payments out of the
Trust Accounts as and to the extent permitted or required by the Basic
Documents.
SECTION 11.02. 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 of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Servicer, the Transferor, the Issuer or the Administrator,
stating that the information with respect to such factual matters is in the
possession of the Servicer, the Transferor, the Issuer or the Administrator,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term
54
<PAGE>
hereof, it is intended that the truth and accuracy, at the time of the
granting of such application or at the effective date of such certificate or
report (as the case may be), of the facts and opinions stated in such
document shall in such case be conditions precedent to the right of the
Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to
affect the 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 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective
when such instrument or instruments are delivered to the Indenture Trustee,
and, where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Noteholders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of
every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
SECTION 11.04. Notices, etc. to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Indenture Trustee and received at its
Corporate Trust Office, or
(b) the Issuer by the Indenture Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to the Issuer addressed to: MetLife Capital
Equipment Loan Trust 1997-A, in care of Wilmington Trust Company, as
Owner Trustee, 1100 North Market Street, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Administration, with a copy to the
55
<PAGE>
Administrator, at the following address: MetLife Capital Corporation,
10900 N.E. 4th Street, Suite 500, Bellevue, Washington 98004, Attention:
Chief Financial Officer or at any other address previously furnished in
writing to the Indenture Trustee by Issuer or the Administrator. The
Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee.
(c) the Rating Agencies by the Issuer, the Indenture Trustee or the
Owner Trustee shall be sufficient for every purpose hereunder if in
writing, personally delivered or mailed by certified mail, return receipt
requested to (i) in the case of Moody's, at the following address:
Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church
Street, New York, New York 10007 and (ii) in the case of Standard &
Poor's, at the following address: Standard & Poor's Ratings Services, 26
Broadway (10th Floor), New York, New York 10004, Attention of Asset
Backed Surveillance Department; or as to each of the foregoing, at such
other address as shall be designated by written notice to the other
parties.
SECTION 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Noteholder's address as it appears on the Note Register, not
later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such notice nor any
defect in any notice so mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice
that is mailed in the manner herein provided shall conclusively be presumed
to have been duly given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the 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 of any event to 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 11.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, to the
extent reasonably satisfactory to the Indenture Trustee, the Issuer may enter
into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee or any Paying
56
<PAGE>
Agent to such Holder, that is different from the methods provided for in this
Indenture for such payments or notices. The Issuer will furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee
will cause payments to be made and notices to be given in accordance with
such agreements.
SECTION 11.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this indenture by any of the provisions of the
TIA, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience
only and shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not.
All covenants and agreements of the Indenture Trustee in this Indenture
shall bind its successors, co-trustees and agents of the Indenture Trustee.
SECTION 11.10. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other Person with an ownership
interest in any part of the Trust Estate, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest
shall accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
57
<PAGE>
SECTION 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the 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 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 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or
the Owner Trustee in its individual capacity, except as any such Person may
have expressly agreed (it being understood that the Indenture Trustee and the
Owner Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance
of any duties or obligations of the Issuer hereunder, the Owner Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17. No Petition. The Indenture Trustee (in its capacity as
Indenture Trustee), by entering into this Indenture, and each Noteholder, by
accepting a Note, hereby covenant and agree that they will not at any time
institute against the Transferor or the Trust, or voluntarily join in any
institution against the Transferor or the 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 Notes, this Indenture
or any of the Basic Documents.
SECTION 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee, during
the Issuer's normal business hours, to examine all the books of account,
records, reports, and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by Independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with
the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The 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
58
<PAGE>
except to the extent that the Indenture Trustee may reasonably determine that
such disclosure is consistent with its obligations hereunder.
SECTION 11.19. Restrictions on Transfer of Class B Notes. To the
fullest extent permitted by applicable law, the Class B Notes (or any
interest therein) may not be transferred by the initial Holder of the Class B
Notes to any Person.
SECTION 11.20. Tax Treatment. Each Class A Noteholder, by acceptance of
its Note, and each holder of a beneficial interest in a Class A Note, by the
acquisition of a beneficial interest therein, agree to treat the Class A
Notes as indebtedness of the Transferor for applicable federal, state, and
local income and franchise tax law and for purposes of any other tax imposed
on or measured by income.
59
<PAGE>
IN WITNESS WHEREOF, the Issuer 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.
METLIFE CAPITAL EQUIPMENT LOAN
TRUST 1997-A
By: WILMINGTON TRUST COMPANY, not in
its individual capacity but
solely as Owner Trustee,
By: ___________________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
not in its individual capacity but as
Indenture Trustee,
By: ____________________________________
Name:
Title:
<PAGE>
DISTRICT OF COLUMBIA )
) ss.:
)
BEFORE ME, the undersigned authority, a Notary Public in and for said
County and State, on this day personally appeared John Myntinnen known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said New
York banking corporation and that he executed the same as the corporation for
the purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 30th day of May, 1997.
__________________________
Notary Public
[Seal]
My commission expires:
______________________
61
<PAGE>
STATE OF DELAWARE )
) ss.:
COUNTY OF __________ )
BEFORE ME, the undersigned authority, a Notary Public in and for said
County and State, on this day personally appeared Emmett Harmon known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said
Delaware banking corporation and that she/he executed the same as the
corporation for the purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 30th day of May, 1997.
__________________________
Notary Public
[Seal]
My commission expires:
______________________
62
<PAGE>
EXHIBIT A
SCHEDULE OF RECEIVABLES
A-1
<PAGE>
EXHIBIT B
FORM OF TRANSFER AND SERVICING AGREEMENT
B-1
<PAGE>
EXHIBIT C
FORM OF DEPOSITORY AGREEMENT
C-1
<PAGE>
EXHIBIT D
FORM OF CLASS [A] [B] NOTE
REGISTERED $___________*
No. ____
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.________
[UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY 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.]**
[TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE CLASS B NOTES (OR
ANY INTEREST THEREIN) MAY NOT BE TRANSFERRED BY THE INITIAL HOLDER OF THE
CLASS B NOTES TO ANY PERSON.]
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND AGREES
THAT IT WILL NOT AT ANY TIME INSTITUTE AGAINST THE TRUST, OR THE TRANSFEROR,
OR JOIN IN ANY INSTITUTION AGAINST THE TRUST OR THE TRANSFEROR, OF, ANY
BANKRUPTCY PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR
SIMILAR LAW IN CONNECTION WITH ANY OBLIGATIONS RELATING TO THE NOTES OR THE
INDENTURE.
___________________
* Denominations of $1,000 and integral multiples thereof; provided,
however, that a single Note of any Class may be issued in a denomination
of other than $1,000.
** For Class A Notes only.
*** For Class B Note only.
D-1
<PAGE>
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
[THE HOLDER OF THIS CLASS A NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH
HOLDER OF A BENEFICIAL INTEREST IN THIS CLASS A NOTE, BY THE ACQUISITION OF A
BENEFICIAL INTEREST THEREIN, AGREE TO TREAT THE CLASS A NOTES AS INDEBTEDNESS
OF METLIFE CAPITAL FUNDING CORP. III FOR APPLICABLE FEDERAL, STATE, AND LOCAL
INCOME AND FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX IMPOSED ON OR
MEASURED BY INCOME.]
D-2
<PAGE>
METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A
[rate%] [rate%]
[CLASS A] [CLASS B]
ASSET BACKED NOTES
MetLife Capital Equipment Loan Trust 1997-A, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as
the "Issuer"), for value received, hereby promises to pay to [_________], or
registered assigns, the principal sum of [____________] DOLLARS payable on
each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is
$[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE]and the denominator of which is
[$________ [for Class A Notes]] [$__________[for Class B Notes]] by (ii) the
aggregate amount, if any, payable from the Note Distribution Account in
respect of principal on the [Class A] [Class B] Notes pursuant to Section
8.02(c) of the Indenture; provided, however, the entire unpaid principal
amount of this Note shall be due and payable on the earlier of the [[month]
[19__] Distribution Date for the Class A] [[month] [19__]Distribution Date
for the Class B] Notes and the Redemption Date, if any, pursuant to Section
10.01 of the Indenture. The Issuer will pay interest on this Note at the
[Class A] [Class B] Note Interest Rate on each Distribution Date until the
principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Distribution Date
after giving effect to all payments of principal made on such preceding
Distribution Date (or in the case of the first Distribution Date, on the
initial principal amount of this Note). Interest on this Note will accrue
for each Distribution Date from and including the most recent Distribution
Date on which interest has been paid to but excluding such Distribution Date
or, for the initial Distribution Date from May 30, 1997 to but excluding such
Distribution Date. Interest will be computed on the basis of a 360-day year
of twelve 30-day months. Such principal of and interest on this Note shall
be paid in the manner specified on the reverse hereof.
The principal of and interest on this 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
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this 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.
D-3
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: METLIFE CAPITAL EQUIPMENT LOAN
TRUST 1997-A,
By: WILMINGTON TRUST COMPANY, not
in its individual capacity but
solely as Owner Trustee under
the Trust Agreement,
By: ___________________________________
Name:
Title:
D-4
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE CHASE MANHATTAN BANK
[INDENTURE TRUSTEE],
not in its individual capacity but
solely as Indenture Trustee,
By:_____________________________________
Name:
Title:
D-5
<PAGE>
[REVERSE OF NOTE]
This Note is one of the [Class A] [Class B] Notes of a duly authorized
issue of Notes of the Issuer, designated as its [rate] [rate%] [Class A]
[Class B] Asset Backed Notes (herein called the "Notes"), all issued under an
Indenture dated as of May 1, 1997 (such indenture, as supplemented or
amended, is herein called the "Indenture"), between the Issuer and
[Indenture Trustee], 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 Issuer, the
Indenture Trustee and the Holders of the Notes. The Notes are subject to all
terms of the Indenture. All terms used in this 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 Notes are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Notes will be payable on each Distribution Date in an
amount described on the face hereof. "Distribution Date" means the 20th day
of each calendar month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing June 20, 1997.
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the [[________ ____] Distribution Date
[for Class A] [_______ ____] Distribution Date [for Class B]] and the
Redemption Date, if any, pursuant to Section 10.01 of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the
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 the Holders of
the Notes representing a majority of the Outstanding Amount of the Notes have
declared the Notes to be immediately due and payable in the manner provided
in Section 5.02 of the Indenture. All principal payments on the Notes of a
Class shall be made pro rata to the Noteholders of such Class entitled
thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not
in full payment of this Note, shall be made by check mailed to the Person
whose name appears as the Registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to 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 Note Register as of the applicable Record Date without
requiring that this Note be submitted for notation of payment. Any reduction
in the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon
all future Holders of this Note and of any 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 available, as provided in the
Indenture, for payment in full
D-6
<PAGE>
of the then remaining unpaid principal amount of this Note on a Distribution
Date, then the Indenture Trustee, in the name of and on behalf of the Issuer,
will notify the Person who was the Registered Holder hereof as of the Record
Date preceding such Distribution Date by notice mailed within five days of
such Distribution Date and the amount then due and payable shall be payable
only upon presentation and surrender of this 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.
As provided in the Indenture, the Notes may be redeemed in whole, but not
in part, at the option of the Servicer, on any Distribution Date on or after
the date on which the Pool Balance is less than or equal to ten percent of
the Initial Pool Balance.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or
agency designated by the issuer pursuant to the Indenture, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to
the Indenture Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, with such signature guaranteed by a commercial
bank or trust company located, or having a correspondent located, in The City
of New York or the city in which the Corporate Trust Office is located, or a
member firm of a national securities exchange, and such other documents as
the Indenture Trustee may require, and thereupon one or more new 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 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 Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, 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.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture that such Noteholder will not at any
time institute against the Trust or the Transferor, or join in any
institution against the Trust or the Transferor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
United States federal or state
D-7
<PAGE>
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the Basic Documents.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this 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 Note be overdue, and neither the Issuer, 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
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
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 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 Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This 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 Note or of
the Indenture shall alter or impair the obligation of the issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place, and rate, and in the coin or currency herein prescribed.
D-8
<PAGE>
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither [Trustee] in its individual
capacity, any owner of a beneficial interest in the Issuer, 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 Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been
made by the Owner Trustee for the sole purposes of binding the interests of
the Owner Trustee in the assets of the Issuer. The Holder of this 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 Holder
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
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
D-9
<PAGE>
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 Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said 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 Note in every
particular, without alteration, enlargement or any change whatsoever.
D-10
<PAGE>
Exhibit 4.2
EXECUTION COPY
- -------------------------------------------------------------------------------
TRANSFER AND SERVICING AGREEMENT
among
METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A
Issuer
METLIFE CAPITAL FUNDING CORP. III
Transferor
and
METLIFE CAPITAL CORPORATION
Servicer
Dated as of May 1, 1997
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions................................................... 1
SECTION 1.02. Other Definitional Provisions................................. 21
SECTION 1.03. Calculations.................................................. 22
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. Conveyance of Initial Receivables............................. 22
SECTION 2.02. Conveyance of Subsequent Receivables.......................... 23
SECTION 2.03. Closing....................................................... 25
SECTION 2.04. Books and Records............................................. 25
SECTION 2.05. Grant of Security Interest.................................... 26
SECTION 2.06. Discounted Receivables........................................ 26
ARTICLE III
THE RECEIVABLES
SECTION 3.01. Representations and Warranties of Transferor.................. 26
SECTION 3.02. Reacquisition by Transferor or MCC Upon Breach................ 27
SECTION 3.03. Duties of Servicer............................................ 28
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01. Duties of Servicer............................................ 29
SECTION 4.02. Collection of Receivable Payments............................. 29
SECTION 4.03. Realization upon Receivables.................................. 30
SECTION 4.04. Physical Damage Insurance..................................... 30
SECTION 4.05. Maintenance of Security Interests in Financed Equipment. . . 30
SECTION 4.06. Covenants of Servicer......................................... 30
SECTION 4.07. Acquisition by Servicer of Receivables upon Breach............ 31
SECTION 4.08. Servicing Fee................................................. 31
SECTION 4.09. Servicer's Certificate........................................ 31
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.......... 31
i
<PAGE>
SECTION 4.11. Annual Independent Public Accountants' Servicing Report....... 32
SECTION 4.12. Servicer Expenses............................................. 32
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS
SECTION 5.01. Establishment of Trust Accounts............................... 33
SECTION 5.02. Collections................................................... 35
SECTION 5.03. Additional Deposits........................................... 35
SECTION 5.04. Distributions................................................. 36
SECTION 5.05. Reserve Account............................................... 38
SECTION 5.06. Statements to Noteholders..................................... 39
SECTION 5.07. Net Deposits.................................................. 40
ARTICLE VI
THE TRANSFEROR
SECTION 6.01. Representations of Transferor................................. 40
SECTION 6.02. Liability of Transferor; Indemnities.......................... 42
SECTION 6.03. Merger or Consolidation of, or Assumption of the Obligations of,
Transferor.................................................... 42
SECTION 6.04. Limitation on Liability of Transferor and Others.............. 43
SECTION 6.05. Transferor May Own Notes...................................... 43
SECTION 6.06. Tax Treatment................................................. 43
ARTICLE VII
THE SERVICER
SECTION 7.01. Representations of Servicer................................... 44
SECTION 7.02. Indemnities of Servicer....................................... 45
SECTION 7.03. Merger or Consolidation of, or Assumption of the Obligations of,
Servicer...................................................... 46
SECTION 7.04. Limitation on Liability of Servicer and Others................ 47
SECTION 7.05. MCC Not To Resign as Servicer................................. 48
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Default.............................................. 48
SECTION 8.02. Appointment of Successor...................................... 49
ii
<PAGE>
SECTION 8.03. Notification to Noteholders................................... 50
SECTION 8.04. Waiver of Past Defaults....................................... 50
ARTICLE IX
EARLY AMORTIZATION EVENTS; OPTIONAL ACQUISITION
SECTION 9.01. Early Amortization Events..................................... 51
SECTION 9.02. Optional Acquisition of All Receivables....................... 52
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment..................................................... 52
SECTION 10.02. Protection of Title to Trust.................................. 53
SECTION 10.03. Notices....................................................... 55
SECTION 10.04. Assignment.................................................... 56
SECTION 10.05. Limitations on Rights of Others............................... 56
SECTION 10.06. Severability.................................................. 56
SECTION 10.07. Separate Counterparts......................................... 56
SECTION 10.08. Headings...................................................... 56
SECTION 10.09. Governing Law................................................. 56
SECTION 10.10. Assignment to Indenture Trustee............................... 56
SECTION 10.11. Nonpetition Covenants......................................... 57
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture Trustee.57
SCHEDULE A - Schedule of Receivables [Deemed Incorporated]............. A-1
SCHEDULE B - Location of Receivable Files.............................. B-1
SCHEDULE C - Servicer's Certificate.................................... C-1
SCHEDULE D - Officers' Certificate..................................... D-1
SCHEDULE E - Subsequent Transfer Assignment............................ E-1
iii
<PAGE>
TRANSFER AND SERVICING AGREEMENT dated as of May 1, 1997, among METLIFE
CAPITAL EQUIPMENT LOAN TRUST 1997-A, a Delaware business trust (the
"Issuer"), METLIFE CAPITAL FUNDING CORP. III, a Delaware corporation (the
"Transferor"), and METLIFE CAPITAL CORPORATION, a Delaware corporation (the
"Servicer").
WHEREAS the Issuer desires to acquire a portfolio of receivables arising
in connection with commercial loan contracts and equipment finance lease
contracts secured by commercial and industrial equipment acquired or
originated by MetLife Capital Corporation in the ordinary course of its
business;
WHEREAS the Transferor has acquired such portfolio of receivables from
MetLife Capital Corporation and desires to transfer such portfolio of
receivables to the Issuer; and
WHEREAS MetLife Capital Corporation desires to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall
have the following meanings:
"Acquired Receivable" means a Receivable acquired as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 or reacquired as of such time by the Transferor pursuant to
Section 3.02.
"Acquisition Amount" means the amount, as of the close of business on the
last day of a Collection Period, required to prepay in full the respective
Receivable under the terms thereof (including interest at the related APR to
the end of the month of acquisition).
"Administration Agreement" means the Administration Agreement dated as of
May 1, 1997 among the Trust, the Transferor, MCC, as Administrator, as the
same may be amended and supplemented from time to time.
"Administration Fee" means the fee payable to the Administrator pursuant
to Section 3 of the Administration Agreement.
"Administrator" means the administrator under the Administration
Agreement.
"Affiliate" has the meaning assigned thereto in Section 1.01 of the
Indenture.
<PAGE>
"Agreement" means this Transfer and Servicing Agreement, as the same may
be amended and supplemented from time to time.
"Amortization Period" means the period commencing on the earlier to occur
of (a) the Scheduled Revolving Period Termination Date and (b) the day on
which an Early Amortization Event is deemed to occur and ending on the
earlier to occur of (i) the Final Scheduled Distribution Date and (ii) the
payment to Noteholders of all amounts required to be paid to them pursuant to
the Indenture.
"APR" or "Annual Percentage Rate" of a Receivable means the annual
percentage rate of interest of such Receivable set forth on the Schedule of
Receivables.
"Available Interest Amount" means, with respect to any Distribution Date,
the sum of the following amounts, without duplication, with respect to the
preceding Collection Period: (i) the portion of all Collections received
during such Collection Period (including any such amounts constituting
Prepayment Proceeds and the discounted portion of any Discounted Receivable)
allocable to interest, (ii) all Investment Earnings with respect to such
Distribution Date, (iii) all Liquidation Proceeds and Recoveries received
during such Collection Period and (iv) the portion of all Acquisition Amounts
received during such Collection Period allocable to interest, but excluding
in all cases (x) all payments and proceeds (including Liquidation Proceeds
and Recoveries) of any Acquired Receivables the principal portion of which
has been included in the Principal Distribution Amount in a prior Collection
Period and (y) any Excluded Amounts.
"Available Principal Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication, with respect to
the preceding Collection Period: (i) that portion of all Collections received
during such Collection Period (including any such amounts constituting
Prepayment Proceeds but excluding the discounted portion of any Discounted
Receivable) allocable to principal, (ii) the portion of all Acquisition
Amounts received during such Collection Period allocable to principal and
(iii) the portion of the Available Interest Amount deposited in the Principal
Funding Account pursuant to Section 5.04(b)(i)(E), but excluding in all cases
(x) all payments and proceeds of any Acquired Receivables the principal
portion of which has been included in the Principal Distribution Amount in a
prior Collection Period and (y) any Excluded Amounts.
"Base Rate" means, with respect to any Collection Period, the annualized
percentage equivalent of a fraction, the numerator of which is equal to the
sum of (a) the Noteholders' Class A Interest Distributable Amount and the
Noteholders' Class B Interest Distributable Amount, each for such
Distribution Date, (b) the Administration Fee with respect to such Collection
Period and (c) the Servicing Fee with respect to such Collection Period and
the denominator of which is the Pool Balance as of the close of business on
the last day of such Collection Period.
"Basic Documents" has the meaning assigned to such term in the Indenture.
2
<PAGE>
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in New York, New York, Seattle,
Washington, or Wilmington, Delaware are authorized or obligated by law,
regulation or executive order to remain closed.
"Certificated Securities" has the meaning specified in Section
8-102(1)(a) of the UCC.
"Class" means the Class A Notes or the Class B Notes, as applicable.
"Class A Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date with respect to the Amortization Period, the
lesser of (a) the Class A Noteholders' Percentage of the Principal
Distribution Amount and (b) the outstanding principal balance of the Class A
Notes.
"Class A Noteholders' Percentage" means (i) as long as the Pool Balance
is greater than $82,663,946 and the Cumulative Net Loss Ratio is less than
3%, the percentage equivalent of a fraction, the numerator of which is the
principal balance of the Class A Notes and the denominator of which is the
Pool Balance, in each case, as of the close of business on the last day of
the Revolving Period, and (ii) from and after the first to occur of (x) the
date on which the Pool Balance is less than or equal to $82,663,946 or (y)
the date on which the Cumulative Net Loss Ratio is equal to or greater than
3%, 100%.
"Class A Noteholders' Principal Distributable Amount" means, with respect
to any Distribution Date with respect to the Amortization Period, the Class A
Noteholders' Monthly Principal Distributable Amount for such Distribution
Date; provided, however, that the Class A Noteholders' Monthly Distributable
Amount shall not exceed the outstanding principal amount of the Class A
Notes, and on the Final Scheduled Distribution Date, the Class A Noteholders'
Principal Distributable Amount will include the amount necessary (after
giving effect to the other amounts to be deposited in the Note Distribution
Account on such Distribution Date and allocable to principal) to reduce the
outstanding principal amount of the Class A Notes to zero.
"Class A Note Interest Rate" has the meaning assigned to such term in the
Indenture.
"Class A Note Pool Factor" means 1.0000000 as of the Closing Date, and as
of the close of business on the last day of a Collection Period thereafter
means a seven-digit decimal figure equal to the outstanding principal amount
of the Class A Notes as of such date (after giving effect to payments in
reduction of the principal amount of the Class A Notes on the immediately
following Distribution Date) divided by the original outstanding principal
amount of the Class A Notes.
"Class B Noteholders' Percentage" means (i) as long as the Pool Balance
is greater than $82,663,946 and the Cumulative Net Loss Ratio is less than
3%, 100% minus the Class A Noteholders' Percentage (if any Class A Notes are
outstanding), and (ii) from and after the first to occur of (x) the date on
which the Pool Balance is less than or equal to $82,663,946 or (y) the date
on which the Cumulative Net Loss Ratio equals or exceeds 3%, 0%; provided,
that
3
<PAGE>
after the Distribution Date on which the Class A Notes are paid in full, the
Class B Noteholders' Percentage shall equal 100%.
"Class B Noteholders' Principal Distributable Amount" means, with respect
to any Distribution Date with respect to the Amortization Period, the Class B
Noteholders' Percentage of the Principal Distribution Amount.
"Class B Note Interest Rate" has the meaning assigned to such term in the
Indenture.
"Closing Date" means May 30, 1997.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.01.
"Collection Period" means, with respect to the first Distribution Date,
the calendar month ending on and including May 31, 1997 and, with respect to
each subsequent Distribution Date, the immediately preceding calendar month.
Any amount stated "as of the close of business on the last day of a
Collection Period" shall give effect to the following calculations as
determined as of the end of the day on such last day: (1) all applications of
collections and (2) all distributions to be made on the following
Distribution Date.
"Collections" means all payments received by the Servicer in respect of
any Receivable, other than Excluded Amounts.
"Commission" means the Securities and Exchange Commission.
"Component Lien" means any Lien, to the extent that it secures the
payment or performance of any Component Receivable (including the ownership
or security interest of the lessor pursuant to any lease transaction that is
a Component Receivable).
"Component Receivable" has the meaning specified in the definition of
the term "Master Receivable Agreement" in this Section 1.01.
"Contract" means, with respect to any Receivable, a commercial loan
contract or an equipment finance lease contract, secured by commercial and/or
industrial equipment, and shall include any amendment or modification of such
Contract and, with respect to Included Component Receivables, shall include
only those schedules and promissory notes that constitute the Included
Component Receivable, and the Master Receivable Agreement solely to the
extent incorporated in the Included Component Receivable.
"Contribution and Sale Agreement" means the Contribution and Sale
Agreement dated as of May 1, 1997 between the Transferor and MCC, as the same
may be amended from time to time.
4
<PAGE>
"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 Agreement is
located at 450 West 33 Street, 15th Floor, New York, New York 10001, except
that for purposes of Section 3.02 of the Indenture, such term shall mean the
office or agency of the Indenture Trustee in the Borough of Manhattan, the
City of New York which office at the date hereof is located at 450 West 33
Street, 15th Floor, New York, New York; or at such other address as the
Indenture Trustee may designate from time to time by notice to the
Noteholders, the Owner Trustee and the Transferor, or the principal corporate
trust office of any successor Indenture Trustee (the address of which the
successor Indenture Trustee will notify the Noteholders, the Owner Trustee
and the Transferor); provided, that for purposes of Section 3.02 of the
Indenture, the address of any such office shall be in the Borough of
Manhattan in the City of New York.
"Cumulative Net Loss Ratio" means the percentage equivalent of a
fraction, the numerator of which is the excess, if any, of the cumulative
aggregate Realized Losses for each Collection Period from the Closing Date
over the sum of (a) the cumulative aggregate Liquidation Proceeds for each
Collection Period from the Closing Date and (b) the cumulative aggregate
Recoveries for each Collection Period from the Closing Date, and the
denominator of which is the Initial Pool Balance.
"Cut-off Date" means, as applicable, the Initial Cut-off Date and each
Subsequent Cut-off Date.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments, readjustment of debt, marshalling of assets or
similar debtor relief laws of the United States or any state from time to
time in effect, affecting the rights of creditors generally.
"Defaulted Receivable" means any Receivable as to which all or any
portion of any unpaid Scheduled Payment has been charged off as uncollectible
on the Receivable Management System in accordance with the Servicer's
customary and normal collection and servicing procedures or as to which the
Servicer has repossessed the related Financed Equipment; provided, however,
that the Servicer shall charge off a Receivable as uncollectible on the
Receivable Management System no later than the date on which such Receivable
becomes 180 days delinquent. A Receivable shall become a Defaulted
Receivable on the earlier to occur of (a) the date on which such Receivable
is recorded as charged off as uncollectible on the Receivable Management
System or (b) the date that the Servicer has repossessed the related Financed
Equipment.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to items of the Trust Account Property that constitute
"instruments" within the meaning of Section 9-105(a)(i) of the UCC (other
than Certificated Securities), transfer thereof to the Indenture Trustee by
physical delivery to the Indenture Trustee, endorsed to, or registered in
the name of, the Indenture Trustee or its nominee in its capacity as
5
<PAGE>
Indenture Trustee or endorsed in blank (with any intervening endorsements
necessary to provide a complete chain of endorsement); and such additional
or alternative procedures as may hereafter become appropriate to effect the
complete transfer of ownership of any such item of the Trust Account
Property to the Indenture Trustee free and clear of any adverse claims,
consistent with changes in applicable law or regulations or the
interpretation thereof, and the Issuer agrees to do or take all actions (or
omit from taking actions) in order to make all transfers contemplated
hereby valid under applicable law, including, without limitation, deliver
to the Indenture Trustee any endorsements, documents or instruments which
may be necessary or appropriate to transfer any such item of the Trust
Account Property to the Indenture Trustee;
(b) with respect to an item of the Trust Account Property that is a
Certificated Security, transfer thereof:
(i) by physical delivery of such Certificated Security to
the Indenture Trustee, provided that if the Certificated Security is in
registered form, it shall be endorsed to, or registered in the name of, the
Indenture Trustee or endorsed in blank (with any intervening endorsements
necessary to provide a complete chain of endorsement);
(ii) by physical delivery of such Certificated Security to a
"financial intermediary" (as defined in Section 8-313(4) of the UCC) of the
Indenture Trustee specially endorsed to or issued in the name of the
Indenture Trustee (with any intervening endorsements necessary to provide a
complete chain of endorsement);
(iii) by the sending by a financial intermediary, not a
"clearing corporation" (as defined in Section 8-102(3) of the UCC), of a
confirmation of the purchase by such financial intermediary of and the
making by such financial intermediary of entries on its books and records
identifying as belonging to the Indenture Trustee of (A) a specific
Certificated Security in the financial intermediary's possession, (B) a
quantity of securities that constitute or are part of a fungible bulk of
Certificated Securities in the financial intermediary's possession, or (C)
a quantity of securities that constitute or are part of a fungible bulk of
securities shown on the account of the financial intermediary on the books
of another financial intermediary; or
(iv) by the making by a clearing corporation of appropriate
entries on its books reducing the appropriate securities account of the
transferor and increasing the appropriate securities account of the
Indenture Trustee, or a financial intermediary acting on its behalf, by the
amount of such Certificated Security, provided that in each case: (A) the
clearing corporation identifies such Certificated Security on its books and
records for the sole and exclusive account of the Indenture Trustee or such
financial intermediary, (B) such Certificated Security shall be subject to
the clearing corporation's exclusive control, (C) such Certificated
Security is endorsed in blank or registered in the name of the clearing
corporation or a custodian bank or a nominee of either of them, (D) custody
of such Certificated Security shall be maintained by such clearing
corporation or any other "custodian" (as defined in Section 8-102(4) of the
UCC) or the nominee of either subject
6
<PAGE>
to the control of the clearing corporation, (E) such Certificated Security
is shown on the account of the transferor thereof on the books of the
clearing corporation prior to the making of such entries, and (F) if such
security is reflected in the account of a financial intermediary for the
Indenture Trustee, the confirmation described in paragraph (b)(iii)
hereinabove shall be provided to the Indenture Trustee;
and such additional or alternative procedures as may be or may hereafter
become appropriate to effect the complete transfer of ownership of any such
item of the Trust Account Property to the Indenture Trustee free and clear of
any adverse claims, consistent with applicable law or regulations or changes
therein or the interpretation thereof, and the Issuer agrees to do or take
all actions (or omit from taking actions) in order to make all transfers
contemplated hereby valid under applicable law, including, without
limitation, deliver to the Indenture Trustee any endorsements, documents or
instruments which may be necessary or appropriate to transfer any such item
of the Trust Account Property to the Indenture Trustee;
(c) with respect to any United States Securities Entitlement held through
the Federal Reserve System pursuant to Federal book-entry regulations,
compliance with the following procedures, all in accordance with applicable
law, including applicable federal regulations and Articles 8 and 9 of the
UCC:
(i) book-entry registration of such property to an
appropriate book-entry account maintained with a Federal Reserve Bank by a
securities intermediary which is also a "depositary" pursuant to applicable
federal regulations and issuance by such depositary of a deposit advice or
other written confirmation of such book-entry registration to the Indenture
Trustee, or to a financial intermediary for the Indenture Trustee, of the
purchase by the financial intermediary on behalf of the Indenture Trustee
(or a financial intermediary for the Indenture Trustee) of such United
States Securities Entitlement;
(ii) the making by such depositary of entries in its books
and records identifying such United States Securities Entitlement held
through the Federal Reserve System as belonging to the Indenture Trustee
and indicating that such depositary holds such United States Securities
Entitlement solely as agent for the Indenture Trustee (or a financial
intermediary for the Indenture Trustee);
(iii) the sending by such depositary to the Indenture Trustee
of the confirmation described in paragraph (b)(iii) of this definition (or
to a financial intermediary for the Indenture Trustee and the sending of
such confirmation to the Indenture Trustee by such financial intermediary);
and
(iv) such additional or alternative procedures as may be or may
hereafter become appropriate to effect complete transfer of ownership of
any such item of the Trust Account Property to the Indenture Trustee free
of any adverse claims, consistent with applicable law or regulations or
changes therein or the interpretation thereof, and the Issuer agrees to do
or take all actions (or omit from taking actions) in order to make all
transfers contemplated hereby valid under applicable law, including,
without limitation, deliver to the
7
<PAGE>
Indenture Trustee any endorsements, documents or instruments which may be
necessary or appropriate to transfer any such item of the Trust Account
Property to the Indenture Trustee;
(d) with respect to any item of the Trust Account Property that is an
"uncertificated security" (as defined in Section 8-102(1)(b) of the UCC)
and that is not governed by clause (c) above, transfer thereof:
(i) by delivery to the Indenture Trustee of a written
statement from the issuer thereof describing such security, identifying the
amount thereof transferred and the date of transfer, and confirming the
registration of the transfer thereof to the Indenture Trustee or its
nominee, on the books and records of the issuer thereof;
(ii) by the sending of a confirmation by a financial
intermediary of the purchase by such financial intermediary, and the making
by such financial intermediary of entries on its books and records
identifying as belonging to the Indenture Trustee, of (A) a quantity of
securities which constitute or are part of a fungible bulk of
uncertificated securities registered in the name of the financial
intermediary or (B) a quantity of securities which constitute or are part
of a fungible bulk of securities shown on the account of the financial
intermediary on the books of another financial intermediary; or
(iii) by the making by a clearing corporation of appropriate
entries on its books reducing the appropriate account of the transferor and
increasing the account of the Indenture Trustee (or a financial
intermediary for the Indenture Trustee) by the amount of such
uncertificated security, provided that in each case: (A) the clearing
corporation identifies on its books and records such uncertificated
security for the sole and exclusive use of the Indenture Trustee (or such
financial intermediary designated by the Indenture Trustee), (B) such
uncertificated security is registered in the name of the clearing
corporation or a custodian bank or a nominee of either, (C) such
uncertificated security is shown on the account of the transferor on the
books of the clearing corporation prior to the making of such entries, and
(D) if such security is shown on the books of such clearing corporation for
the account of a financial intermediary for the Indenture Trustee, a
confirmation described in paragraph (b)(iii) hereinabove shall be sent to
the Indenture Trustee;
and such additional or alternative procedures as may be or may hereafter
become appropriate to effect the complete transfer of ownership of any such
item of the Trust Account Property to the Indenture Trustee free and clear of
any adverse claims, consistent with applicable law or regulations or changes
therein or the interpretation thereof, and the Issuer agrees to do or take
all actions (or omit from taking actions) in order to make all transfers
contemplated hereby valid under applicable law, including, without
limitation, deliver to the Indenture Trustee any endorsements, documents or
instruments which may be necessary or appropriate to transfer any such item
of the Trust Account Property to the Indenture Trustee; and
8
<PAGE>
(e) in each case of Delivery contemplated herein, the Indenture Trustee
shall make appropriate notations on its records, and shall cause same to be
made on the records of its nominees, if any, indicating that such securities
are held in trust pursuant to and as provided in this Indenture.
