<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 4, 1999
REGISTRATION NOS. 333-67993
333-67993-01
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
GREEN TREE LEASE FINANCE II, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MINNESOTA 41-1892359
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
GREEN TREE LEASE FINANCE 1998-1, LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE NONE
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
---------------
1100 LANDMARK TOWERS
345 ST. PETER STREET
ST. PAUL, MINNESOTA 55102-1639
(651) 293-3400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JOEL H. GOTTESMAN, ESQ.
1100 LANDMARK TOWERS
345 ST. PETER STREET
ST. PAUL, MINNESOTA 55102-1639
(651) 293-3400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO: COPIES TO:
CHARLES F. SAWYER, ESQ. SIEGFRIED P. KNOPF, ESQ.
DORSEY & WHITNEY LLP BROWN & WOOD LLP
220 SOUTH SIXTH STREET ONE WORLD TRADE CENTER
MINNEAPOLIS, MINNESOTA 55402 NEW YORK, NEW YORK 10048
(612) 343-7986 (212) 839-5300
---------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering:
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [X]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The Exhibits filed as part of this Registration Statement are:
<TABLE>
<C> <S>
1.1 --Underwriting Agreement dated as of December 18, 1998.
**3.1 --Certificate of Formation of Green Tree Lease Finance 1998-1, LLC.
**3.2 --LLC Agreement of Green Tree Lease Finance 1998-1, LLC.
***3.3 --Articles of Incorporation of Green Tree Lease Finance II, Inc.
***3.4 --By-Laws of Green Tree Lease Finance II, Inc.
4.1 --Transfer Agreement dated as of December 1, 1998.
4.2 --Contribution and Servicing Agreement dated as of December 1, 1998.
4.3 --Indenture dated as December 1, 1998.
**5.1 --Opinion and consent of Dorsey & Whitney LLP with respect to
legality.
**8.1 --Opinion and consent of Dorsey & Whitney LLP with respect to tax
matters.
**23.1 --Consent of Dorsey & Whitney LLP (included as part of Exhibit 5.1).
**23.2 --Consent of Dorsey & Whitney LLP (included as part of Exhibit 8.1).
**23.3 --Consent of Dorsey & Whitney LLP (true sale and nonconsolidation
opinions).
**23.4 --Consent of PricewaterhouseCoopers LLP.
*24.1 --Power of attorney from officers and directors of Green Tree Lease
Finance II, Inc.
**25.1 --Statement of eligibility of Trustee.
**99.1 --Form of Opinion of Dorsey & Whitney LLP with respect to true sale
of the Leases.
**99.2 --Form of Opinion of Dorsey & Whitney LLP with respect to
nonconsolidation.
</TABLE>
- --------
* Previously filed in the Company's Registration Statement on Form S-1 on
November 25, 1998, as part of Page II-5, Registration Statement Nos. 333-
67993 and 333-67993-01
** Previously filed in Amendment No. 1 to the Company's Registration Statement
on Form S-1 on December 11, 1998, Registration Nos. 333-67993 and 333-
67993-01
*** Incorporated by reference to the corresponding exhibit number in
Registration Statement on Form S-3 Amendment No. 3 filed December 9, 1997,
Registration Statement Nos. 333-38687, 333-38687-01 and 333-38687-02
II-1
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, REGISTRANT HAS
DULY CAUSED THIS POST-EFFECTIVE AMENDMENT NO. 1 TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF ST. PAUL, STATE OF
MINNESOTA, ON THE 4TH DAY OF JANUARY, 1999.
Green Tree Lease Finance 1998-1, LLC
By: Green Tree Lease Finance II,
Inc.
/s/ Joel H. Gottesman
By: _________________________________
Joel H. Gottesman
Senior Vice President and
Secretary
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, REGISTRANT HAS
DULY CAUSED THIS POST-EFFECTIVE AMENDMENT NO. 1 TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF ST. PAUL, STATE OF
MINNESOTA, ON THE 4TH DAY OF JANUARY, 1999.
Green Tree Lease Finance II, Inc.
/s/ Joel H. Gottesman
By: _________________________________
Joel H. Gottesman
Senior Vice President and
Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS POST-
EFFECTIVE AMENDMENT NO. 1 HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON JANUARY 4, 1999.
SIGNATURE TITLE DATE
* President (Principal January 4, 1999
- ------------------------------------- Executive Officer)
RICHARD G. EVANS
*
- ------------------------------------- Senior Vice January 4, 1999
PHYLLIS A. KNIGHT President and
Treasurer
(Principal
Financial and
Accounting Officer)
/s/ Joel H. Gottesman Director January 4, 1999
- -------------------------------------
JOEL H. GOTTESMAN
* Director January 4, 1999
- -------------------------------------
PAUL A. BOYUM
/s/ Joel H. Gottesman
By: _________________________________
Joel H. Gottesman
Attorney-in-fact
II-3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION FORM OF FILING
------- ----------- --------------
<C> <S> <C>
1.1 Underwriting Agreement dated as of December
18, 1998. Electronically Filed
4.1 Transfer Agreement dated as of December 1,
1998. Electronically Filed
4.2 Contribution and Servicing Agreement dated as
of December 1, 1998. Electronically Filed
4.3 Indenture dated as of December 1, 1998. Electronically Filed
</TABLE>
<PAGE>
Exhibit 1.1
Execution Copy
GREEN TREE LEASE FINANCE II, INC.
GREEN TREE LEASE FINANCE 1998-1, LLC
AND GREEN TREE FINANCIAL CORPORATION
Lease-Backed Notes, Class A-1, Class A-2
Class A-3, Class A-4, Class B and Class C
UNDERWRITING AGREEMENT
December 18, 1998
First Union Capital Markets, a division of Wheat First Securities, Inc.
Lehman Brothers Inc.
NationsBanc Montgomery Securities LLC
c/o FIRST UNION CAPITAL MARKETS, a division of Wheat First Securities, Inc.
One First Union Center, TW-9
Charlotte, North Carolina 28288-0610
Dear Sirs:
Green Tree Lease Finance 1998-1, LLC (the "Issuer") is a Delaware limited
liability company. Green Tree Lease Finance II, Inc. (the "SPC"), a wholly
owned subsidiary of Green Tree Vendor Services Corporation ("Vendor Services"),
is the sole member of the Issuer. Vendor Services is a wholly owned subsidiary
of Green Tree Financial Corporation ("Green Tree"). The Issuer's Lease-Backed
Notes identified in Schedule I hereto (the "Notes") will be issued pursuant to
an Indenture, dated as of December 1, 1998 (the "Indenture"), between the Issuer
and U.S. Bank Trust National Association (the "Trustee"). The Notes will be
secured by a pledge by the Issuer of a pool of equipment lease contracts,
installment sale contracts, promissory notes, loan and security agreements and
other similar types of receivables (the "Leases") and certain other property,
including certain rights to the proceeds of disposition of the equipment
underlying the Leases (the "Equipment") to be held in trust pursuant to the
Indenture. The Leases will be serviced by Vendor Services pursuant to a
Contribution and Servicing Agreement, dated as of December 1, 1998 (the
"Contribution and Servicing Agreement"), among the Issuer, Vendor Services and
the SPC. The Leases will have been contributed by Vendor Services, together
with Vendor Services' rights in the Equipment, to the SPC pursuant to a Transfer
Agreement, dated as of December 1, 1998 (the "Transfer Agreement"), between
Vendor Services and the SPC and the SPC will in turn contribute the Leases,
together with certain rights to the proceeds of disposition of the Equipment, to
the Issuer pursuant to the Contribution and Servicing Agreement. The forms of
the Indenture, Transfer Agreement and Contribution and Servicing Agreement
(collectively, the "Transaction Agreements") have been filed as exhibits to the
Registration Statement (hereinafter defined).
<PAGE>
The Notes are more fully described in the Registration Statement (defined
below) which the Issuer and the SPC as the registrants thereunder (together, the
"Registrants") have furnished to you. The Notes identified in Schedule I hereto
will be sold in a public offering through the underwriters listed in Schedule II
hereto, one or more of which may act as representative of such underwriters (any
underwriter through which Notes are sold shall be referred to herein as an
"Underwriter" or, collectively, all such Underwriters may be referred to as
"you" or the "Underwriters") and First Union Capital Markets, a division of
Wheat First Securities, Inc., will act as representative of the Underwriters and
may be referred to herein as the "Representative". Capitalized terms used but
not defined herein shall have the meanings given to them in the Registration
Statement.
The offering of the Notes will be governed by this Underwriting Agreement
which forms one agreement between the Registrants and Green Tree, on one hand,
and the Underwriters, on the other, and references herein to "this Agreement"
shall, unless the context provides otherwise, refer to this Underwriting
Agreement.
SECTION 1. Representations and Warranties. The Registrants and Green Tree
represent and warrant to the Underwriters as of the date hereof as follows:
(a) The Registrants have prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Securities Act"), a
registration statement on Form S-1 (registration numbers 333-67993 and 333-
67993-01), including a form of prospectus, relating to the Notes. The
registration statement, and any post-effective amendment thereto, each in
the form heretofore delivered to you and, excluding exhibits thereto, have
been declared effective by the Commission. As used in this Agreement,
"Effective Time" means the date and the 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. The Registrants have furnished to you, for use by the
Underwriters, copies of one or more preliminary prospectuses (each, a
"Preliminary Prospectus"), relating to the Notes. Except where the context
otherwise requires, the registration statement, as amended at the Effective
Time, including all documents filed as a part thereof, and including any
information contained in a prospectus subsequently filed with the
Commission pursuant to Rule 424(b) under the Securities Act and deemed to
be part of the registration statement as of the Effective Time pursuant to
Rule 430A under the Securities Act, is herein called the "Registration
Statement", and the prospectus, in the form filed by the Registrants with
the Commission pursuant to Rule 424(b) under the Securities Act or, if no
such filing is required, the form of final prospectus included in the
Registration Statement at the time it became effective, is hereinafter
called the "Prospectus".
(b) The Registration Statement relating to the Notes, has been filed
with the Commission and such Registration Statement has become effective.
No stop order suspending the effectiveness of the Registration Statement
has been issued and no proceeding for that purpose has been instituted or,
to the knowledge of the Registrants or Green Tree, threatened by the
Commission. No order preventing or suspending
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<PAGE>
the use of any Preliminary Prospectus has been issued by the Commission,
and each Preliminary Prospectus, at the time of filing thereof, conformed
in all material respects to the requirements of the Securities Act, and the
rules and regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made (and taking
into account Rule 430A of the Securities Act, which permits certain
information to be omitted from a preliminary prospectus), not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon or conformity with the
Underwriters' Information (as defined in Section 10(d) herein).