"Determination Date" means, with respect to any Distribution Date, the
second Business Day prior to such Distribution Date.
"Discounted Receivable" means a Subsequent Receivable that the Transferor
discounts pursuant to Section 2.06.
"Distribution Date" means the 20th day of each calendar month or, if such
day is not a Business Day, the immediately following Business Day, commencing
on June 20, 1997.
"Early Amortization Event" has the meaning assigned thereto in Section
9.01.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution shall have a credit
rating from each Rating Agency in one of its generic rating categories which
signifies investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee or the Owner Trustee, so long as it is a paying agent under
the Indenture, or such other institution acceptable to the Rating Agencies,
or (b) a depository institution (excluding the Servicer or any of its
Affiliates) organized under the laws of the United States of America or any
one of the states thereof or the District of Columbia (or any domestic branch
of a foreign bank) (i)(A) which has either (1) a long-term unsecured debt
rating of AAA or better by Standard & Poor's and Aaa or better by Moody's or
(2) a short-term unsecured debt rating or a certificate of deposit rating of
A-1+ by Standard & Poor's and P-1 or better by Moody's, or any other
long-term, short-term or certificate of deposit rating acceptable to the
Rating Agencies and (B) whose deposits are insured by the FDIC or (ii)(A) the
parent of which has a long-term or short-term unsecured debt rating
acceptable to the Rating Agencies and (B) whose deposits are insured by the
FDIC. If so qualified, the Indenture Trustee or the Owner Trustee may be
considered an Eligible Institution for the purposes of clause (b) of this
definition.
"Eligible Investments" mean book-entry securities, negotiable instruments
or securities (other than any such instrument or security issued by MCC or
any of its Affiliates) represented by instruments in bearer or registered
form or United States Securities Entitlements which evidence:
(a) direct obligations of, and obligations fully guaranteed as to timely
payment by, the United States of America;
9
<PAGE>
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or
State banking or depository institution authorities; provided, however,
that at the time of the investment or contractual commitment to invest
therein, the commercial paper or other short-term unsecured debt
obligations (other than such obligations the rating of which is based on
the credit of a Person other than such depository institution or trust
company) thereof shall have a credit rating from each Rating Agency in the
highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or contractual
commitment to invest therein, a rating from each Rating Agency in the
highest investment category granted thereby;
(d) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(e) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of America or any
agency or instrumentality thereof the obligations of which are backed by
the full faith and credit of the United States of America, in either case
entered into with (i) a depository institution or trust company (acting as
principal) described in clause (b) or (ii) a depository institution or trust
company the deposits of which are insured by FDIC; or
(f) investments in money market funds (including those of the Indenture
Trustee or its affiliates) rated AAA-m or AAA-mg by Standard & Poor's and
P-1 by Moody's or otherwise approved in writing by each Rating Agency;
provided, however, that investments in this clause (f) must be disposed of
(i) with respect to any money market funds of the Indenture Trustee, only
on the Business Day immediately preceeding the Distribution Date relating
to the Monthly Period in which such investment is made by the Trust, (ii)
with respect to any money market funds of a Person other than the Indenture
Trustee, only on the Business Day immediately preceding the Distribution
Date relating to the Monthly Period in which such investment is made by the
Trust; or
(g) any other investment permitted by each of the Rating Agencies.
"Excluded Amounts" means (i) any payments received from an Obligor in
connection with any insurance premiums or fees, or Taxes or other charges
imposed by any Governmental Authority, (ii) any indemnity payments made by an
Obligor pursuant to any Receivable, (iii) any Make-Whole Amount and (iv) all
Late Fees, extension fees, and other incidental charges (from whatever
source) collected with respect to any Receivable.
"Excluded Component Receivable" means any Component Receivable that is
not a Receivable.
10
<PAGE>
"Farm Credit Entitlement" means a "Security Entitlement" as defined in 12
C.F.R. Section 615.5450.
"Farm Credit Intermediary" means a "Securities Intermediary" as defined
in 12 C.F.R. Section 615.5450 whose jurisdiction for purposes of 12 C.F.R.
Section 615.5453 with respect to the related Farm Credit Entitlement is the
State of New York.
"FHL Bank Entitlement" means a "Security Entitlement" as defined in 12
C.F.R. Section 912.1.
"FHL Bank Intermediary" means a "Securities Intermediary" as defined in
12 C.F.R. Section 912.1 whose jurisdiction for purposes of 12 C.F.R. Section
912.3 with respect to the related FHL Bank Entitlement is the State of New
York.
"Final Scheduled Distribution Date" means the May 2008 Distribution Date.
"Financed Equipment" means all goods, equipment or other property which
secure the payment or performance of a Receivable which were directly or
indirectly acquired with the proceeds of such Receivable, or in the case of a
lease transaction, are leased by the Obligor in connection with such
Receivable.
"Funding Corporation Entitlement" means a "Security Entitlement" as
defined in 12 C.F.R. Section 1511.1.
"Funding Corporation Intermediary" means a "Securities Intermediary" as
defined in 12 C.F.R. Section 1511.1 whose jurisdiction for purposes of 12
C.F.R. Section 1511.3 with respect to the related Funding Corporation
Entitlement is the State of New York.
"Governmental Authority" means the United States of America, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Holder" or "Noteholder" has the meaning assigned to such term in Section
1.01 of the Indenture.
"HUD Entitlement" means a "Security Entitlement" as defined in 24 C.F.R.
Section 81.2.
"HUD Intermediary" means a "Securities Intermediary" as defined in 24
C.F.R. Section 81.2 whose jurisdiction for purposes of 12 C.F.R. Section
81.92 with respect to the related HUD Entitlement is the State of New York.
"Included Component Receivable" means any Component Receivable that is a
Receivable.
"Indenture" means the Indenture dated as of May 1, 1997 between the
Issuer and the Indenture Trustee, as the same may be amended and supplemented
from time to time.
11
<PAGE>
"Indenture Trustee" means The Chase Manhattan Bank, in its capacity as
trustee under the Indenture, its successors in interest and any successor
trustee under the Indenture.
"Initial Cut-off Date" means, with respect to the Initial Receivables,
May 1, 1997.
"Initial Pool Balance" means the Pool Balance as of the Initial Cut-off
Date, which is $330,665,783.
"Initial Receivable" means each loan or lease Contract, including any
Included Component Receivable, which is identified in the initial Schedule of
Receivables delivered to the Owner Trustee and the Indenture Trustee on or
prior to the Closing Date pursuant to Section 2.01.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property 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 for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or (b) the commencement by such Person 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 such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
for such Person or for any substantial part of its property, or the making by
such Person of any general assignment for the benefit of creditors, or the
failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.
"Insurance Policy" means any insurance policy maintained by an Obligor
(or on an Obligor's behalf by the Servicer) covering physical damage to the
Financed Equipment relating to any Receivable or the related Obligor's
ability to make Scheduled Payments pursuant to such Receivable.
"Insurance Proceeds" means all payments made to the Servicer under an
Insurance Policy in respect of or in lieu of any amount that has or may
become due pursuant to any Receivable, including any such amount received in
respect of any Scheduled Payment.
"Interest Payment Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Investment Earnings" means, with respect to any Distribution Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the Collection Account on
such Distribution Date pursuant to Section 5.01(b).
12
<PAGE>
"Issuer" means MetLife Capital Equipment Loan Trust 1997-A.
"Late Fees" means any interest or other amounts assessed by MCC and paid
by an Obligor in excess of the Scheduled Payment due to the delinquency of
such Scheduled Payment.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind with respect to any Receivable other than mechanics'
liens and any liens which attach to such Receivable by operation of law as a
result of any act or omission by the related Obligor.
"Liquidation Proceeds" means, with respect to any Defaulted Receivable,
the moneys collected in respect thereof, from whatever source (including any
Insurance Proceeds) during the Collection Period in which such Receivable
became a Defaulted Receivable, net of the sum of any amounts expended by the
Servicer in connection with such liquidation and any amounts required by law
to be remitted to the Obligor on such Defaulted Receivable.
"Make-Whole Amount" means, with respect to any prepayment, the amount, if
any, by which the amount required (by the Contract evidencing such
Receivable, as in effect on the applicable Cut-off Date) to be paid by the
Obligor in connection with a prepayment exceeds the sum of (i) the Scheduled
Principal Payments that are the subject of such prepayment and (ii) any
accrued and unpaid interest on such Receivable.
"Master Receivable Agreement" means any agreement or series of agreements
(including an agreement as to which an Obligor has entered into multiple
schedules or promissory notes) pursuant to which MCC has entered or has the
right to enter into more than one loan and/or lease transaction (as lender or
lessor) with a single Obligor (each of which transactions is referred to as a
"Component Receivable"), at any time when
(a) at least one Component Receivable is a Receivable which is part of the
Trust Estate,
(b) at least one Component Receivable is not a Receivable that is part of
the Trust Estate, and
(c) (i) such Obligor's obligations pursuant to at least one Component
Receivable that is described in clause (a) above are secured by assets
directly or indirectly acquired with the proceeds of, or leased by such
Obligor as the lessee pursuant to, at least one Component Receivable that
is described in clause (b) above, or
(ii) such Obligor's obligations pursuant to at least one Component
Receivable that is described in clause (b) above are secured by assets
directly or indirectly acquired with the proceeds of, or leased by such
Obligor as the lessee pursuant to, at least one Component Receivable that
is described in clause (a) above.
"Master Receivable Collateral" means any asset that secures the payment
or performance of one or more Component Receivables or any asset leased to
the Obligor pursuant to any lease transaction that is a Component Receivable.
13
<PAGE>
"MCC" means MetLife Capital Corporation, a Delaware corporation.
"Monthly Class A Note Interest" means, with respect to any Distribution
Date, an amount equal to one-twelfth of the product of (a) the Class A Note
Interest Rate and (b) the outstanding principal balance of the Class A Notes
as of the close of business on the preceding Distribution Date after giving
effect to all payments of principal made to the Class A Noteholders on such
preceding Distribution Date; provided, however, that with respect to the
first Distribution Date, interest on the outstanding principal balance of the
Class A Notes will accrue from and including the Closing Date to but
excluding the June 1997 Distribution Date and will be calculated on the basis
of a 360-day year of twelve 30-day months.
"Monthly Class B Note Interest" means, with respect to any Distribution
Date, an amount equal to one-twelfth of the product of (a) the Class B Note
Interest Rate and (b) the outstanding principal balance of the Class B Notes
as of the close of business on the preceding Distribution Date after giving
effect to all payments of principal made to the Class B Noteholder on such
preceding Distribution Date; provided, however, that with respect to the
first Distribution Date, interest on the outstanding principal balance of the
Class B Notes will accrue from and including the Closing Date to but
excluding the June 1997 Distribution Date and will be calculated on the basis
of a 360-day year of twelve 30-day months.
"Moody's" means Moody's Investors Service, Inc., or its successor.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Note Register" and "Note Registrar" have the meanings specified in
Section 2.04 of the Indenture.
"Noteholders' Class A Interest Carryover Shortfall" means, with respect
to any Distribution Date, the sum of (a) the excess of (i) the sum of (A) the
Monthly Class A Note Interest for the preceding Distribution Date and (B) any
outstanding Noteholders' Class A Interest Carryover Shortfall on such
preceding Distribution Date, over (ii) the amount in respect of interest that
is actually deposited in the Note Distribution Account on such preceding
Distribution Date and allocated to the Class A Notes for such Distribution
Date, plus (b) interest on the amount of interest due but not paid to the
Class A Noteholders on the preceding Distribution Date, to the extent
permitted by law, at the Class A Note Interest Rate from and including such
preceding Distribution Date to but excluding the current Distribution Date.
"Noteholders' Class A Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of (a) the Monthly Class A Note Interest
for such Distribution Date and (b) the Noteholders' Class A Interest
Carryover Shortfall for such Distribution Date.
"Noteholders' Class B Interest Carryover Shortfall" means, with respect
to any Distribution Date, the sum of (a) the excess of (i) the sum of (A) the
Monthly Class B Note Interest for the preceding Distribution Date and (B) any
outstanding Noteholders' Class B Interest Carryover
14
<PAGE>
Shortfall on such preceding Distribution Date, over (ii) the amount in
respect of interest that is actually deposited in the Note Distribution
Account on such preceding Distribution Date and allocated to the Class B
Notes for such Distribution Date, plus (b) interest on the amount of interest
due but not paid to the Class B Noteholder on the preceding Distribution
Date, to the extent permitted by law, at the Class B Note Interest Rate from
and including such preceding Distribution Date to but excluding the current
Distribution Date.
"Noteholders' Class B Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of (a) the Monthly Class B Note Interest
for such Distribution Date and (b) the Noteholders' Class B Interest
Carryover Shortfall for such Distribution Date.
"Notes" means the Class A Notes and the Class B Notes, collectively.
"Notes of a Class" or "Class of Notes" means all Notes included in Class
A Notes or all Notes included in Class B Notes, whichever is appropriate.
"Obligor" with respect to any Receivable means any Person which is an
obligor, lessee or guarantor thereof; provided, that in no event shall MCC or
the Transferor be construed to be the Obligor with respect to any Receivable
due to the application of Section 3.02 or Section 4.07, as applicable.
"Obligor Over-concentration Amount" means, with respect to any Obligor as
of any date of determination, an amount equal to the product of (a) the
positive difference, if any, by which (i) the percentage equivalent of a
fraction, the numerator of which is the aggregate of the Principal Balance of
each Receivable relating to such Obligor as of such date of determination and
the denominator of which is the Pool Balance as of such date of determination
exceeds (ii) 1.5% and (b) the Pool Balance as of such date of determination.
"Officers' Certificate" of any Person means a certificate on behalf of
such Person that is signed by any Vice President or more senior officer of
such Person and states that the certifications set forth in such certificate
are based upon the results of a due inquiry into the matters in question
conducted by or under the supervision of the signing officer and that the
facts stated in such certifications are true and correct to the best of the
signing officer's knowledge.
"Opinion of Counsel" means one or more written opinions of counsel who
may be an employee of or counsel to the Transferor or the Servicer, which
counsel shall be acceptable to the Indenture Trustee, the Owner Trustee
and/or the Rating Agencies, as applicable.
"Outstanding" has the meaning assigned to such term in Section 1.01 of
the Indenture.
"Outstanding Amount" means the aggregate principal amount of all Notes,
or a Class of Notes, as applicable, Outstanding at the date of determination.
"Owner" means GSS Holdings, Inc., as holder of the certificate of
beneficial ownership issued by the Trust.
15
<PAGE>
"Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.
"Owner Trustee" means Wilmington Trust Company in its capacity as Owner
Trustee under the Trust Agreement, its successors in interest and any
successor owner trustee under the Trust Agreement.
"Permitted Lien" means (i) any Component Lien, to the extent it secures
an Excluded Component Receivable, and (ii) any Lien for municipal or other
local Taxes and other governmental charges, so long as either (x) such Taxes
or governmental charges are not at the time due and payable or (y) the
Transferor or MCC is then contesting the validity of any such Taxes or
charges in good faith by appropriate proceedings and there has been set aside
on the appropriate entity's books any reserve that is required under
generally accepted accounting principles with respect to such Taxes or
charges.
"Pool Balance" means, at any time, the sum of (a) the aggregate of the
Principal Balances of the Receivables at the end of the preceding Collection
Period, after giving effect to (i) all payments received from or for the
credit of Obligors and Acquisition Amounts remitted by the Transferor or the
Servicer, as the case may be, for such Collection Period, and (ii) all
Realized Losses on Defaulted Receivables during such Collection Period and
(b) with respect to any date of determination during the Revolving Period,
the sum of the Principal Funding Account Balance at such time and, if such
date of determination is prior to the Distribution Date in the current
Collection Period, the Available Principal Amount with respect to such
preceding Collection Period on deposit in the Collection Account.
"Prepayment Proceeds" means all Collections that constitute part of any
prepayment.
"Principal Balance" of a Receivable, as of the close of business on the
last day of a Collection Period or as of the applicable Cut-off Date, as
applicable, means the aggregate amount of all Scheduled Principal Payments
that have not been received by the Servicer (including all Scheduled
Principal Payments that are then due and payable), calculated as of the
related Cut-off Date or as of the end of the preceding Collection Period, as
applicable; provided, however, that the Principal Balance of Discounted
Receivables will be the discounted Principal Balance specified on the
Schedule of Receivables; and provided further, however, that the Principal
Balance of each Defaulted Receivable is zero.
"Principal Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication: (i) that portion
of all Collections on the Receivables allocable to principal with respect to
the preceding Collection Period; (ii) the amount of Realized Losses with
respect to the preceding Collection Period (except to the extent included in
clause (iii) below), (iii) the Principal Balance of each Receivable that the
Servicer became obligated to acquire or that the Transferor became obligated
to reacquire with respect to the preceding Collection Period (except to the
extent included in clause (i) above) and (iv) the aggregate amount of all
Principal Distribution Amounts with respect to prior Distribution Dates that
have not previously been deposited into the Principal Funding Account on
previous Distribution Dates.
16
<PAGE>
"Principal Funding Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Principal Funding Account Balance" means, as of any date of
determination, the principal amount on deposit in the Principal Funding
Account.
"Quality Code" means, with respect to each Receivable, the numeric code
assigned to such Receivable by the Servicer in accordance with the Servicer's
customary and usual procedures for measuring credit quality of loan and lease
contracts substantially similar to the Receivables.
"Rating Agencies" means Moody's and Standard & Poor's. If no such
organization or successor is in existence, "Rating Agency" shall be a
nationally recognized statistical rating organization or other comparable
Person designated by the Transferor, notice of which designation shall be
given to the Indenture Trustee, the Owner Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have notified the Transferor, the Servicer, the Owner
Trustee and the Indenture Trustee in writing that such action will not result
in a reduction or withdrawal of the then current rating of the Class A Notes.
"Realized Loss" means, with respect to any Collection Period, for any
Receivable which became a Defaulted Receivable during such Collection Period,
the Principal Balance of such Defaulted Receivable.
"Receivable" means each Initial Receivable and each Subsequent
Receivable; provided, that from and after the date on which a Receivable
becomes an Acquired Receivable, such Acquired Receivable will no longer be a
Receivable.
"Receivable Files" means the written agreements (including, as
applicable, schedules, subschedules, supplements, amendments, modifications
and renewals thereof or thereto), note(s), security agreement(s) and other
instruments and documents relating to the Receivables.
"Receivable Management System" means the computerized electronic
Receivable Management System maintained by MCC for all Receivables and other
assets similar to the Receivables.
"Recoveries" means, with respect to any Defaulted Receivable (a) monies
collected in respect thereof, from whatever source, (including Insurance
Proceeds) during any Collection Period following the Collection Period in
which such Receivable became a Defaulted Receivable, net of (b) the sum of
any out-of-pocket costs and expenses of collection (including attorneys fees
and expenses deducted therefrom) expended by the Servicer in connection with
such Defaulted Receivable and any amounts required by law to be remitted to
the Obligor.
"Related Property" means all right, title and interest of the Transferor
in, to and under (a) the Financed Equipment, (b) any proceeds with respect to
the Receivables from claims on any
17
<PAGE>
physical damage, credit life or disability insurance policies covering
Financed Equipment or Obligors with respect to Financed Equipment, as the
case may be, (c) the Contribution and Sale Agreement and (d) the proceeds of
any of the foregoing.
"Remaining Available Principal Amounts" has the meaning assigned thereto
in Section 5.04(b)(iii).
"Remaining Residual Amount" means, with respect to any non-tax oriented
operating lease as of any date of determination, that portion of the
aggregate amount initially financed with respect to such lease the repayment
of which is not guaranteed by the terms of the contract, as such amount is
reduced from time to time in accordance with the terms of the related
Contract.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.01(a).
"Reserve Account Initial Deposit" means the initial deposit by the
Transferor on the Closing Date of $5,088,828.
"Revolving Period" means the period commencing on the Initial Cut-off
Date and ending on the day immediately preceding the commencement of the
Amortization Period.
"Sallie Mae Entitlement" means a "Security Entitlement" as defined in 24
C.F.R. Section 354.1.
"Sallie Mae Intermediary" means a "Securities Intermediary" as defined in
24 C.F.R. Section 81.2 whose jurisdiction for purposes of 12 C.F.R. Section
81.92 with respect to the related Sallie Mae Entitlement is the State of New
York.
"Schedule of Receivables" means each schedule of Receivables delivered to
the Owner Trustee and the Indenture Trustee (as supplemented from time to
time to reflect Subsequent Receivables and Acquired Receivables) marked as
Schedule A to this Agreement and incorporated into and made a part of this
Agreement.
"Scheduled Interest Payment" means, with respect to any Receivable, that
portion of the regularly scheduled payment required to be paid in accordance
with the terms and conditions of such Receivable as in effect on the
applicable Cut-off Date that is allocable to interest.
"Scheduled Payment" on a Receivable means the Scheduled Principal Payment
or Scheduled Interest Payment for such Receivable.
"Scheduled Principal Payment" means, with respect to any Receivable, that
portion of the regularly scheduled payment required to be paid in accordance
with the terms and conditions of such Receivable as in effect on the
applicable Cut-off Date (other than by reason of acceleration of such
Scheduled Principal Payment in connection with a default under such
Receivable or any other event that causes a payment to become due prior to
its scheduled payment date pursuant to the terms of such Receivable as in
effect on the applicable Cut-off Date) that is allocable to
18
<PAGE>
principal; provided, however, that the Scheduled Principal Payments of
Discounted Receivables shall be reduced by the amount specified by the
Transferor on the Schedule of Receivables delivered to the Owner Trustee and
the Indenture Trustee on the related Transfer Date.
"Scheduled Revolving Period Termination Date" means September 1, 2000.
"Servicer" means MCC, as the servicer of the Receivables, and each
successor to MCC (in the same capacity) pursuant to Section 7.03 or 8.02.
"Servicer Default" means an event specified as such in Section 8.01.
"Servicer's Certificate" means an Officers' Certificate of the Servicer
delivered pursuant to Section 4.09, substantially in the form of Schedule C
or in such other form that is acceptable to the Indenture Trustee, the Owner
Trustee and the Servicer.
"Servicer Termination Event" means an event specified as such in Section
8.01.
"Servicer's Yield" means, with respect to any Receivable, (i) any
indemnity payments made by an Obligor pursuant to a Receivable (ii) any
Make-Whole Amount and (iii) all Late Fees, extension fees and other
incidental charges (from whatever source) collected with respect to any
Receivable.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during the respective Collection Period, determined pursuant to
Section 4.08.
"Servicing Fee Rate" means 0.5% per annum.
"Specified Reserve Account Balance" with respect to any Distribution Date
means the sum of (a) 1% of the Initial Pool Balance and (b) the sum, without
duplication, of (i) the aggregate of all Remaining Residual Amounts as of the
close of business on the last day of the preceding Collection Period and (ii)
the aggregate of all Obligor Over-concentration Amounts as of the close of
business on the last day of the preceding Collection Period; provided,
however, that the Specified Reserve Account Balance shall not exceed the
Outstanding Amount of the Class A Notes.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc., or its successor.
"Subsequent Cut-off Date" means, with respect to any Transfer Date for
any Subsequent Receivables, the last day of the immediately preceding
Collection Period.
"Subsequent Receivable" means each loan or lease Contract, including any
Included Component Receivable, which is identified in a Schedule of
Receivables to the related Subsequent Transfer Assignment delivered to the
Owner Trustee and the Indenture Trustee pursuant to Section 2.02.
19
<PAGE>
"Subsequent Transfer Assignment" has the meaning assigned thereto in
Section 2.02.
"Tax" with respect to any Person means each tax, assessment or other
governmental charge or levy imposed upon such Person, its income, any
transaction in which it engages, or any of its properties, franchises or
assets.
"Transfer Date" has the meaning assigned thereto in Section 2.02.
"Transferor" means MetLife Capital Funding Corp. III, a Delaware
corporation, and its successors in interest to the extent permitted hereunder.
"Treasury Entitlement" means a "Security Entitlement" as defined in 31
C.F.R. Section 357.2.
"Treasury Intermediary" means a "Securities Intermediary" as defined in
31 C.F.R. Section 357.2 whose jurisdiction for purposes of 31 C.F.R. Section
357.11 with respect to the related Treasury Entitlement is the State of New
York.
"Trust" means the Issuer.
"Trust Accounts" has the meaning assigned thereto in Section 5.01(b).
"Trust Account Property" means the Trust Accounts, all monies,
instruments, securities, documents and other property held in or credited to
any Trust Account from time to time (whether in the form of deposit accounts,
Physical Property, book-entry securities, uncertificated securities, United
States Securities Entitlements or otherwise), including the Reserve Account
Initial Deposit, and all proceeds of the foregoing.
"Trust Agreement" means the Trust Agreement dated as of May 1, 1997,
between the Transferor and the Owner Trustee, as the same may be amended and
supplemented from time to time.
"Trust Estate" means all money, instruments, documents, securities,
general intangibles and other property that are subject or intended to be
subject to the lien and security interest of the Indenture for the benefit of
the Noteholders (including, without limitation, all property and interests
Granted (as defined in the Indenture) to the Indenture Trustee), including
all proceeds thereof.
"Trust Officer" means, (a) in the case of the Indenture Trustee, any
Officer within the Corporate Trust Office of the Indenture Trustee assigned
to administer the Indenture Trustee's duties under the Basic Documents, and
(b) with respect to the Owner Trustee, any officer in the Corporate Trustee
Administration Department of the Owner Trustee with direct responsibility for
the administration of the Trust Agreement and the Basic Documents on behalf
of the Owner Trustee.
20
<PAGE>
"Trust Yield" means, with respect to any Collection Period, the
annualized percentage equivalent of a fraction, the numerator of which is
equal to the Available Interest Amount for the related Distribution Date and
the denominator of which is equal to the Pool Balance as of the close of
business on the last day of such Collection Period.
"UCC" has the meaning assigned thereto in Section 1.01 of the Indenture.
"United States Securities Entitlement" means a Treasury Entitlement, a
HUD Entitlement, a FHL Bank Entitlement, a Funding Corporation Entitlement, a
Farm Credit Entitlement, or a Sallie Mae Entitlement.
SECTION 1.02. Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined herein have the meanings assigned to them in
the Indenture.
(b) 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.
(c) As used in this Agreement and in any certificate or other document made
or delivered pursuant hereto or thereto, 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.
(d) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules
and Exhibits in or to this Agreement unless otherwise specified; and the
term "including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
SECTION 1.03. Calculations. For all purposes of this Agreement,
interest shall be computed on the basis of a 360-day year consisting of twelve
30-day months.
21
<PAGE>
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. Conveyance of Initial Receivables. In consideration of the
Issuer's delivery to or upon the order of the Transferor of (i) $304,203,000 and
(ii) Class B Notes in the principal amount of $26,452,783, the Transferor does
hereby transfer, assign, set over and otherwise convey to the Issuer, without
recourse (subject to the obligations herein) all right, title and interest of
the Transferor in and to the following, whether now owned or hereafter acquired:
(a) all right, title and interest of the Transferor, in and to the
Initial Receivables, and all moneys (including accrued interest) due or to
become due, or received thereunder on or after the Initial Cut-off Date;
(b) the interest of the Transferor in the Trust Accounts and all
monies, instruments, documents, securities and other property held in or
credited thereto;
(c) the interest of the Transferor in the Financed Equipment granted
by Obligors pursuant to the Initial Receivables;
(d) the interest of the Transferor in any proceeds with respect to
the Initial Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Equipment or Obligors with
respect to Financed Equipment;
(e) all right, title and interest of the Transferor in and to the
Contribution and Sale Agreement, including the right of the Transferor to
cause MCC to reacquire Receivables from the Transferor under certain
circumstances, the rights of the Transferor to enforce the Contribution and
Sale Agreement and to give or withhold any and all consents, requests,
notices, directions, approvals, extensions or waivers under or with respect
to the Contribution and Sale Agreement to the same extent as the Transferor
could but for the assignment and security interest granted to the Indenture
Trustee for the benefit of the Noteholders; and
(f) the proceeds of any and all of the foregoing.
22
<PAGE>
SECTION 2.02. Conveyance of Subsequent Receivables.
(a) On or prior to the Distribution Date (x) in each month (beginning with
the June 1997 Distribution Date) during the Revolving Period and (y) if no
Early Amortization Event has occurred, in the first month with respect to
the Amortization Period, on one or more days selected by the Servicer
(each, a "Transfer Date"), the Servicer shall direct the Indenture Trustee
to reinvest Available Principal Amounts remaining on deposit in the
Principal Funding Account (after making the required deposit, if any, into
the Reserve Account) in additional loan or lease Contracts originated and
selected by MCC from its portfolio of loan and lease Contracts. Subject to
the conditions set forth in paragraph (b) below on each Transfer Date, upon
transfer of the applicable Subsequent Receivables from MCC to the
Transferor pursuant to the Contribution and Sale Agreement and payment to
the Transferor from amounts on deposit in the Principal Funding Account in
an amount equal to the Principal Balance of the Subsequent Receivables
being transferred on such date as of the related Subsequent Cut-off Date,
the Transferor hereby transfers, assigns, sets over and otherwise conveys
to the Issuer, without recourse (subject to the obligations herein) all
right, title and interest of the Transferor in and to the following,
whether then owned or thereafter acquired:
(i) all right, title and interest of the Transferor, in and to
the Subsequent Receivables listed on the related Schedule of
Receivables and all moneys (including accrued interest) due or to
become due, or received thereunder on or after the related Subsequent
Cut-off Date;
(ii) the interest of the Transferor in the Financed Equipment
granted by Obligors pursuant to such Subsequent Receivables;
(iii) the interest of the Transferor in any proceeds with respect
to such Subsequent Receivables from claims on any physical damage,
credit life or disability insurance policies covering Financed
Equipment or Obligors with respect to Financed Equipment; and
(iv) the proceeds of any and all of the foregoing.
(b) The Transferor shall transfer to the Issuer the Subsequent Receivables
and the other property and rights related thereto described in paragraph
(a) above only upon the satisfaction of each of the following conditions
precedent on or prior to the related Transfer Date:
(i) the Transferor shall have delivered to the Owner Trustee and the
Indenture Trustee a duly executed written assignment in substantially the
form of Exhibit E (the "Subsequent Transfer Assignment"), which shall
include supplements to the Schedule of Receivables listing the Subsequent
Receivables;
23
<PAGE>
(ii) the Transferor shall, to the extent required by Section
5.02, have deposited in the Collection Account all Collections in respect
of the Subsequent Receivables;
(iii) as of such Transfer Date, (A) the Transferor was not
insolvent and will not become insolvent as a result of the transfer of
Subsequent Receivables on such Transfer Date, (B) there has been no filing
of a decree or order for relief by a court having jurisdiction in the
premises in respect of the Transferor or any substantial part of its
property in an insolvency or other similar law now in effect or appointing
a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for the Transferor or for any substantial part of its
property, or ordering the winding up or liquidation of the Transferor's
affairs which remains unstayed and in effect, (C) the Transferor did not
intend to incur or believe that it would incur debts that would be beyond
the Transferor's ability to pay as such debts matured, (D) such transfer
was not made with actual intent to hinder, delay or defraud any Person and
(E) the assets of the Transferor did not constitute unreasonably small
capital to carry out its business as conducted;
(iv) the Receivables then in the Trust, including the Subsequent
Receivables to be conveyed to the Trust on such Transfer Date, shall meet
the criteria (based on the characteristics of the Initial Receivables on
the Initial Cut-off Date and the Subsequent Receivables on the respective
Subsequent Cut-off Dates) specified in Section 3.01.
(v) each of the representations and warranties made by the
Transferor pursuant to Section 3.01 with respect to the Subsequent
Receivables shall be true and correct as of such Transfer Date, and the
Transferor shall have performed all obligations to be performed by it
hereunder on or prior to such Transfer Date;
(vi) the Transferor shall, at its own expense, on or prior to such
Transfer Date, indicate in its computer files that the Subsequent
Receivables identified in the Subsequent Transfer Assignment have been
transferred to the Issuer pursuant to this Agreement and the Subsequent
Transfer Assignments;
(vii) the Transferor shall have taken any action (other than
delivery of the original Contracts) required to maintain the first
perfected ownership or security interest of the Issuer in the Trust Estate;
(viii) no selection procedures believed by the Transferor to be
adverse or beneficial to the interests of the Class A Noteholders shall
have been utilized in selecting the Subsequent Receivables; and
(ix) the Transferor shall have delivered to the Indenture Trustee
and the Owner Trustee an Officer's Certificate confirming the satisfaction
of each condition specified in this paragraph (b).
24
<PAGE>
(c) The Transferor agrees to add all loan or lease Contracts originated by
MCC to a Schedule of Receivables on or prior to each Transfer Date provided,
however, that the Transferor's obligation hereunder shall be limited to loan
or lease Contracts having an outstanding principal balance (after giving
effect to the discounting of any Discounted Receivable) of not more than the
funds available pursuant to Section 5.04(b)(ii)(A) to effect such purchase on
such Transfer Date. Nothing herein shall be deemed to require MCC to
originate any one or more loan or lease Contracts at any time.
SECTION 2.03. Closing. The conveyance of the Initial Receivables
shall take place at the offices of Orrick, Herrington & Sutcliffe LLP, 3050 K
Street, N.W., Washington, D.C. 20007, on the Closing Date, simultaneously
with the closing of the transactions contemplated by the Contribution and
Sale Agreement, the underwriting agreement related to the Class A Notes and
the other Basic Documents. Upon the acceptance by the Transferor of the
Class B Note and the proceeds of the sale of the Class A Notes on the Closing
Date, and upon the release of funds from the Principal Funding Account to the
Transferor on each Transfer Date in an amount equal to the aggregate
Principal Balance of the Subsequent Receivables being transferred on such
Transfer Date, the ownership of each Receivable transferred on such date and
the contents of the related Receivable File is vested in the Issuer, subject
only to the lien of the Indenture. Notwithstanding the foregoing, the
assignment, transfer and conveyance set forth in Section 2.01 or Section 2.02
shall not constitute and is not intended to result in the creation, or an
assumption by the Issuer of any obligation of the Transferor or any other
Person in connection with the Receivables or any Contract or under any
agreement or instrument relating thereto, including any obligation to any
Obligors or any Affiliate of or other Person to whom the Transferor may
delegate servicing duties or to insurers.
SECTION 2.04. Books and Records.
(a) In connection with the transfer, assignment, set-over and conveyance
set forth in Section 2.01 or Section 2.02, the Transferor agrees to record
and file, at its own expense, any financing statements (and continuation
statements with respect to such financing statements when applicable)
required to be filed with respect to the Receivables sold or to be sold by
the Transferor hereunder, meeting the requirements of applicable state law
in such manner and in such jurisdictions as are necessary under the
applicable UCC to perfect the transfer and assignment of the Receivables to
the Issuer, and to deliver a file-stamped copy of such financing statements
or other evidence of such filings to the Issuer on or prior to the Initial
Closing Date (excluding such continuation and similar statements, which
shall be delivered promptly after filing).
(b) In connection with the sales and conveyances hereunder, the Transferor
further agrees, at its own expense, on or prior to the Closing Date with
respect to the Initial Receivables and on or prior to the relevant Transfer
Date with respect to the Subsequent Receivables to indicate on its books
and records (including any computer files) that all of the Receivables have
been sold to the Issuer pursuant to this Agreement. The Transferor further
agrees not to alter the computer file designation referenced in this
paragraph with respect to any Receivable during the term of this Agreement
unless and until such Receivable becomes an
25
<PAGE>
Acquired Receivable. The transfer of each Receivable shall be reflected on
the Transferor's balance sheets and other financial statements prepared in
accordance with generally accepted accounting principles as a transfer of
assets by the Transferor to the Issuer. The Transferor shall be responsible
for maintaining, and shall maintain, a complete and accurate set of books
and records and computer files for each Receivable which shall be clearly
marked to reflect the ownership of each Receivable by the Issuer.
SECTION 2.05. Grant of Security Interest. In the event that the
Receivables are held to continue to be property of the Transferor, then (i)
this Agreement also shall be deemed to be and hereby is a security agreement
within the meaning of the UCC, and (ii) the conveyance by the Transferor
provided for in the Agreement shall be deemed to be and hereby is a grant by
the Transferor to the Issuer of a security interest in and to all of the
Transferor's right, title and interest in, to and under all accounts,
contract rights, general intangibles, chattel paper, instruments, documents,
money, deposit accounts, certificates of deposit, goods, letters of credit,
advices of credit, certificated securities and uncertificated securities
consisting of, arising from, or relating to the Receivables and the Related
Property, to secure the rights of the Issuer under this Agreement and the
obligations of the Transferor hereunder. The Transferor and the Issuer
shall, to the extent consistent with this Agreement, take such actions (other
than delivery of the original contracts) as may be necessary to ensure that,
if the conveyance of the Receivables and the Related Property by the
Transferor to the Issuer pursuant to this Agreement is not deemed to be a
sale, the security interest in the Receivables and the Related Property
created hereunder will be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of
this Agreement.
SECTION 2.06. Discounted Receivables. The Transferor shall have
the option, on any Transfer Date, to discount any Subsequent Receivables
being transferred to the Trust on such Transfer Date (any such Subsequent
Receivable, a "Discounted Receivable") by indicating on the Schedule of
Receivables the discounted Principal Balance and the discounted Scheduled
Principal Payments of such Discounted Receivables and the APR of such
Discounted Receivables after giving effect to such discount.
ARTICLE III
THE RECEIVABLES
SECTION 3.01. Representations and Warranties of Transferor. The
Transferor makes the following representations and warranties as to the
Receivables on which the Issuer is deemed to have relied in acquiring the
Receivables. Such representations and warranties speak as of the execution
and delivery of this agreement and as of each Transfer Date, but shall
survive the transfer and assignment of the Receivables to the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Title. It is the intention of the Transferor that the transfer and
assignment herein contemplated constitute either (i) a sale of the
Receivables or (ii) a grant of a perfected security interest therein from
the Transferor to the Issuer and that the beneficial interest
26
<PAGE>
in and title to such Receivables not be part of the debtor's estate in the
event of the filing of a bankruptcy petition by or against the Transferor
under any bankruptcy law. No Receivable has been sold, transferred,
assigned or pledged by the Transferor to any Person other than the Issuer.
Immediately prior to the transfer and assignment herein contemplated, the
Transferor had good and marketable title to each Receivable, free and clear
of all Liens and rights of others and, immediately upon the transfer
thereof, the Issuer shall have good and marketable title to each such
Receivable, free and clear of all Liens and rights of others or a first
priority perfected security interest therein; and the transfer has been
perfected, by the filing of appropriate financing statements pursuant to the
UCC, under the UCC.
(b) All Actions Taken. All actions (other than delivering the original
Contract) necessary under the applicable UCC in any jurisdiction to be
taken (i) to give the Issuer a first priority perfected security interest
or ownership interest in the Receivables, and (ii) to give the Indenture
Trustee a first priority perfected security interest therein (including,
without limitation, UCC filings with the Delaware and Washington
Secretaries of State) have been taken.
(c) Location of Receivable Files. The Receivable Files are kept at the
location specified in Schedule B hereto.
(d) No Consents Required. All approvals, authorizations, consents, orders
or other actions of any Person or of any Governmental Authority required in
connection with the execution and delivery by the Transferor of this
Agreement or any other Basic Document, the performance by the Transferor of
the transactions contemplated by this Agreement or any other Basic Document
and the fulfillment by the Transferor of the terms hereof or thereof, have
been obtained or have been completed and are in full force and effect
(other than approvals, authorizations, consents, orders or other actions
which if not obtained or completed or in full force and effect would not
have a material adverse effect on the Transferor or the Issuer or upon the
collectibility of any Receivable or upon the ability of the Transferor to
perform its obligations under this Agreement).
SECTION 3.02. Reacquisition by Transferor or MCC Upon Breach.
(a) The Transferor, the Servicer, MCC or the Owner Trustee, as the case
may be, shall inform the other parties to the Agreement, MCC and the
Indenture Trustee promptly, in writing, upon the discovery of any breach of
the Transferor's representations and warranties made pursuant to Section
3.01 or any breach of MCC's representations and warranties made pursuant to
Section 3.02(b) of the Contribution and Sale Agreement. Unless any such
breach shall have been cured by the last day of the second month following
the month of the discovery thereof by the Transferor or receipt by the
Transferor of written notice from the Owner Trustee or the Servicer of such
breach, the Transferor shall be obligated, and, if necessary, the
Transferor or the Owner Trustee shall enforce, the obligation of MCC, if
any, under Section 6.02(a) of the Contribution and Sale Agreement to
reacquire any Receivable materially and adversely
27
<PAGE>
affected by any such breach as of such last day (or, at the Transferor's
option, as of the last day of the first month following the month of the
discovery).
(b) In consideration of the reacquisition of the Receivable, the
Transferor shall remit the Acquisition Amount in the manner specified in
Section 5.03; provided, however, that the obligation of the Transferor to
reacquire any Receivable arising solely as a result of a breach of MCC's
representations and warranties pursuant to Section 3.02(b) of the
Contribution and Sale Agreement is subject to the receipt by the Transferor
of the Acquisition Amount from MCC. Subject to the provisions of Section
6.02, the sole remedy of each of the Issuer, the Owner Trustee, the
Indenture Trustee and the Noteholders with respect to a breach of
representations and warranties pursuant to Section 3.01 and the agreement
contained in this Section shall be to require the Transferor to reacquire
Receivables pursuant to this Section, subject to the conditions contained
herein, or to enforce MCC's obligation, if any, to the Transferor to
reacquire such Receivables pursuant to the Contribution and Sale Agreement.
The Owner Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the
reacquisition of any Receivable pursuant to this Section.
(c) The Issuer shall execute such documents and instruments of transfer or
assignment and take other actions as shall reasonably be requested by the
Servicer to evidence the conveyance of such Receivable pursuant to this
Section 3.02.
SECTION 3.03. Duties of Servicer.
(a) Receivable Files. The Servicer shall maintain such accurate and
complete accounts, records and computer systems pertaining to each
Receivable File as shall enable itself and the Issuer to comply with this
Agreement. In performing its duties, the Servicer shall act with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to the receivable files relating to all comparable
receivables that the Servicer services for itself or others. The Servicer
shall conduct, or cause to be conducted, periodic audits of the related
accounts, records and computer systems, in such a manner as shall enable
the Issuer or the Indenture Trustee to verify the accuracy of the
Servicer's record keeping. The Servicer shall promptly report to the
Issuer and the Indenture Trustee any failure on its part to maintain its
accounts, records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be
deemed to require an initial review or any periodic review by the Issuer,
the Owner Trustee or the Indenture Trustee.
(b) Access to Records. The Servicer shall notify the Owner Trustee and
the Indenture Trustee of any change in the location of its principal place
of business in writing not later than 90 days after any such change. The
Servicer shall make available to the Owner Trustee and the Indenture
Trustee, or their respective duly authorized representatives, attorneys or
auditors, a list of locations of the related accounts, records and computer
systems maintained by the Servicer at such times as the Owner Trustee or
the Indenture Trustee shall instruct. The Indenture Trustee shall have
access to such
28
<PAGE>
accounts, records and computer systems, after reasonable notice and during
normal business hours.
(c) Safekeeping. The Servicer shall hold on behalf of the Issuer (i) all
file stamped copies of UCC financing statements evidencing the security
interest of MCC in Financed Equipment, and (ii) any and all documents, that
MCC or the Transferor shall keep on file, in accordance with its customary
procedures, relating to a Receivable, an Obligor or Financed Equipment, and
shall maintain such accurate and complete records pertaining to each
Receivable as shall enable the Issuer to comply with this Agreement. Upon
instruction from the Indenture Trustee, the Servicer shall release any such
UCC filing or other document to the Indenture Trustee, the Indenture
Trustee's agent, or the Indenture Trustee's designee, as the case may be,
at such place or places as the Indenture Trustee may designate, as soon as
practicable.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01. Duties of Servicer. The Servicer, as agent for the
Issuer (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Acquired Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable receivables that it services for
itself or others. The Servicer's duties shall include calculating, billing,
collection and posting of all payments, responding to inquiries of Obligors
on such Receivables, investigating delinquencies, reporting tax information
to Obligors (to the extent required under the related Contracts), accounting
for collections, and furnishing monthly and annual statements to the Owner
Trustee and the Indenture Trustee with respect to distributions. Subject to
the provisions of Section 4.02, the Servicer shall follow its customary
standards, policies and procedures in performing its duties as Servicer.
Without limiting the generality of the foregoing, the Servicer is authorized
and empowered to execute and deliver, on behalf of itself, the Issuer, the
Owner Trustee, the Indenture Trustee and the Noteholders or any of them, any
and all instruments of satisfaction or cancellation, or partial or full
release or discharge, and all other comparable instruments, with respect to
such Receivables or to the Financed Equipment securing such Receivables. If
the Servicer shall commence a legal proceeding to enforce a Receivable, the
Issuer (in the case of a Receivable other than an Acquired Receivable) shall
thereupon be deemed to have automatically assigned, solely for the purpose of
collection, such Receivable to the Servicer. If in any enforcement suit or
legal proceeding it shall be held that the Servicer may not enforce a
Receivable on the ground that it shall not be a real party in interest or a
holder entitled to enforce such Receivable, the Issuer shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Owner Trustee, the
Indenture Trustee or the Noteholders. The Issuer shall upon the written
request of the Servicer furnish the Servicer with any powers of attorney and
other documents reasonably necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder.
29
<PAGE>
SECTION 4.02. Collection of Receivable Payments. The Servicer
shall make reasonable efforts to collect all payments called for under the
terms and provisions of the Receivables as and when the same shall become due
and shall follow such collection procedures as it follows with respect to all
comparable receivables that it services for itself or others. In connection
therewith, the Servicer may grant extensions, rebates or adjustments on a
Receivable; provided, however, that if the Servicer extends the date for
final payment by the Obligor of any Receivable beyond the date one month
prior to the Final Scheduled Distribution Date, it shall promptly acquire the
Receivable from the Issuer in accordance with the terms of Section 4.07. The
Servicer may in its discretion waive any other amounts of Servicer's Yield
that may be collected in the ordinary course of servicing a Receivable. The
Servicer shall not agree to any reduction of the underlying interest rate on
any Receivable or, subject to the foregoing, of the amount of any Scheduled
Payment on a Receivable. Notwithstanding anything in this Agreement to the
contrary, any Recoveries shall be paid to the Transferor, and any Defaulted
Receivables shall be assigned by the Trust to the Transferor, to the extent
the Principal Balance thereof has been distributed as part of the Principal
Distribution Amount.
SECTION 4.03. Realization upon Receivables. On behalf of the
Issuer, the Servicer shall use its customary servicing procedures, to
repossess or otherwise realize upon the Financed Equipment securing any
Receivable as to which the Servicer shall have determined eventual payment in
full is unlikely. The Servicer shall follow such customary and usual
practices and procedures as it shall deem necessary or advisable in its
servicing of comparable receivables, which may include selling the Financed
Equipment at public or private sale. The foregoing shall be subject to the
provision that, in any case in which any item of Financed Equipment shall
have suffered damage, the Servicer shall not expend funds in connection with
the repair or the repossession of such Financed Equipment unless it shall
determine in its discretion that such repair and/or repossession will
increase the Liquidation Proceeds by an amount greater than the amount of
such expenses.
SECTION 4.04. Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Financed Equipment
as of the execution of the Receivable.
SECTION 4.05. Maintenance of Security Interests in Financed
Equipment. The Servicer shall, in accordance with its customary servicing
procedures, take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed
Equipment. The Servicer is hereby authorized to take such steps as are
necessary to re-perfect such security interest or to maintain such perfected
security interest on behalf of the Issuer and the Indenture Trustee in the
event of the relocation of Financed Equipment, or for any other reason.
SECTION 4.06. Covenants of Servicer. The Servicer shall not: (i)
release the Financed Equipment securing any Receivable from the security
interest granted by such Receivable in whole or in part except (A) in
accordance with Section 4.03 above or (B) in the event of payment in full by
the Obligor thereunder; (ii) impair the rights of the Issuer, the Indenture
Trustee or the Noteholders in any Receivable; or (iii) increase the number of
30
<PAGE>
Scheduled Payments due under a Receivable except in accordance with the terms
thereof or the terms of Section 4.02.
SECTION 4.07. Acquisition by Servicer of Receivables upon Breach.
(a) The Servicer or the Owner Trustee shall inform the other party and the
Indenture Trustee, the Transferor and MCC promptly, in writing, upon the
discovery of any breach pursuant to Section 4.02, 4.05 or 4.06. Unless the
breach shall have been cured by the last day of the second month following
such discovery (or, at the Transferor's election, the last day of the first
following month), the Servicer shall acquire any Receivable materially and
adversely affected by such breach. If the Servicer takes any action pursuant
to Section 4.02 that impairs the rights of the Issuer, the Indenture Trustee
or the Noteholders in any Receivable or as otherwise provided in Section
4.02, the Servicer shall acquire such Receivable. In consideration of the
acquisition of any such Receivable pursuant to either of the two preceding
sentences, the Servicer shall remit the Acquisition Amount in the manner
specified in Section 5.03. Subject to Section 7.02, the sole remedy of any
of the Issuer, the Owner Trustee, the Indenture Trustee and the Noteholders
with respect to a breach pursuant to Section 4.02, 4.05 or 4.06 shall be to
require the Servicer to acquire Receivables pursuant to this Section. The
Owner Trustee shall have no duty to conduct any affirmative investigation as
to the occurrence of any condition requiring the acquisition of any
Receivable pursuant to this Section. The parties hereto intend that the
Servicer will not intentionally breach or cause a breach pursuant to Section
4.02, 4.05 or 4.06 in order to provide direct or indirect assurance to the
Transferor, the Indenture Trustee, the Owner Trustee or the Noteholders, as
applicable, against loss by reason of the bankruptcy or insolvency (or other
credit condition) of, or default by, the Obligor on, or the uncollectibility
of, any Receivable.
(b) The Issuer shall execute such documents and instruments of transfer or
assignment and take other actions as shall reasonably be requested by the
Servicer to evidence the conveyance of such Receivable pursuant to this
Section 4.07.
SECTION 4.08. Servicing Fee. On each Determination Date, the
Servicer shall be entitled to receive the Servicing Fee in respect of the
immediately preceding Collection Period equal to the product of (a)
one-twelfth of the Servicing Fee Rate and (b) the Pool Balance as of the
first day of such preceding Collection Period. The Servicer shall also be
entitled to any Servicer's Yield with respect to Receivables, collected (from
whatever source) on the Receivables, which Servicer's Yield shall be paid to
the Servicer pursuant to Section 5.07.
SECTION 4.09. Servicer's Certificate. On each Determination Date,
the Servicer shall deliver to the Owner Trustee, the Indenture Trustee and
the Transferor, with a copy to the Rating Agencies, a Servicer's Certificate
containing all information necessary to make the distributions pursuant to
Sections 5.04 and 5.05 for the Collection Period immediately preceding the
date of such Servicer's Certificate. Neither the Owner Trustee nor the
Indenture Trustee shall be required to determine, confirm or recalculate the
information contained in the Servicer's Certificate. Receivables to be
acquired by the Servicer or to be reacquired by the Transferor
31
<PAGE>
shall be identified by the Servicer by account number with respect to such
Receivable as specified in Schedule A.
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Owner Trustee and the Indenture Trustee
and the Rating Agencies, on or before April 30 of each year beginning April
30, 1998, an Officers' Certificate stating that (i) a review of the
activities of the Servicer during the preceding 12-month period ending on
December 31 (or, in the case of April 30, 1998, the period from the Closing
Date to December 31, 1997) and of its performance under this Agreement has
been made under such officers' supervision and (ii) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled in all
material respects all its obligations under this Agreement throughout such
period or, if there has been a default in the fulfillment of any such
obligation in any material respect, specifying each such default known to
such officers and the nature and status thereof. The Indenture Trustee shall
send a copy of such certificate and the report referred to in Section 4.11 to
the Rating Agencies. A copy of such certificate and the report referred to
in Section 4.11 may be obtained by any Noteholder by a request in writing to
the Indenture Trustee at its address in Section 10.03.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee
and the Rating Agencies, promptly after having obtained knowledge thereof,
but in no event later than five (5) Business Days thereafter, written notice
in an Officers' Certificate of any event which with the giving of notice or
lapse of time, or both, would become a Servicer Default under Section 8.01(a)
or (b).
SECTION 4.11. Annual Independent Public Accountants' Servicing
Report. The Servicer will cause a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer) to
furnish to the Transferor, each Rating Agency and each Holder, on or prior to
April 30 of each year, commencing April 30, 1998, a report relating to the
previous calendar year to the effect that management's assertion that it has
maintained an effective internal control system for the servicing of the
Receivables is fairly stated, in all material respects, based upon criteria
established by the Committee of Sponsoring Organizations of the Treadway
Commission as described in Internal Control--Integrated Framework, and meets
the standards applicable to accountants' reports intended for general
distribution.
SECTION 4.12. Servicer Expenses. The Servicer shall be required to
pay all expenses incurred by it in connection with its activities under this
Article, including fees and disbursements of independent accountants, taxes
imposed on the Servicer and expenses incurred in connection with
distributions and reports to the Owner Trustee, the Indenture Trustee and the
Noteholders; provided, that nothing in this Section 4.12 shall preclude the
Servicer from retaining certain amounts with respect to reimbursement for
certain other expenses as expressly provided for by the terms of this
Agreement.
32
<PAGE>
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS
SECTION 5.01. Establishment of Trust Accounts.
(a)(i) The Servicer, for the benefit of the Noteholders, shall establish and
maintain in the name of the Indenture Trustee an Eligible Deposit Account
(the "Collection Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Noteholders.
(ii) The Servicer, for the benefit of the Noteholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
(the "Interest Payment Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Noteholders.
(iii) The Servicer, for the benefit of the Noteholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
(the "Principal Funding Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Noteholders.
(iv) The Servicer, for the benefit of the Noteholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
(the "Note Distribution Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Noteholders.
(v) The Servicer, for the benefit of the Class A Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Reserve Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Class A Noteholders.
(b) Funds on deposit in the Collection Account, the Interest Payment
Account, the Principal Funding Account, the Note Distribution Account and the
Reserve Account (collectively the "Trust Accounts") shall be invested by the
Indenture Trustee in Eligible Investments selected by the Servicer; provided,
however, it is understood and agreed that the Indenture Trustee shall not be
liable for any loss arising from such investment in Eligible Investments.
All such Eligible Investments shall be held by the Indenture Trustee for the
benefit of the Noteholders; provided, however, that on each Distribution Date
all investment earnings (net of losses and investment expenses) on funds on
deposit therein shall be deposited into the Collection Account and shall be
deemed to constitute a portion of the Available Interest Amount. Other than
as permitted by the Rating Agencies, funds on deposit in the Trust Accounts
shall be invested in Eligible Investments that will mature so that such funds
will be available at the close of business on the Business Day preceding the
immediately following Distribution Date; provided, however, that funds on
deposit in
33
<PAGE>
Trust Accounts may be invested in Eligible Investments of the Indenture
Trustee which may mature so that such funds will be available on the
Distribution Date. Funds deposited in a Trust Account on a Business Day
which immediately precedes a Distribution Date upon the maturity of any
Eligible Investments are not required to be invested overnight, but if so
invested, such investments must meet the conditions of the immediately
preceding sentence.
(c) (i) The Indenture Trustee shall possess all right, title and interest in
all monies, securities, instruments and other property on deposit from time
to time in or credited to the Trust Accounts and in all proceeds thereof
(including all income thereon) and all such monies, securities, instruments
and other property (together with all earnings, dividends, distributions,
income, issues, and profits relating thereto) shall be part of the Trust
Estate. The Trust Accounts shall be under the sole dominion and control of
the Indenture Trustee for the benefit of the Noteholders. If, at any time,
any of the Trust Accounts ceases to be an Eligible Deposit Account, the
Indenture Trustee (or the Servicer on its behalf) shall within 10 Business
Days (or such longer period, not to exceed 30 calendar days, as to which each
Rating Agency may consent) establish a new Trust Account as an Eligible
Deposit Account and shall transfer any cash and/or any investments to such
new Trust Account. So long as the Indenture Trustee is an Eligible
Institution, any Trust Account may be maintained with it in an Eligible
Deposit Account.
(ii) With respect to the Trust Account Property, the Indenture Trustee
agrees, by its acceptance hereof, that:
(A) any Trust Account Property held in deposit accounts shall be
held solely in the Eligible Deposit Accounts; and each such Eligible Deposit
Account shall be subject to the exclusive custody and control of the
Indenture Trustee, and the Indenture Trustee shall have sole signature
authority with respect thereto;
(B) any Trust Account Property that constitutes an instrument or
Certificated Security delivered to the Indenture Trustee in accordance with
the definition of "Delivery" and shall be held, pending maturity or
disposition, solely by the Indenture Trustee or a financial intermediary (as
such term is defined in Section 8-313(4) of the UCC) acting solely for the
Indenture Trustee;
(C) any Trust Account Property that is a United States Securities
Entitlement held through the Federal Reserve System pursuant to Federal
book-entry regulations delivered in accordance with paragraph (c) of the
definition of "Delivery" and shall be maintained by the Indenture Trustee,
pending maturity or disposition, through continued book-entry registration of
such Trust Account Property as described in such paragraph; and
(D) any Trust Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause (C)
above delivered to the Indenture Trustee in accordance with paragraph (d) of
the definition of "Delivery" and shall
34
<PAGE>
be maintained by the Indenture Trustee, pending maturity or disposition,
through continued registration of the Indenture Trustee's (or its nominee's)
ownership of such security.
(iii) The Servicer shall have the power, revocable by the Indenture
Trustee or by the Owner Trustee with the consent of the Indenture
Trustee, to instruct the Indenture Trustee to make withdrawals and
payments from the Trust Accounts for the purpose of permitting the
Servicer or the Owner Trustee to carry out its respective duties
hereunder or permitting the Indenture Trustee to carry out its duties
under the Indenture.
(iv) The Indenture Trustee is hereby authorized to execute purchase
and sales directed by the Servicer through the facilities of its own
trading or capital markets operations. The Indenture Trustee shall
send statements to the Servicer monthly reflecting activity for each
amount created hereunder for the preceding month. Although the
Servicer recognizes that it may obtain a broker confirmation at no
additional cost, the Servicer hereby agrees that confirmations of
investments are not required to be issued by the Indenture Trustee for
each month in which a monthly statement is rendered. No statement
need be rendered pursuant to the provision hereof if no activity
occurred in the account for such month.
SECTION 5.02. Collections. Subject to Section 5.03, the Servicer
shall remit to the Collection Account (i) all payments by or on behalf of the
Obligors with respect to the Receivables (including Insurance Proceeds, if
any) and (ii) all Liquidation Proceeds (except to the extent of Recoveries
applied in accordance with Section 4.02), in each case as collected during
each Collection Period within two Business Days of receipt and identification
thereof. Notwithstanding the foregoing, if (i) MCC is the Servicer, (ii) a
Servicer Default shall not have occurred and be continuing and (iii) MCC (or
any entity that guarantees the servicing obligations of MCC) maintains a
short-term rating of at least A-1 by Standard & Poor's and P-1 by Moody's,
the Servicer may remit such collections with respect to each Collection
Period to the Collection Account on or before the second Business Day prior
to the following Distribution Date. For purposes of this Article V, the
phrase "payments by or on behalf of Obligors" shall mean payments made with
respect to the Receivables by Persons other than the Servicer or the
Transferor.
SECTION 5.03. Additional Deposits. The Servicer and the Transferor
shall deposit or cause to be deposited in the Collection Account the
Acquisition Amounts with respect to Acquired Receivables as set forth in the
immediately following sentence, and the Servicer shall deposit in the
Collection Account all amounts to be paid under Section 9.02 as set forth
therein. The Servicer and the Transferor will deposit the Acquisition Amount
with respect to each Acquired Receivable when such obligations are due,
unless, with respect to Acquisition Amounts to be remitted by the Servicer,
the Servicer shall be permitted to make deposits monthly prior to each
Distribution Date pursuant to Section 5.02, in which case such deposits shall
be made in accordance with such Section. The Servicer shall account for
Acquisition Amounts paid by itself and the Transferor separately.
35
<PAGE>
SECTION 5.04. Distributions.
(a) On or prior to each Determination Date, the Servicer shall calculate
all amounts required to determine the amounts to be deposited in the
Interest Payment Account, the Principal Funding Account and the Note
Distribution Account.