(c) The Registration Statement conforms, and any amendments or
supplements thereto and the Prospectus will conform, in all material
respects to the requirements of the Securities Act and the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), and do not and will
not, as of the Effective Date and as of the Closing Date (as defined
herein), contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however that this
representation and warranty shall not apply to (i) that part of the
Registration Statement which shall constitute the Statement of Eligibility
and Qualification (Form T-1) of the Trustee under the Trust Indenture Act
or (ii) any Underwriters' Information (as defined in Section 10(d) herein)
contained therein. The Indenture conforms in all respects to the
requirements of the Trust Indenture Act and the rules and regulations of
the Commission thereunder.
(d) The Issuer has been duly organized and is validly existing as a
limited liability company in good standing under the laws of the State of
Delaware. The SPC has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Minnesota. Each
of Vendor Services and Green Tree has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware. Each Registrant, Vendor Services and Green Tree possess the power
and authority to own, lease and operate its properties and conduct its
business as described in the Prospectus and to enter into and perform its
obligations under this Agreement, the Indenture, the Contribution and
Servicing Agreement and the Transfer Agreement, as applicable; and each
Registrant and Green Tree are duly qualified as a foreign entity to
transact business and are in good standing in each jurisdiction in which
the ownership or lease of its properties or the conduct of its business
requires such qualification.
(e) None of the Registrants, Vendor Services or Green Tree are in
violation of its limited liability company agreement or articles of
incorporation or by-laws, as the case may be, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which it is a party or by which it or
its properties may be bound, which default might result in any material
adverse change in the financial
3
<PAGE>
condition, earnings, affairs or business of such Registrant, Vendor
Services or Green Tree, as applicable, or which might materially and
adversely affect the properties or assets thereof.
(f) The execution, delivery and performance by each Registrant, Vendor
Services and Green Tree of this Agreement and the Transaction Agreements,
as applicable, are within its corporate or limited liability company power,
as applicable, and have been duly authorized by all necessary corporate or
limited liability company action on the part of such Registrant, Vendor
Services or Green Tree.
(g) The execution, delivery and performance of this Agreement, the
Transaction Agreements to which the Registrants, Vendor Services or Green
Tree, as the case may be, is a party, the issuance and sale of the Notes
and the consummation of the transactions contemplated hereby and thereby
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which any of the Registrants, Vendor Services or Green Tree
is a party or by which any of the Registrants, Vendor Services or Green
Tree is bound or to which any of the property or assets of any of the
Registrants, Vendor Services or Green Tree is subject, nor will such
actions result in any violation of the provisions of the charter, by-laws
or limited liability company agreement, as applicable, of any of the
Registrants, Vendor Services or Green Tree or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over any of the Registrants, Vendor Services or Green Tree or
any of their properties or assets; and except for the registration of the
Notes under the Securities Act, the qualification of the Indenture under
the Trust Indenture Act, such consents, approvals, authorizations,
registrations or qualifications as may be required under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Exchange Act") and applicable
state securities laws in connection with the purchase and distribution of
the Notes by the Underwriters and the filing of any financing statements
required to perfect the Issuer's interest in the Trust Assets, no consent,
approval, authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement or the Transaction Agreements,
the issuance and sale of the Notes and the consummation of the transactions
contemplated hereby and thereby.
(h) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change,
or any development involving a prospective change, in or affecting the
Registrants, Vendor Services or Green Tree (other than as may be
contemplated in the Registration Statement) which would be expected to have
a material adverse effect on either (i) the ability of such person to
consummate the transactions contemplated by, or to perform its respective
obligations under, this Agreement or the Transaction Agreements, as
applicable, or (ii) the Leases or the Trust Assets.
4
<PAGE>
(i) Each of the Indenture, the Transfer Agreement and the Contribution
and Servicing Agreement when executed and delivered as contemplated hereby
and thereby will have been duly authorized, executed and delivered by each
of the Registrants or Vendor Services, as the case may be, purporting to
execute the same, and will constitute when so executed and delivered, a
legal, valid and binding instrument enforceable against each such
Registrant or Vendor Services, as applicable, in accordance with its terms,
subject (i) to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights generally and
(ii) as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(j) As of the Closing Date, the Notes will have been duly and validly
authorized by the Issuer, and, when executed and authenticated as specified
in the Indenture, will be validly issued and outstanding and will be
entitled to the benefits of the Indenture, and will be binding obligations
of the Issuer to the extent provided in the Indenture, subject (i) to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally and (ii) as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(k) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act and which have not been so described or
filed.
(l) Any taxes, fees and other governmental charges on the part of the
Registrants or Vendor Services that are assessed and due in connection with
the execution, delivery and issuance of this Agreement or the Transaction
Agreements shall have been paid or will be paid at or prior to the Closing
Date to the extent then due.
(m) There are no legal or governmental proceedings pending to which
any of the Registrants, Vendor Services or Green Tree is a party or of
which any property or assets of any of the Registrants, Vendor Services or
Green Tree is the subject which, individually or in the aggregate, would
(i) be reasonably likely to, if determined adversely to any of the
Registrants, Vendor Services or Green Tree, have a material adverse effect
on the condition (financial or otherwise), results of operations, business
or prospects of any of the Registrants, Vendor Services or Green Tree, as
the case may be, or taken as a whole; and to the best of each Registrant's
or Green Tree's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others, that (i)
assert the invalidity of this Agreement or the Transaction Agreements, (ii)
seek to prevent the issuance of the Notes or the consummation of any of the
transactions contemplated by this Agreement or the Transaction Agreements,
(iii) be reasonably likely to, if determined adversely to any of the
Registrants, Vendor Services or Green Tree, materially and adversely affect
the performance by the Registrants, Vendor Services or Green Tree, as the
case may be, of their respective obligations under, or the validity or
enforceability of, this Agreement or the Transaction Agreements, as
applicable, or (iv) seek to affect adversely the federal income tax
attributes of the Notes described in the Prospectus.
5
<PAGE>
(n) This Agreement has been duly authorized, executed and delivered by
each of the Registrants and Green Tree.
(o) Each of the Registrants, Vendor Serivces and Green Tree possess
all material licenses, certificates, authorities or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now operated by it and as described in
the Prospectus and has received no notice of proceedings relating to the
revocation or modification of any such license, certificate, authority or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect its
business, operations, financial condition or earnings.
(p) As of the Closing Date, the Leases and the other Trust Assets will
have been duly and validly granted to the Trustee in accordance with the
Indenture; and when such assignment is effected, a duly and validly
perfected transfer to the Trustee of all such Trust Assets subject to no
prior lien, mortgage, security interest, pledge, charge or other
encumbrance created by Vendor Services or any of the Registrants, will have
occurred.
(q) The representations and warranties of the SPC in Section 3.2 of
the Transfer Agreement and of Vendor Services in Section 3.1 of the
Transfer Agreement will be true and correct as of the Closing Date.
(r) Neither the Issuer nor the Trust Assets created by the Indenture
is required to be registered under the Investment Company Act of 1940, as
amended (the "1940 Act").
(s) The Notes, the Indenture, the Contribution and Servicing
Agreement, and the Transfer Agreement conform in all material respects to
the descriptions thereof contained in the Prospectus.
SECTION 2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the covenants, representations and warranties herein set forth,
the Issuer agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Issuer, the principal amount of
Notes set forth opposite such Underwriter's name in Schedule II hereto. The
purchase price for the Notes shall be as set forth in Schedule I hereto.
SECTION 3. Delivery and Payment. Payment for the Notes shall be made to the
Issuer or to its order by wire transfer of same day funds at the office of
Dorsey & Whitney LLP, 220 South Sixth Street, Minneapolis, Minnesota 55402, at
10:00 a.m., Minneapolis time, on the Closing Date, or at such other time on the
same or such other date as the Representative and the Issuer may agree upon. The
time and date of such payment for the Notes as specified in Schedule I hereto
are referred to herein as the "Closing Date." As used herein, the term "Business
Day" means any day other than a day on which banks are permitted or required to
be closed in New York City or Minneapolis, Minnesota.
Payment for the Notes shall be made against delivery to the Representative
for the respective accounts of the several Underwriters of the Notes registered
in the name of Cede & Co. as nominee of The Depository Trust Company and in such
denominations as the
6
<PAGE>
Representative shall request in writing not later than two full Business Days
prior to the Closing Date. The Issuer shall make the Notes available for
inspection by the Representative in Minneapolis, Minnesota not later than one
full Business Day prior to the Closing Date.
SECTION 4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Notes for sale to the public, which may
include selected dealers, as set forth in the Prospectus.
SECTION 5. Covenants of the Registrants and Green Tree. Each of the
Registrants and Green Tree, jointly and severally, covenants with each of the
Underwriters, as follows:
(a) The Registrants will prepare the Prospectus in a form approved by
the Representative and file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act.
(b) During the period that a prospectus relating to the Notes is
required to be delivered under the Securities Act in connection with sales
of such Notes (such period being hereinafter sometimes referred to as the
"prospectus delivery period"), before filing any amendment or supplement to
the Registration Statement or the Prospectus, the Registrants will furnish
to the Representative a copy of the proposed amendment or supplement for
review and will not file any such proposed amendment or supplement to which
the Representative reasonably objects.
(c) During the prospectus delivery period, the Registrants will advise
the Representative promptly after it receives notice thereof, (i) when any
amendment to the Registration Statement shall have become effective, (ii)
of any request by the Commission for any amendment or supplement to the
Registration Statement or the Prospectus or for any additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation or
threatening of any proceeding for that purpose, (iv) of the issuance by the
Commission of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or the initiation or threatening of any
proceedings for that purpose and (v) of any notification with respect to
any suspension of the qualification of the Notes for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and will use its best efforts to prevent the issuance of any such
stop order or suspension and, if any is issued, will promptly use its best
efforts to obtain the withdrawal thereof.
(d) If, at any time during the prospectus delivery period, any event
occurs as a result of which the Prospectus as then supplemented would
include any 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 shall be
necessary to amend or supplement the Prospectus to comply with the
Securities Act, the Registrants promptly will prepare and file with the
Commission, an
7
<PAGE>
amendment or a supplement which will correct such statement or omission or
effect such compliance.
(e) The Registrants will endeavor to qualify the Notes for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representative shall reasonably request and will continue such
qualification in effect so long as reasonably required for distribution of
the Notes; provided, however, that neither Registrant shall be obligated to
qualify to do business in any jurisdiction in which it is not currently so
qualified; and provided, further, that neither Registrant shall be required
to file a general consent to service of process in any jurisdiction.