(b) The rights of the Class B Noteholder to receive distributions of
Available Interest Amounts and Available Principal Amounts shall be and
hereby are subordinated to the rights of the Class A Noteholders to the
extent provided in this Section 5.04(b). On the second Business Day prior
to each Distribution Date, the Servicer shall instruct the Indenture
Trustee, which instruction shall be in the form of Exhibit B to Schedule D
(or such other form that is acceptable to the Indenture Trustee and the
Servicer), to (i) withdraw from the Reserve Account the amount, if any,
described in Section 5.05(c) for application as described in Section
5.05(c) and (ii) withdraw from the Collection Account the Available
Interest Amount and the Available Principal Amount for deposit in the
Interest Payment Account and the Principal Funding Account, respectively,
and to make the following deposits and distributions for receipt by the
Servicer or the Administrator or for deposit in the Note Distribution
Account by 12:00 Noon (New York time) on such following Distribution Date
to the extent of the Available Interest Amount and the Available Principal
Amount:
(i) from the Available Interest Amount on deposit in the Interest
Payment Account, in the following order of priority:
(A) to the Servicer, the Servicing Fee and all unpaid Servicing
Fees from prior Collection Periods;
(B) to the Administrator under the Administration Agreement, the
Administration Fee and all unpaid Administration Fees from prior Collection
Periods;
(C) to the Note Distribution Account, the Noteholders' Class A
Interest Distributable Amount;
(D) to the Reserve Account, the positive difference, if any, by
which (i) the Specified Reserve Account Balance for such Distribution Date
exceeds (ii) the amount on deposit in the Reserve Account on such
Distribution Date (not taking into account the amount deposited into the
Reserve Account on such Distribution Date pursuant to this clause (D)).
(E) to the Principal Funding Account, the positive difference,
if any, by which the Principal Distribution Amount exceeds the Available
Principal Amount (not taking into account the amount of the Available
Principal Amount derived from clause (iii) of the definition thereof);
(F) to the Note Distribution Account, the Noteholders' Class B
Interest Distributable Amount; and
36
<PAGE>
(G) to the Transferor, the amount remaining on deposit in the
Interest Payment Account after giving effect to the distributions to be
made pursuant to Sections 5.04(b)(i)(A), 5.04(b)(i)(B), 5.04(b)(i)(C),
5.04(b)(i)(D), 5.04(b)(i)(E) and 5.04(b)(i)(F);
(ii) from the Available Principal Amount on deposit in the Principal
Funding Account, in the following order of priority:
(A) on each Distribution Date with respect to the Revolving
Period (1) first, to the Reserve Account, the positive difference, if any,
by which (x) the Specified Reserve Account Balance for such Distribution
Date exceeds (y) the principal amount on deposit in the Reserve Account on
such Distribution Date (after taking into account the amount deposited into
the Reserve Account on such Distribution Date pursuant to Section
5.04(b)(i)(D) but not taking into account the amount deposited into the
Reserve Account on such Distribution Date pursuant to this clause (A)) and
(2) second, the Available Principal Amount remaining after the application
of clause (1) above will be retained in the Principal Funding Account and
will be paid to the Transferor in connection with transfers of Subsequent
Receivables to the Issuer pursuant to Section 2.02; and
(B) on Distribution Dates with respect to the Amortization
Period, (1) first, to the Note Distribution Account, the Class A
Noteholders' Principal Distributable Amount, (2) second, to the Reserve
Account, the positive difference, if any, by which (x) the Specified
Reserve Account Balance for such Distribution Date exceeds (y) the
principal amount on the deposit in the Reserve Account on such Distribution
Date (after taking into account the amount deposited into the Reserve
Account on such Distribution Date pursuant to Section 5.04(b)(i)(D) but not
taking into account the amount deposited into the Reserve Account on such
Distribution Date pursuant to this clause (B)) and (3) third, to the Note
Distribution Account, the Class B Noteholders' Principal Distributable
Amount;
(iii) on the first Distribution Date with respect to the Amortization
Period, from Available Principal Amounts deposited in the Principal
Funding Account on prior Distribution Dates that were not used to
acquire Subsequent Receivables from the Transferor on or prior to such
Distribution Date ("Remaining Available Principal Amounts"), in the
following order of priority:
(A) to the Note Distribution Account, the Class A Noteholders'
Percentage of the Remaining Available Principal Amounts; and
(B) to the Note Distribution Account, the Class B Noteholders'
Percentage of the Remaining Available Principal Amounts.
(c) Notwithstanding anything in this Section 5.04 to the contrary, if an
Event of Default under the Indenture occurs and the maturities of the Notes
are accelerated pursuant to Section 5.02 of the Indenture, amounts standing
to the credit of the Collection Account, the Interest Payment Account and
the Principal Funding Account shall be applied by the Indenture Trustee in
accordance with Section 5.04(b) of the Indenture.
37
<PAGE>
SECTION 5.05. Reserve Account.
(a) On the Closing Date, the Transferor shall deposit the Reserve Account
Initial Deposit into the Reserve Account. The Servicer shall determine the
Specified Reserve Account Balance for each Distribution Date.
(b) If the amount on deposit in the Reserve Account on any Distribution
Date (after giving effect to all deposits or withdrawals therefrom on such
Distribution Date) is greater than the Specified Reserve Account Balance
for such Distribution Date, the Servicer shall instruct the Indenture
Trustee to distribute the amount of such excess to the Transferor;
provided, however, that if, after giving effect to all payments made on the
Notes on such Distribution Date, the Pool Balance as of the end of the
preceding Collection Period is less than the sum of the outstanding
principal balance the Notes, such excess amount shall not be distributed to
the Transferor and shall be retained in the Reserve Account available for
application in accordance with Sections 5.05(c) and (d). Amounts properly
distributed to the Transferor pursuant to this Section 5.05(b) shall be
deemed released from the Trust and the security interest therein granted to
the Indenture Trustee, and the Transferor shall in no event thereafter be
required to refund any such distributed amounts.
(c) In the event that the sum of the distributions and deposits to be made
pursuant to Section 5.04(b)(i)(A), Section 5.04(b)(i)(B), Section
5.04(b)(i)(C) and, on any Distribution Date with respect to the Revolving
Period, Section 5.04(b)(i)(E) with respect to any Distribution Date exceeds
the Available Interest Amount distributed in respect thereof on such
Distribution Date, the Indenture Trustee shall withdraw from the Reserve
Account on such Distribution Date, upon receipt of the instruction from the
Servicer pursuant to Section 5.04(b), to the extent of funds available
therein, an amount equal to such excess, and the Indenture Trustee shall
pay the applicable portion of such amount to the Servicer and the
Administrator, as applicable, deposit the applicable portion of such amount
into the Note Distribution Account and deposit the applicable portion of
such amount into the Principal Funding Account.
(d) In the event that the Class A Noteholders' Principal Distributable
Amount for a Distribution Date exceeds the amount deposited in the Note
Distribution Account pursuant to Section 5.04(b)(ii)(A) on such
Distribution Date, the Indenture Trustee shall withdraw on such
Distribution Date from the Reserve Account, upon receipt of the instruction
of the Servicer pursuant to Section 5.04(b), to the extent of funds
available therein after giving effect to paragraph (c) above, an amount
equal to such excess, and the Indenture Trustee shall deposit such amount
into the Note Distribution Account pursuant to the terms of the Indenture.
(e) Notwithstanding anything in this Section 5.05 to the contrary, if an
Event of Default under the Indenture occurs and the maturities of the Notes
are accelerated pursuant to Section 5.02 of the Indenture, amounts on
deposit in the Reserve Account shall be applied by the Indenture Trustee in
accordance with Section 5.04(a) of the Indenture.
38
<PAGE>
SECTION 5.06. Statements to Noteholders. On the second Business Day
prior to each Distribution Date, the Servicer shall provide to the Indenture
Trustee (with a copy to the Rating Agencies) for the Indenture Trustee to
forward to each Class A Noteholder of record, and to the Owner Trustee a
statement substantially in the form of Exhibit A to Schedule D (or such other
form that is acceptable to the Indenture Trustee, the Owner Trustee and the
Servicer) setting forth at least the following information as to the Notes
(separately stating such information as to the Class A Notes and the Class B
Notes), to the extent applicable:
(i) the amount of the distribution to be made on such Distribution
Date allocable to principal of each Class of Notes;
(ii) the amount of the distribution to be made on such Distribution
Date allocable to interest on or with respect to each Class of Notes;
(iii) the Pool Balance as of the close of business on the last day
of the preceding Collection Period, the aggregate Principal Balance of the
Receivables and the amount on deposit in the Principal Funding Account;
(iv) the aggregate outstanding principal balance of the Class A Notes
and the Class A Note Pool Factor, in each case as of the close of business
on the last day of the preceding Collection Period, after giving effect to
payments allocated to principal reported under (i) above;
(v) the amount of the Servicing Fee paid to the Servicer with respect
to the related Collection Period;
(vi) the amount of the Administration Fee paid to the Administrator
with respect to the related Collection Period;
(vii) the aggregate Acquisition Amounts for Acquired Receivables
with respect to the related Collection Period paid by each of the
Transferor and the Servicer (accounted for separately);
(viii) the amount of Realized Losses, if any, for such Collection
Period;
(ix) the balance of the Reserve Account on such Distribution Date,
after giving effect to withdrawals therefrom and deposits thereto on such
Distribution Date;
(x) the Specified Reserve Account Balance for such Distribution Date;
and
(xi) the Noteholders' Class A Interest Distributable Amount, the
Noteholders' Class B Interest Distributable Amount, the Class A
Noteholders' Principal Distributable Amount and the Class B Noteholders'
Principal Distributable Amount, the components of each thereof, and the
amount, if any, to be withdrawn from the Reserve Account and deposited into
the Note Distribution Account pursuant to Section 5.05(c) or (d);
39
<PAGE>
Each amount set forth pursuant to paragraph (i) and (ii) above shall be
expressed as a dollar amount per $1,000 of original principal balance of a
Note.
Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of the Indenture, the Indenture
Trustee shall mail to each Person who at any time during such calendar year
shall have been a Class A Noteholder and received any payment thereon, a
statement containing the amounts described in (i) and (ii) above and any
other information required by applicable tax laws, for the purposes of such
Noteholder's preparation of Federal income tax returns.
The Indenture Trustee shall only be required to provide to the Class A
Noteholders the information furnished to it by the Servicer. The Indenture
Trustee shall not be required to determine, confirm or recompute any such
information.
SECTION 5.07. Net Deposits. As an administrative convenience, so long
as MCC is the Servicer and the Administrator, the Servicer will be permitted
to make the deposit of Collections on the Receivables and Acquisition Amounts
for or with respect to any Collection Period net of distributions to be made
to the Servicer and the Administrator with respect to such Collection Period
(and the Servicer shall pay amounts owing to the Administrator directly).
The Servicer, however, will account to the Owner Trustee and the Indenture
Trustee and the Noteholders as if the Servicing Fee and Administration Fee
was paid pursuant to the mechanics provided for pursuant to Section 5.04.
ARTICLE VI
THE TRANSFEROR
SECTION 6.01. Representations of Transferor. The Transferor makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of each Transfer Date and shall survive the
transfer of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Transferor is duly
organized and validly existing as a corporation in good standing under the
laws of the State of Delaware with the power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, the power, authority and legal right to acquire and own the
Receivables.
(b) Due Qualification. The Transferor 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 failure
to so qualify or to obtain any such
40
<PAGE>
license or approval would render any Receivable unenforceable that would
otherwise be enforceable by the Transferor or the Owner Trustee.
(c) Power and Authority. The Transferor has the power and authority
to execute and deliver this Agreement and to carry out its terms; the
Transferor has full power and authority to transfer and assign the
Receivables and other property to be transferred and assigned to and
deposited with the Issuer and the Transferor has duly authorized such
transfer and assignment to the Issuer by all necessary corporate action;
and each of the execution, delivery and performance of this Agreement has
been duly authorized by the Transferor by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Transferor enforceable in accordance with its
terms, except to the extent that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and the
remedy of specific performance and injunctive relief may be subject to
certain equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not (i)
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,
the certificate of incorporation or by-laws of the Transferor, or any
indenture, agreement or other instrument to which the Transferor is a party
or by which it is bound; (ii) 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); or (iii) violate any law or, to the best of the Transferor's
knowledge, any order, rule or regulation applicable to the Transferor of
any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the
Transferor or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or to the Transferor's best knowledge, threatened, before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Transferor or its properties:
(i) asserting the invalidity of this Agreement, the Indenture, the Notes or
any of the other Basic Documents, (ii) seeking to prevent the issuance of
the Notes 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 Transferor of its obligations under, or the
validity or enforceability of, this Agreement, the Indenture, the Notes or
any other of the Basic Documents or (iv) which might adversely affect the
Federal or state income tax attributes of the Notes.
41
<PAGE>
SECTION 6.02. Liability of Transferor; Indemnities. The Transferor
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Transferor under this Agreement.
(a) The Transferor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee and the Indenture Trustee and their officers,
directors and agents from and against any taxes that may at any time be
asserted against the Issuer, the Owner Trustee or the Indenture Trustee or
their respective officers, directors, and agents with respect to the
transfer of the Receivables to the Issuer or the issuance and original sale
of the Notes, including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes and costs and
expenses in defending against the same.
(b) The Transferor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee and the Indenture Trustee and their officers,
directors, and agents from and against any loss, liability or expense
incurred by reason of (i) the Transferor's willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this
Agreement and (ii) the Transferor's or the Issuer's violation or alleged
violation of Federal or state securities laws in connection with the
offering and sale of the Notes, except that the Transferor shall not
indemnify the Owner Trustee for any such loss, liability or expense as
shall result from the willful misconduct of the Owner Trustee.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination
of this Agreement and shall include reasonable fees and expenses of counsel
and expenses of litigation. If the Transferor shall have made any indemnity
payments pursuant to this Section 6.02 and the Person to or on behalf of
whom such payments are made thereafter shall collect any of such amounts
from others, such Person shall promptly repay such amounts collected from
others to the Transferor, without interest.
SECTION 6.03. Merger or Consolidation of, or Assumption of the
Obligations of, Transferor. Any Person (a) into which the Transferor may be
merged or consolidated, (b) which may result from any merger or consolidation
to which the Transferor shall be a party or (c) which may succeed to the
properties and assets of the Transferor substantially as a whole, which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Transferor under this Agreement, shall be the
successor to the Transferor hereunder without the execution or filing of any
document or any further act by any of the parties to this Agreement;
provided, however, that (i) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.01
shall have been breached and no Servicer Default, and no event that, after
notice or lapse of time, or both, would become a Servicer Default shall have
occurred and be continuing, (ii) the Transferor shall have delivered to the
Owner Trustee and the Indenture Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, (iii) the
42
<PAGE>
Rating Agency Condition shall have been satisfied with respect to such
transaction and (iv) the Transferor shall have delivered to the Owner Trustee
and the Indenture Trustee an Opinion of Counsel either (A) stating that, in
the opinion of such counsel, all actions (other than the delivery of the
original Contract) necessary to perfect the interests of the Owner Trustee
and the Indenture Trustee have been taken, including that all financing
statements and continuation statements and amendments thereto have been
executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve
and protect such interests. Notwithstanding anything herein to the contrary,
the execution of the foregoing agreement of assumption and compliance with
clauses (i), (ii), (iii) and (iv) above shall be conditions to the
consummation of the transactions referred to in clause (a), (b) or (c) above.
Following the effectiveness of the succession provided for in this Section
6.03, the predecessor Transferor shall be released from any obligations and
liabilities provided for under the Basic Documents other than any obligations
or liabilities incurred by such predecessor Transferor prior to the
effectiveness of such succession.
SECTION 6.04. Limitation on Liability of Transferor and Others. The
Transferor and any director or officer or employee or agent of the Transferor
may rely in good faith on the advice of counsel or on any document of any
kind, prima facie properly executed and submitted by any Person respecting
any matters arising hereunder. The Transferor shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its obligations under this Agreement, and that in its
opinion may involve it in any expense or liability.
SECTION 6.05. Transferor May Own Notes. The Transferor and any
Affiliate (other than MCC) thereof may in its individual or any other
capacity become the owner or pledgee of Class A Notes with the same rights as
it would have if it were not the Transferor or an Affiliate thereof, except
as expressly provided herein (including, without limitation, the definition
of "Outstanding" contained in the Indenture) or in any Basic Document. The
Transferor agrees that it shall not transfer any interest in Notes (including
the Class B Notes) or any rights hereunder without delivering to the Owner
Trustee an Opinion of Counsel that such transfer will not cause the Trust to
be taxable as a corporation for federal income tax purposes.
SECTION 6.06. Tax Treatment. The Transferor has structured this
Agreement, the Indenture and any related agreement with the intention that
the Class A Notes qualify under applicable federal, state, and local income
and franchise tax law as indebtedness of the Transferor secured by the
Receivables and the Issuer shall be disregarded as a separate entity for such
purposes. The Transferor, the Servicer, and the Issuer agree to treat and to
take no action inconsistent with the treatment of the Class A Notes (or any
beneficial interest therein) as such indebtedness for purposes of federal,
state, and local income and franchise tax law and for purposes of any other
tax imposed on or measured by income.
43
<PAGE>
ARTICLE VII
THE SERVICER
SECTION 7.01. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of the Agreement and as of each Transfer Date (or as of the date a
Person (other than the Indenture Trustee) becomes Servicer pursuant to
Sections 7.03 and 8.02, in the case of a successor to the Servicer) and shall
survive the transfer of the Receivables to the Issuer and the pledge thereof
to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is a corporation
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation, and has the corporate power and
authority to own its properties and to conduct the business in which
it is currently engaged, and had at all relevant times, and has, the
power, authority and legal right to acquire, own, transfer and
service the Receivables.
(b) Power and Authority. The Servicer has the power and authority
to execute and deliver this Agreement and to carry out its terms; and
the execution, delivery and performance of this Agreement have been
duly authorized by the Servicer by all necessary corporate action.
(c) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Servicer enforceable in accordance with
its terms, except that such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and the
remedy of specific performance and injunctive relief may be subject to
certain equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(d) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof shall not
conflict with, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time) a default
under, the certificate of incorporation or by-laws of the Servicer, or
any material indenture, agreement or other instrument to which the
Servicer is a party or by which it is bound; nor result in the creation
or imposition of any material Lien upon any of its properties pursuant
to the terms of any such indenture, agreement or other instrument
(other than this Agreement); nor violate any material law or, to the
best of the Servicer's knowledge, any material order, rule or
regulation applicable to the Servicer of any court or of any Federal
or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its
properties.
44
<PAGE>
(e) No Proceedings. To the Servicer's best knowledge, there are no
proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its
properties: (i) asserting the invalidity of this Agreement, the
Indenture, the Notes or any of the other Basic Documents; (ii) seeking
to prevent the issuance of the Notes 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
Servicer of its obligations under, or the validity or enforceability
of, this Agreement, the Indenture, the Notes or any of the other Basic
Documents; or (iv) relating to the Servicer and which might adversely
affect the Federal or state income tax attributes of the Notes.
(f) No Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any Governmental
Authority required in connection with the execution and delivery by
the Servicer of this Agreement or any other Basic Document, the
performance by the Servicer of the transactions contemplated by
this Agreement or any other Basic Document and the fulfillment by
the Servicer of the terms hereof or thereof, have been obtained or
have been completed and are in full force and effect (other than
approvals, authorizations, consents, orders or other actions which
if not obtained or completed or in full force and effect would not
have a material adverse effect on the Servicer or the Issuer or
upon the collectibility of any Receivable or upon the ability of
the Servicer to perform its obligations under this Agreement).
SECTION 7.02. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under this Agreement.
(a) The Servicer shall defend, indemnify and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders
and the Transferor and any of the officers, directors and agents of
the Issuer, the Owner Trustee, the Indenture Trustee, and the
Transferor from and against any and all costs, expenses, losses,
damages, claims and liabilities, arising out of or resulting from
the use, ownership or operation by the Servicer or any Affiliate
(other than the Transferor) thereof of any Financed Equipment.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee and the Transferor
and their respective officers, directors and agents from and
against (i) any taxes that may at any time be asserted against any
such Person with respect to the transactions contemplated herein,
including any sales, gross receipts, general corporation, tangible
personal property, privilege or license taxes (but, in the case of
the Issuer or the Transferor, not including any taxes asserted with
respect to, and as of the date of, the transfer of the Receivables
to the Issuer or the issuance and original sale of the Notes, or
Federal or other income taxes arising out of distributions on the
Notes) and (ii) costs and expenses in defending against the same.
45
<PAGE>
(c) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Transferor
and the Noteholders and any of the officers, directors and agents
of the Issuer, the Owner Trustee, the Indenture Trustee and the
Transferor from and against any and all costs, expenses, losses,
claims, damages and liabilities to the extent that any such cost,
expense, loss, claim, damage or liability arose out of, or was
imposed upon any such Person through, the negligence, willful
misfeasance or bad faith of the Servicer in the performance of its
duties under this Agreement, or by reason of reckless disregard of
its obligations and duties under this Agreement or on account of
the failure of the Servicer to be qualified to do business as a
foreign corporation or to have obtained a license or approval in
any jurisdiction.
(d) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers,
directors and agents from and against all costs, expenses, losses,
claims, damages and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and
duties herein, and in the case of the Owner Trustee, in the Trust
Agreement, and in the case of the Indenture Trustee, the Indenture,
except to the extent that any such cost, expense, loss, claim,
damage or liability: (i) shall be due to the willful misfeasance,
bad faith or negligence of the Owner Trustee or the willful
misfeasance, bad faith or negligence of the Indenture Trustee, as
applicable; or (ii) shall arise from the breach by the Owner
Trustee of any of its representations or warranties set forth in
Section 6.03 of the Trust Agreement.
(e) The Servicer shall pay any and all taxes levied or assessed upon
all or any part of the Owner Trust Estate, other than any taxes
asserted with respect to, and as of the date of, the transfer of
the Receivables to the Issuer or the Transferor or the issuance and
original sale of the Notes, or Federal or other income taxes
arising out of distributions on the Notes.
For purposes of this Section, in the event of the termination of the
rights and obligations of MCC (or any successor thereto pursuant to Section
7.03) as Servicer pursuant to Section 8.01, or a resignation by such Servicer
pursuant to this Agreement, such Servicer shall be deemed to be the Servicer
pending appointment of a successor Servicer (other than the Indenture
Trustee) pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or the termination of
this Agreement. Indemnification under this Section shall include reasonable
fees and expenses of counsel and expenses of litigation if the indemnitee
prevails in any action for which indemnification is sought. If the Servicer
shall have made any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made thereafter collects any
of such amounts from others, such Person shall promptly repay such amounts to
the Servicer, without interest.
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) (i) into which the Servicer may be
merged or consolidated, (ii) which
46
<PAGE>
may result from any merger or consolidation to which the Servicer shall be a
party, (iii) which may succeed to the properties and assets of the Servicer
substantially as a whole, or (iv) which is a corporation 50% or more of the
voting stock of which is owned, directly or indirectly, by Metropolitan Life
Insurance Company, and (b) in the case of any of (i), (ii), (iii) or (iv),
which has executed an agreement of assumption to perform every obligation of
the Servicer hereunder, shall be the successor to the Servicer under this
Agreement without further act on the part of any of the parties to this
Agreement; provided, however, that (w) immediately after giving effect to
such transaction, no Servicer Default, and no event which, after notice or
lapse of time, or both, would become a Servicer Default shall have occurred
and be continuing, (x) the Servicer shall have delivered to the Owner Trustee
and the Indenture Trustee an Officers' Certificate and an Opinion of Counsel
each stating that such consolidation, merger or succession and such agreement
of assumption comply with this Section and that all conditions precedent
provided for in this Agreement relating to such transaction have been
complied with, (y) the Rating Agency Condition shall have been satisfied with
respect to such transaction and (z) the Servicer shall have delivered to the
Owner Trustee and the Indenture Trustee an Opinion of Counsel either (A)
stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed
that are necessary fully to preserve and protect the interest of the Owner
Trustee and the Indenture Trustee, respectively, in the Receivables and
reciting the details of such filings or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and protect such
interests. Notwithstanding anything herein to the contrary, the execution of
the foregoing agreement of assumption and compliance with clauses (w), (x),
(y) and (z) above shall be conditions to the consummation of the transactions
referred to in clause (a)(i), (a)(ii), (a)(iii), or (a)(iv) above. Following
the effectiveness of the succession provided for in this Section 7.03, the
predecessor Servicer shall be released from any obligations and liabilities
provided for under the Basic Documents other than any obligations or
liabilities incurred by such predecessor Servicer prior to the effectiveness
of such succession.
SECTION 7.04. Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the directors or officers or employees or agents of
the Servicer shall be under any liability to the Issuer or the Noteholders,
except as provided under this Agreement, for any action taken or for
refraining from the taking of any action pursuant to this Agreement or for
errors in judgment; provided, however, that this provision shall not protect
the Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Servicer and any director or officer or
employee or agent of the Servicer as the case may be, may rely in good faith
on any document of any kind prima facie properly executed and submitted by
any person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its duties to service the Receivables in accordance with
this Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement
and the other
47
<PAGE>
Basic Documents and the rights and duties of the parties to this Agreement
and the other Basic Documents and the interests of the Noteholders under the
Indenture.
SECTION 7.05. MCC Not To Resign as Servicer. Subject to the provisions
of Section 7.03, MCC shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon determination that
the performance of its duties under this Agreement shall no longer be
permissible under applicable law (if it is also determined that such
determination may not be reversed). Notice of any such determination
permitting the resignation of MCC shall be communicated to the Owner Trustee
and the Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Servicer shall have assumed the responsibilities and obligations of MCC in
accordance with Section 8.02.
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer (i) to deliver to the Indenture
Trustee for deposit in any of the Trust Accounts any required payment or
(ii) to direct the Indenture Trustee to make any required distribution
therefrom in either case that shall continue unremedied for a period of
three Business Days after written notice of such failure is received by
the Servicer from the Owner Trustee or the Indenture Trustee or after
discovery of such failure by an officer of the Servicer; or
(b) failure on the part of the Servicer duly to observe or to
perform in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement or any other Basic Document, which
failure shall (i) materially and adversely affect the rights of Class A
Noteholders and (ii) continues unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same to
be remedied, shall have been given (A) to the Servicer by the Owner
Trustee or the Indenture Trustee or (B) to the Servicer, and to the
Owner Trustee and the Indenture Trustee by the Holders of Class A Notes
evidencing not less than 25% of the Outstanding Amount of the Class A
Notes; or
(c) an Insolvency Event occurs with respect to the Servicer;
then, and in each and every case, so long as the Servicer Default shall not
have been remedied, either the Indenture Trustee, or the Holders of Class A
Notes evidencing not less than 25% of
48
<PAGE>
the Outstanding Amount of the Class A Notes, by notice then given in writing
to the Servicer (and to the Indenture Trustee and the Owner Trustee if given
by the Class A Noteholders) may terminate all the rights and obligations
(other than the obligations set forth in Section 7.02 hereof) of the Servicer
under this Agreement (a "Servicer Termination Event"). On or after the
receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Agreement, whether with respect to the Notes or the
Receivables or otherwise, shall, without further action, pass to and be
vested in the Indenture Trustee or such successor Servicer as may be
appointed under Section 8.02; and, without limitation, the Indenture Trustee
and the Owner Trustee are hereby authorized and empowered to execute and
deliver, on behalf of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer, the
Indenture Trustee and the Owner Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this Agreement,
including the transfer to the successor Servicer for administration by it of
all cash amounts that shall at the time be held by the predecessor Servicer
for deposit, or shall thereafter be received by it with respect to a
Receivable. All reasonable costs and expenses (including reasonable
attorneys' fees) incurred in connection (x) with transferring the computer or
other records to the successor Servicer in the form requested and (y)
amending this Agreement to reflect such succession as Servicer pursuant to
this Section shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses. Upon receipt of notice
of the occurrence of a Servicer Default, the Owner Trustee shall give notice
thereof to the Rating Agencies.
SECTION 8.02. Appointment of Successor.
(a) Upon the Servicer's receipt of notice of termination, pursuant
to Section 8.01 or the Servicer's resignation in accordance with the
terms of this Agreement, the predecessor Servicer shall continue to
perform its functions as Servicer under this Agreement, in the case of
termination, only until the date specified in such termination notice
or, if no such date is specified in a notice of termination, until
receipt of such notice and, in the case of resignation, until the
earlier of (x) the date 45 days from the delivery to the Owner Trustee
and the Indenture Trustee of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms of
this Agreement and (y) the date upon which the predecessor Servicer
shall become unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of the
Servicer's termination hereunder, the Indenture Trustee shall appoint a
successor Servicer, and the successor Servicer shall accept its
appointment by a written assumption in form acceptable to the Owner
Trustee (such acceptance not to be unreasonably withheld) and the
Indenture Trustee (such acceptance not to be unreasonably withheld). In
the event that a successor Servicer has not been appointed at the time
when the predecessor Servicer has ceased to act as Servicer in
accordance with this Section, pending the appointment of and acceptance
by a successor Servicer, the Indenture Trustee without further action
shall automatically be appointed and serve
49
<PAGE>
as the successor Servicer and the Indenture Trustee shall be entitled to
the Servicing Fee and the Servicer's Yield. Notwithstanding the above,
the Indenture Trustee shall, if it shall be legally unable so to act,
appoint or petition a court of competent jurisdiction to appoint, any
established institution who has demonstrated its capability to service
the Receivables to the satisfaction of the Indenture Trustee, as the
successor to the Servicer under this Agreement, having a net worth of not
less than $50,000,000 and whose regular business shall include the
servicing of receivables comparable with the Receivables, as the
successor to the Servicer under this Agreement.
The Indenture Trustee, acting in its capacity as successor Servicer, and
any successor Servicer appointed by it, shall have no responsibility or
obligation (i) for any breach by any predecessor Servicer of any of its
representations and warranties, or (ii) any acts or omissions of MCC or any
other Servicer prior to its termination or resignation.
(b) Upon appointment, the successor Servicer (including the
Indenture Trustee acting as successor servicer) shall be the successor
in all respects to the predecessor Servicer and shall be subject to all
the responsibilities, duties and liabilities arising thereafter
relating thereto placed on the predecessor Servicer and shall be
entitled to the Servicing Fee and the Servicer's Yield accruing or
collected, as the case may be, after the successor Servicer becomes the
Servicer, as set forth above, and all the rights granted to the
predecessor Servicer by the terms and provisions of this Agreement.
(c) Subject to the Indenture Trustee's right to appoint a successor
Servicer pursuant to Section 8.02(a) after the Indenture Trustee has become
the Servicer pending the appointment of and acceptance by a successor
Servicer, the Servicer may not resign unless it is prohibited from serving as
such by law.
(d) Notwithstanding any other provision of this Agreement, neither the
Indenture Trustee nor any successor Servicer shall be deemed in default,
breach or violation of this Agreement as a result of the failure of MCC or
any Servicer (i) to cooperate with the Indenture Trustee or any successor
Servicer pursuant to Section 8.01, (ii) to deliver funds required to be
deposited to any Trust Account, or (iii) to deliver files or records relative
to the Receivables as may be requested by the Indenture Trustee or successor
Servicer.
SECTION 8.03. Notification to Noteholders. Upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article VIII,
the Owner Trustee shall give prompt written notice thereof to the Rating
Agencies and the Indenture Trustee and the Indenture Trustee shall give
prompt written notice thereof to the Noteholders in the manner provided for
in the Indenture.
SECTION 8.04. Waiver of Past Defaults. The Holders of Class A Notes
evidencing not less than a majority of the Outstanding Amount of the Class A
Notes may, on behalf of all Noteholders, waive in writing any default by the
Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to or payments
from any of the Trust Accounts in accordance with this Agreement. Upon any
such waiver of
50
<PAGE>
a past default, such default shall cease to exist, and any Servicer Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereto.