(f) The Registrants will furnish to the Representative, without
charge, two copies of the Registration Statement (including exhibits
thereto), one of which will be signed, and to each Underwriter conformed
copies of the Registration Statement (without exhibits thereto) and, during
the prospectus delivery period, as many copies of any Preliminary
Prospectus and the Prospectus and any supplement thereto as the
Underwriters may reasonably request.
(g) For a period from the date of this Agreement until the retirement
of the Notes, or until such time as the Underwriters shall cease to
maintain a secondary market in the Notes, whichever first occurs, the
Registrants will deliver to the Representative (i) the annual statements of
compliance under the Indenture, (ii) the annual independent certified
public accountants' reports furnished to the Trustee, (iii) all documents
required to be distributed to the Noteholders of the Trust and (iv) all
documents filed with the Commission pursuant to the Exchange Act or any
order of the Commission thereunder, in each case as provided to the Trustee
or filed with the Commission, as soon as such statements and reports are
furnished to the Trustee or filed or as soon thereafter as practicable.
(h) To the extent, if any, that the rating provided with respect to
the Notes by the rating agency or agencies that initially rate the Notes is
conditional upon the furnishing of documents or the taking of any other
actions by the Registrants, the Registrants shall furnish such documents
and take any such other actions.
(i) The Issuer will use the net proceeds received by it from the
issuance of the Notes in the manner specified in the Prospectus under the
caption "Use of Proceeds".
(j) The Registrants will file the Monthly Report on Form 8-K for a
period of twelve months following the Closing Date.
SECTION 6. Conditions to the Obligations of the Underwriters. The
respective obligations of the several Underwriters to purchase Notes pursuant to
this Agreement are subject to the accuracy of the representations and warranties
on the part of the Registrants and Green Tree herein contained, to the accuracy
of the statements of the officers of each of the
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Registrants, Vendor Services and Green Tree made pursuant hereto, to the
performance by each of the Registrants and Green Tree of all of its obligations
hereunder and to the following further conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424 in the manner and within the applicable time period prescribed
for such filing by the rules and regulations of the Commission under the
Securities Act and in accordance with Section 5(a) of this Agreement; and,
prior to the Closing Date, no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and
no proceedings for such purpose shall have been initiated or threatened by
the Commission; and all requests for additional information from the
Commission with respect to the Registration Statement shall have been
complied with to the reasonable satisfaction of the Representative.
(b) (i) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Transaction
Agreements, the Notes, the Registration Statement, the Preliminary
Prospectus and the Prospectus, and all other legal matters relating to such
agreements and the transactions contemplated hereby and thereby shall be
reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Registrants shall have furnished to such counsel all
documents and information that they may reasonably request to enable them
to pass upon such matters and (ii) prior to or contemporaneously with the
purchase of Notes hereunder, all transactions contemplated to be
consummated under such Transaction Documents on the Closing Date shall have
been so consummated to the reasonable satisfaction of the Underwriters.
(c) At the Closing Date you shall have received:
(1) The favorable opinion, dated as of the Closing Date, of
Dorsey & Whitney L.L.P., counsel for the Registrants, in form and
substance satisfactory to you, to the effect that:
(i) The Issuer has been duly organized and is validly
existing as a limited liability company in good standing under
the laws of the State of Delaware; the SPC has been duly
organized and is validly existing as a corporation in good
standing under the laws of the State of Minnesota, and that each
of Green Tree and Vendor Services has been duly incorporated and
is validly existing as a corporation in good standing under the
laws of the State of Delaware.
(ii) The execution and delivery by the Registrants, Vendor
Services and Green Tree, as applicable, of this Agreement and the
Transaction Agreements and the signing of the Registration
Statement by the Registrants are within the corporate or limited
liability company power of the Registrants and have been duly
authorized by all necessary corporate or limited liability
company action on the part of the Registrants.
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(iii) This Agreement has been duly authorized, executed and
delivered by the Registrants and Green Tree, and each is a valid
and binding obligation of the Registrants and Green Tree
enforceable against the Registrants and Green Tree in accordance
with its terms, except that (A) such enforcement may be subject
to applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to
creditors' or secured parties' rights generally, (B) such
enforcement may be limited by general principles of equity,
including (without limitation) concepts of materiality,
reasonableness, good faith and fair dealing, and other similar
doctrines affecting the enforceability of agreements generally
(regardless of whether enforcement is sought in a proceeding in
equity or at law), and (C) the enforceability as to rights to
indemnity thereunder is subject to the effect of federal and
state securities laws and public policy relating thereto.
(iv) The Transaction Agreements and the Registration
Statement have been duly authorized, executed and delivered by
each of Vendor Services, if applicable, and the Registrants
purporting to execute the same, and are the valid and binding
obligations of Vendor Services and the Registrants, as
applicable, enforceable against Vendor Services and the
Registrants, as applicable, in accordance with its terms, except
that (A) 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 (B) such enforcement may be limited by general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(v) None of the transfer of the Leases and its rights in the
Equipment by Vendor Services to the SPC or of the Leases and its
rights to disposition proceeds of the Equipment by the SPC to the
Issuer, the pledge of the Trust Assets by the Issuer, the issue
and sale of the Notes by the Issuer or the consummation of the
transactions contemplated herein nor the fulfillment of the terms
hereof will, to the best of such counsel's knowledge, conflict
with or constitute a breach of, or default under, any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which Vendor Services or any of the Registrants may
be a party or by which any may be bound or to which the property
or assets of Vendor Services or any of the Registrants are
subject (which contracts, indentures, mortgages, loan agreements,
notes, leases and other such instruments have been identified by
Vendor Services and the Registrants to such counsel), nor will
such action result in any violation of the provisions of the
certificate of incorporation or by-laws or limited liability
company agreement, as the case may be, of Vendor Services or any
of the Registrants or, to the best of such counsel's knowledge,
any order or regulation known to us to be applicable to Vendor
Services or any of the Registrants of any state or federal court,
regulatory body, administrative
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agency, governmental body or arbitrator having jurisdiction over
Vendor Services or any of the Registrants.
(vi) The Notes have been duly authorized and executed by the
Issuer and when authenticated as specified in the Indenture and
delivered and paid for pursuant to this Agreement, will be duly
issued obligations of the Issuer, entitled to the benefits of the
Indenture.
(vii) The Indenture creates a valid security interest in
favor of the Trustee in the Leases and other property included in
the Trust Assets on the date hereof, which security interest of
the Trustee in the Leases and the Trust Assets will be perfected
and will constitute a first perfected security interest upon the
filing of Uniform Commercial Code ("UCC") financing statements in
the offices of the Secretary of State of Minnesota and Delaware;
provided, however, that such counsel may take customary
exceptions acceptable to you. Such counsel need express no
opinion (a) as to the continuation of a security interest in the
Leases if the Trustee does not file continuation statements as
required by the Indenture or (b) as to the priority of any
security interest in the Leases against any liens, claims or
other interests that arise by operation of law and do not require
any filing or similar action in order to take priority over
perfected security interests.
(viii) To the best of such counsel's knowledge, no filing or
registration with or notice to or consent, approval,
authorization or order of any Minnesota or federal court or
governmental authority or agency is required to be obtained by
Vendor Services or the Registrants for the consummation by Vendor
Services or any of the Registrants, as applicable, of the
transactions contemplated by the Transaction Agreements, except
such as may be required under the Securities Act or the
regulations thereunder, or state securities or Blue Sky laws.
(ix) The Registration Statement is effective under the
Securities Act and, to the best of such counsel's knowledge and
information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act
or proceedings therefor initiated or threatened by the
Commission.
(x) The Indenture has been duly qualified under the Trust
Indenture Act.
(xi) To the best of such counsel's knowledge, there are no
contracts or documents of the Registrants which are required to
be filed as exhibits to the Registration Statement pursuant to
the Securities Act or the regulations thereunder which have not
been so filed or incorporated by reference.
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(xii) The statements in the Prospectus under the heading
"Federal Income Tax Consequences," to the extent that they
constitute statements of law or legal conclusions as to the
likely outcome of material issues under the federal income tax
laws, have been prepared or reviewed by such counsel and are
correct in all material respects.
(xiii) The Issuer is not and will not as a result of the
offer and sale of the Notes as contemplated in the Prospectus and
in this Agreement become, an "investment company" or "under the
control of an investment company" as such terms are defined in
the 1940 Act.
(xiv) The statements in the Prospectus under the caption
"Description of the Notes," "The Leases - Representations and
Warrantees Made by Vender Services" and "Description of the
Contribution and Servicing Agreement" insofar as such statements
purport to summarize certain terms of the Notes, and the
Transaction Agreements constitute a fair and accurate summary of
such documents.
(xv) The Registration Statement and the Prospectus (other
than the financial statements and other financial, statistical
and numerical information included therein, as to which no
opinion need be rendered) as of their respective effective or
issue dates, complied as to form in all material respects with
the requirements of the Securities Act and the regulations
thereunder.
(xvi) The execution, delivery and performance by Vendor
Services or the Registrants, as applicable, of the Transaction
Agreements do not require the consent or approval of, the giving
of notice to, the registration with, or the taking of any other
action in respect of any federal, state or other governmental
agency or authority which has not previously been effected.
(xvii) To such counsel's knowledge, there are no pending or
overtly threatened lawsuits or claims against the Registrants or
Green Tree, or relating to the transaction, Vendor Services or
contemplated by the Underwriting Agreement and the Transaction
Agreements which, if adversely determined, would have a material
adverse effect on the transactions contemplated by the
Underwriting Agreement and the Transaction Agreements.
Such counsel shall deliver to you such additional opinions addressing the
transfer by Vendor Services or the Registrants of any right, title and interest
in and to the Leases and other property included in the Trust Assets on the
Closing Date as may be required by each Rating Agency rating the Notes.
Such counsel shall state that it has participated in the conferences with
officers and other representatives of the Registrants, your counsel,
representatives of the independent accountants
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for the Registrants and you at which the contents of the Registration Statement
and the Prospectus were discussed and, although such counsel is not passing upon
and does not assume responsibility for, the factual accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus (except as stated in paragraphs (xii) and (xiv) above) and has made
no independent check or verification thereof for the purpose of rendering this
opinion, on the basis of the foregoing, nothing has come to their attention that
leads such counsel to believe that the Registration Statement, when it became
effective, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus on the date of this
Agreement contained, or on the Closing Date contains, any untrue statement of a
material fact or omitted or omits 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, except that such counsel need express no view with
respect to the financial statements, schedules and other financial, statistical
and numerical data included in the Registration Statement or the Prospectus.
Said counsel may state that they are admitted to practice only in the State
of Minnesota, that they are not admitted to the Bar in any other State and are
not experts in the law of any other State and to the extent that the foregoing
opinions concern the laws of any other State such counsel may rely upon the
opinion of counsel satisfactory to the Underwriters and admitted to practice in
such jurisdiction. Any opinions relied upon by such counsel as aforesaid shall
be addressed to the Underwriters and shall be delivered together with the
opinion of such counsel, which shall state that such counsel believes that their
reliance thereon is justified.
(2) The favorable opinion, dated as of the Closing Date, of Joel H.
Gottesman, Senior Vice President and Secretary to the Issuer and the SPC
and Senior Vice President and General Counsel to Green Tree, in form and
substance satisfactory to you and your counsel, to the effect that:
(i) There are no pending or threatened litigation or
administrative proceeding of or before any court, tribunal or
governmental agency, authority or body or any arbitrator which,
if adversely determined, would have a material adverse effect on
the financial condition of Vendor Services or any of the
Registrants or Green Tree.
(ii) Each of Vendor Services or the Registrants and Green
Tree is qualified to do business, and is in good standing, as a
foreign corporation or other appropriate entity in each U.S.
jurisdiction in which the character of the business owned or
leased by it makes such qualification necessary, except where the
failure to be so qualified would not have a material adverse
effect on the financial condition of Vendor Services, such
Registrant or Green Tree.
(3) The favorable opinion of counsel to the Trustee, dated as of the
Closing Date, addressed to you and in form and scope satisfactory to your
counsel, to the effect that:
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(i) The Trustee has duly authorized, executed and delivered
the Indenture and the Indenture is enforceable against the
Trustee in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights in general and by general principles of equity
regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(ii) The Trustee has full power and authority to execute and
deliver the Indenture and to perform its obligations thereunder.
(iii) To the best of such counsel's knowledge, there are no
actions, proceedings or investigations pending or threatened
against or affecting the Trustee before or by any court,
arbitrator, administrative agency or other governmental authority
which, if adversely decided, would materially and adversely
affect the ability of the Trustee to carry out the transactions
contemplated in the Indenture.
(iv) No consent, approval or authorization of, or
registration, declaration or filing with, any court or
governmental agency or body of the jurisdiction of incorporation
of the Trustee is required for the execution, delivery or
performance by the Trustee of the Indenture.
(v) The Notes have been duly authenticated by the Trustee.
In rendering such opinion, such counsel may rely, as to matters of fact, to
the extent deemed proper and stated therein, on certificates of responsible
officers of the Trustee or public officials.
(4) The favorable opinion or opinions, dated as of the Closing Date,
of Brown & Wood llp, counsel for the Underwriters, with respect to the
issue and sale of the Notes, the Registration Statement, this Agreement,
the Prospectus, and other related matters as the Underwriters may require
and the Registrants shall have furnished to such counsel such documents as
they reasonably request for enabling them to pass upon such matters.
(d) Each of the Registrants shall have furnished to the Representative
a certificate, dated the Closing Date, of any of its Chairman of the Board,
President or Vice President and its chief financial officer stating that
(i) such officers have carefully examined the Registration Statement and
the Prospectus, (ii) the Prospectus does not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading (provided
that each of the Registrants may exclude Underwriters' Information (as
defined in Section 10(d) herein) from such representation), (iii) the
representations and warranties of any of the Registrants contained in this
Agreement and the Transaction Agreements are true and correct in all
material respects on and as of the Closing Date, (iv) each of the
Registrants
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has complied in all material respects with all agreements and satisfied in
all material respects all conditions on its part to be performed or
satisfied hereunder and under such agreements at or prior to the Closing
Date, (v) no stop order suspending the effectiveness of the Registration
Statement has been issued and is outstanding and no proceedings for that
purpose have been instituted and not terminated or, to the best of his or
her knowledge, are contemplated by the Commission, and (vi) since the date
of its most recent financial statements, there has been no material adverse
change in the financial position or results of operations of any of the
Registrants or Green Tree, as applicable, or any change, or any development
including a prospective change, in or affecting the condition (financial or
otherwise), results of operations or business of any of the Registrants,
Vendor Services or Green Tree except as set forth in or contemplated by the
Registration Statement and the Prospectus.
(e) Subsequent to the date 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 any of the
Registrants, Vendor Services or Green Tree which materially impairs the
investment quality of the Notes; (ii) trading in securities generally on
the New York Stock Exchange, the American Stock Exchange or the over-the-
counter market shall have been suspended or limited, or minimum prices
shall have been established on either of such exchanges or such market by
the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, or trading in securities of any
of the Registrants or Green Tree on any exchange or in the over-the-counter
market shall have been suspended or (iii) a general moratorium on
commercial banking activities shall have been declared by Federal or New
York State authorities or (iv) an outbreak or escalation of hostilities or
a declaration by the United States of a national emergency or war or such a
material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of the Representative, impracticable or inadvisable to proceed with the
public offering or the delivery of the Notes on the terms and in the manner
contemplated in the Prospectus.
(f) The Underwriters shall have received from KPMG Peat Marwick LLP or
other independent certified public accountants acceptable to the
Underwriters, a letter, dated as of the date hereof and as of the Closing
Date, delivered at such times, in the form heretofore agreed to.
(g) The Underwriters shall receive evidence satisfactory to them that,
on or before the Closing Date, UCC-1 financing statements have been or are
being filed in each office in each jurisdiction in which such financing
statements are required to perfect the first priority security interests
created by the Transaction Agreements reflecting the interest of the
Trustee in the Trust Assets and the proceeds thereof.
(h) At the Closing Date, the Class A-1 Notes shall be rated by each of
S&P and Fitch in their highest rating category; the Class A-2, Class A-3
and Class A-4 Notes shall be rated at least ""AAA" by each of S&P and
Fitch, the Class B Notes shall be rated at
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least "A" by each of S&P and Fitch; and the Class C Notes shall be rated at
least "BBB" by each of S&P and Fitch.
All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Underwriters.
SECTION 7. Termination of Agreement. The obligations of the Underwriters
hereunder may be terminated by the Representative, in its absolute discretion,
by notice given to and received by the Registrants prior to delivery of and
payment for the Notes if, prior to that time, any of the events described in
Section 6(e) or Section 6(j) shall have occurred.
SECTION 8. Defaulting Underwriters.
(a) If, on the Closing Date, any Underwriter or Underwriters default
in the performance of its or their obligations under this Agreement, the
Representative may make arrangements for the purchase of such Notes by
other persons satisfactory to the Registrants and the Representative,
including any of the Underwriters, but if no such arrangements are made by
the Closing Date, then each remaining non-defaulting Underwriter shall be
severally obligated to purchase the Notes which the defaulting Underwriter
or Underwriters agreed but failed to purchase on the Closing Date in the
respective proportions which the principal amount of Notes set forth
opposite the name of each remaining non-defaulting Underwriter in Schedule
I hereto bears to the aggregate principal amount of Notes set forth
opposite the names of all the remaining non-defaulting Underwriters in
Schedule I hereto; provided, however, that the remaining non-defaulting
Underwriters shall not be obligated to purchase any of the Notes on the
Closing Date if the aggregate principal amount of Notes which the
defaulting Underwriter or Underwriters agreed but failed to purchase on
such date exceeds one-eleventh of the aggregate principal amount of the
Notes to be purchased on the Closing Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase in total more than 10% of
the principal amount of the Notes which it agreed to purchase on the
Closing Date pursuant to the terms of Section 2. If the foregoing maximums
are exceeded and the remaining Underwriters or other underwriters
satisfactory to the Representative and the Registrants do not elect to
purchase the Notes which the defaulting Underwriter or Underwriters agreed
but failed to purchase, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter or the Registrants, except that
the provisions of Sections 9 and 13 shall not terminate and shall remain in
effect. As used in this Agreement, the term "Underwriter" includes, for all
purposes of this Agreement unless the context otherwise requires, any party
not listed in Schedule I hereto who, pursuant to this Section 8, purchases
Notes which a defaulting Underwriter agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Notes of a defaulting
Underwriter, either the Representative or the Registrants may postpone the
Closing Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the
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Registrants or counsel for the Underwriters may be necessary in the
Registration Statement, the Prospectus or in any other document or
arrangement, and the Registrants agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus that effects any
such changes.
SECTION 9. Reimbursement of Underwriters' Expenses. If (i) the Issuer shall
fail to tender the Notes for delivery to the Underwriters for any reason
permitted under this Agreement or (ii) the Underwriters shall decline to
purchase the Notes for any reason permitted under this Agreement, Green Tree
shall reimburse the Underwriters for the fees and expenses of their counsel and
for such other out-of-pocket expenses as shall have been reasonably incurred by
them in connection with this Agreement and the proposed purchase of the Notes,
and upon demand Green Tree shall pay the full amount thereof to the
Representative. If this Agreement is terminated pursuant to Section 8 by reason
of the default of one or more Underwriters, Green Tree shall not be obligated to
reimburse any defaulting Underwriter on account of those expenses.
SECTION 10. Indemnification.