ARTICLE IX
EARLY AMORTIZATION EVENTS; OPTIONAL ACQUISITION
SECTION 9.01. Early Amortization Events. If any of the following events
shall occur during the Revolving Period:
(a) failure on the part of the Transferor or the Servicer to make any
payment or deposit under this Agreement or the Contribution and Sale Agreement
on or before the date occurring three Business Days after such payment or
deposit is required to be made;
(b) failure on the part of the Transferor or the Servicer to duly
observe or perform in any material respect any other covenants or agreements
of the Transferor or the Servicer set forth in this Agreement or the
Contribution and Sale Agreement, which failure materially and adversely
affects the rights of the Class A Noteholders and which continues unremedied
for a period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (A) to the
Transferor or the Servicer (as the case may be) by the Owner Trustee or the
Indenture Trustee or (B) to the Servicer or the Transferor (as the case may
be) and the Owner Trustee and the Indenture Trustee by the Holders of Class A
Notes evidencing not less than 25% of the Outstanding Amount of the Class A
Notes;
(c) any representation or warranty made by MCC in the Contribution and
Sale Agreement or by the Transferor or the Servicer in this Agreement or any
information in the Schedule of Receivables (x) shall prove to be incorrect in
any material respect when made or when delivered, (y) which continues to be
incorrect in any material respect for a period of 60 days after the date on
which written notice of such failure, requiring the same to be remedied,
shall have been given to (A) MCC, the Transferor or the Servicer (as the case
may be) by the Owner Trustee or the Indenture Trustee or (B) MCC, the
Transferor or the Servicer (as the case may be) and the Owner Trustee and the
Indenture Trustee by Holders of Class A Notes evidencing not less than 25% of
the Outstanding Amount of the Class A Notes and (z) as a result of which the
interest of the Class A Noteholders are materially and adversely affected;
provided, however, that an Early Amortization Event shall not be deemed to
occur pursuant to this subparagraph (c) if MCC, the Transferor or the
Servicer (as the case may be) shall have acquired the relevant Receivable
pursuant to Section 6.02(a)(i) of the Contribution and Sale Agreement or
Section 3.02 or 4.07 (as applicable) by depositing the related Acquisition
Amount in the Collection Account pursuant to Section 5.03;
(d) an Insolvency Event shall occur with respect to MCC or the
Transferor;
51
<PAGE>
(e) the Transferor or the Trust shall become subject to registration as
an "investment company" under the Investment Company Act of 1940, as amended;
(f) the Pool Balance shall be less than the outstanding principal
balance of the Notes for any three consecutive Distribution Dates;
(g) a Servicer Termination Event shall occur;
(h) the amount on deposit in the Reserve Account shall be less than the
Specified Reserve Account Balance for any three consecutive Distribution
Dates;
(i) an Event of Default shall have occurred and be continuing and the
Notes shall be declared immediately due and payable;
(j) the average of the Trust Yields for any three consecutive Collection
Periods is less than the average of the Base Rates for such period; or
(k) the Cumulative Net Loss Ratio shall exceed 3%.
then (but in the case of any event described in subparagraph (a), (b) or (c)
after any applicable grace period) an early amortization event (an "Early
Amortization Event") shall have occurred.
SECTION 9.02. Optional Acquisition of All Receivables. If on the last
day of any Collection Period the Pool Balance is less than 10% of the Initial
Pool Balance, the Transferor shall have the option to acquire the Owner Trust
Estate, other than the Trust Accounts, which acquisition shall be effective
as of such last day; provided, that the Transferor may not effect any such
acquisition so long as the rating on Transferor's long-term debt obligations
is either non-existent or is less than Baa3 by Moody's, unless the Owner
Trustee and the Indenture Trustee shall have received an Opinion of Counsel
to the effect that such acquisition would not constitute a fraudulent
conveyance or transfer. To exercise such option, (x) the Transferor shall
deliver notice of such intention to the Indenture Trustee at least 15 days
prior to the next succeeding Distribution Date and (y) the Transferor shall
deposit in the Collection Account on or prior to the second Business Day
prior to such next succeeding Distribution Date an amount equal to the
aggregate Acquisition Amount for the Receivables (including Defaulted
Receivables) pursuant to Section 5.03, and shall succeed to all interests in
and to the Trust.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment. The Agreement may be amended by the
Transferor, the Servicer and the Trust, with the consent of the Indenture
Trustee, but without the consent of any of the Noteholders, to cure any
ambiguity, to correct or supplement any provisions in this Agreement or for
the purpose of adding any provisions to or changing in any manner or
52
<PAGE>
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Owner
Trustee and the Indenture Trustee, adversely affect in any material respect
the interests of any Noteholder.
This Agreement may also be amended from time to time by the Transferor,
the Servicer and the Trust, with the consent of the Indenture Trustee, the
consent of the Holders of Class A Notes evidencing not less than a majority
of the Outstanding Amount of the Class A Notes, 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
Noteholders; provided, however, that no such amendment shall (a) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be
required to be made for the benefit of the Noteholders or (b) reduce the
aforesaid portion of the Outstanding Amount of the Class A Notes, the Holders
of which are required to consent to any such amendment, without the consent
of the Holders of all the outstanding Class A Notes.
Prior to the execution of any such amendment or consent, the Servicer
shall furnish written notification of the substance of such amendment or
consent to each of the Rating Agencies. Promptly after the execution of any
such amendment or consent, the Servicer shall furnish written notification of
the substance of such amendment or consent to the Indenture Trustee.
It shall not be necessary for the consent of Noteholders pursuant to this
Section to approve the particular form of any proposed amendment or consent,
but it shall be sufficient if such consent shall approve the substance
thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture 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 the Opinion of Counsel referred
to in Section 10.02(i)(1). The Owner Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects
the Owner Trustee's or the Indenture Trustee's, as applicable, own rights,
duties or immunities under this Agreement or otherwise.
SECTION 10.02. Protection of Title to Trust.
(a) The Transferor shall take all actions necessary (other than delivery
of the original Contracts), and the Issuer shall cooperate with the
Transferor, if applicable, to perfect, and maintain perfection of, the
interests of the Issuer and the Indenture Trustee in the Receivables. In the
event it is determined that the Indenture Trustee's or the Issuer's interests
are no longer perfected, such actions shall include but shall not be limited
to enforcement of the terms of Section 6.02 of the Contribution and Sale
Agreement. In addition, without limiting the rights of the Indenture Trustee
or the Issuer specified in the immediately preceding sentence, the Transferor
shall execute and file and cause to be executed and filed such financing
statements
53
<PAGE>
and continuation statements, all in such manner and in such places as may be
required by law fully to perfect, maintain, and protect the interest of the
Issuer and the interest of the Indenture Trustee in the Receivables and in
the proceeds thereof. The Transferor shall deliver (or cause to be
delivered) to the Owner Trustee and the Indenture Trustee file-stamped copies
of, or filing receipts for, any document filed as provided above, as soon as
available following such filing.
(b) The Transferor 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 in accordance with paragraph (a)
above or otherwise seriously misleading within the meaning of Section
9-402(7) of the UCC (regardless of whether such a filing was ever made),
unless it shall have given the Owner Trustee and the Indenture Trustee at
least five days' prior written notice thereof and, if applicable, shall have
timely filed appropriate amendments to any and all previously filed financing
statements or continuation statements (so that the interest of the Issuer or
the Indenture Trustee is not adversely affected).
(c) Each of the Transferor and the Servicer shall have an obligation to
give the Owner Trustee and the Indenture Trustee at least 60 days' prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement (regardless of whether such a
filing was ever made) and shall promptly, if applicable, file any such
amendment. The Servicer shall at all times maintain each office from which
it shall service Receivables, and its principal executive office, within the
United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and Recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or Recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account in respect of such Receivable.
(e) The Servicer shall maintain its Receivable Management System so that,
from and after the time of transfer under this Agreement of the Receivables,
the Servicer's Receivable Management System (including any backup archives)
that refer to a Receivable shall indicate clearly the interest of the Issuer
(which interest has been acquired from the Transferor) and the Indenture
Trustee in such Receivable and that such Receivable is owned by or has been
pledged to the Issuer and has been pledged to the Indenture Trustee.
Indication of the Issuer's interest (which interest has been acquired from
the Transferor) and the Indenture Trustee's interest in a Receivable shall be
deleted from or modified on the Servicer's Receivable Management System when,
and only when, the related Receivable shall have been paid in full or
reacquired.
(f) If at any time the Transferor or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in
receivables comparable with the Receivables, to any prospective purchaser,
lender or other transferee, the Servicer shall give to such prospective
purchaser, lender or other transferee computer tapes, records or printouts
(including
54
<PAGE>
any restored from backup archives) that, if they shall refer in
any manner whatsoever to any Receivable, shall indicate clearly that such
Receivable has been transferred and is owned by or has been pledged to the
Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and its agents at any
time following reasonable notice and during normal business hours to inspect,
audit and make copies of and abstracts from the Servicer's records regarding
any Receivable.
(h) Upon reasonable request, the Servicer shall furnish to the Owner
Trustee or to the Indenture Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(1) promptly after the execution and delivery of this Agreement and
of each amendment thereto, an Opinion of Counsel either (A) stating
that, in the opinion of such counsel, all actions (other than delivering
the original Contracts) have been taken that are necessary fully to
perfect the interests of the Owner Trustee and the Indenture Trustee in
the Receivables, and reciting the details of such action or referring to
prior Opinions of Counsel in which such details are given, or (B)
stating that, in the opinion of such counsel, no such action shall be
necessary to perfect such interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Initial Cut-off Date, an Opinion of Counsel, dated as of a
date during such 90-day period, either (A) stating that, in the opinion
of such counsel, all actions (other than the delivery of the original
Contracts) have been taken, and, if applicable, all financing statements
and continuation statements have been executed and filed, that are
necessary fully to perfect the interests of the Owner Trustee and the
Indenture Trustee in the Receivables and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details
are given, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to perfect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify any action necessary (as of the date of such opinion) to be taken in
the following year to perfect such interest.
(j) The Transferor shall, to the extent required by applicable law, cause
the Class A Notes to be registered with the Commission pursuant to Section
12(b) or Section 12(g) of the Exchange Act within the time periods specified
in such sections.
SECTION 10.03. Notices. All demands, notices and communications upon or
to the Transferor, the Servicer, the Issuer, the Owner Trustee, the Indenture
Trustee or the Rating
55
<PAGE>
Agencies under this Agreement shall be in writing,
personally delivered or mailed by certified mail, return receipt requested,
and shall be deemed to have been duly given upon receipt (a) in the case of
the Transferor, to MetLife Capital Funding Corp. III, 10900 NE 4th Street,
Suite 550, Bellevue, WA 98004, (b) in the case of the Servicer, to MetLife
Capital Corporation, 10900 NE 4th Street, Suite 500, Bellevue, WA 98004, (c)
the case of the Issuer or the Owner Trustee, at the "Corporate Trust Office"
(as defined in the Trust Agreement), (d) in the case of the Indenture
Trustee, at the Corporate Trust Office, (e) in the case of Moody's, to
Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street,
New York, New York 10007 and (f) in the case of Standard & Poor's, to
Standard & Poor's Ratings Services, 26 Broadway (15th Floor), New York, New
York 10004, Attention of 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 10.04. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.04 and 7.03 and as
provided in the provisions of this Agreement concerning the resignation of
the Servicer, this Agreement may not be assigned by the Transferor or the
Servicer.
SECTION 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Transferor, the Servicer, the
Issuer, the Owner Trustee, the Indenture Trustee and the 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
Owner Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
SECTION 10.06. 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 10.07. Separate 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 10.08. 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 10.09. 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, REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
56
<PAGE>
SECTION 10.10. Assignment to Indenture Trustee. The Transferor hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and interest
of the Issuer in, to and under the Receivables and the other property
constituting the Owner Trust Estate and/or the assignment of any or all of
the Issuer's rights and obligations hereunder to the Indenture Trustee.
SECTION 10.11. Nonpetition Covenants.
(a) Notwithstanding any prior termination of this Agreement, the
Servicer, the Transferor, the Owner Trustee and the Indenture Trustee (in its
capacity as Indenture Trustee or Servicer) shall not at any time with respect
to the Issuer, acquiesce, petition or otherwise invoke or cause the Issuer to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, the
Servicer, the Issuer, the Owner Trustee and the Indenture Trustee shall not
at any time with respect to the Transferor, acquiesce, petition or otherwise
invoke or cause the Transferor to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Transferor under any Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Transferor or any
substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Transferor.
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the
Issuer, and in no event shall Wilmington Trust Company in its individual
capacity have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer. For all
purposes of this Agreement, in the performance of its duties or obligations
hereunder or in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Articles V, VI and VII of the Trust
Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been acknowledged and accepted by The Chase Manhattan Bank not
in its individual capacity but solely as Indenture Trustee, and in no event
shall The Chase Manhattan Bank have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer
57
<PAGE>
hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the
assets of the Issuer.
[Signature page to follow]
58
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Transfer and
Servicing Agreement to be duly executed by their respective officers as of the
day and year first above written.
METLIFE CAPITAL EQUIPMENT LOAN TRUST
1997-A
By: WILMINGTON TRUST COMPANY
not in its individual capacity but
solely as Owner Trustee on behalf of the
Trust,
By: _______________________________
Name:
Title:
METLIFE CAPITAL FUNDING CORP. III,
Transferor,
By: _______________________________
Name:
Title:
METLIFE CAPITAL CORPORATION,
Servicer,
By: _______________________________
Name:
Title:
Acknowledged and Accepted:
THE CHASE MANHATTAN BANK,
not in its individual capacity
but solely as Indenture Trustee
By:_______________________________
Name:
Title:
[Signature Page to Transfer and Servicing Agreement]
<PAGE>
Exhibit 4.3
EXECUTION COPY
- -------------------------------------------------------------------------------
METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A
TRUST AGREEMENT
among
METLIFE CAPITAL FUNDING CORP. III,
as Transferor
METLIFE CAPITAL CORPORATION,
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
Dated as of May 1, 1997
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Capitalized Terms......................................... 1
SECTION 1.02. Other Definitional Provisions............................. 2
ARTICLE II
ORGANIZATION
SECTION 2.01. Name..................................................... 3
SECTION 2.02. Office................................................... 3
SECTION 2.03. Purpose and Powers....................................... 3
SECTION 2.04. Appointment of Owner Trustee............................. 4
SECTION 2.05. Initial Capital Contribution of Trust Estate............. 4
SECTION 2.06. Declaration of Trust..................................... 4
SECTION 2.07. Title to Trust Property.................................. 5
SECTION 2.08. Situs of Trust........................................... 5
SECTION 2.09. Representations and Warranties of Transferor............. 5
ARTICLE III
CERTIFICATE
SECTION 3.01. Initial Ownership........................................ 6
SECTION 3.02. Form of Certificates..................................... 6
SECTION 3.03. Authentication of Certificate............................ 6
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.01. Prior Notice to Owner and Transferor with Respect to
Certain Matters.......................................... 7
SECTION 4.02. Action By Transferor with Respect to Certain Matters..... 7
SECTION 4.03. Restrictions on Power.................................... 7
i
<PAGE>
ARTICLE V
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Page
----
SECTION 5.01. General Authority........................................ 8
SECTION 5.02. General Duties........................................... 8
SECTION 5.03. Action Upon Instruction.................................. 8
SECTION 5.04. No Duties Except as Specified in this Agreement or in
Instructions............................................. 9
SECTION 5.05. No Action Except under Specified Documents or
Instructions............................................. 9
SECTION 5.06. Restrictions............................................. 9
ARTICLE VI
CONCERNING THE OWNER TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties......................... 10
SECTION 6.02. Furnishing of Documents................................. 11
SECTION 6.03. Representations and Warranties.......................... 11
SECTION 6.04. Reliance; Advice of Counsel............................. 12
SECTION 6.05. Not Acting in Individual Capacity....................... 12
SECTION 6.06. Owner Trustee Not Liable for Certificate, Notes or
Receivables............................................. 12
SECTION 6.07. Owner Trustee May Own Notes............................. 13
ARTICLE VII
COMPENSATION OF OWNER TRUSTEE
SECTION 7.01. Owner Trustee's Fees and Expenses....................... 13
SECTION 7.02. Indemnification......................................... 13
SECTION 7.03. Payments to the Owner Trustee........................... 14
ARTICLE VIII
TERMINATION OF TRUST AGREEMENT
SECTION 8.01. Termination of Trust Agreement.......................... 14
ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 9.01. Eligibility Requirements for Owner Trustee.............. 14
SECTION 9.02. Resignation or Removal of Owner Trustee................. 15
SECTION 9.03. Successor Owner Trustee................................. 15
ii
<PAGE>
SECTION 9.04. Merger or Consolidation of Owner Trustee................ 16
SECTION 9.05. Appointment of Co-Trustee or Separate Trustee........... 16
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Supplements and Amendments.............................. 17
SECTION 10.02. No Legal Title to Owner Trust Estate in Owner........... 18
SECTION 10.03. Limitations on Rights of Others......................... 18
SECTION 10.04. Notices................................................. 18
SECTION 10.05. Severability............................................ 19
SECTION 10.06. Separate Counterparts................................... 19
SECTION 10.07. Successors and Assigns.................................. 19
SECTION 10.08. Covenant of theTransferor............................... 19
SECTION 10.09. No Petition............................................. 19
SECTION 10.10. No Recourse............................................. 19
SECTION 10.11. Headings................................................ 20
SECTION 10.12. GOVERNING LAW........................................... 20
SECTION 10.13. Certificate Transfer Restrictions....................... 20
SECTION 10.14. Transferor Payment Obligation........................... 20
SECTION 10.15. Certain Tax Matters..................................... 20
EXHIBITS
EXHIBIT A FORM OF CERTIFICATE......................................... A-1
EXHIBIT B FORM OF CERTIFICATE OF TRUST................................ B-1
iii
<PAGE>
TRUST AGREEMENT dated as of May 1, 1997, among METLIFE CAPITAL FUNDING
CORP. III, a Delaware corporation, as Transferor, METLIFE CAPITAL
CORPORATION, a Delaware corporation and WILMINGTON TRUST COMPANY, a Delaware
banking corporation, as Owner Trustee.
ARTICLE I
DEFINITIONS
SECTION 1.01. Capitalized Terms. For all purposes of this Agreement,
the following terms shall have the meanings set forth below:
"Administration Agreement" means the Administration Agreement dated as of
May 1, 1997, among the Administrator, the Trust, the Transferor and the
Indenture Trustee, as the same may be amended, modified or supplemented from
time to time.
"Administrator" means MetLife Capital Corporation, a Delaware
corporation, or any successor Administrator under the Administration
Agreement.
"Agreement" shall mean this Trust Agreement, as the same may be amended
and supplemented from time to time.
"Basic Documents" shall mean the Contribution and Sale Agreement, the
Transfer and Servicing Agreement, the Indenture, the Administration
Agreement, the Depository Agreement, the Notes, the Certificate and the other
documents and certificates delivered in connection therewith.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801, et seq., as the same may be amended
from time to time.
"Certificate" shall mean the certificate evidencing the beneficial
interest of the Owner in the Trust, substantially in the form attached hereto
as Exhibit A.
"Certificate of Trust" shall mean the Certificate of Trust in the form of
Exhibit B which has been filed for the Trust pursuant to Section 3810(a) of
the Business Trust Statute.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" shall mean, with respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee located at 1100
North Market Street, Wilmington, DE 19890-0001, Attention: Corporate Trust
Administration; or at such other address as the Owner Trustee may designate
by notice to the Transferor, or the principal corporate trust office of any
successor Owner Trustee (the address of which the successor owner trustee
will notify the Transferor).
<PAGE>
"Depository Agreement" means the agreement among the Trust, the Indenture
Trustee, the Administrator and The Depository Trust Company, dated as of the
Closing Date, substantially in the form of Exhibit C to the Indenture.
"Expenses" shall have the meaning assigned to such term in Section 7.02.
"Indenture Trustee" shall mean The Chase Manhattan Bank, not in its
individual capacity but solely as Indenture Trustee under the Indenture, and
any successor Indenture Trustee under the Indenture.
"MCC" shall mean MetLife Capital Corporation, a Delaware corporation.
"Merrill Lynch" shall have the meaning assigned to such term in Section
2.03(a)(i).
"Owner" shall mean GSS Holdings, Inc.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Transfer and Servicing Agreement, all monies, securities,
instruments and other property on deposit from time to time in the Trust
Accounts and all other property of the Trust from time to time, including any
rights of the Owner Trustee and the Trust pursuant to the Transfer and
Servicing Agreement and the Administration Agreement.
"Owner Trustee" shall mean Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
this Agreement (unless otherwise specified herein), and any successor Owner
Trustee hereunder.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Transfer and Servicing Agreement" shall mean the Transfer and Servicing
Agreement among the Trust, the Transferor, as transferor, and MetLife Capital
Corporation, as servicer, dated as of May 1, 1997, as the same may be
amended, modified or supplemented from time to time.
"Transferor" shall mean MetLife Capital Funding Corp. III in its capacity
as Transferor hereunder.
"Trust" shall mean the trust created by this Agreement.
SECTION 1.02. Other Definitional Provisions. (a) Capitalized terms
used herein and not otherwise defined have the meanings assigned to them in
the Transfer and Servicing Agreement or, if not defined therein, in the
Indenture.
(b) 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.
2
<PAGE>
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, 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.
(d) The words "hereof," "herein," "hereunder," and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
ARTICLE II
ORGANIZATION
SECTION 2.01. Name. The Trust created hereby shall be known as "MetLife
Capital Equipment Loan Trust 1997-A," in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.
SECTION 2.02. Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in the
State of Delaware as the Owner Trustee may designate by written notice to the
Transferor.
SECTION 2.03. Purpose and Powers. The purpose of the Trust is to engage
in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Certificate pursuant to this Agreement, and to sell $304,203,000
aggregate principal amount of the Class A Notes to Merrill Lynch,
Pierce, Fenner & Smith, Incorporated ("Merrill Lynch") and $26,452,783
aggregate principal amount of the Class B Notes to the Transferor, each
upon the written order of the Transferor and to issue $1.00 aggregate
principal amount of the Certificate to the Owner upon the written order
of the Transferor;
(ii) with the proceeds of the sale of the Notes, to pay the
Transferor the amounts owed pursuant to Section 2.01 of the Transfer and
Servicing Agreement, by
3
<PAGE>
directing Merrill Lynch to wire transfer such
proceeds in accordance with instructions received from the Transferor;
(iii) with the proceeds from the sale of the Notes, to fund the
Reserve Account;
(iv) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture and to hold, manage and distribute
to the Owner pursuant to the terms of the Transfer and Servicing
Agreement any portion of the Trust Estate released from the Lien of, and
remitted to the Trust pursuant to, the Indenture;
(v) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to engage
in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions to
the Noteholders.
The 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 Basic Documents.
SECTION 2.04. Appointment of Owner Trustee. The Transferor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.05. Initial Capital Contribution of Trust Estate. The
Transferor hereby assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1 received from the Owner. The
Owner Trustee hereby acknowledges receipt in trust from the Transferor, as of
the date hereof, of the foregoing contribution, which shall constitute the
initial Owner Trust Estate and shall be held by the Owner Trustee. The
Transferor shall pay organizational expenses of the Trust as they may arise
or shall, upon the request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.06. Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Owner, subject to
the obligations of the Trust under the Basic Documents. It is the intention
of the parties hereto that the Trust constitute a business trust under the
Business Trust Statute and that this Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, for income and franchise tax purposes, the Trust shall be disregarded
as an entity and treated as owned in whole by the Transferor. The parties
hereto agree that they will take no action contrary to the foregoing
intention. Effective as of the date hereof, the Owner Trustee shall have all
rights, powers and
4
<PAGE>
duties set forth herein and, to the extent not inconsistent herewith, in the
Business Trust Statute with respect to accomplishing the purposes of the
Trust.
SECTION 2.07. Title to Trust Property. Legal title to all the Owner
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in
which case title shall be deemed to be vested in the Owner Trustee, a
co-trustee and/or a separate trustee, as the case may be.
SECTION 2.08. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of
Delaware or the State of New York. The Trust shall not have any employees in
any state other than Delaware; provided, however, that nothing herein shall
restrict or prohibit the Owner Trustee from having employees within or
without the State of Delaware. Payments will be received by the Trust only in
Delaware or New York, and payments will be made by the Trust only from
Delaware or New York. The only office of the Trust will be at the Corporate
Trust Office in Delaware.
SECTION 2.09. Representations and Warranties of Transferor. The
Transferor hereby represents and warrants to the Owner Trustee that:
(a) The Transferor is duly organized and validly existing as a
corporation in good standing under the laws of the State of Delaware,
with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted.
(b) The Transferor 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 failure to so qualify or to
obtain such license or approval would render any Receivable unenforceable
that would otherwise be enforceable by the Transferor, the Servicer or
the Owner Trustee.
(c) The Transferor has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Transferor has
full power and authority to assign the property to be assigned to and
deposited with the Trust and the Transferor shall have duly authorized
such assignment and deposit to the Trust by all necessary corporate
action; and the execution, delivery and performance of this Agreement has
been duly authorized by the Transferor by all necessary corporate action.
(d) 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, or constitute
(with or without notice or lapse of time) a default under, the
certificate of incorporation or by-laws of the Transferor, or any
indenture, agreement or other instrument to which the Transferor 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
5
<PAGE>
to the Basic Documents); nor violate any law or, to the best of the
Transferor's knowledge, any order, rule or regulation applicable to the
Transferor of any court, federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Transferor or its properties.
(e) There are no proceedings or investigations pending, or, to the
best of the Transferor's knowledge, threatened, before any court, federal
or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Transferor or its properties
which (i) assert the invalidity of this Agreement or any of the Basic
Documents, (ii) seek to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the Basic
Documents, or (iii) seek any determination or ruling that might
materially and adversely affect the performance by the Transferor of its
obligations under, or the validity or enforceability of, this Agreement
or any of the Basic Documents.
ARTICLE III
CERTIFICATE
SECTION 3.01. Initial Ownership. Upon the formation of the Trust by the
contribution pursuant to Section 2.05, the Owner shall be the sole beneficial
owner of the Trust.
SECTION 3.02. Form of Certificates. The Certificate shall be issued in
registered form in substantially the form of Exhibit A. The Certificate
shall be executed on behalf of the Trust by manual or facsimile signature of
a Trust Officer of the Owner Trustee. The Certificate 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
Trust, shall, when duly authenticated pursuant to Section 3.03, 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 the Certificate or did not hold such
offices at the date of authentication and delivery of the Certificate.
SECTION 3.03. Authentication of Certificate. Concurrently with the
initial assignment of the Receivables to the Trust pursuant to the Transfer
and Servicing Agreement, the Owner Trustee shall cause a single Certificate
to be executed on behalf of the Trust, authenticated and delivered to or upon
the written order of the Transferor, signed by its Chairman of the Board, its
President, any Vice President, its Treasurer, its Secretary or any Assistant
Treasurer, without further corporate action by the Transferor. The
Certificate shall not entitle its holder to any benefit under this Agreement,
or be valid for any purpose, unless there shall appear on the Certificate a
certificate of authentication substantially in the form set forth in Exhibit
A, executed by the Owner Trustee or the Owner Trustee's authentication agent,
by manual signature; such authentication shall constitute conclusive evidence
that the Certificate shall have been duly authenticated and delivered
hereunder. The Certificate shall be dated the date of its authentication.
6
<PAGE>
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.01. Prior Notice to Owner and Transferor with Respect to
Certain Matters. With respect to the following matters, the Owner Trustee
shall not take action unless the Owner Trustee shall have notified the Owner
and Transferor and the Transferor shall have given its prior written consent:
(a) the initiation of any claim or lawsuit by the Trust (other than
an action to collect on a Receivable) and the compromise of any action,
claim or lawsuit brought by or against the Trust (other than an action to
collect on a Receivable);
(b) the election by the Trust to file an amendment to the Certificate
of Trust;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Owner and
Transferor;
(e) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or supplement any
provision in a manner that would not materially adversely affect the
interests of the Owner and Transferor; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar or Trustee, or the consent to the assignment by the Note
Registrar or Trustee of its obligations under the Indenture.
SECTION 4.02. Action By Transferor with Respect to Certain Matters. The
Owner Trustee shall not have the power, except upon the direction of the
Transferor, to (a) remove the Administrator under the Administration
Agreement pursuant to Section 8 thereof, (b) appoint a successor
Administrator pursuant to Section 8 of the Administration Agreement, (c)
remove the Servicer under the Transfer and Servicing Agreement pursuant to
Section 8.01 thereof or (d) except as expressly provided in the Basic
Documents, sell the Receivables after the termination of the Indenture. The
Owner Trustee shall take the actions referred to in the preceding sentence
only upon written instructions signed by the Transferor.
SECTION 4.03. Restrictions on Power. The Transferor shall not direct
the Owner Trustee to take or refrain from taking any action if such action or
inaction would be contrary to any obligation of the Trust or the Owner
Trustee under this Agreement or any of the Basic Documents or would be
contrary to Section 2.03 nor shall the Owner Trustee be obligated to follow
any such direction, if given.
7
<PAGE>
ARTICLE V
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 5.01. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is to
be a party and each certificate or other document attached as an exhibit to
or contemplated by the Basic Documents to which the Trust is to be a party,
or any amendment thereto or other agreement, in each case, in such form as
the Transferor shall approve as evidenced conclusively by the Owner Trustee's
execution thereof. In addition to the foregoing, the Owner Trustee is
authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Basic Documents. The Owner Trustee is further
authorized from time to time to take such action as the Administrator directs
in writing with respect to the Basic Documents.
SECTION 5.02. General Duties. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant
to the terms of this Agreement and the Basic Documents and to administer the
Trust in the interest of the Transferor, subject to the Basic Documents and
in accordance with the provisions of this Agreement. Notwithstanding the
foregoing, the Owner Trustee shall be deemed to have discharged its duties
and responsibilities hereunder and under the Basic Documents to the extent
the Administrator has agreed in the Administration Agreement to perform any
act or to discharge any duty of the Owner Trustee hereunder or under any
Basic Document, and the Owner Trustee shall not be liable for the default or
failure of the Administrator to carry out its obligations under the
Administration Agreement.
SECTION 5.03. Action Upon Instruction. (a) Subject to Article IV, the
Transferor may, by written instruction, direct the Owner Trustee in the
management of the Trust. Such direction may be exercised at any time by
written instruction of the Transferor pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any action hereunder
or under any Basic Document if the Owner 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 Owner Trustee or is contrary to the
terms hereof or of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Transferor requesting
instruction as to the course of action to be adopted, and to the extent the
Owner Trustee acts in good faith in accordance with any written instruction
of the Transferor received, the Owner Trustee shall not be liable on account
of such action to any Person. If the Owner Trustee shall not have received
appropriate instruction within 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 under no duty to,
take or refrain from taking such action, not inconsistent with this Agreement
or the Basic Documents, as it shall
8
<PAGE>
deem to be in the best interest of the Transferor, and shall have no
liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the application
of any provision of this Agreement or any 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 permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Transferor requesting instruction and, to the extent that the Owner Trustee
acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of
such action or inaction, to any Person. If the Owner Trustee shall not have
received appropriate instruction within 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 Basic Documents, as it shall deem to be in the best
interests of the Transferor, and shall have no liability to any Person for
such action or inaction.
SECTION 5.04. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Owner Trust Estate, or to otherwise take or
refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Owner Trustee is a party, except as
expressly provided by the terms of this Agreement or in any document or
written instruction received by the Owner Trustee pursuant to Section 5.03;
and no implied duties or obligations shall be read into this Agreement or any
Basic Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to prepare or
file any Securities and Exchange Commission filing for the Trust or to record
this Agreement or any Basic Document. The Owner Trustee nevertheless agrees
that it will, at its own cost and expense, promptly take all action as may be
necessary to discharge any liens on any part of the Owner Trust Estate that
result from actions by, or claims against, the Owner Trustee that are not
related to the ownership or the administration of the Owner Trust Estate.
SECTION 5.05. No Action Except under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell,
dispose of or otherwise deal with any part of the Owner Trust Estate except
(i) in accordance with the powers granted to and the authority conferred upon
the Owner Trustee pursuant to this Agreement, (ii) in accordance with the
Basic Documents and (iii) in accordance with any document or instruction
delivered to the Owner Trustee pursuant to Section 5.03.
SECTION 5.06. Restrictions. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section
2.03 or (b) that, to the actual knowledge of a Trust Officer of the Owner
Trustee, would result in the Trust's becoming taxable
9
<PAGE>
as a corporation for federal income tax purposes. The Transferor shall not
direct the Owner Trustee to take action that would violate the provisions of
this Section.