(a) The Registrants and Green Tree shall, jointly and severally,
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the Securities Act
(collectively referred to for the purposes of this Section 10 as the
Underwriter) against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which that Underwriter may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of or is based upon (i)
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement as originally filed or in any
amendment thereof or supplement thereto, or in any Preliminary Prospectus
or the Prospectus or in any amendment thereof or supplement thereto or (ii)
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, and shall reimburse each Underwriter for any legal or other
expenses reasonably incurred by that Underwriter directly in connection
with investigating or preparing to defend or defending against or appearing
as a third party witness in connection with any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
none of the Registrants or Green Tree shall be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue statement in
or omission or alleged omission from any Registration Statement as
originally filed or in any amendment thereof or supplement thereto, or in
any Preliminary Prospectus or the Prospectus or in any amendment thereof or
supplement thereto in reliance upon and in conformity with the
Underwriters' Information (as defined in Section 10(d) herein), and
provided, further, that none of the Registrants or Green Tree shall be
liable to any Underwriter or any person controlling such Underwriter under
the indemnity agreement in this subsection (a) with respect to any of such
documents to the extent that any such loss, claim, damage or liability of
such Underwriter or such controlling person results from the fact that such
Underwriter sold Notes to a person to whom there was not sent or given, at
or prior to the written confirmation of such sale, a
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copy of the Prospectus or of the Prospectus as then amended or
supplemented, whichever is most recent, if the Registrants have previously
furnished copies thereof to you.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless each of the Registrants and Green Tree, and each of their
directors, each officer of the Registrants and Green Tree who signed the
Registration Statement and each person, if any, who controls the
Registrants and Green Tree within the meaning of the Securities Act,
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Registrants and Green Tree may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of or is based upon (i)
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement as originally filed or in any
amendment thereof or supplement thereto, or in any Preliminary Prospectus
or the Prospectus or in any amendment thereof or supplement thereto or (ii)
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, but in each case only to the extent that the untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with the Underwriters' Information (as
defined in Section 10(d) herein), and shall reimburse the Registrants and
Green Tree for any legal or other expenses reasonably incurred by the
Registrants and Green Tree in connection with investigating or preparing to
defend or defending against or appearing as third party witness in
connection with any such loss, claim, damage or liability (or any action in
respect thereof) as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 10, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 10 except to the extent it has been materially prejudiced by such
failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 10. If any
such claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume the
defense thereof with counsel reasonably satisfactory to the indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party). After notice from the indemnifying
party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the
indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that the Representative shall have the right to employ counsel to
represent jointly the Representative and the other Underwriters (and their
respective controlling persons who may be subject to liability arising out
of any claim in respect of which indemnity may be sought under this Section
10) if, in the reasonable judgment of the Representative, it is advisable
for the
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Representative and the other Underwriters and controlling persons
to be jointly represented by separate counsel, and in that event the fees
and expenses of such separate counsel shall be paid by the Registrants and
Green Tree. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 10(a) and 10(b), shall use all reasonable
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall be liable for any settlement
of any such action effected without its written consent (which consent
shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment of the plaintiff in any such
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) The Underwriters confirm that the information (such information,
the "Underwriters' Information") set forth (i) in the last paragraph on the
cover page, and (ii) in the second sentence of the second paragraph under
the caption "Underwriting" in the Prospectus is correct and constitutes the
only information furnished in writing to the Registrants by or on behalf of
the Underwriters specifically for inclusion in the Registration Statement
and the Prospectus.
(e) The obligations of the Registrants and Green Tree in this Section
10 shall be in addition to any liability which the Registrants or Green
Tree may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Securities Act; and the obligations of the Underwriters
under this Section 10 shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director and officer of the Registrants and
Green Tree (including any person who, with his or her consent, is named in
the Registration Statement as about to become a director of the Registrants
or Green Tree) and to each person, if any, who controls the Registrants or
Green Tree within the meaning of the Securities Act.
SECTION 11. Contribution. If the indemnification provided for in Section 10
is unavailable or insufficient to hold harmless an indemnified party under
Section 10, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or any action in
respect thereof, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by the Registrants and Green Tree on the one hand and
the Underwriters on the other from the offering of the Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Registrants
and Green Tree on the one hand and the Underwriters on the other with respect to
the statements or omissions which resulted in such loss, claim, damage or
liability, or any action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Registrants and
Green Tree on the one hand and the Underwriters on the other with respect to
such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Notes purchased hereunder (before deducting
expenses) received by the Issuer bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Notes purchased
hereunder, in each case as set forth in the table
19
<PAGE>
on the cover page of the Prospectus. The relative fault shall be 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
relates to information supplied by the Registrants and Green Tree on the one
hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Registrants and Green Tree and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 11 were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim damage or liability referred to above in
Section 10 shall be deemed to include, for purposes of this Section 11, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such claim or any action.
Notwithstanding the provisions of this Section 11, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Notes underwritten by it and distributed to the public were
offered to the public less the amount of any damages which such Underwriter has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 10(d) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to indemnify and
contribute as provided in Section 10 and this Section 11 are several in
proportion to their respective underwriting obligations and not joint.
SECTION 12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon you, the Registrants and Green Tree
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors and
the controlling persons and officers and directors referred to in Sections 10
and 11 and their heirs and legal representatives any legal or equitable right,
remedy or claim under or with respect to this Agreement or any provision herein
or therein contained.
SECTION 13. Expenses. Green Tree will pay all expenses incident to the
performance of the Registrants' obligations under this Agreement, including
without limitation those related to (i) the costs incident to the authorization,
issuance, sale, preparation and delivery of the Notes and any taxes payable in
that connection; (ii) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (iii) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus and the
Prospectus, all as provided in this Agreement; (iv) the costs of reproducing and
distributing this Agreement and any other underwriting and selling group
documents by mail, telex or other means of communications; (v) the fees and
expenses of qualifying the Notes under the securities laws of the several
jurisdictions as provided in Section 5(e) and of preparing, printing and
distributing Blue Sky Memoranda and Legal Investment Surveys (including the
related reasonable and documented fees and expenses of counsel to the
Underwriters); (vi) any fees charged by rating agencies for rating the Notes;
(vii) all fees and expenses of the Trustee and its counsel; (viii) any transfer
taxes payable in connection with its sale of the Notes pursuant to this
Agreement; and (ix) all other costs and
20
<PAGE>
expenses incident to the performance of the obligations of the Registrants under
this Agreement; provided that, except as otherwise provided in this Section 13,
the Underwriters shall pay their own costs and expenses, including, the costs
and expenses of their counsel and the expenses of advertising any offering of
the Notes made by the Underwriters.
SECTION 14. Survival. The respective indemnities, rights of contribution,
agreements, representations, warranties and other statements of the Registrants,
Green Tree and the several Underwriters, as set forth in this Agreement or made
by or on behalf of them, respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation (or any statement as
to the results thereof) made by or on behalf of any Underwriter or any
controlling person of any Underwriter, or any of the Registrants or Green Tree,
or any officer, director or controlling person of the Registrants or Green Tree,
and shall survive delivery of and payment for the Notes.
SECTION 15. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunications and, (i) if sent to the Underwriters
will be mailed, delivered or telecopied and confirmed to them at First Union
Capital Markets, a division of Wheat First Securities, Inc., Asset
Securitization Division, 301 South College Street, TW-9, Charlotte, North
Carolina 28288-0610, Telecopy Number: (704) 374-3254; provided, however, that
any notice to an Underwriter pursuant to Section 9(c) shall be delivered or sent
by mail, delivery or telecopy to such Underwriter at its address set forth in
its acceptance telex to the Representative, which address will be supplied to
any other party hereto by the Representative upon request; and (ii) if sent to
the Issuer, the SPC, Vendor Services or Green Tree will be mailed, delivered or
telecopied and confirmed to them at 1100 Landmark Towers, 345 St. Peter Street,
Saint Paul, Minnesota 55102-1639, attention of the Secretary, with a copy to the
Treasurer Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof. The Issuer, the SPC, the Servicer and Green Tree
shall be entitled to act and rely upon any request, consent, notice or agreement
given or made on behalf of the Underwriters by the Representative.
SECTION 16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 17. Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original of any party whose signature appears
on it, and all of which shall together constitute one and the same instrument.
SECTION 18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
SECTION 19. Effectiveness. This Agreement shall become effective upon
execution and delivery.
21
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement among you, the
Registrants and Green Tree in accordance with its terms.
Very truly yours,
GREEN TREE LEASE FINANCE II, INC.
By: /s/ Joel H. Gottesman
-----------------------------------
Joel H: Gottesman
Senior Vice President and Secretary
GREEN TREE LEASE FINANCE 1998-1, LLC
By: GREEN TREE LEASE FINANCE II, INC.
By: /s/ Joel H. Gottesman
-----------------------------------
Joel H: Gottesman
Senior Vice President and Secretary
GREEN TREE FINANCIAL CORPORATION
By: /s/ Joel H. Gottesman
-----------------------------------
Joel H: Gottesman
Senior Vice President, General Counsel and
Secretary
CONFIRMED AND ACCEPTED, as of
the date first above written:
FIRST UNION CAPITAL MARKETS, A DIVISION
OF WHEAT FIRST SECURITIES, INC., as
Representative of the Underwriters
By: /s/ William W. Ingram
----------------------------------
William W. Ingram
Managing Director
22
<PAGE>
SCHEDULE I
Date of Underwriting Agreement: December 18, 1998
Underwriters: First Union Capital Markets, a division
of Wheat First Securities, Inc.
Lehman Brothers Inc.
NationsBanc Montgomery Securities LLC
Representative and Address: First Union Capital Markets, a division
of Wheat First Securities, Inc.
One First Union Center, TW-9
301 South College Street
Charlotte, NC 28288-0610
Schedule I-1
<PAGE>
Title, Purchase Price and Description of Notes:
Class A-1 Notes
- ----------------
Title: $122,726,804 5.201% Class A-1 Receivable-
Backed Notes, Series 1998-1
Price to public: !00%
Purchase price: 99.85000%
Underwriting
discount: 0.15%
Maturity: January 2000 Payment Date
Class A-2 Notes
- ----------------
Title: $51,695,213 5.55% Class A-2 Receivable-
Backed Notes, Series 1998-1
Price to public: 99.99014%
Purchase price: 99.79014%
Underwriting
discount: .20%
Maturity: December 2000 Payment Date
Class A-3 Notes
- ----------------
Title: $122,332,184 5.60% Class A-3 Receivable-
Backed Notes, Series 1998-1
Price to public: 99.98860%
Purchase price: 99.73860%
Underwriting
discount: .25%
Maturity: July 2002 Payment Date
Class A-4 Notes
- ----------------
Title: $58,403,752 5.74% Class A-4 Receivable-
Backed Notes, Series 1998-1
Price to public: 99.97080%
Purchase price: 99.67080%
Underwriting
discount: .30%
Maturity: January 2004 Payment Date
Schedule I-2
<PAGE>
Class B Notes
- --------------
Title: $25,650,297 6.66% Class B Receivable-
Backed Notes, Series 1998-1
Price to public: 99.99649%
Purchase price: 99.59649%
Underwriting
discount: .40%
Maturity: October 2004 Payment Date
Class C Notes
- --------------
Title: $13,811,698 7.63% Class C Receivable-
Backed Notes, Series 1998-1
Price to public: 99.75981%
Purchase price: 99.25981%
Underwriting
discount: .50%
Maturity: October 2006 Payment Date
Closing Date and Location:
Date: December 23, 1998
Location: Dorsey & Whitney LLP, Minneapolis, Minnesota
Scedule I-3
<PAGE>
SCHEDULE II
UNDERWRITERS
<TABLE>
<CAPTION>
$122,726,804 Principal Amount of Class A-1 Notes to be Purchased
Principal Amount
----------------
<S> <C>
First Union Capital Markets $ 40,908,936
Lehman Brothers Inc. $ 40,908,934
NationsBanc Montgomery Securities LLC $ 40,908,934
------------
$122,726,804
</TABLE>
UNDERWRITERS
<TABLE>
<CAPTION>
$51,695,213 Amount of Class A-2 Notes to be Purchased
Principal Amount
----------------
<S> <C>
First Union Capital Markets $17,231,739
Lehman Brothers Inc. $17,231,737
NationsBanc Montgomery Securities LLC $17,231,737
-----------
$51,695,213
</TABLE>
UNDERWRITERS
<TABLE>
<CAPTION>
$122,332,184 Principal Amount of Class A-3 Notes to be Purchased
Principal Amount
----------------
<S> <C>
First Union Capital Markets $ 40,777,396
Lehman Brothers Inc. $ 40,777,394
NationsBanc Montgomery Securities LLC $ 40,777,394
------------
$122,332,184
</TABLE>
UNDERWRITERS
<TABLE>
<CAPTION>
$58,403,752 Principal Amount of Class A-4 Notes to be Purchased
Principal Amount
----------------
<S> <C>
First Union Capital Markets $19,467,918
Lehman Brothers Inc. $19,467,917
NationsBanc Montgomery Securities LLC $19,467,917
-----------
$58,403,752
</TABLE>
Schedule II-1
<PAGE>
UNDERWRITER
$25,650,297 Principal Amount of Class B Notes to be Purchased
Principal Amount
----------------
First Union Capital Markets $25,650,297
UNDERWRITER
$13,811,698 Principal Amount of Class C Notes to be Purchased
Principal Amount
----------------
First Union Capital Markets $13,811,698
Schedule II-2
<PAGE>
Exhibit 4.1
TRANSFER AGREEMENT
AMONG
GREEN TREE LEASE FINANCE II, INC.
PURCHASER
AND
GREEN TREE VENDOR SERVICES CORPORATION
SELLER AND SERVICER
_______________
DATED AS OF DECEMBER 1, 1998
_______________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I DEFINITIONS 2
SECTION 1.1 General 2
SECTION 1.2 Specific Terms 2
SECTION 1.3 Certain References 3
SECTION 1.4 No Recourse 3
SECTION 1.5 Action by or Consent of Noteholders 3
ARTICLE II CONVEYANCE OF THE LEASES 4
SECTION 2.1 Conveyance of Leases and Related Assets 4
SECTION 2.2 Substitution 5
SECTION 2.3 Intention of the Parties 7
ARTICLE III REPRESENTATIONS AND WARRANTIES 7
SECTION 3.1 Representations and Warranties of Vendor Services 7
SECTION 3.2 Representations and Warranties of Lease Finance 9
ARTICLE IV COVENANTS OF VENDOR SERVICES 11
SECTION 4.1 Protection of Title of Lease Finance and the LLC 11
SECTION 4.2 Other Liens or Interests 13
SECTION 4.3 Costs and Expenses 13
SECTION 4.4 Indemnification 13
SECTION 4.5 Further Assurances 15
SECTION 4.6 Negative Covenant 15
ARTICLE V REPURCHASES 16
SECTION 5.1 Repurchase of Leases Upon Breach of Representation or Warranty 16
SECTION 5.2 Reassignment of Purchased Leases and Equipment 17
SECTION 5.3 Waivers 17
ARTICLE VI MISCELLANEOUS 17
SECTION 6.1 Reserved 17
SECTION 6.2 Merger or Consolidation of Vendor Services or Lease Finance 17
SECTION 6.3 Limitation on Liability of Vendor Services and Others 18
SECTION 6.4 Vendor Services May Own Notes 18
SECTION 6.5 Amendment 18
SECTION 6.6 Notices 19
SECTION 6.7 Merger and Integration 20
SECTION 6.8 Severability of Provisions 20
SECTION 6.9 GOVERNING LAW 20
SECTION 6.10 Counterparts 20
SECTION 6.11 Conveyance of the Leases to the Trust 20
SECTION 6.12 Nonpetition Covenant 20
</TABLE>
-i-
<PAGE>
SCHEDULES
Schedule A -- Schedule of Leases and Equipment
Schedule B -- Schedule of Representations and Warranties of Vendor Services
-ii-
<PAGE>
TRANSFER AGREEMENT
THIS TRANSFER AGREEMENT, dated as of December 1, 1998, executed
between Green Tree Lease Finance II, Inc., a Minnesota corporation, as purchaser
("Lease Finance") and Green Tree Vendor Services Corporation, a Delaware
corporation ("Vendor Services"), as seller and servicer (in such capacity, the
"Servicer").
W I T N E S S E T H:
WHEREAS, Vendor Services owns certain Leases (the "Leases") as are
more particularly described in Schedule A attached hereto and has an ownership
or security interest in the items of Equipment subject thereto (the
"Equipment"), as more particularly described in Schedule A attached hereto; and
WHEREAS, Lease Finance has agreed to acquire the Leases and the
Equipment from Vendor Services, and Vendor Services has agreed to transfer the
Leases and the Equipment to Lease Finance; and
WHEREAS, pursuant to the terms of a Contribution and Servicing
Agreement, dated as of December 1, 1998 (the "Contribution and Servicing
Agreement"), by and among Green Tree Lease Finance 1998-1, LLC (the "LLC"),
Lease Finance, as contributor, and Vendor Services, in its individual capacity
and as Servicer, to be executed concurrently with the execution of this
Agreement, Lease Finance will convey the Leases and certain rights to the
proceeds of disposition of the Equipment ("Residual Realizations") to the LLC;
and
WHEREAS, pursuant to the terms of an Indenture, dated as of December
1, 1998 (the "Indenture"), between Green Tree Lease Finance 1998-1, LLC (the
"LLC") and U.S. Bank Trust National Association, as Trustee (the "Trustee"), to
be executed concurrently with this Agreement, the LLC will, on the Closing Date,
issue the Notes (as defined in the Indenture), secured by a pledge of the Leases
and the Residual Realizations.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and for other good and valuable consideration, the receipt of which
is acknowledged, Lease Finance, Vendor Services and the Servicer, intending to
be legally bound, hereby agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.1 General.
(a) The words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision, and Article, Section, Schedule and Exhibit
references, unless otherwise specified, refer to Articles and Sections of and
Schedules and Exhibits to this Agreement. All capitalized terms used herein
without definition shall have the respective meanings assigned to such terms in
the Contribution and Servicing Agreement or, if not defined in the Contribution
and Servicing Agreement, in the Indenture.
(b) With respect to all terms used in this Agreement, the singular includes
the plural and the plural the singular; words importing any gender include the
other gender; references to "writing" include printing, typing, lithography, and
other means of reproducing words in a visible form; references to agreements and
other contractual instruments include all subsequent amendments thereto or
changes therein entered into in accordance with their respective terms and not
prohibited by this Agreement or the Contribution and Servicing Agreement;
references to Persons include their permitted successors and assigns; and the
terms "include" or "including" mean "include without limitation" or "including
without limitation."
SECTION 1.2 Specific Terms. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Agreement" means this Transfer Agreement and all amendments hereof
and supplements hereto.
"Closing Date" means December 23, 1998.
"Related Documents" means the Indenture, the Contribution and
Servicing Agreement, the Underwriting Agreement and related Terms Agreement with
the Underwriters of the Notes, and the Notes. The Related Documents to be
executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.
"Repurchase Event" means, with respect to any Lease, the occurrence of
a breach of any of the representations and warranties set forth in the Schedule
of Representations that materially and adversely affects the value of such
Lease.
"Schedule of Leases" means, collectively, the schedule of Leases and
Equipment attached hereto as Schedule A, as the same may be revised from time to
time in accordance with the Contribution and Servicing Agreement.
"Schedule of Representations" means the Schedule of Representations
and Warranties of Vendor Services attached hereto as Schedule B.
-2-
<PAGE>
"Trust Assets" means the property and proceeds of every description
conveyed pursuant to Section 2.1 of the Contribution and Servicing Agreement,
together with the Trust Accounts (including all Eligible Investments therein and
all proceeds therefrom).
SECTION 1.3 Certain References. All references to the Principal
Balance of a Lease as of an Accounting Date shall refer to the close of business
on such day, or as of the first day of a Collection Period shall refer to the
opening of business on such day. All references to the last day of a Collection
Period shall refer to the close of business on such day.
SECTION 1.4 No Recourse. Without limiting the obligations of Vendor
Services hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection herewith
or therewith, against any stockholder, officer or director, as such, of any of
Vendor Services, the Servicer, Lease Finance or the Trustee, or of any
predecessor or successor of any of Vendor Services, the Servicer, Lease Finance
or the Trustee.
SECTION 1.5 Action by or Consent of Noteholders. Whenever any
provision of this Agreement refers to action to be taken, or consented to, by
Noteholders, such provision shall be deemed to refer to Noteholders of record as
of the Record Date immediately preceding the date on which such action is to be
taken, or consent given, by such Noteholders. Solely for the purposes of any
action to be taken, or consented to, by Noteholders, any Note registered in the
name of any of Lease Finance, Vendor Services or any Affiliate thereof, shall be
deemed not to be outstanding, and the related Principal Balance, as applicable,
evidenced thereby shall not be taken into account in determining whether the
requisite Principal Balance necessary to effect any such action or consent has
been obtained; provided, however, that, solely for the purpose of determining
whether the Trustee is entitled to rely upon any such action or consent, only
Notes which the Trustee knows to be so owned shall be so disregarded.
-3-
<PAGE>
ARTICLE II
CONVEYANCE OF THE LEASES
SECTION 2.1 Conveyance of Leases and Related Assets.
(a) As a contribution to the capital of Lease Finance, Vendor Services
hereby sells, transfers, assigns, and otherwise conveys to Lease Finance,
without recourse (but without limitation of its obligations in this Agreement),
and Lease Finance hereby acquires, all right, title and interest, including
security interests, whether now owned or hereafter acquired, of Vendor Services
in and to the following:
(i) the Leases, including, without limitation, (A) all monies at any
time paid or payable thereon or in respect thereof from and after the Initial
Cut-Off Date or, in the case of Substitute Leases, the applicable Cut-Off Date,
including but not limited to (1) Scheduled Payments (including those Scheduled
Payments due prior to, but not received as of, the Cut-Off Date, but excluding
those Scheduled Payments due on or after, but received prior to, the Cut-Off
Date), (2) Prepayments, (3) Liquidation Proceeds (including all net proceeds
from the disposition of the related Equipment), (4) Extension Fees, (5) payments
to be applied by the Servicer to the payment of insurance charges, maintenance,
taxes or other similar obligations, and (6) payments to be retained by the
Servicer in payment of Administrative Fees, (B) all security interests of the
lessor or secured party, as the case may be, in the related Equipment and all
present or future leases and other contracts relating to the Equipment and all
revenues, payments, rights to payment, profits, accounts, chattel paper,
products and contract rights arising from or related to the Equipment or any use
thereof or from any such lease or other contract, (C) all rights of the lessor
or secured party, as the case may be, in all Insurance Policies and all other
security for the payment of amounts due under the Leases (including all rights,
if any, the lessor or the secured party may have against vendors and other third
parties for payments of such amounts) and (D) all items contained in the related
Lease Files and any and all other documents that are kept on file in accordance
with Vendor Services's customary procedures relating to the Leases;
(ii) the Equipment and all proceeds thereof, including in any event
and without limitation, all present and future leases and other contracts
relating to the Equipment and all revenues, payments, rights to payment,
profits, accounts, chattel paper, products and contract rights arising from or
related to the Equipment or any use thereof or from any such lease or other
contract; and
(iii) any and all proceeds of any and all of the foregoing.