ARTICLE VI
CONCERNING THE OWNER TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The
Owner Trustee also agrees to disburse all moneys actually received by it
constituting part of the Owner Trust Estate upon the terms of the Basic
Documents and this Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any Basic Document under any circumstances,
except (i) for its own willful misconduct or negligence or (ii) in the case
of the inaccuracy of any representation or warranty contained in Section 6.03
expressly made by the Owner Trustee. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) the Owner Trustee shall not be liable for any error of judgment
made by a Trust Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of
the Administrator or the Transferor;
(c) no provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers
hereunder or under any Basic Document, if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or
provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution
hereof by the Transferor or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust Estate or for or
in respect of the validity or sufficiency of the Basic Documents, other
than the certificate of authentication on the Certificate, and the Owner
Trustee shall in no event assume or incur any liability, duty, or
obligation to any Noteholder or to any Owner, other than as expressly
provided for herein and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Administrator, the Indenture Trustee or the Servicer
under any of the Basic Documents
10
<PAGE>
or otherwise, and the Owner Trustee shall
have no obligation or liability to perform the obligations of the Trust
under this Agreement or the Basic Documents that are required to be
performed by the Administrator under the Administration Agreement, the
Indenture Trustee under the Indenture or the Servicer under the Transfer
and Servicing Agreement;
(g) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document, at the request, order or
direction of any of the Transferor, unless the Transferor has offered to
the Owner Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities that may be incurred by the Owner Trustee
therein or thereby. The right of the Owner Trustee to perform any
discretionary act enumerated in this Agreement or in any Basic Document
shall not be construed as a duty, and the Owner Trustee shall not be
answerable for other than its negligence or willful misconduct in the
performance of any such act; and
(h) Notwithstanding anything contained herein to the contrary, the
Owner Trustee shall not be required to take any action in any jurisdiction
other than in the State of Delaware if the taking of such action will (i)
require the registration with, licensing by or the taking of any other
similar action in respect of, any state or other governmental authority or
agency of any jurisdiction other than the State of Delaware by or with
respect to the Owner Trustee; (ii) result in any fee, tax or other
governmental charge under the laws of any jurisdiction or any political
subdivisions thereof in existence on the date hereof other than the State
of Delaware becoming payable by the Owner Trustee; or (iii) subject the
Owner Trustee to personal jurisdiction in any jurisdiction other than the
State of Delaware for causes of action arising from acts unrelated to the
consummation of the transactions by the Owner Trustee contemplated hereby.
The Owner Trustee shall be entitled to obtain advice of counsel (which
advice shall be an expense of MCC) to determine whether any action required
to be taken pursuant to the Agreement results in the consequences described
in clauses (i), (ii) and (iii) of the preceding sentence. In the event
that said counsel advises the Owner Trustee that such action will result in
such consequences, the Owner Trustee may, or if instructed to do so by the
Transferor, shall appoint an additional trustee pursuant to Section 9.05
hereby to proceed with such action.
SECTION 6.02. Furnishing of Documents. The Owner Trustee shall furnish
to the Owner and the Indenture Trustee, promptly upon written request
therefor, copies of the Contribution and Sale Agreement, the Transfer and
Servicing Agreement, the Administration Agreement and the Trust Agreement.
SECTION 6.03. Representations and Warranties. The Owner Trustee hereby
represents and warrants to the Transferor, for the benefit of the Owner and
the Transferor, that:
(a) It is a Delaware 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.
11
<PAGE>
(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 Owner Trustee or any judgment or order
binding on it, or constitute any default under its charter documents or
by-laws or any indenture, mortgage, contract, agreement or instrument to
which it is a party or by which any of its properties may be bound.
SECTION 6.04. Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion,
bond, or other document or paper believed by it to be genuine and believed by
it to be signed by the proper party or parties. The Owner Trustee may accept
a certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the method of the determination of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by
the treasurer or other authorized officers of the relevant party, as to such
fact or matter, and such certificate shall constitute full protection to the
Owner Trustee for any action taken or omitted to be taken by it in good faith
in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants
and other skilled persons to be selected with reasonable care and employed by
it. The Owner Trustee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the written opinion or written
advice of any such counsel, accountants or other such persons.
SECTION 6.05. Not Acting in Individual Capacity. Except as provided in
this Article VI, in accepting the trusts hereby created Wilmington Trust
Company acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason
of the transactions contemplated by this Agreement or any Basic Document
shall look only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 6.06. Owner Trustee Not Liable for Certificate, Notes or
Receivables. The recitals contained herein and in the Certificate (other than
the signature and counter-signature of the Owner Trustee on the Certificate and
its representations and warranties in Section 6.03)
12
<PAGE>
shall be taken as the statements of the Transferor and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner Trustee
makes no representations as to the validity or sufficiency of this Agreement,
or of the Certificate (other than the signature and countersignature of the
Owner Trustee on the Certificate) or the Notes or of any other Basic Document
or of any Receivable or related documents. The Owner Trustee shall at no time
have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Receivable, or the perfection and priority
of any security interest created by any Receivable in any Financed Equipment
or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Owner Trust Estate or its ability to
generate the payments to be distributed to the Noteholders under the
Indenture, including, without limitation: the existence, condition and
ownership of any Financed Equipment; the existence and enforceability of any
insurance thereon; the existence and contents of any Receivable on any
computer or other record thereof; the validity of the assignment of any
Receivable to the Trust or of any intervening assignment; the completeness of
any Receivable; the performance or enforcement of any Receivable; the
compliance by the Transferor or the Servicer with any warranty or
representation made under any Basic Document or in any related document or
the accuracy of any such warranty or representation or any action of the
Administrator, the Indenture Trustee or the Servicer or any subservicer taken
in the name of the Owner Trustee.
SECTION 6.07. Owner Trustee May Own Notes. The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may deal with the Transferor, the Administrator, the Indenture Trustee and the
Servicer in banking transactions with the same rights as it would have if it
were not Owner Trustee.
ARTICLE VII
COMPENSATION OF OWNER TRUSTEE
SECTION 7.01. Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have
been separately agreed upon before the date hereof between the Transferor and
the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed
by the Transferor for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder; provided, however, that the Owner Trustee's right to enforce such
obligation shall be subject to the provisions of Section 10.09.
SECTION 7.02. Indemnification. The Transferor shall be liable as
primary obligor for, and shall indemnify the Owner Trustee and its
successors, assigns, agents and servants (collectively, the "Indemnified
Parties") from and against, any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of
any kind and nature whatsoever (collectively, "Expenses") which may at any
time be imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of this
13
<PAGE>
Agreement, the Basic Documents, the Owner Trust Estate, the administration of
the Owner Trust Estate or the action or inaction of the Owner Trustee
hereunder, except only that the Transferor shall not be liable for or
required to indemnify the Owner Trustee from and against Expenses arising or
resulting from any of the matters described in the third sentence of Section
6.01; provided, however, that the Owner Trustee's right to enforce such
obligation shall be subject to the provisions of Section 10.09. The
indemnities contained in this Section shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement. In
the event of any claim, action or proceeding for which indemnity will be
sought pursuant to this Section, the Owner Trustee's choice of legal counsel
shall be subject to the approval of the Transferor, which approval shall not
be unreasonably withheld.
SECTION 7.03. Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article VII shall be deemed not to be a part
of the Owner Trust Estate immediately after such payment.
ARTICLE VIII
TERMINATION OF TRUST AGREEMENT
SECTION 8.01. Termination of Trust Agreement. (a) This Agreement
(other than Article VIII) and the Trust shall terminate and be of no further
force or effect, upon the final distribution by the Owner Trustee of all
moneys or other property or proceeds of the Owner Trust Estate in accordance
with the Business Trust Statute and the terms of the Indenture and the
Transfer and Servicing Agreement. Any money or other property held as part
of the Owner Trust Estate following such distribution shall be distributed to
the Transferor. The bankruptcy, liquidation, dissolution, termination, death
or incapacity of the Owner shall not (x) operate to terminate this Agreement
or the Trust, or (y) entitle the Owner's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or Owner Trust Estate
or (z) otherwise affect the rights, obligations and liabilities of the
parties hereto.
(b) Except as provided in Section 8.01(a), neither the Transferor nor the
Owner shall be entitled to revoke or terminate the Trust.
(c) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 9.01. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust
14
<PAGE>
Statute; authorized to exercise corporate trust powers; having a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by federal or state authorities; and having (or having a parent
which has) a rating of at least Baa3 by Moody's and at least BBB- by Standard
& Poor's or if not rated, otherwise satisfactory to such Rating Agencies. If
such corporation shall publish reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Owner Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Owner Trustee shall
resign immediately in the manner and with the effect specified in Section
9.02.
SECTION 9.02. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Administrator; provided,
however, that such resignation and discharge shall only be effective upon the
appointment of a successor Owner Trustee. Upon receiving such notice of
resignation, the Administrator shall promptly appoint a successor Owner
Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Owner Trustee and one copy to the
successor Owner Trustee. If no successor Owner Trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Owner Trustee may petition any
court of competent jurisdiction for the appointment of a successor Owner
Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 9.01 and shall fail to resign after written
request therefor by the Administrator, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent,
or a receiver of the Owner Trustee or of its property shall be appointed, or
any public officer shall take charge or control of the Owner Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Administrator may remove the Owner Trustee. If the
Administrator shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Administrator shall promptly appoint a
successor Owner Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the outgoing Owner Trustee so removed
and one copy to the successor Owner Trustee and payment of all fees owed to
the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 9.03 and payment of all fees and expenses
owed to the outgoing Owner Trustee. The Administrator shall provide notice
of such resignation or removal of the Owner Trustee to each of the Rating
Agencies.
SECTION 9.03. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 9.02 shall execute, acknowledge and deliver to
the Administrator and to its predecessor Owner Trustee an instrument
accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become
effective and such successor Owner Trustee, without any further act, deed or
conveyance, shall become
15
<PAGE>
fully vested with all the rights, powers, duties, and obligations of its
predecessor under this Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees
and expenses deliver to the successor Owner Trustee all documents and
statements and monies held by it under this Agreement; and the Administrator
and the predecessor Owner Trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such
rights, powers, duties, and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 9.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Administrator shall mail notice of the successor of such
Owner Trustee to the Owner, the Indenture Trustee, the Noteholders and the
Rating Agencies. If the Administrator shall fail to mail such notice within
10 days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense
of the Administrator.
SECTION 9.04. Merger or Consolidation of Owner Trustee. Any corporation
into which the Owner Trustee may be merged or converted or with which it may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder;
provided such corporation shall be eligible pursuant to Section 9.01, 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 Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
SECTION 9.05. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate or any Financed Equipment may at the time be
located, the Administrator and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Owner Trustee to act as co-trustee, jointly with
the Owner Trustee, or separate trustee or separate trustees, of all or any
part of the Owner Trust Estate, and to vest in such Person, in such capacity,
such title to the Trust, or any part thereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and
trusts as the Administrator and the Owner Trustee may consider necessary or
desirable. If the Administrator shall not have joined in such appointment
within 15 days after the receipt by it of a request so to do, the Owner
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 9.01 and no notice
of the appointment of any co-trustee or separate trustee shall be required
pursuant to Section 9.03.
16
<PAGE>
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties, and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed, the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties, and obligations (including the holding of title to
the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Administrator and the Owner Trustee acting 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 Owner Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Owner Trustee or separately, as may be provided therein, subject to all
the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Owner Trustee. Each such instrument shall be
filed with the Owner Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Supplements and Amendments. This Agreement may be
amended by the Transferor and the Owner Trustee, with prior written notice to
the Rating Agencies, without the consent of any of the Noteholders or the
Owner or any other Person, to cure any ambiguity, to correct or supplement
any provisions in this Agreement.
17
<PAGE>
This Agreement may also be amended from time to time by the Transferor
and the Owner Trustee, with prior written notice to the Rating Agencies, with
the consent of the holders of Notes evidencing not less than a majority of
the Outstanding Amount of the Notes and the consent of the Owner, 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 Noteholders and the Owner; provided, however, that without the
consent of all Noteholders, no such amendment shall (a) increase or reduce in
any manner the amount of, or accelerate or delay the timing of, collections
of payments on Receivables or distributions that shall be required to be made
for the benefit of the holders of the Notes or (b) reduce the aforesaid
percentage of the Outstanding Amount of the Notes required to consent to any
such amendment, without the consent of the holders of all the outstanding
Notes.
Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment
or consent to the Indenture Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of the Noteholders or the Owner
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
The Owner Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officer's Certificate of the Transferor or MCC
to the effect that the conditions to such Amendment have been satisfied. The
Owner Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Owner Trustee's own rights, duties or immunities
under this Agreement or otherwise.
SECTION 10.02. No Legal Title to Owner Trust Estate in Owner. The Owner
shall not have legal title to any part of the Owner Trust Estate. No
transfer, by operation of law or otherwise, of any right, title, and interest
of the Owner to and in its ownership interest in the Owner Trust Estate 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 Owner Trust Estate.
SECTION 10.03. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Owner Trustee, the Transferor,
the Administrator and, to the extent expressly provided herein, the Indenture
Trustee and the 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 Owner Trust Estate or under or in
respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 10.04. Notices. 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
18
<PAGE>
prepaid (except that notice to the Owner Trustee shall be deemed given only
upon actual receipt by the Owner Trustee), if to the Owner Trustee, addressed
to the Corporate Trust Office; if to the Transferor, addressed to MetLife
Capital Funding Corp. III, 10900 N.E. 4th Street, Suite 550, Bellevue, WA
98004, Attention: Treasurer; if to the Owner, addressed to GSS Holdings,
Inc., 25 West 43rd Street, Suite 704, New York, New York 10036; if to MCC,
addressed to MetLife Capital Corporation, 10900 N.E. 4th Street, Suite 500,
Bellevue, WA 98004, Attention: Chief Financial Officer; or, as to each
party, at such other address as shall be designated by such party in a
written notice to each other party.
SECTION 10.05. 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 10.06. Separate 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 10.07. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Transferor, the Owner Trustee and its successors and the Owner and its
successors and permitted assigns, all as herein provided. Any request,
notice, direction, consent, waiver or other instrument or action by the Owner
shall bind the successors and assigns of the Owner.
SECTION 10.08. Covenant of the Transferor. The Transferor agrees that
prior to the termination of the Trust it shall not revoke, modify or
otherwise amend any agreements with MetLife Capital Corporation in effect on
the Closing Date in any manner that would adversely affect the rights of the
Transferor to receive from MetLife Capital Corporation contributions of
capital or payments on demand pursuant to such agreements. The Transferor
further covenants and agrees that it will not enter into any transaction or
take any action (other than any transaction or action contemplated by this
Agreement or any of the Basic Documents) if, as a result of such transaction
or action, any rating of the Notes by any of the Rating Agencies would be
downgraded or withdrawn.
SECTION 10.09. No Petition. The Owner Trustee, by entering into this
Agreement, the Owner, by accepting the Certificate, and the Indenture Trustee
and each Noteholder by accepting the benefits of this Agreement, hereby
covenant and agree that they will not at any time institute against the Trust
or the Transferor, or join in any institution against the Trust or the
Transferor 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 Certificate, the Notes, this Agreement or any of the Basic
Documents.
SECTION 10.10. No Recourse. The Owner by accepting the Certificate
acknowledges that the Certificate does not represent an interest in or
obligation of the Transferor, the Servicer,
19
<PAGE>
the Administrator, the Owner Trustee, the Indenture Trustee or any Affiliate
thereof, and no recourse may be had against such parties or their assets, or
against the assets pledged under the Indenture.
SECTION 10.11. 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 10.12. GOVERNING LAW. THIS AGREEMENT 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.
SECTION 10.13. Certificate Transfer Restrictions. To the fullest extent
permitted by applicable law, the Certificate (or any interest therein) may
not be transferred by the Owner to any Person.
SECTION 10.14. Transferor Payment Obligation. The Transferor shall be
responsible for payment of the Administrator's fees under the Administration
Agreement (to the extent not paid pursuant to Section 5.04 of the Transfer
and Servicing Agreement) and shall reimburse the Administrator for all
expenses and liabilities of the Administrator incurred thereunder.
SECTION 10.15. Certain Tax Matters. MCC agrees that it shall pay the
business and occupation taxes imposed on the Trust by the state of
Washington, if any, from its own funds. The Transferor and Owner Trustee
agree to cooperate with MCC in connection with the determination, contest and
proper payment of any such tax liability in accordance with the reasonable
wishes of MCC, and hereby acknowledge that the agreement of MCC to pay such
taxes pursuant to this Section 10.15 shall constitute the sole obligation
undertaken by MCC as a signatory to this Agreement.
20
<PAGE>
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.
WILMINGTON TRUST COMPANY,
as Owner Trustee,
By:____________________________
Name:
Title:
METLIFE CAPITAL FUNDING CORP. III,
as Transferor,
By:____________________________
Name:
Title:
METLIFE CAPITAL CORPORATION
By:____________________________
Name:
Title:
<PAGE>
EXHIBIT-A
METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A
OWNER CERTIFICATE
(This Certificate does not represent an interest in or obligation of MetLife
Capital Funding Corp. III, MetLife Capital Corporation or any of their
respective affiliates, except to the extent described below.)
THIS CERTIFIES THAT GSS Holdings, Inc. is the registered Owner of the
MetLife Capital Equipment Loan Trust 1997-A (the "Trust") created by MetLife
Funding Corp. III, a Delaware corporation (the "Transferor").
The Trust was created pursuant to (i) the filing of the Certificate of
Trust with the Secretary of State of the State of Delaware and (ii) a Trust
Agreement as of May 1, 1997 (the "Trust Agreement"), between the Transferor
and Wilmington Trust Company, as owner trustee (the "Owner Trustee"). To the
extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Trust Agreement including, as specified
in Section 1.02(a).
This Certificate is the duly authorized Certificate evidencing a
beneficial interest in the Trust (herein called the "Certificate"). Also
issued under the Indenture dated as of May 1, 1997 between the Trust and The
Chase Manhattan Bank, as indenture trustee, are Notes designated as "Asset
Backed Notes", (the "Notes"). This Certificate is issued under and is subject
to the terms, provisions and conditions of the Trust Agreement, to which
Trust Agreement the Owner by virtue of the acceptance hereof assents and by
which the Owner is bound.
Notwithstanding any prior termination of the Trust Agreement, the Owner,
by its acceptance of the Certificate, covenants and agrees that it shall not
at any time with respect to the Issuer or the Transferor, acquiesce, petition
or otherwise invoke or cause the Issuer to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Issuer, under any Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Issuer or the Transferor.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Owner Trustee, by manual signature, this
Certificate shall not entitle the Holder hereof to any benefit under the
Trust Agreement or the Transfer and Servicing Agreement or be valid for any
purpose.
A-1
<PAGE>
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
A-2
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Certificate to be duly executed.
METLIFE CAPITAL EQUIPMENT LOAN TRUST
1997-A
By: WILMINGTON TRUST COMPANY,
as Owner Trustee
Dated: May 30, 1997 By: ___________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is the Certificate referred to in the within-mentioned Trust
Agreement.
WILMINGTON TRUST COMPANY, or WILMINGTON TRUST COMPANY
as Owner Trustee as Owner Trustee
By ______________________,
Authenticating Agent
By:___________________________ By:________________________________
Authorized Signatory Authorized Signatory
A-3
<PAGE>
EXHIBIT B
CERTIFICATE OF TRUST OF
METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A
THIS Certificate of Trust of METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A
(the "Trust"), dated May 1, 1997, has been duly executed and is being filed
by Wilmington Trust Company, a Delaware banking corporation, as trustee, to
create a business trust under the Delaware Business Trust Act (12 Del. C.,
Section 3801 et seq.).
1. Name. The name of the business trust created hereby is METLIFE
CAPITAL EQUIPMENT LOAN TRUST 1997-A.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware are Wilmington Trust Company 1100 North
Market Street, Wilmington, DE 19890-0001, Attention: Corporate Trust
Administration.
3. Effective Date. This Certificate of Trust shall be effective as of
its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust,
has executed this Certificate of Trust as of the date first above written.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely
as Owner Trustee,
By:_______________________
Name:
Title:
B-1
<PAGE>
Exhibit 10.1
EXECUTION COPY
- -------------------------------------------------------------------------------
METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A
-------------------
ADMINISTRATION AGREEMENT
Dated as of May 1, 1997
--------------------
METLIFE CAPITAL CORPORATION
Administrator
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
1. Duties of
Administrator.................................................. 1
2. Records........................................................ 7
3. Compensation................................................... 7
4. Additional Information To Be Furnished to Issuer............... 7
5. Independence of Administrator.................................. 7
6. No Joint Venture............................................... 7
7. Other Activities of Administrator.............................. 7
8. Term of Agreement; Resignation and Removal of Administrator.... 7
9. Action upon Termination, Resignation or Removal................ 8
10. Notices........................................................ 9
11. Amendments..................................................... 9
12. Successors and Assigns......................................... 10
13. GOVERNING LAW.................................................. 10
14. Headings....................................................... 10
15. Counterparts................................................... 10
16. Severability................................................... 10
17. Not Applicable to MetLife Capital Corporation in Other
Capacities................................................... 11
18. Limitation of Liability of Owner Trustee and Trustee........... 11
19. Third-Party Beneficiary........................................ 11
20. Successor Servicer and Administrator........................... 11
21. Nonpetition Covenants.......................................... 11
EXHIBIT A -- Form of Power of Attorney
<PAGE>
ADMINISTRATION AGREEMENT dated as of May 1, 1997, among METLIFE CAPITAL
EQUIPMENT LOAN TRUST 1997-A, a Delaware business trust (the "Issuer"), METLIFE
CAPITAL CORPORATION, a Delaware corporation, as administrator (the
"Administrator") and METLIFE CAPITAL FUNDING CORP. III, a Delaware corporation
(the "Transferor").
W I T N E S S E T H :
WHEREAS the Issuer is issuing the Notes (the "Notes"), pursuant to the
Indenture dated as of May 1, 1997 (as amended, modified or supplemented from
time to time in accordance with the provisions thereof, the "Indenture"),
between the Issuer and The Chase Manhattan Bank, a New York banking corporation
(the "Indenture Trustee").
WHEREAS the Issuer has entered into certain agreements in connection with
the issuance of the Notes and of the beneficial ownership interest of the
Issuer, including (i) a Transfer and Servicing Agreement dated as of May 1,
1997 (the "Transfer and Servicing Agreement") (capitalized terms used herein
and not defined herein shall have the meanings assigned such terms in the
Transfer and Servicing Agreement, or if not defined therein, in the
Indenture) among the Issuer, MetLife Capital Corporation ("MCC"), as
servicer, and the Transferor, (ii) a Depository Agreement dated May 1, 1997
(the "Depository Agreement") among the Issuer, the Indenture Trustee, the
Administrator and The Depository Trust Company and (iii) the Indenture, (the
Transfer and Servicing Agreement, the Depository Agreement, the Trust
Agreement and the Indenture being hereinafter referred to collectively as the
"Related Agreements");
WHEREAS pursuant to the Related Agreements, the Issuer and the Owner
Trustee are required to perform certain duties in connection with (a) the
Notes and the collateral therefor pledged pursuant to the Indenture (the
"Collateral") and (b) the beneficial ownership interest in the Issuer (the
holder of such interest being referred to herein as the "Owner");
WHEREAS the Issuer and the Owner Trustee desire to have the Administrator
perform certain of the duties of the Issuer and the Owner Trustee referred to
in the preceding clause, and to provide such additional services consistent
with the terms of this Agreement and the Related Agreements as the Issuer and
the Owner Trustee may from time to time request;
WHEREAS the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and
the Owner Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
1. Duties of Administrator. (a) Duties with Respect to the Related
Agreements. (i) The Administrator agrees to perform all its duties as
Administrator and the duties of the Issuer and
<PAGE>
the Owner Trustee under the Depository Agreement. In addition, the
Administrator shall consult with the Owner Trustee regarding the duties of
the Issuer and the Owner Trustee under the Related Agreements. The
Administrator shall monitor the performance of the Issuer and shall advise
the Owner Trustee when action is necessary to comply with the Issuer's or the
Owner Trustee's duties under the Related Agreements. The Administrator shall
prepare for execution by the Issuer or the Owner Trustee or shall cause the
preparation by other appropriate persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of
the Issuer or the Owner Trustee to prepare, file or deliver pursuant to any
Related Agreement. In furtherance of the foregoing, the Administrator shall
take all appropriate action that it is the duty of the Issuer or the Owner
Trustee to take pursuant to the Indenture including, without limitation, such
of the foregoing as are required with respect to the following matters under
the Indenture (references are to sections of the Indenture):
(A) the duty to cause the Note Register to be kept and to give the
Indenture Trustee notice of any appointment of a new Note Registrar and
the location, or change in location, of the Note Register (Section 2.04);
(B) the notification of Noteholders of the final principal payment
on their Notes (Section 2.07(b));
(C) the fixing or causing to be fixed of any specified record date
and the notification of the Indenture Trustee and Noteholders with
respect to special payment dates, if any (Section 2.07(c));
(D) the preparation of or obtaining of the documents and
instruments required for authentication of the Notes, if any, and
delivery of the same to the Indenture Trustee (Section 2.02);
(E) the preparation, obtaining or filing of the instruments,
opinions and certificates and other documents required for the release
of collateral (Section 2.09);
(F) the duty to cause newly appointed Paying Agents, if any, to
deliver to the Indenture Trustee the instrument specified in the
Indenture regarding funds held in trust (Section 3.03);
(G) the direction to Paying Agents to pay to the Indenture Trustee
all sums held in trust by such Paying Agents (Section 3.03);
(H) the obtaining and preservation of the Issuer's qualification to
do business in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of the
Indenture, the Notes, the Collateral and each other instrument and
agreement included in the Trust Estate;
(I) the preparation of all supplements, amendments, financing
statements, continuation statements, if any, instruments of further
assurance and other instruments,
2
<PAGE>
in accordance with Section 3.05 of the
Indenture, necessary to protect the Trust Estate (Section 3.05);
(J) the obtaining of the Opinion of Counsel on the Closing Date and
the annual delivery of Opinions of Counsel, in accordance with Section
3.06 of the Indenture, as to the Trust Estate, and the annual delivery
of the Officers' Certificate and certain other statements, in accordance
with Section 3.09 of the Indenture, as to compliance with the Indenture
(Sections 3.06 and 3.09);
(K) the identification to the Indenture Trustee in an Officers'
Certificate of a Person with whom the Issuer has contracted to perform
its duties under the Indenture (Section 3.07(b));
(L) the notification of the Indenture Trustee and the Rating
Agencies of a Servicer Default pursuant to the Transfer and Servicing
Agreement and, if such Servicer Default arises from the failure of the
Servicer to perform any of its duties under the Transfer and Servicing
Agreement, the taking of all reasonable steps available to remedy such
failure (Section 3.07(d));
(M) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligation under the
Indenture (Section 3.11(b));
(N) the delivery of notice to the Indenture Trustee of each Event
of Default and each default by the Servicer or Transferor under the
Transfer and Servicing Agreement (Section 3.19);
(O) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officers' Certificate and the obtaining of the Opinion of Counsel and
the Independent Certificate relating thereto (Section 4.01);
(P) the compliance with any written directive of the Indenture
Trustee with respect to the sale of the Trust Estate in a commercially
reasonable manner if an Event of Default shall have occurred and be
continuing (Section 5.04);
(Q) the preparation and delivery of notice to Noteholders of the
removal of the Indenture Trustee and the appointment of a successor
Indenture Trustee (Section 6.08);
(R) the preparation of any written instruments required to confirm
more fully the authority of any co-trustee or separate trustee and any
written instruments necessary in connection with the resignation or
removal of any co-trustee or separate trustee (Sections 6.08 and 6.10);
(S) the furnishing of the Indenture Trustee with the names and
addresses of Noteholders during any period when the Indenture Trustee is
not the Note Registrar (Section 7.01);
3
<PAGE>
(T) the preparation and, after execution by the Issuer, the filing
with the Commission, any applicable state agencies and the Indenture
Trustee of documents required to be filed on a periodic basis with, and
summaries thereof as may be required by rules and regulations prescribed
by, the Commission and any applicable state agencies and the
transmission of such summaries, as necessary, to the Noteholders
(Section 7.03);
(U) the opening of one or more accounts in the Trust's name, the
preparation of Issuer Orders, Officers' Certificates and Opinions of
Counsel and all other actions necessary with respect to investment and
reinvestment of funds in the Trust Accounts (Sections 8.02 and 8.03);
(V) the preparation of an Issuer Request and Officers' Certificate
and the obtaining of an Opinion of Counsel and Independent
Certificates, if necessary, for the release of the Trust Estate as
defined in the Indenture (Sections 8.04 and 8.05);
(W) the preparation of Issuer Orders and the obtaining of Opinions
of Counsel with respect to the execution of supplemental indentures and
the mailing to the Noteholders of notices with respect to such
supplemental indentures (Sections 9.01, 9.02 and 9.03);
(X) the execution of new Notes conforming to any supplemental
indenture (Section 9.06);
(Y) the notification of Noteholders of redemption of the Notes
(Section 10.02);
(Z) the preparation of all Officers' Certificates, Opinions of
Counsel and Independent Certificates with respect to any requests by the
Issuer to the Indenture Trustee to take any action under the Indenture
(Section 11.01(a));
(AA) the preparation and delivery of Officers' Certificates and the
obtaining of Independent Certificates, if necessary, for the release of
property from the lien of the Indenture (Section 11.01(b));
(BB) the notification of the Rating Agencies, upon the failure of
the Indenture Trustee to give such notification, of the information
required pursuant to Section 11.04 of the Indenture (Section 11.04);
(CC) the preparation and delivery to Noteholders and the Indenture
Trustee of any agreements with respect to alternate payment and notice
provisions (Section 11.06);
(DD) the recording of the Indenture, if applicable (Section 11.15);
and
(EE) causing the Servicer to comply with Sections 4.09, 4.10, 4.11
and 5.06 of the Transfer and Servicing Agreement.
4
<PAGE>
(ii) The Administrator will:
(A) pay the Indenture Trustee from time to time reasonable
compensation for all services rendered by the Indenture Trustee under
the Indenture (which compensation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust);
(B) except as otherwise expressly provided in the Indenture,
reimburse the Indenture Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Indenture
Trustee in accordance with any provision of the Indenture (including the
reasonable compensation, expenses and disbursements of its agents and
either in-house counsel or outside counsel, but not both), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith;
(C) indemnify the Indenture Trustee and its officers, directors,
employees and agents for, and to hold them harmless against, any losses,
liability or expense incurred without negligence or bad faith on their
part, arising out of or in connection with the acceptance or
administration of the transactions contemplated by the Indenture,
including the reasonable costs and expenses of defending themselves
against any claim or liability in connection with the exercise or
performance of any of their powers or duties under the Indenture; and
(D) indemnify the Owner Trustee and its officers, directors,
employees and agents for, and to hold them harmless against, any losses,
liability or expense incurred without negligence or bad faith on their
part, arising out of or in connection with the acceptance or
administration of the transactions contemplated by the Trust Agreement,
including the reasonable costs and expenses of defending themselves
against any claim or liability in connection with the exercise or
performance of any of their powers or duties under the Trust Agreement.
(b) Additional Duties. (i) In addition to the duties of the
Administrator set forth above, the Administrator shall perform such
calculations and shall prepare for execution by the Issuer or the Owner
Trustee or shall cause the preparation by other appropriate persons of all
such documents, reports, filings, instruments, certificates and opinions as
it shall be the duty of the Issuer or the Owner Trustee to prepare, file or
deliver pursuant to the Related Agreements, and at the request of the Owner
Trustee shall take all appropriate action that it is the duty of the Issuer
or the Owner Trustee to take pursuant to the Related Agreements. Subject to
Section 5 of this Agreement, and in accordance with the directions of the
Owner Trustee, the Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Collateral
(including the Related Agreements) as are not covered by any of the foregoing
provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Administrator.
(ii) The Administrator shall perform the duties of the Administrator
specified in Section 9.02 of the Trust Agreement required to be performed in
connection with the resignation
5
<PAGE>
or removal of the Owner Trustee, and any
other duties expressly required to be performed by the Administrator under
the Trust Agreement.
(iii) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into
transactions with or otherwise deal with any of its Affiliates; provided,
however, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in the
Administrator's opinion, no less favorable to the Issuer than would be
available from unaffiliated parties.