(b) LEASE FINANCE ACKNOWLEDGES THAT VENDOR SERVICES IS TRANSFERRING
THE EQUIPMENT "AS-IS, WHERE-IS," AND THAT VENDOR SERVICES MAKES NO
REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT, INCLUDING
WITHOUT LIMITATION ITS MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
-4-
<PAGE>
SECTION 2.2 Substitution.
(a) Lease Finance may at any time request that Vendor Services
transfer to it one or more Substitute Leases and the Equipment subject thereto
to replace any Lease (for purposes of this Section 2,2, such Lease referred to
as a "Predecessor Lease") and the Equipment subject thereto if:
(i) the Predecessor Lease became (A) a Liquidated Lease, (B) a Prepaid
Lease, (C) a Warranty Lease or (D) an Adjusted Lease during the immediately
preceding Collection Period; and
(ii) the aggregate Principal Balance of the Liquidated Leases,
Adjusted Leases and Warranty Leases that are Predecessor Leases shall not
in the aggregate exceed 10% of the Initial Pool Principal Balance.
(b) Each transfer of Substitute Leases pursuant to this Section 2.2(a)
will be subject to the satisfaction of the following conditions precedent:
(i) Vendor Services has agreed to deliver such Substitute Leases and
the related Equipment to Lease Finance.
(ii) after giving effect to such substitutions and any adjustments
pursuant to Section 3.2, the aggregate Book Value of such Leases must be
not less than 90% of the Book Value of the Leases substituted or adjusted
since the Closing Date.
(iii) either the final payment on such Substitute Lease must be on or
prior to September 30, 2005 or, to the extent the final payment on such
Lease is due subsequent to September 30, 2005 only scheduled payments due
on or prior to such date may be included in the Principal Balance of such
Lease for the purpose of making any calculation under the Indenture.
(iv) the Lease Pool Principal Balance, after giving effect to such
adjustments and substitutions, must not be less than the Lease Pool
Principal Balance prior to such adjustment or substitution (without giving
effect to the proviso to the definition of "Principal Balance").
(v) the weighted average life of the Notes, after giving effect to
such adjustments and substitutions, must not differ materially from the
weighted average life of the Notes prior to such adjustments and
substitutions.
(vi) after giving effect to such adjustments and substitutions, the
aggregate Principal Balance of the Leases that were originated by Vendor
Services must not be less than the aggregate Principal Balance of the
Leases that were originated by Vendor Services prior to such adjustment or
substitution.
-5-
<PAGE>
(c) If Vendor Services has agreed to transfer Substitute Leases to
Lease Finance during any Collection Period, then by 11:00 a.m. on the following
Deposit Date, Vendor Services shall deliver to Lease Finance, the Servicer and
the Trustee:
(i) a supplement to Exhibit A hereto setting forth the information
shown thereon for each such Substitute Lease,
(ii) an Officer's Certificate (A) certifying that each such Substitute
Lease is an Eligible Lease, (B) specifying each Predecessor Lease for which
a substitution has been made and the Principal Balance and the Book Value
under each such Predecessor Lease and the Principal Balance and the Book
Value under each Substitute Lease being transferred thereby and (C) that
all conditions precedent to such addition or substitution have been
satisfied, and
(iii) such additional information concerning such Substitute Leases
or Predecessor Leases as may be needed for the Servicer to prepare its
Servicer's Certificates pursuant to Section 3.9 and to otherwise carry out
its duties as servicer hereunder.
(d) Subject to the provisions of Section 9.3 of the Contribution and
Servicing Agreement, the delivery of any Officer's Certificate and supplement to
Exhibit A pursuant to Section 2.2(c) shall be conclusive evidence, without
further act or deed, that during the immediately preceding Collection Period and
as of the related Cut-Off Date:
(i) Vendor Services assigned to Lease Finance all of Vendor Services'
right, title and interest in and to the Substitute Leases identified in
such supplement and the related rights described in Section 2.1,
(ii) Vendor Services transferred to Lease Finance all of Vendor
Services' right, title and interest in and to the Equipment subject to such
Substitute Leases and the related rights described in Section 2.1, and
(iii) Lease Finance assigned and transferred to Vendor Services,
without representation or warranty, all of the Contributor's right, title
and interest in and to the Predecessor Leases identified in such Officer's
Certificate and the Equipment subject thereto.
Vendor Services shall promptly deliver to the Servicer the original executed
copy of each Substitute Lease assigned to Lease Finance pursuant to Section
2.2(a) and the related Lease File and Lease Finance shall promptly request the
Servicer to deliver to Vendor Services the original executed copy of each
Predecessor Lease for which substitution has been made pursuant to Section
2.2(a) hereof and the related Lease File.
(e) Upon any substitution of Leases in accordance with the provisions
of this Section 2.2, Vendor Services' obligations hereunder with respect to the
Predecessor Lease shall
-6-
<PAGE>
cease but Vendor Services shall thereafter have the same obligations with
respect to the Substitute Lease substituted as it has with respect to all other
Leases subject to the terms hereof.
SECTION 2.3 Intention of the Parties. The execution and delivery of
this Agreement shall constitute an acknowledgment by each of Vendor Services and
Lease Finance that they intend that each assignment and transfer herein
contemplated constitute a sale and assignment outright, and not for security, of
the property described in Section 2.1(a), conveying good title thereto free and
clear of any Liens, from Vendor Services to Lease Finance, and that all such
property shall not be a part of the estate of Vendor Services in the event of
the bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law, or the occurrence of another similar event, of, or with respect to Vendor
Services. In the event that such conveyance is determined to be made as
security for a loan made by Lease Finance, the LLC or the Noteholders to Vendor
Services, Vendor Services hereby grants to Lease Finance a security interest in
all of Vendor Services's right, title and interest in and to the property
described in Section 2.1(a) to secure the loan determined to have been made to
Vendor Services and the payment and performance of the other obligations of
Vendor Services under this Agreement, and agrees that in such event this
Agreement shall constitute a security agreement under applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of Vendor Services.
Vendor Services makes the following representations and warranties, on which
Lease Finance relies in purchasing the Leases and in transferring the Leases to
the LLC under the Contribution and Servicing Agreement. Such representations
are made as of the Closing Date, or with respect to each Substitute Lease, as of
the applicable Cut-Off Date, but shall survive the sale, transfer and assignment
of the Leases hereunder and the transfer of the Leases and the Residual
Realizations by Lease Finance to the LLC under the Contribution and Servicing
Agreement, and the Granting thereof under the Indenture. Vendor Services and
Lease Finance agree that Lease Finance will assign to the LLC, and the LLC will
immediately Grant to the Trustee, all of Lease Finance's rights under this
Agreement at the Closing Date and that the Trustee will thereafter be entitled
to enforce this Agreement against Vendor Services directly or on behalf of the
Noteholders.
(a) Schedule of Representations. With respect to each Lease, the
representations and warranties set forth on the Schedule of Representations are
true and correct as of the date specified therein.
(b) Organization and Good Standing. Vendor Services has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is currently conducted, and had at all relevant times, and now has,
power, authority and legal right to acquire, own and sell the Leases transferred
to Lease Finance.
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(c) Due Qualification. Vendor Services is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in each jurisdiction in which the ownership or
lease of its property or the conduct of its business requires such qualification
and in which the failure to so qualify would have a material adverse impact on
its business or financial condition.
(d) Power and Authority. Vendor Services has the power and authority
to execute and deliver this Agreement and its Related Documents and to carry out
its terms and their terms, respectively, and the execution, delivery and
performance of this Agreement and all of Vendor Services's Related Documents
have been duly authorized by Vendor Services by all necessary corporate action.
(e) No Consents. Vendor Services holds all necessary licenses,
certificates and permits from all government authorities necessary for
conducting its business as it is presently conducted, and is not required to
obtain the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, except for such
consents, licenses, approvals or authorizations, or registrations or
declarations, as shall have been obtained or filed, as the case may be, prior to
the Closing Date.
(f) Valid Sale; Binding Obligations. This Agreement and each of
Vendor Services's Related Documents have been duly executed and delivered, and
effect a valid sale, transfer and assignment of the Leases and Vendor Services's
interest in the related Equipment, enforceable against Vendor Services, and
creditors of and purchasers from Vendor Services; and this Agreement and each of
Vendor Services's Related Documents constitute legal, valid and binding
obligations of Vendor Services, enforceable in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(g) No Violation. The execution and delivery of this Agreement, the
consummation of the transactions contemplated by this Agreement and the Related
Documents and the fulfillment of the terms of this Agreement and the Related
Documents shall not conflict with, result in any breach of any of the terms and
provisions of or constitute (with or without notice or lapse of time, or both) a
default under, the certificate of incorporation or bylaws of Vendor Services, or
any indenture, agreement, mortgage, deed of trust or other instrument to which
Vendor Services is a party or by which it is bound, or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust or other instrument, other
than this Agreement, the Contribution and Servicing Agreement and the Indenture,
or violate any law, order, rule or regulation applicable to Vendor Services of
any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over Vendor Services or
any of its properties.
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(h) No Proceedings. There are no proceedings or investigations
pending or, to the knowledge of Vendor Services, threatened against Vendor
Services, before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction over Vendor
Services or any properties of Vendor Services (i) asserting the invalidity of
this Agreement or any of the Related Documents, (ii) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (iii) seeking
any determination or ruling that might materially and adversely affect the
performance by Vendor Services of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents or (iv)
seeking to affect adversely the federal income tax or other federal, state or
local tax attributes of, or seeking to impose any excise, franchise, transfer or
similar tax upon, the transfer and acquisition of the Leases hereunder or under
the Contribution and Servicing Agreement.
(i) Chief Executive Offices. The chief executive office of Vendor
Services is located at 1100 Landmark Towers, 345 St. Peter Street, St. Paul, MN
55102, and the offices where Vendor Services keeps its records concerning the
Leases and related documents are at 3601 Minnesota Drive, 9th Floor, France
Place, Bloomington, Minnesota 55435.