(iv) It is the intention of the parties hereto that the Administrator
shall, and the Administrator hereby agrees to, execute on behalf of the
Issuer all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Issuer to prepare, file or deliver
pursuant to the Related Documents. In furtherance thereof, the Owner Trustee
shall, on behalf of the Issuer, execute and deliver to the Administrator, and
to each successor Administrator appointed pursuant to the terms hereof, one
or more powers of attorney substantially in the form of Exhibit A hereto,
appointing the Administrator the attorney-in-fact of the Issuer for the
purpose of executing on behalf of the Issuer all such documents, reports,
filings, instruments, certificates and opinions.
(c) Non-Ministerial Matters. (i) With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless within a reasonable time
before the taking of such action, the Administrator shall have notified the
Owner Trustee of the proposed action and the Owner Trustee shall not have
withheld consent or provided an alternative direction. For the purpose of the
preceding sentence, "non-ministerial matters" shall include, without
limitation:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the Issuer
(other than in connection with the collection of the Receivables);
(C) the amendment, change or modification of the Related Agreements;
(D) the appointment of successor Note Registrars, successor Paying
Agents and successor Trustees pursuant to the Indenture or the appointment
of successor Administrators or successor Servicers, or the consent to the
assignment by the Note Registrar, Paying Agent or Trustee of its
obligations under the Indenture; and
(E) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this Agreement, the
Administrator shall not be obligated to, and shall not, (x) make any payments
to the Noteholders or the Owner under the Related Agreements, (y) sell the
Trust Estate pursuant to Section 5.04 of the Indenture other than pursuant to
a written directive of the Indenture Trustee or (z) take any other action
that the Issuer directs the Administrator not to take on its behalf.
6
<PAGE>
2. Records. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer, the
Owner Trustee, the Indenture Trustee and the Transferor at any time during
normal business hours.
3. Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement, the Administrator shall be
entitled to $500 per month which shall be payable in accordance with Section
5.04 of the Transfer and Servicing Agreement. The Transferor shall reimburse
the Administrator for any of its liabilities and extra out-of-pocket expenses
related to its performance hereunder or under any Related Document (including
without limitation those expenses set forth in Section 1(a)(ii) of this
Agreement).
4. Additional Information To Be Furnished to Issuer. The Administrator
shall furnish to the Issuer from time to time such additional information
regarding the Collateral as the Issuer shall reasonably request.
5. Independence of Administrator. For all purposes of this Agreement,
the Administrator shall be an independent contractor and shall not be subject
to the supervision of the Issuer or the Owner Trustee with respect to the
manner in which it accomplishes the performance of its obligations hereunder.
Unless expressly authorized by the Issuer, the Administrator shall have no
authority to act for or represent the Issuer or the Owner Trustee in any way
and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.
6. No Joint Venture. Nothing contained in this Agreement shall (i)
constitute the Administrator and either of the Issuer or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) be construed to impose
any liability as such on any of them or (iii) be deemed to confer on any of
them any express, implied or apparent authority to incur any obligation or
liability on behalf of the others.
7. Other Activities of Administrator. Nothing herein shall prevent the
Administrator or its affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for
any other person or entity even though such person or entity may engage in
business activities similar to those of the Issuer, the Owner Trustee or the
Indenture Trustee.
8. Term of Agreement; Resignation and Removal of Administrator. (a)
This Agreement shall continue in force until the dissolution of the Issuer,
upon which event this Agreement shall automatically terminate.
(b) Subject to Section 8(e) and (f), the Administrator may resign its
duties hereunder by providing the Issuer with at least 60 days prior written
notice.
(c) Subject to Section 8(e) and (f), the Issuer may remove the
Administrator without cause by providing the Administrator with at least 60
days prior written notice.
7
<PAGE>
(d) Subject to Section 8(e) and (f), at the sole option of the Issuer,
the Administrator may be removed immediately upon written notice of
termination from the Issuer to the Administrator if any of the following
events shall occur:
(i) the Administrator shall default in the performance of any of
its duties under this Agreement and, after notice of such default, shall not
cure such default within ten days (or, if such default cannot be cured in
such time, shall not give within ten days such assurance of cure as shall be
reasonably satisfactory to the Issuer);
(ii) a court having jurisdiction in the premises shall enter a
decree or order for relief, and such decree or order shall not have been
vacated within 60 days, in respect of the Administrator in any involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect or appoint a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for the Administrator or any
substantial part of its property or order the winding-up or liquidation of
its affairs; or
(iii) the Administrator shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary
case under any such law, or shall consent to the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator or similar official
for the Administrator or any substantial part of its property, shall consent
to the taking of possession by any such official of any substantial part of
its property, shall make any general assignment for the benefit of creditors
or shall fail generally to pay its debts as they become due.
The Administrator agrees that if any of the events specified in clause
(ii) or (iii) of this Section shall occur, it shall give written notice
thereof to the Issuer and the Indenture Trustee within seven days after the
happening of such event.
(e) No resignation or removal of the Administrator pursuant to this
Section shall be effective until (i) a successor Administrator shall have
been appointed by the Issuer and (ii) such successor Administrator shall have
agreed in writing to be bound by the terms of this Agreement in the same
manner as the Administrator is bound hereunder.
(f) The appointment of any successor Administrator shall be effective
only after satisfaction of the Rating Agency Condition with respect to the
proposed appointment.
9. Action upon Termination, Resignation or Removal. Promptly upon the
effective date of termination of this Agreement pursuant to Section 8(a) or
the resignation or removal of the Administrator pursuant to Section 8(b) or
(c), respectively, the Administrator shall be entitled to be paid all fees
and reimbursable expenses accruing to it to the date of such termination,
resignation or removal. The Administrator shall forthwith upon such
termination pursuant to Section 8(a) deliver to the Issuer all property and
documents of or relating to the Collateral then in the custody of the
Administrator. In the event of the resignation or removal of the
Administrator pursuant to Section 8(b) or (c), respectively, the
Administrator shall cooperate
8
<PAGE>
with the Issuer and take all reasonable steps
requested to assist the Issuer in making an orderly transfer of the duties of
the Administrator.
10. Notices. Any notice, report or other communication given hereunder
shall be in writing and addressed as follows:
(a) if to the Issuer or the Owner Trustee, to
MetLife Capital Equipment Loan Trust 1997-A
c/o Wilmington Trust Company, as Owner Trustee
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
(b) if to the Administrator, to
MetLife Capital Corporation
10900 N.E. 4th Street
Suite 500
Bellevue, Washington 98004
(c) if to the Indenture Trustee, to
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Structured Finance Services
(d) if to the Transferor, to
MetLife Capital Funding Corp. III
10900 N.E. 4th Street
Suite 550
Bellevue, Washington 98004
Attention: Treasurer
or to such other address as any party shall have provided to the other
parties in writing. Any notice required to be in writing hereunder shall be
deemed given if such notice is mailed by certified mail, postage prepaid, or
hand-delivered to the address of such party as provided above, except that
notices to the Indenture Trustee are effective only upon receipt.
11. Amendments. This Agreement may be amended from time to time by a
written amendment duly executed and delivered by the Issuer and the
Administrator, with the written consent of the Owner Trustee (and with
respect to subsections 1(a)(ii)(A), (B) and (C), the Indenture Trustee),
without the consent of the Noteholders and the Owner, for the purpose of
9
<PAGE>
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
Noteholders or Owner; provided that such amendment will not, in the Opinion
of Counsel, materially and adversely affect the interest of any Noteholder or
the Owner. This Agreement may also be amended by the Issuer and the
Administrator with the written consent of the Owner Trustee and the holders
of Notes evidencing a majority in the Outstanding Amount of the Notes 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 Noteholders; provided, however, that no such amendment may (i)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that are
required to be made for the benefit of the holders of the Class A Notes or
(ii) reduce the aforesaid percentage of the holders of Class A Notes which
are required to consent to any such amendment, without the consent of the
holders of all the outstanding Class A Notes. Notwithstanding the foregoing,
the Administrator may not amend this Agreement without the permission of the
Transferor, which permission shall not be unreasonably withheld.
12. Successors and Assigns. This Agreement may not be assigned by the
Administrator unless such assignment is previously consented to in writing by
the Issuer and the Owner Trustee and subject to the satisfaction of the
Rating Agency Condition in respect thereof. An assignment with such consent
and satisfaction, if accepted by the assignee, shall bind the assignee
hereunder in the same manner as the Administrator is bound hereunder.
Notwithstanding the foregoing, this Agreement may be assigned by the
Administrator without the consent of the Issuer or the Owner Trustee to a
corporation or other organization that is a successor (by merger,
consolidation or purchase of assets) to the Administrator, provided that such
successor organization executes and delivers to the Issuer and the Owner
Trustee an agreement in which such corporation or other organization agrees
to be bound hereunder by the terms of said assignment in the same manner as
the Administrator is bound hereunder. Subject to the foregoing, this
Agreement shall bind any successors or assigns of the parties hereto.
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.
14. Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
15. Counterparts. This Agreement may be executed in counterparts, each
of which when so executed shall together constitute but one and the same
agreement.
16. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability
10
<PAGE>
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.
17. Not Applicable to MetLife Capital Corporation in Other Capacities.
Nothing in this Agreement shall affect any obligation MetLife Capital
Corporation may have in any other capacity.
18. Limitation of Liability of Owner Trustee and Trustee.
Notwithstanding anything contained herein to the contrary, this instrument
has been signed by Wilmington Trust Company not in its individual capacity
but solely in its capacity as Owner Trustee of the Issuer and in no event
shall Wilmington Trust Company in its individual capacity or any beneficial
owner of the Issuer have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder, as to all
of which recourse shall be had solely to the assets of the Issuer. For all
purposes of this Agreement, in the performance of any duties or obligations
of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled
to the benefits of, the terms and provisions of Articles V, VI and VII of the
Trust Agreement.
19. Third-Party Beneficiary. (a) The Owner Trustee is a third-party
beneficiary to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.
(b) Solely with respect to any amounts owing to the Indenture
Trustee pursuant to Section 6.07 of the Indenture, the Indenture Trustee is
an intended third-party beneficiary to this Agreement and is entitled to the
rights and benefits hereunder and may enforce the provisions hereof as if it
were a party hereto.
20. Successor Servicer and Administrator. The Administrator shall
undertake, as promptly as possible after the giving of notice of termination
to the Servicer of the Servicer's rights and powers pursuant to Section 8.02
of the Transfer and Servicing Agreement, to enforce the provisions of Section
8.02 with respect to the appointment of a successor Servicer. Such successor
Servicer shall, upon compliance with the last sentence of the first paragraph
of Section 8.02 of the Transfer and Servicing Agreement, become the successor
Administrator hereunder.
21. Nonpetition Covenants. (a) Notwithstanding any prior termination of
this Agreement, the Transferor, the Administrator and the Owner Trustee shall
not at any time with respect to the Issuer, acquiesce, petition or otherwise
invoke or cause the Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the
Issuer under any Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Issuer or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the
Issuer.
(b) Notwithstanding any prior termination of this Agreement, the
Issuer, the Administrator and the Owner Trustee shall not, at any time with
respect to the Transferor, acquiesce, petition or otherwise invoke or cause
the Transferor to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the
11
<PAGE>
Transferor under any Federal or state bankruptcy, insolvency or similar law
or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Transferor or any substantial
part of its property, or ordering the winding up or liquidation of the
affairs of the Transferor.
12
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
METLIFE CAPITAL EQUIPMENT LOAN
TRUST 1997-A
By: WILMINGTON TRUST COMPANY,
as Owner Trustee,
By: _____________________
Name:
Title:
METLIFE CAPITAL CORPORATION,
as Administrator,
By: _____________________
Name:
Title:
METLIFE CAPITAL FUNDING CORP. III,
as Transferor
By: _____________________
Name:
Title:
<PAGE>
EXHIBIT A
[Form of Power of Attorney]
POWER OF ATTORNEY
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
KNOW ALL MEN BY THESE PRESENTS, that MetLife Capital Equipment Loan Trust
1997-A, a Delaware statutory business trust ("Trust"), does hereby make,
constitute and appoint MetLife Capital Corporation, as Administrator under
the Administration Agreement (as defined below), and its agents and
attorneys, as Attorneys-in-Fact to execute on behalf of the Trust all such
documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Trust to prepare, file or deliver pursuant to the
Related Documents (as defined in the Administration Agreement), including,
without limitation, to appear for and represent the Trust in connection with
the preparation, filing and audit of federal, state and local tax returns
pertaining to the Trust, and with full power to perform any and all acts
associated with such returns and audits that the Trust could perform,
including without limitation, the right to distribute and receive
confidential information, defend and assert positions in response to audits,
initiate and defend litigation, and to execute waivers of restriction on
assessments of deficiencies, consents to the extension of any statutory or
regulatory time limit, and settlements. For the purpose of this Power of
Attorney, the term "Administration Agreement" means the Administration
Agreement dated as of May 1, 1997, among the Trust, MetLife Capital
Corporation, as Administrator and Servicer, and The Chase Manhattan Bank, as
Indenture Trustee, as such may be amended from time to time.
All powers of attorney for this purpose heretofore filed or executed by
the Trust are hereby revoked.
EXECUTED this 30th day of May, 1997.
METLIFE CAPITAL EQUIPMENT
LOAN TRUST 1997-A
By: WILMINGTON TRUST COMPANY,
as Owner Trustee
By: _________________________
Name:
Title:
<PAGE>
Exhibit 10.2
EXECUTION COPY
- ------------------------------------------------------------------------------
METLIFE CAPITAL CORPORATION
and
METLIFE CAPITAL FUNDING CORP. III
------------------------
CONTRIBUTION AND SALE AGREEMENT
Dated as of May 1, 1997
------------------------
- ------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
TABLE OF CONTENTS
PAGE
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01. Definitions................................................................ 1
SECTION 1.02. Other Definitional Provisions.............................................. 3
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. Conveyance of Initial Receivables.......................................... 4
SECTION 2.02. Conveyance of Subsequent Receivables....................................... 4
SECTION 2.03. Ownership of Receivables................................................... 5
SECTION 2.04. Books and Records.......................................................... 6
SECTION 2.05. The Closing................................................................ 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of Funding.................................. 7
SECTION 3.02. Representations and Warranties of MCC...................................... 8
ARTICLE IV
CONDITIONS
SECTION 4.01. Conditions to the Obligation of Funding.................................... 14
SECTION 4.02. Conditions to Obligation of MCC with Respect to Initial Receivables........ 15
SECTION 4.03. Conditions to Obligation of MCC With Respect to Subsequent
Receivables................................................................ 15
SECTION 4.04. Subordination of Liens on Financed Equipment............................... 16
ARTICLE V
COVENANTS OF MCC
SECTION 5.01. Protection of Right, Title and Interest.................................... 16
SECTION 5.02. Other Liens or Interests................................................... 16
SECTION 5.03. Chief Executive Office..................................................... 16
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 5.04. Corporate Existence........................................................ 16
SECTION 5.05. Indemnification............................................................ 17
SECTION 5.06. Subsequent Receivables..................................................... 18
ARTICLE VI
COVENANTS OF FUNDING
SECTION 6.01. Protection of Right, Title and Interest.................................... 18
SECTION 6.02. Corporate Existence........................................................ 18
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01. Obligations of MCC......................................................... 20
SECTION 7.02. Repurchase Events.......................................................... 20
SECTION 7.03. Funding Assignment of Repurchased Receivables.............................. 20
SECTION 7.04. Trust...................................................................... 20
SECTION 7.05. Amendment.................................................................. 21
SECTION 7.06. Waivers.................................................................... 21
SECTION 7.07. Notices.................................................................... 21
SECTION 7.08. Costs and Expenses......................................................... 21
SECTION 7.09. Representations of MCC and Funding......................................... 21
SECTION 7.10. Confidential Information................................................... 22
SECTION 7.11. Headings and Cross-References.............................................. 22
SECTION 7.12. Governing Law.............................................................. 22
SECTION 7.13. Counterparts............................................................... 22
EXHIBIT A Supplemental Assignment
SCHEDULE A Schedule of Receivables [Deemed Incorporated]
</TABLE>
ii
<PAGE>
CONTRIBUTION AND SALE AGREEMENT dated as of May 1, 1997 between METLIFE
CAPITAL CORPORATION, a Delaware corporation ("MCC"), and METLIFE CAPITAL FUNDING
CORP. III, a Delaware corporation ("Funding").
WHEREAS in the regular course of its business, MCC has originated or
purchased certain fixed-rate commercial equipment loan contracts and equipment
finance lease contracts secured by new and used machinery, equipment or other
property; and
WHEREAS MCC and Funding wish to set forth the terms pursuant to which the
Receivables (as hereinafter defined) are to be contributed or sold by MCC to
Funding, which Receivables will be transferred by Funding, pursuant to the
Transfer and Servicing Agreement (as hereinafter defined), to MetLife Capital
Equipment Loan Trust 1997-A (the "Trust"), which Trust will issue Asset Backed
Notes (the "Notes") secured by, such Receivables and the other property of the
Trust.
NOW, THEREFORE, in consideration of the foregoing, other good and valuable
consideration and the mutual terms and covenants contained herein, the parties
hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01. Definitions. Except as otherwise specified herein or as the
context may otherwise require, the following terms have the respective meanings
set forth below for all purposes of this Agreement.
"Agreement" shall mean this Contribution and Sale Agreement, as the same
may be amended, modified or supplemented from time to time.
"Assignment" shall mean the document of assignment attached to this
Agreement as Exhibit A.
"Basic Documents" shall have the meaning given such term in the Indenture.
"Closing Date" shall mean May 30, 1997.
"Eligible Franchise Concept" shall mean a franchise concept included within
MCC's Franchise Finance Portfolio relating to any of McDonald's, Burger King,
Wendy's, Taco Bell, Pizza Hut, Kentucky Fried Chicken, Applebee's and T.G.I.
Friday's.
"Funding" shall mean MetLife Capital Funding Corp. III, a Delaware
corporation, its successors and assigns.
<PAGE>
"Indenture" shall mean the Indenture dated as of May 1, 1997 between the
Trust and The Chase Manhattan Bank, as indenture trustee, as the same may be
amended, modified or supplemented from time to time.
"Initial Receivable" shall mean each loan or lease Contract originated by
MCC and transferred to Funding pursuant to Section 2.01 that is identified in
the initial Schedule of Receivables assigned to Funding on the Closing Date
pursuant to Section 2.01.
"MCC" shall mean MetLife Capital Corporation, a Delaware corporation, its
successors and assigns.
"Minimum Weighted Average APR" shall mean a weighted average APR (weighted
based on the Principal Balance of each Receivable) equal to the sum of the Class
A Note Interest Rate and the Servicing Fee Rate.
"Person" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, business
trust, trust (including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof.
"Prospectus" shall mean the Prospectus (which consists of a base
prospectus, dated May 19, 1997, and a prospectus supplement, dated May 22, 1997)
pursuant to which the Class A Notes were offered.
"Receivable" shall mean each Initial Receivable and each Subsequent
Receivable; provided, that from and after the date on which a Receivable becomes
an Acquired Receivable, such Acquired Receivable will no longer be a Receivable.
"Related Property" shall mean all right, title and interest of MCC in, to
and under the Financed Equipment, any proceeds with respect to the Receivables
from claims on any physical damage, credit life or disability insurance policies
covering Financed Equipment or Obligors with respect to Financed Equipment, as
the case may be, and the proceeds of any of the foregoing.
"Repurchase Event" shall have the meaning specified in Section 7.02(a).
"Schedule of Receivables" shall mean each list of Receivables (as
supplemented from time to time to reflect Subsequent Receivables and Acquired
Receivables) annexed hereto as Schedule A (which may be in the form of
microfiche) and incorporated into and made a part of this Agreement.
"Subsequent Receivable" shall mean each loan or lease Contract originated
by MCC and transferred to Funding pursuant to Section 2.02, that is identified
in a Schedule of Receivables attached to a Supplemental Assignment.
2
<PAGE>
"Supplemental Assignment" shall have the meaning assigned thereto in
Section 4.01.
"Transfer and Servicing Agreement" shall mean the Transfer and Servicing
Agreement dated as of May 1, 1997, among the Trust, Funding (in its capacity as
Transferor thereunder) and MCC (in its capacity as Servicer thereunder), as the
same may be amended, modified or supplemented from time to time.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
SECTION 1.02. Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined have the
meanings assigned to them in the Transfer and Servicing Agreement or, if not
defined therein, in the Indenture, or if not defined therein, in the Trust
Agreement.
(b) All terms defined in this Agreement shall have the meanings contained
herein when used in any document made or delivered pursuant hereto unless
otherwise defined therein.
(c) As used in this Agreement and in any document made or delivered
pursuant hereto or thereto, accounting terms not defined in this Agreement or in
any such other document, and accounting terms partly defined in this Agreement
or in any such 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 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 other document shall control.
(d) The words "hereof," "herein," "hereunder," and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
3
<PAGE>
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. Conveyance of Initial Receivables.
(a) Subject to the satisfaction of the conditions set forth herein, MCC
does hereby contribute, transfer, assign, set over and otherwise convey to the
capital of Funding, without recourse (subject to the obligations herein), all
right, title and interest in and to the following, whether now owned or
hereafter acquired:
(i) all right, title and interest of MCC, in and to the Initial
Receivables, and all moneys (including accrued interest) due or to become
due thereunder on and after the Initial Cut-off Date;
(ii) the interest of MCC in the Financed Equipment granted by
Obligors pursuant to the Initial Receivables;
(iii) the interest and rights of MCC in any proceeds with respect to
the Initial Receivables from claims on any physical damage, credit life
or disability insurance policies covering Financed Equipment or Obligors
with respect to Financed Equipment, as the case may be; and
(iv) the proceeds of any and all of the foregoing.
(b) The Initial Receivables transferred on the Closing Date are to be
conveyed by MCC to Funding as a capital contribution to Funding in consideration
for MCC's ownership of all of the outstanding common stock of Funding.
SECTION 2.02. Conveyance of Subsequent Receivables.
(a) Subject to the conditions set forth herein, on each Transfer Date, MCC
does hereby sell, transfer, assign, set over and otherwise convey to Funding,
without recourse (subject to the obligations herein) all right, title and
interest of MCC in and to the following, whether then owned or thereafter
acquired:
(i) all right, title and interest of MCC, in and to the Subsequent
Receivables listed on the related Schedule of Receivables and all moneys
(including accrued interest) due or to become due, or received thereunder
on or after the related Subsequent Cut-off Date;
(ii) the interest of MCC in the Financed Equipment granted by
Obligors pursuant to such Subsequent Receivables;
4
<PAGE>
(iii) the interest and rights of MCC in any proceeds with respect to
such Subsequent Receivables from claims on any physical damage, credit life
or disability insurance policies covering Financed Equipment or Obligors
with respect to Financed Equipment; and
(iv) the proceeds of any of the foregoing.
(b) The consideration for the Subsequent Receivables being transferred on
each Transfer Date shall be in the form of (i) cash, (ii) with the consent of
MCC, by means of capital contributed to Funding by MCC, or (iii) with the
consent of MCC, any combination of the foregoing. The purchase price for any
Subsequent Receivables being sold for cash on such Transfer date shall be an
amount equal to the Principal Balance of such Subsequent Receivables as of the
related Subsequent Cut-off Date.
SECTION 2.03. Ownership of Receivables.
(a) Upon the acceptance by Funding of the capital contribution from MCC as
set forth in Section 2.01, the ownership of each Initial Receivable and the
contents of the related Receivable Files shall be vested in Funding. Upon the
delivery of the purchase price set forth in Section 2.02, the ownership of the
related Subsequent Receivables and the contents of the related Receivable Files
shall be vested in Funding. Notwithstanding the foregoing, the assignment,
transfer and conveyance set forth in Section 2.01 or Section 2.02 shall not
constitute and is not intended to result in the creation, or an assumption by
Funding of any obligation of MCC or any other Person in connection with the
Receivables or any Contract or under any agreement or instrument relating
thereto, including any obligation to any Obligors or any Affiliate of or other
Person to whom MCC may delegate servicing duties or to insurers.
(b) It is the express intent of MCC and Funding that the conveyance of the
Receivables by MCC to Funding pursuant to this Agreement be construed as a sale
or contribution of the Receivables and the Related Property by MCC to Funding.
However, in the event that, notwithstanding the intent of the parties, the
Receivables and Related Property are held to continue to be property of MCC,
then (i) this Agreement also shall be deemed to be and hereby is a security
agreement within the meaning of the UCC, and (ii) the conveyance by MCC provided
for in the Agreement shall be deemed to be and hereby is a grant by MCC to
Funding of a security interest in and to all of MCC's right, title and interest
in, to and under all accounts, contract rights, general intangibles, chattel
paper, instruments, documents, money, deposit accounts, certificates of deposit,
goods, letters of credit, advices of credit, certificated securities and
uncertificated securities consisting of, arising from, or relating to the
Receivables and the Related Property, to secure the rights of Funding under this
Agreement and the obligations of MCC hereunder. MCC and Funding shall, to the
extent consistent with this Agreement, take such actions (other than delivering
the original contract) as may be necessary to ensure that, if the conveyance of
the Receivables and the Related Property by MCC to Funding pursuant to this
Agreement is not deemed to be a sale or a contribution of capital, the security
interest in the Receivables and the Related Property created hereunder will be a
perfected security interest of
5
<PAGE>
first priority under applicable law and will be maintained as such throughout
the term of this Agreement.
SECTION 2.04. Books and Records.
(a) In connection with the transfer, assignment, set-over and conveyance
set forth in Section 2.01 or Section 2.02, MCC agrees to record and file, at its
own expense, any financing statements (and continuation statements with respect
to such financing statements when applicable) required to be filed with respect
to the Receivables sold or to be sold by MCC hereunder, meeting the requirements
of applicable state law in such manner and in such jurisdictions as are
necessary under the applicable UCC to perfect (on the date such Receivables are
transferred and assigned to Funding) the transfer and assignment of the
Receivables to Funding, and to deliver a file-stamped copy of such financing
statements or other evidence of such filings to Funding on or prior to the
Closing Date (excluding such continuation and similar statements, which shall be
delivered promptly after filing). (b) The transfer of each Receivable shall be
reflected on MCC's and Funding's balance sheets and other financial statements
prepared in accordance with generally accepted accounting principles as a sale
or contribution of assets by MCC to Funding. MCC shall be responsible for
maintaining, and shall maintain, a complete and accurate set of accounts,
records and computer files for each Receivable which shall be clearly marked to
reflect the ownership of each Receivable by Funding.
(c) In connection with the sales and conveyances hereunder, MCC further
agrees, at its own expense, on or prior to the Closing Date with respect to the
Initial Receivables and on or prior to the relevant Transfer Date with respect
to the Subsequent Receivables to indicate on its books and records (including
any computer files) that the Receivables have been sold to Funding or
contributed to the capital of Funding pursuant to this Agreement. MCC further
agrees not to alter the computer file designation referenced in this paragraph
with respect to the Receivables during the term of this Agreement unless and
until such Receivable becomes an Acquired Receivable.
SECTION 2.05. The Closing. The conveyance of the Initial Receivables
shall take place at the offices of Orrick, Herrington & Sutcliffe LLP, 3050 K
Street, N.W., Washington, D.C. 20007, on the Closing Date, simultaneously with
the closing of the transactions contemplated by the Transfer and Servicing
Agreement, the underwriting agreement related to the Notes and the other Basic
Documents.
6
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of Funding . Funding hereby
represents and warrants to MCC as of the date hereof, as of the Closing Date and
as of each Transfer Date:
(a) Organization and Good Standing. Funding is duly organized, validly
existing in good standing under the laws of the State of Delaware, and has the
power and authority to own its properties and to conduct the business in which
it is currently engaged, and had at all relevant times, and has, the power,
authority and legal right to acquire and own the Receivables.
(b) Due Qualification. Funding 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 shall require such qualifications.
(c) Power and Authority. Funding has the power and authority to execute
and deliver this Agreement and to carry out its terms and the execution,
delivery and performance of this Agreement has been duly authorized by Funding
by all necessary corporate action.
(d) No Violation. 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 notice or lapse of time) a default under, the certificate of
incorporation or by-laws of Funding, or any indenture, agreement or other
instrument to which Funding 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 the
Basic Documents); nor violate any law or, to the best of Funding's knowledge,
any order, rule or regulation applicable to Funding of any court, federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over Funding or its properties.
(e) No Proceedings. There are no proceedings or investigations pending
or, to Funding's best knowledge, threatened, before any court, federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over Funding or its properties which (i) assert the
invalidity of this Agreement, (ii) seek to prevent the consummation of any of
the transactions contemplated by this Agreement or (iii) seek any determination
or ruling that might materially and adversely affect the performance by Funding
of its obligations under, or the validity or enforceability of, this Agreement.
(f) No Consents Required. All approvals, authorizations, consents, orders
or other actions of any Person or of any Governmental Authority required in
connection with the execution and delivery by Funding of this Agreement or any
other Basic Document, the
7
<PAGE>
performance by Funding of the transactions contemplated by this Agreement or
any other Basic Document and the fulfillment by Funding of the terms hereof or
thereof, have been obtained or have been completed and are in full force and
effect (other than approvals, authorizations, consents, orders or other actions
which if not obtained or completed or in full force and effect would not have
a material adverse effect on Funding or upon the collectibility of any
Receivable or upon the ability of Funding to perform its obligations under this
Agreement).
SECTION 3.02. Representations and Warranties of MCC.
(a) MCC hereby represents and warrants to Funding as of the date hereof,
as of the Closing Date and as of each Transfer Date:
(i) Organization and Good Standing. MCC is duly organized,
validly existing in good standing under the laws of the State of Delaware,
and has the power and authority to own its properties and to conduct the
business in which it is currently engaged, and had at all relevant times,
and has, the power, authority and legal right to own and transfer the
Receivables.
(ii) Due Qualification. MCC 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 shall require such
qualifications.
(iii) Power and Authority. MCC has the power and authority
to execute and deliver this Agreement and to carry out its terms; MCC has
full power and authority to contribute, sell and assign the property
contributed, sold and assigned to Funding hereby and has duly authorized
such sale and assignment to Funding by all necessary corporate action; and
each of the execution, delivery and performance of this Agreement has been
duly authorized by MCC by all necessary corporate action.
(iv) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
neither conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time) a
default under, the certificate of incorporation or by-laws of MCC, or any
material indenture, agreement or other instrument to which MCC 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 this Agreement); nor
violate any material law or, to the best of MCC's knowledge, any material
order, rule or regulation applicable to MCC of any court, federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over MCC or its properties.
(v) No Proceedings. There are no proceedings or investigations
pending, or, to the best of MCC's knowledge, threatened, before any court,
federal or state regulatory body, administrative agency or other
governmental instrumentality having
8
<PAGE>
jurisdiction over MCC or its properties which (A) assert the invalidity of
this Agreement, (B) seek to prevent the consummation of any of the
transactions contemplated by this Agreement, or (C) seek any determination
or ruling that might materially and adversely affect the performance by
MCC of its obligations under, or the validity or enforceability of, this
Agreement.
(vi) No Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental
Authority required in connection with the execution and delivery by MCC of
this Agreement or any other Basic Document, the performance by MCC of the
transactions contemplated by this Agreement or any other Basic Document and
the fulfillment by MCC of the terms hereof or thereof, have been obtained
or have been completed and are in full force and effect (other than
approvals, authorizations, consents, orders or other actions which if not
obtained or completed or in full force and effect would not have a material
adverse effect on MCC or upon the collectibility of any Receivable or upon
the ability of MCC to perform its obligations under this Agreement).
(vii) Chief Executive Office. MCC's chief executive office
is located at 10900 NE 4th Street, Bellevue, Washington, 98004.
(b) MCC makes the following representations and warranties as to the
Receivables on which Funding relied in accepting the Receivables. All such
representations and warranties are made "to the best of MCC's knowledge";
provided, however, that the determination as to whether a Repurchase Event has
occurred pursuant to Section 7.02 of this Agreement shall be made without
reliance on the phrase described above. Such representations and warranties
speak as of the Closing Date with respect to the Initial Receivables and, with
respect to Subsequent Receivables, as of the Transfer Date relating to such
Subsequent Receivables but shall survive the sale, transfer and assignment of
the Receivables to Funding and the subsequent assignments and transfers of the
Receivables pursuant to the Transfer and Servicing Agreement and pursuant to the
Indenture:
(i) Characteristics of Receivables. Each Receivable (A) was
originated in the United States of America by MCC in the ordinary course of
business and was fully and properly executed by the parties thereto, (B) is
secured by a valid, subsisting and enforceable first priority perfected
security interest in favor of MCC in the Financed Equipment, which security
interest is assignable by MCC to Funding, (C) contains customary and
enforceable provisions such that the rights and remedies of the holder
thereof are adequate for realization against the collateral of the
benefits of the security, (D) provides for fixed payments on a monthly
basis and yields interest at a fixed-rate, (E) does not have a Quality Code
of more than 2, (F) was originated in connection with a transaction that,
in accordance with MCC's customary and normal classification procedures, is
classified as other than a "commercial/industrial" transaction and (G) if
such Receivable relates to a franchise concept, then such franchise concept
is an Eligible Franchise Concept.
9
<PAGE>
(ii) Schedule of Receivables. The information set forth in the
Schedule of Receivables to this Agreement is true and correct in all
material respects as of the opening of business on the Initial Cut-off Date
(with respect to the Initial Receivables) and as of the applicable
Subsequent Cut-Off Date (with respect to the related Subsequent
Receivables). The computer tape regarding the Receivables made available
to Funding and its assigns is true and correct in all respects.
(iii) Compliance with Law. Each Receivable complied at the
time it was originated or made, and at the execution of this Agreement
(with respect to the Initial Receivables) or as of the applicable Transfer
Date (with respect to Subsequent Receivables) complies, in all material
respects with all requirements of applicable federal, state and local laws
and regulations thereunder, including usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations B and S, and other equal credit opportunity and disclosure
laws, in each case to the extent applicable to non-consumer transactions.
(iv) Binding Obligations. Each Receivable represents the genuine,
legal, valid and binding payment obligation in writing of the Obligor
located outside of the States of Washington and/or Florida, enforceable by
the holder thereof (which as of the Closing Date (with respect to the
Initial Receivables) or the relevant Transfer Date (with respect to
Subsequent Receivables) is MCC) in accordance with its terms, subject to
bankruptcy, insolvency and other laws relating to the enforcement of
creditors' rights generally and to general principles of equity (regardless
of whether enforceability is considered in a proceeding in equity or at
law). Such enforceability has not been and is not adversely affected by
whether or not MCC was or is qualified to do business in the state in which
the Obligor was or is located.
(v) Receivables in Force. No Receivable has been satisfied,
subordinated or rescinded, nor has any Financed Equipment been released
from the lien granted by the Obligor of the related Receivable in whole or
in part. No Receivable is rescindable on the basis of whether or not MCC
was or is qualified to do business in the state in which the Obligor was or
is located.
(vi) Prospectus Information. As of the Initial Cut-off Date, each
Initial Receivable conforms and all Receivables in the aggregate conform,
in all material respects, to the description set forth in the Prospectus,
including all statistical data or otherwise.
(vii) No Amendments. No Receivable has been amended such that the
amount of the Obligor's Scheduled Payments has been increased or decreased.
(viii) No Defenses. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened with respect to any Receivable.
10
<PAGE>
(ix) No Liens. No liens or claims have been filed for work, labor
or materials relating to any Financed Equipment that are liens prior to, or
equal to, the security interest in the Financed Equipment granted by the
Obligor to MCC.
(x) No Default. No Receivable has a payment that is more than 60
days overdue as of the applicable Cut-off Date and, except as permitted in
this paragraph, no default, breach, violation or event permitting
acceleration under the terms of any Receivable has occurred and is
continuing; and (except for payment defaults continuing for a period of not
more than 60 days) no continuing condition that with notice or the lapse of
time would constitute a default, breach, violation or event permitting
acceleration under the terms of any Receivable has arisen; and MCC has not
waived and shall not waive any of the foregoing.
(xi) Insurance. MCC, in accordance with its customary procedures,
has determined that the Obligor has obtained physical damage insurance
covering the Financed Equipment, and under the terms of the Receivable the
Obligor is required to maintain such insurance.
(xii) Title. It is the intention of MCC that the transfer
and assignment herein contemplated constitute a contribution of the Initial
Receivables and either a contribution or a sale (as provided in Section
2.02) of the Subsequent Receivables from MCC to Funding, and that the
beneficial interest in and title to the Receivables not be part of the
debtor's estate in the event of the filing of a bankruptcy petition by or
against MCC under any bankruptcy law. No Receivable has been sold,
transferred, assigned or pledged by MCC to any Person other than Funding.
Immediately prior to the transfer and assignment herein contemplated, MCC
has good and marketable title to each Receivable, free and clear of all
Liens, encumbrances, security interests and rights of others and,
immediately upon the transfer thereof, Funding shall have good and
marketable title to each Receivable, free and clear of all Liens; and the
transfer of the Receivables to Funding has been perfected, by the filing of
appropriate financing statements pursuant to the UCC, under the UCC.
(xiii) Lawful Assignment. No Receivable has been
originated in, or is subject to the laws of, any jurisdiction under which
the sale, transfer and assignment of such Receivable or any Receivable
under this Agreement is unlawful, void or voidable.
(xiv) All Actions Taken. All actions (other than delivering
the original Contract) necessary to give Funding a first priority perfected
ownership or security interest in the Receivables pursuant to the
applicable UCC have been taken.
(xv) One Original. There is only one original Contract related to
each Receivable.
(xvi) Maturity of Receivables. Each Initial Receivable has a
scheduled maturity of more than 11 months but not more than 120 months as
of the Initial Cut-Off
11
<PAGE>
Date. Each Subsequent Receivable has a scheduled maturity of more than
11 months but not more than the difference between 120 months and the
number of months that have passed in the Revolving Period as of the
related Subsequent Cut-Off Date for such Subsequent Receivable.
(xvii) Location of Receivable Files. The Receivable
Files are kept at the location listed in Schedule B to the Transfer and
Servicing Agreement.
(xviii) No Bankruptcies. No Obligor on any Receivable as
of the applicable Cut-off Date was noted in the related Receivable File as
having filed for bankruptcy or as being subject to a bankruptcy proceeding
and to MCC's knowledge no such proceeding is pending or threatened against
any Obligor as of the Closing Date (with respect to the Initial
Receivables) or as of the relevant Transfer Date (with respect to
Subsequent Receivables).
(xix) No Repossessions. No Financed Equipment securing any
Receivable has been repossessed as of the Closing Date (with respect to the
Initial Receivables) or as of the related Transfer Date (with respect to
Subsequent Receivables).
(xx) Accounts, General Intangibles or Chattel Paper. Each
Receivable constitutes "accounts," "general intangibles" or "chattel paper"
within the meaning of the UCC of the State of Washington.
(xxi) U.S. Obligors. None of the Receivables is due from (i)
any Person which does not have a mailing address in the United States of
America and (ii) any Person that is a Governmental Authority.
(xxii) Interest Accrual. Each Receivable is, as of the
Closing Date (with respect to the Initial Receivables) or as of the
relevant Transfer Date (with respect to the Subsequent Receivables),
accruing interest.
(xxiii) Financed Equipment. (A) Not more than 50% of the
Receivables, measured by federal income tax basis, are secured by Financed
Equipment consisting of land, buildings, structural components thereof or
other inherently permanent structures within the meaning of Treasury
Regulation Section 1.856-3(d) or interests therein within the meaning of
Treasury Regulation Section 1.856-3(c), (B) the Financed Equipment does not
consist of aircraft and (C) the Financed Equipment is located outside of
the State of Florida.
(xxiv) Leases. Each Lease, relating to any Receivable (A) is a
"lease intended for security" under the UCC, (B) is not a "consumer lease"
within the meaning of Article 2A of the UCC in any jurisdiction where
said Article 2A has been adopted and governs the construction thereof,
(C) to the best knowledge of MCC, the related Obligor has accepted the
related Financed Equipment leased to it and has not notified MCC of any
12
<PAGE>
defects therein, (D) is not cancellable by the related Obligor and
(E) requires the related Obligor to maintain the related Financed Equipment
for its own account.
(xxv) Limitation on Franchise Receivables. As of each Transfer
Date, taking into account the Subsequent Receivables being transferred on
such Transfer Date, the aggregate Principal Balance (calculated as of the
last day of the prior Collection Period or as of the related Subsequent
Cut-off Date, as applicable) of Receivables selected from MCC's Franchise
Finance Portfolio shall not exceed 20% of the Pool Balance.
(xvi) Minimum Weighted Average APR. As of each Transfer Date, the
weighted average APR (weighted based upon the Principal Balance of each
Receivable) of the Receivables, taking into account the Subsequent
Receivables being transferred on such Transfer Date, shall be at least
equal to the Minimum Weighted Average APR.
(xxvii) Weighted Average Remaining Term. As of each Transfer
Date, the weighted average remaining term of the Receivables, taken as a
whole after taking into account the addition of the Subsequent Receivable
to be transferred on such Transfer Date, shall not be longer than 60
months.
(xxviii) Titled Vehicles. As of each Transfer Date, taking into
account the Subsequent Receivables being transferred on such Transfer Date,
the aggregate Principal Balance (calculated as of the last day of the prior
Collection Period or as of the related Subsequent Cut-off Date, as
applicable) of Receivables relating to (i) Obligors with billing addresses
within the same state and (ii) Financed Equipment consisting of motor
vehicles, will not exceed 10% of the Pool Balance.
(xxix) Mortgages. No Financed Equipment is of a type, a
security interest in which is required to be perfected by the filing of a
mortgage in the real property records of any Governmental Authority with
jurisdiction over the location within which such Financed Equipment is
located;
(xxx) Selection Procedures. No selection procedures believed by MCC
to be adverse or beneficial to the interests of Funding or the Class A
Noteholders shall have been utilized in selecting the Subsequent
Receivables.
13
<PAGE>
ARTICLE IV
CONDITIONS
SECTION 4.01. Conditions to the Obligation of Funding. The obligation of
Funding to purchase the Initial Receivables (with respect to the Closing Date)
or any Subsequent Receivables (with respect to any related Transfer Date), as
the case may be, is subject to the satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of MCC hereunder shall be true and correct on the Closing Date (with
respect to the Initial Receivables) and on the applicable Transfer Date (with
respect to the related Subsequent Receivables) with the same effect as if then
made, and MCC shall have performed all obligations to be performed by it
hereunder on or prior to the Closing Date or the applicable Transfer Date, as
applicable.
(b) Computer Files Marked. MCC shall, at its own expense on or prior to
the Closing Date (with respect to the Initial Receivables) or the relevant
Transfer Date (with respect to the Subsequent Receivables), (i) indicate in its
Receivables Management System that receivables created in connection with the
Initial Receivables have been contributed, and in connection with the Subsequent
Receivables, have been either contributed or sold (as provided in Section 2.02)
to Funding pursuant to this Agreement and transferred by Funding to the Trust
pursuant to the Transfer and Servicing Agreement and (ii) deliver to Funding the
Schedule of Receivables certified by the Chairman, the President, a Vice
President, the Secretary, the Treasurer or an Assistant Treasurer of MCC to be
true, correct and complete.
(c) Documents to be Delivered by MCC.
(i) Assignment. On each Transfer Date, with respect to the
related Subsequent Receivables, MCC will execute and deliver to
Funding a duly executed written assignment in substantially the form
of Exhibit A hereto (each, a "Supplemental Assignment").
(ii) Evidence of UCC Filings. On or prior to the Closing Date
and, as applicable, each Transfer Date, MCC shall deliver to Funding,
for its inspection and review, completed UCC requests for information,
dated on or before the Closing Date, or related Transfer Date, as the
case may be, listing all effective financing statements filed with the
Washington Secretary of State listing MCC as debtor.
(iii) Other Documents. On or prior to the Closing Date and, as
applicable, each Transfer Date, MCC shall execute and deliver to
Funding such other documents as Funding may reasonably request.
14
<PAGE>
(d) Other Transactions. With respect to the Initial Receivables, the
transactions contemplated by the Transfer and Servicing Agreement and the
Indenture to be consummated on the Closing Date shall be consummated on such
date.
(e) MCC Solvent. As of the Closing Date or the related Transfer Date, as
applicable, (i) MCC shall not have been insolvent and shall not become insolvent
as a result of the conveyance of the Initial Receivables on the Closing Date or
the Subsequent Receivables on such Transfer Date, (ii) there has been no filing
of a decree or order for relief by a court having jurisdiction in the premises
in respect of MCC or any substantial part of its property in an insolvency or
other similar law now in effect or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for MCC or for any
substantial part of its property, or ordering the winding up or liquidation of
MCC's affairs which remains unstayed and in effect, (iii) MCC shall not have
intended to incur or believed that it would incur debts that would be beyond
MCC's ability to pay as such debts matured, (iv) such transfer shall not have
been made with actual intent to hinder, delay or defraud any Person and (v) the
assets of MCC shall not have constituted unreasonably small capital to carry out
its business as conducted.
(f) Officer's Certificate. MCC shall have delivered to Funding an
Officer's Certificate confirming the satisfaction of each condition specified in
this Section 4.01.
SECTION 4.02. Conditions to Obligation of MCC with Respect to Initial
Receivables. The obligation of MCC to contribute the Initial Receivables to
Funding is subject to the satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of Funding hereunder shall be true and correct on the Closing Date
with the same effect as if then made, and Funding shall have performed all
obligations to be performed by it hereunder on or prior to the Closing Date.
(b) Receivables Purchase Price. On the Closing Date, Funding shall have
accepted the capital contribution specified in Section 2.01.
SECTION 4.03. Conditions to Obligation of MCC With Respect to Subsequent
Receivables. The obligation of MCC to transfer the Subsequent Receivables to
Funding on any Transfer Date is subject to the satisfaction of the following
conditions:
(a) Representations and Warranties True. The representations and
warranties of Funding hereunder shall be true and correct on such Transfer Date
with the same effect as if then made, and Funding shall have performed all
obligations to be performed by it hereunder on or prior to such Transfer Date.
(b) Receivables Consideration. On such Transfer Date, Funding shall have
delivered to MCC the purchase price specified in Section 2.02.
15
<PAGE>
SECTION 4.04. Subordination of Liens on Financed Equipment.
Notwithstanding the time of the making of any Component Receivable or filing of
the Component Lien, and notwithstanding anything to the contrary whatsoever in
any Master Receivable Agreement, this Agreement, the Transfer and Servicing
Agreement or the Indenture, or any other document or agreement, MCC's rights and
remedies in the Financed Equipment under the Master Receivable Agreement or
otherwise in and to the Financed Equipment are hereby expressly made subject and
subordinate in all respects to the prior payment in full of the Receivables.
MCC agrees not to accept any payment on account of, or exercise its right to
foreclose upon or exercise any other right or remedy with respect to the
Financed Equipment until (i) the related Receivable has been paid in full or
(ii) the related first priority lien on the Financed Equipment assigned to
Funding pursuant to Section 2.01 has been foreclosed upon or released.
ARTICLE V
COVENANTS OF MCC
MCC covenants with Funding as follows; provided, however, that to the
extent that any provision of this Article conflicts with any provision of the
Transfer and Servicing Agreement, the Transfer and Servicing Agreement shall
govern:
SECTION 5.01. Protection of Right, Title and Interest.
(a) Further Assurances. MCC shall take all actions to preserve and
protect the right, title and interest of Funding in and to the Receivables and
the other property transferred hereunder.
(b) Name Change. Within 15 days after MCC makes any change in its name,
identity or corporate structure, MCC shall give Funding notice of any such
change.
SECTION 5.02. Other Liens or Interests. Except for the conveyances
hereunder MCC will not sell, pledge, assign or transfer to any Person, or grant,
create, incur, assume or suffer to exist any Lien on, any interest in, to and
under the Receivables, and MCC shall defend the right, title and interest of
Funding in, to and under the Receivables against all claims of third parties
claiming through or under MCC; provided, however, that MCC's obligations under
this Section shall terminate one year and one day after the termination of the
Trust pursuant to the Trust Agreement.
SECTION 5.03. Chief Executive Office. During the term of the Receivables,
MCC will maintain its chief executive office in one of the United States, except
Louisiana or Vermont.
SECTION 5.04. Corporate Existence.
(a) During the term of this Agreement, MCC will keep in full force and
effect its existence, rights and franchises as a corporation under the laws of
Delaware and will obtain and
16
<PAGE>
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 Agreement, the Basic Documents and each other instrument
or agreement necessary or appropriate to the proper administration of this
Agreement and the Transfer and Servicing Agreement and the transactions
contemplated hereby.
(b) MCC will not take any action or fail to take any action if such act or
omission would cause Funding not to observe the covenants set forth in Section
6.02(b) of this Agreement or to violate the provisions of Funding's certificate
of incorporation.
(c) MCC agrees that its business shall be conducted as follows, and MCC
shall not take any action or fail to take any action if such act or omission
would cause its business not to be conducted as follows:
(i) Except as expressly permitted by the Transfer and Servicing
Agreement with respect to collections on the Receivables prior to the
transfer of such collections to the Collection Account, MCC's funds will
not be commingled with those of Funding and MCC shall maintain bank
accounts separate from those of Funding.
(ii) MCC shall maintain records permitting a determination on a daily
basis of the amount and location of any of its funds which are commingled
as permitted under subsection (i) above and subsection 6.02(b)(iv) below.
(iii) The data and records (including computer records) used by MCC
in the collection and administration of the Receivables shall reflect
Funding's ownership interest therein.
(d) MCC will furnish to Funding on or before April 30 of each year for so
long as any Note remains outstanding an Officer's Certificate to the effect that
all of its obligations under this Section 5.04 have been fulfilled throughout
the preceding calendar year, or, if there has been any default in the
fulfillment of any such obligations, specifying each such default known to the
signer thereof and the nature and status thereof.
(e) MCC will not transfer or assign any interest in Funding except
pursuant to an instrument under which the transferee or assignee of such
interest expressly assumes the performance of all covenants of MCC to be
performed or observed under this Section 5.04.
(f) The annual audited consolidated financial statements that include MCC
will reflect the results of the issuance of the Notes in accordance with
generally accepted accounting principles and, to the extent applicable, also
disclose that the assets of Funding are not available to pay creditors of MCC or
any other Affiliate of MCC.
SECTION 5.05. Indemnification. MCC shall indemnify Funding for any
liability as a result of the failure of a Receivable to be originated in
compliance, in all material respects, with all requirements of law and for any
breach of any of its representations and warranties contained
17
<PAGE>
herein, other than the representations and warranties made pursuant to Section
3.02(b) for which the sole remedy shall be provided by Section 7.02 hereof;
provided, however, that MCC shall indemnify Funding for any liability arising
from a breach of Section 3.02(b)(ii) and, (iii). These indemnity obligations
shall be in addition to any obligation that MCC may otherwise have.
SECTION 5.06. Subsequent Receivables. MCC agrees to add all loan or lease
Contracts originated by MCC to a Schedule of Receivables on or prior to each
Transfer Date provided, however, that MCC's obligation hereunder shall be
limited to loan or lease Contracts having an outstanding principal balance
(after giving effect to any discounting of such principal balance contemplated
by MCC) of not more than the funds available to Funding to effect such purchase
on such Transfer Date and provided further, that MCC shall have no obligation to
add any loan or lease Contract to a Schedule of Receivables if the
representations and warranties of MCC under Section 3.02(b) hereof would not be
true with respect to such loan or lease Contract or with respect to the
Receivables in the aggregate were such loan or lease Contract included as a
"Receivable." Nothing herein shall be deemed to require MCC to originate any
one or more loan or lease Contracts at any time.
ARTICLE VI
COVENANTS OF FUNDING
Funding covenants with MCC as follows; provided, however, that to the
extent that any provision of this Article conflicts with any provision of the
Transfer and Servicing Agreement, the Transfer and Servicing Agreement shall
govern:
SECTION 6.01. Protection of Right, Title and Interest . Funding shall
cooperate fully with MCC in connection with the obligations set forth in Section
5.01 above and will execute any and all documents reasonably required to fulfill
the purpose of that Section.
SECTION 6.02. Corporate Existence.
(a) During the term of this Agreement, Funding will keep in full force and
effect its existence, rights and franchises as a corporation under the laws of
Delaware 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 Agreement, the Basic Documents and each
other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the Transfer and Servicing Agreement and
the transactions contemplated hereby.
(b) Funding agrees that its business shall be conducted as follows, and
Funding shall not take any action or fail to take any action if such act or
omission would cause its business not to be conducted as follows:
18
<PAGE>
(i) Funding will maintain both an office at which its business is
and will be conducted and a telephone number separate from MCC or any of
MCC's Affiliates.
(ii) At least one of Funding's directors shall be a person who is
not and will not be a director, officer or employee of MCC or any of MCC's
Affiliates.
(iii) Funding will maintain corporate records and books and
accounts separate from those of MCC or any of MCC's Affiliates.
(iv) Except as expressly permitted by the Transfer and Servicing
Agreement with respect to collections on the Receivables prior to the
transfer of such collections to the Collection Account, Funding's funds
will not be commingled with those of MCC or any of MCC's Affiliates, and
Funding shall maintain bank accounts separate from those of MCC or any of
MCC's Affiliates.
(v) The Board of Directors of Funding will take appropriate
corporate action (including without limitation holding meetings or acting
by unanimous consent) to authorize all of Funding's corporate actions, and
minutes shall be maintained by Funding separate and apart from those of MCC
or any of MCC's Affiliates.
(vi) Funding shall at all times be adequately capitalized to engage
in the transactions contemplated at its formation.
(vii) Funding shall not incur or guarantee any debt other than
under the Basic Documents, nor shall Funding make any loans, other than as
permitted by Funding's Certificate of Incorporation.
(viii) Funding shall not engage in any transaction with MCC or any
of MCC's Affiliates on terms more favorable than in a similar transaction
involving a third party.
(ix) Funding shall at all times use its own stationery.
(x) Funding shall always be described as a separate corporation,
and never as a department, division or otherwise of MCC or any of MCC's
Affiliates.
(xi) Funding shall act solely in its own corporate name and through
its own authorized officers and agents.
(xii) The data and records (including computer records) used by
Funding or MCC in the collection and administration of the Receivables
shall reflect Funding's ownership interest therein.
(xiii) Other than organizational expenses, Funding shall be
responsible for the payment of all expenses, indebtedness and other
obligations incurred by it.
19
<PAGE>
(xiv) None of Funding's funds nor any of the funds held by MCC on
behalf of Funding or the holders of the Notes shall be invested in
securities issued by MCC or any of MCC's Affiliates.
(c) Funding will furnish to MCC on or before April 30 of each year, for so
long as any Note remains outstanding, an Officer's Certificate to the effect
that all of its obligations under this Section 6.02 have been fulfilled
throughout the preceding calendar year, or, if there has been any default in the
fulfillment of any such obligations, specifying each such default known to the
signer thereof and the nature and status thereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01. Obligations of MCC. The obligations of MCC under this
Agreement shall not be affected by reason of any invalidity, illegality or
irregularity of any Receivable.
SECTION 7.02. Repurchase Events. (a) MCC hereby covenants and agrees with
Funding for the benefit of Funding, the Indenture Trustee, the Noteholders, the
Owner Trustee and the Owner that the occurrence of a material breach of any of
MCC's representations and warranties contained in Section 3.02(b) in respect of
a Receivable shall constitute an event obligating MCC to repurchase such
Receivable ("Repurchase Events"), at the Acquisition Amount from Funding.
(b) Other than as provided in Section 5.05, these repurchase obligations
of MCC shall constitute the sole remedies to Funding, the Indenture Trustee, the
Noteholders, the Owner Trustee and the Owner against MCC with respect to any
Repurchase Event.
(c) The terms and conditions of Funding's obligation to enforce its right
of repurchase pursuant to this Section 7.02 shall be governed by the terms of
the Transfer and Servicing Agreement.
SECTION 7.03. Funding Assignment of Repurchased Receivables . With
respect to all Receivables repurchased by MCC pursuant to this Agreement,
Funding shall assign, without recourse, representation or warranty, to MCC all
Funding's right, title and interest in and to such Receivables, and all security
and documents relating thereto.
SECTION 7.04. Trust. MCC acknowledges and agrees that (a) Funding will,
pursuant to the Transfer and Servicing Agreement, sell the Receivables to the
Trust and assign its rights under this Agreement to the Trust, (b) the Trust
will, pursuant to the Indenture, assign such Receivables and such rights to the
Indenture Trustee as security and (c) the representations and warranties
contained in this Agreement and the rights of Funding under this Agreement,
including under Section 7.02, are intended to benefit the Trust, the Owner and
the Noteholders (and may be enforced directly by the Indenture Trustee on behalf
of the Noteholders and by the
20
<PAGE>
Owner Trustee on behalf of the Trust or the Owner). MCC hereby consents to all
such sales and assignments.
SECTION 7.05. Amendment. This Agreement may be amended from time to time,
with prior written notice to the Rating Agencies, by a written amendment duly
executed and delivered by MCC and Funding, without the consent of the
Noteholders or the Owner, 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 Noteholders or the Owner; provided
that such amendment will not, as evidenced by an Officer's Certificate of
Funding, materially and adversely affect the interest of any Noteholder or the
Owner. This Agreement may also be amended by MCC and Funding, with prior
written notice to the Rating Agencies, with the consent of the holders of the
Notes evidencing a majority in the Outstanding Amount of the Notes 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
Noteholders; provided, however, that no such amendment may (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that are required to be
made for the benefit of holders of Class A Notes or (ii) reduce the aforesaid
percentage of the Class A Notes which are required to consent to any such
amendment, without the consent of the holders of all the outstanding Class A
Notes.
SECTION 7.06. Waivers. No failure or delay on the part of Funding in
exercising any power, right or remedy under this Agreement or the Assignment
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or remedy preclude and any other or further exercise
thereof or the exercise of any other power, right or remedy.
SECTION 7.07. Notices. All demands, notices and communications under this
Agreement shall be in writing, personally delivered or mailed by certified mail,
return receipt requested, and shall be deemed to have been duly given upon
receipt (a) in the case of MCC, to MetLife Capital Corporation, 10900 NE 4th
Street, Suite 500, Bellevue, Washington 98004; (b) in the case of Funding, to
MetLife Capital Funding Corp. III, 10900 NE 4th Street, Suite 550, Bellevue,
Washington, 98004, Attention: Treasurer; (c) in the case of Moody's, to Moody's
Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York,
New York 10007; and (d) in the case of Standard & Poor's, to Standard & Poor's
Ratings Services, 26 Broadway (10th Floor), New York, New York 10004, Attention
of 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 7.08. Costs and Expenses. MCC will pay all expenses incident to
the performance of its obligations under this Agreement, and MCC agrees to pay
all reasonable out-of-pocket costs and expenses of Funding, in connection with
the perfection as against third parties of Funding's right, title and interest
in and to the Receivables and the enforcement of any obligation of MCC
hereunder.
SECTION 7.09. Representations of MCC and Funding. The respective
agreements, representations, warranties and other statements by MCC and Funding
set forth in or made
21
<PAGE>
pursuant to this Agreement shall remain in full force and effect and will
survive the closing under Section 2.02.
SECTION 7.10. Confidential Information. Funding agrees that it will
neither use nor disclose to any Person the names and addresses of the Obligors,
except in connection with the enforcement of Funding's rights hereunder, under
the Receivables, under the Transfer and Servicing Agreement or the Indenture or
any other Basic Document or as required by any of the foregoing or by law.
SECTION 7.11. Headings and Cross-References. The various headings in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. References in this Agreement
to Section names or numbers are to such Sections of this Agreement.
SECTION 7.12. Governing Law. THIS AGREEMENT AND THE SUPPLEMENTAL
ASSIGNMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
SECTION 7.13. Counterparts. This Agreement may be executed in two or more
counterparts and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
22
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers duly authorized as of the date and year
first above written.
METLIFE CAPITAL FUNDING CORP. III
By: _____________________________
Name:
Title:
METLIFE CAPITAL CORPORATION
By: _____________________________
Name:
Title:
<PAGE>
EXHIBIT A
SUPPLEMENTAL ASSIGNMENT
(As required by Section 4.01(c) of
the Contribution and Sale Agreement)
SUPPLEMENTAL ASSIGNMENT NO. ____ dated as of __________, 199_, by and
between METLIFE CAPITAL CORPORATION, a Delaware corporation ("MCC"), and METLIFE
CAPITAL FUNDING CORP. III, a Delaware corporation ("Funding"), pursuant to the
Contribution and Sale Agreement referred to below.
WITNESSETH:
WHEREAS, MCC and Funding are parties to a Contribution and Sale Agreement,
dated as of May __, 1997 (hereinafter as such agreement may have been, or may
from time to time be, amended, supplemented or otherwise modified, the
"Contribution and Sale Agreement");
WHEREAS, pursuant to the Contribution and Sale Agreement, MCC wishes to
transfer Subsequent Receivables (as defined in the Contribution and Sale
Agreement), whether now existing or hereafter created, to Funding pursuant to
the Contribution and Sale Agreement; and
WHEREAS, Funding is willing to accept such transfer subject to the terms
and conditions hereof.
NOW, THEREFORE, MCC and Funding hereby agree as follows:
1. Defined Terms. Each capitalized term used herein shall have the
meaning specified in the Contribution and Sale Agreement unless otherwise
defined herein.
"Transfer Date" shall mean, with respect to the Subsequent Receivables
transferred hereby, __________, 199_.
"Subsequent Cut-off Date" shall mean, with respect to the Subsequent
Receivables transferred hereby, __________ __, 199_.
2. Conveyance of Subsequent Receivables. MCC hereby sells, transfers,
assigns, sets over and otherwise conveys to Funding, without recourse (subject
to the obligations herein) all right, title and interest of MCC in and to the
following, whether now existing or hereafter created:
A-1
<PAGE>
(i) all right, title and interest of MCC, in and to the Subsequent
Receivables listed on Schedule I attached hereto and made a part hereof and
all monies (including accrued interest) due or to become due, or received
thereunder on or after the Subsequent Cut-off Date;
(ii) the interest of MCC in the Financed Equipment granted by
Obligors pursuant to the Subsequent Receivables;
(iii) the interest and rights of MCC in any proceeds with respect to
the Subsequent Receivables from claims on any physical damage, credit life
or disability insurance policies covering Financed Equipment or Obligors
with respect to Financed Equipment; and
(iv) the proceeds of any of the foregoing.
3. Acceptance by Funding. Funding hereby acknowledges its acceptance of
all right, title and interest to the property, now existing and hereafter
created, conveyed to Funding pursuant to Section 2 of this Supplemental
Assignment, and declares that it shall maintain such right, title and interest.
Funding shall pay on the Transfer Date to MCC the purchase price, in accordance
with Section 2.02(b) of the Contribution and Sale Agreement, for such property.
4. Representations and Warranties of the Parties. Each of MCC and
Funding hereby makes the representations and warranties required by the
Contribution and Sale Agreement to be made as of the Transfer Date.
5. Ratification of the Contribution and Sale Agreement. The Contribution
and Sale Agreement is hereby ratified, and all references to the "Contribution
and Sale Agreement", to "this Agreement" and "herein" shall be deemed from and
after the Transfer Date to be a reference to the Contribution and Sale Agreement
as supplemented by this Supplemental Assignment. Except as expressly amended
hereby, all the representations, warranties, terms, covenants and conditions of
the Contribution and Sale Agreement shall remain unamended and shall continue to
be, and shall, remain, in full force and effect in accordance with its terms and
except as expressly provided herein shall not constitute or be deemed to
constitute a waiver of compliance with or consent to non-compliance with any
term or provision of the Contribution and Sale Agreement.
6. Counterparts. This Supplemental Assignment may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument.
7. GOVERNING LAW. THIS SUPPLEMENTAL ASSIGNMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
A-2
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Assignment to be duly executed and delivered by their respective duly authorized
officers on the day and the year first above written.
METLIFE CAPITAL CORPORATION
By:_________________________
Name:
Title:
METLIFE CAPITAL FUNDING CORP. III
By:_________________________
Name:
Title:
A-3
<PAGE>
SCHEDULE A
SCHEDULE OF RECEIVABLES