SECTION 3.2 Representations and Warranties of Lease Finance. Lease
Finance makes the following representations and warranties, on which Vendor
Services relies in selling, assigning, transferring and conveying the Leases to
Lease Finance hereunder. Such representations are made as of the Closing Date
but shall survive the sale, transfer and assignment of the Leases hereunder and
the transfer thereof by Lease Finance to the LLC under the Contribution and
Servicing Agreement.
(a) Organization and Good Standing. Lease Finance has been duly
organized and is validly existing and in good standing as a corporation under
the laws of the State of Minnesota, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is currently conducted, and had at all relevant times, and
has, full power, authority and legal right to acquire and own the Leases and to
transfer the Leases to the LLC pursuant to the Contribution and Servicing
Agreement.
(b) Due Qualification. Lease Finance is duly qualified to do business
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in each jurisdiction where the failure to do so would
materially and adversely affect (i) Lease Finance's ability to acquire the
Leases, (ii) the validity or enforceability of the Leases or (iii) Lease
Finance's ability to perform its obligations hereunder and under the Related
Documents.
(c) Power and Authority. Lease Finance has the power and authority to
execute and deliver this Agreement and its Related Documents and to carry out
its terms and their terms, respectively, and to acquire the Leases and the
Equipment; and the execution, delivery and performance of this Agreement and its
Related Documents and all of the documents required pursuant hereto or thereto
have been duly authorized by Lease Finance by all necessary action.
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(d) No Consents. Lease Finance holds all necessary licenses,
certificates and permits from all government authorities necessary for
conducting its business as it is presently conducted, and is not required to
obtain the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, except for such
consents, licenses, approvals or authorizations, or registrations or
declarations, as shall have been obtained or filed, as the case may be, prior to
the Closing Date.
(e) Binding Obligation. This Agreement and each of Lease Finance's
Related Documents constitutes a legal, valid and binding obligation of Lease
Finance, enforceable against Lease Finance in accordance with its terms; and
this Agreement and each of Lease Finance's Related Documents constitute legal,
valid and binding obligations of Lease Finance, enforceable in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(f) No Violation. The execution, delivery and performance by Lease
Finance of this Agreement, the consummation of the transactions contemplated by
this Agreement and the Related Documents and the fulfillment of the terms of
this Agreement and the Related Documents do not and will not conflict with,
result in any breach of any of the terms and provisions of or constitute (with
or without notice or lapse of time, or both) a default under the articles of
incorporation or bylaws of Lease Finance, or any indenture, agreement, mortgage,
deed of trust or other instrument to which Lease Finance is a party or by which
Lease Finance is bound or to which any of its properties are subject, or result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or other
instrument (other than the Contribution and Servicing Agreement and the
Indenture), or violate any law, order, rule or regulation, applicable to Lease
Finance or its properties, of any federal or state regulatory body or any court,
administrative agency, or other governmental instrumentality having jurisdiction
over Lease Finance or any of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of Lease Finance, threatened against Lease
Finance, before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality having jurisdiction over Lease Finance
or its properties: (i) asserting the invalidity of this Agreement or any of the
Related Documents, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the Related Documents,
(iii) seeking any determination or ruling that might materially and adversely
affect the performance by Lease Finance of its obligations under, or the
validity or enforceability of, this Agreement or any of the Related Documents or
(iv) that may adversely affect the federal or state income tax attributes of, or
seeking to impose any excise, franchise, transfer or similar tax upon, the
transfer and acquisition of the Leases hereunder or the transfer of the Leases
to the LLC pursuant to the Contribution and Servicing Agreement.
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(h) Chief Executive Offices. The chief executive office of Lease
Finance is located at 1100 Landmark Towers, 345 St. Peter Street, St. Paul,
Minnesota 55102, and the offices where Lease Finance keeps its records
concerning the Leases and related documents are at 3601 Minnesota Drive, 9th
Floor, France Place, Bloomington, Minnesota 55435.
In the event of any breach of a representation and warranty made by Lease
Finance hereunder, Vendor Services covenants and agrees that (i) it will not
take any action or pursue any remedy that it may have hereunder, in law, in
equity or otherwise, until a year and a day have passed since the date on which
all Notes have been paid in full, and (ii) any remedy it may have hereunder is
subject to Section 6.12. Each of Vendor Services and Lease Finance agree that
damages will not be an adequate remedy for breach of the foregoing covenant and
that this covenant may be specifically enforced by Lease Finance on behalf of
the LLC.
ARTICLE IV
COVENANTS OF VENDOR SERVICES
SECTION 4.1 Protection of Title of Lease Finance and the LLC.
(a) At or prior to the Closing Date, Vendor Services shall have filed
or caused to be filed UCC-1 financing statements, executed by Vendor Services,
as seller or debtor, naming Lease Finance as secured party and the LLC as
assignee and (i) describing the Leases and other property described in Section
2.1 as collateral, filed with the office of the Secretary of State of the State
of Minnesota, and (ii) describing the Equipment as collateral, filed with the
appropriate filing office in those jurisdictions where Equipment subject to
Leases constituting at least 75% of the Initial Pool Principal Balance and at
least 75% of the aggregate Book Value as of the Initial Cut-Off Date is located.
Vendor Services shall deliver (or cause to be delivered) to Lease Finance, the
LLC and the Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing. In the
event that Vendor Services fails to perform its obligations under this
subsection, Lease Finance or the LLC may do so at the expense of Vendor
Services.
(b) If Vendor Services changes its name, identity, or corporate
structure in any manner that would, could or might make any financing statement
or continuation statement filed by Vendor Services (or by Lease Finance or the
LLC on behalf of Vendor Services) in accordance with paragraph (a) above,
seriously misleading within the meaning of (S) 9-402(7) of the UCC, it shall
give Lease Finance and the LLC written notice thereof no later than 10 days
following the occurrence of such change, and shall file appropriate amendments
to all such previously filed financing statements and continuation statements
within the time period required by the UCC.
(c) If Vendor Services relocates its principal executive office and,
as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement, it shall give Lease
Finance, the LLC and the Trustee written notice thereof; and shall
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promptly file such appropriate amendments or financing statements within the
time period required by the UCC.
(d) Vendor Services shall at all times maintain its principal
executive office, and any office from which it services Leases, within the
United States of America.
(e) Vendor Services shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Leases, the Equipment and
the other items described in Section 2.1(a) to Lease Finance, and the conveyance
of the Leases by Lease Finance to the LLC, the master computer records
(including archives) of Vendor Services that shall refer to a Lease, any
Equipment or any of the other items described in Section 2.1(a) indicate clearly
that such Lease, Equipment or other item described in Section 2.1(a) has been
sold to Lease Finance and that such Lease has been conveyed by Lease Finance to
the LLC. Indication of the LLC's ownership of a Lease shall be deleted from or
modified on any of Vendor Services's computer systems when, and only when, the
Lease has been paid in full, liquidated (including receipt of all recoveries
reasonably expected to be collected) or purchased by Vendor Services or Lease
Finance.
(f) If at any time Vendor Services shall propose to sell, grant a
security interest in, or otherwise transfer any interest in lease contracts of a
character similar to the Leases to any prospective purchaser, lender or other
transferee, Vendor Services shall give to such prospective purchaser, lender, or
other transferee computer tapes, records, or print-outs (including any restored
from archives) that, if they shall refer in any manner whatsoever to any Lease,
shall indicate clearly that such Lease has been sold to Lease Finance and is
owned by the LLC. Vendor Services and Lease Finance agree that, if any one of
them receives an inquiry from a bona fide potential creditor regarding whether
any lease contract or item of equipment is identified on the Schedule of Leases,
they will instruct the Trustee to disclose the contents of the Schedule of
Leases to such potential creditor in accordance with the provisions of Section
11.17 of the Indenture.
(g) If Vendor Services receives payments in respect of Leases, any
Equipment or any of the other items described in Section 2.1(a), Vendor Services
agrees to pay or cause to be paid to the Servicer all such payments as soon as
practicable after identification thereof, but in no event later than two
Business Days after receipt thereof by Vendor Services.
(h) Vendor Services shall notify Lease Finance and the Trustee within
three Business Days after becoming aware of any Lien on any Lease, Equipment or
other item described in Section 2.1(a), other than the conveyances hereunder or
under the Contribution and Servicing Agreement.
(i) Vendor Services will promptly pay and discharge all taxes,
assessments, levies and other governmental charges imposed on it which may
materially and adversely affect any of the Leases, Equipment or other items
described in Section 2.1(a), or Lease Finance's rights with respect thereto.
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(j) Vendor Services hereby agrees that it will perform its obligations
under the agreements relating to the Leases in conformity with its customary and
usual policies and procedures relating to the Leases.
(k) No later than 10 days after the Closing Date, Vendor Services
shall deliver to Lease Finance and the Trustee a written certification that all
notifications and consents required by paragraph (J) in the Schedule of
Representations hereto have been given or obtained, as applicable.
(l) With respect to lease transactions, Vendor Services's credit
underwriting standards generally require the filing of appropriate UCC financing
statements if the underlying equipment cost is over $25,000.
SECTION 4.2 Other Liens or Interests. Except for the conveyances
hereunder, with respect to any Lease and the related Equipment, Vendor Services
will not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on such Lease or Equipment or any
interest therein, and Vendor Services shall defend the right, title, and
interest of Lease Finance and the LLC in and to such Lease and Equipment against
all claims of third parties claiming through or under Vendor Services.
SECTION 4.3 Costs and Expenses. Vendor Services shall pay all
reasonable costs and disbursements in connection with the performance of its
obligations hereunder and under its Related Documents.
SECTION 4.4 Indemnification.
Vendor Services shall defend, indemnify and hold harmless Lease
Finance, the LLC, the Trustee and the Noteholders from and against:
(a) any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from any breach of any representations
and warranties of Vendor Services contained herein (other than those set forth
in the Schedule of Representations, the exclusive remedies for which are
specified in Section 5.1);
(b) any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from the use, ownership or operation of
any item of Equipment (notwithstanding the disclaimer of Section 2.1(b)); and,
in addition, Vendor Services shall cause Lease Finance and the LLC to be named
as an additional insured under its liability insurance policies;
(c) any and all costs, expenses, losses, damages, claims and
liabilities arising out of or resulting from any action taken, or failed to be
taken, by it in respect of any portion of the Trust Assets other than any action
taken in accordance with this Agreement or any Related Document;
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(d) any taxes that may at any time be asserted against Lease Finance,
the LLC, the Trustee and the Noteholders with respect to the transactions
contemplated in this Agreement, including, without limitation, any sales, gross
receipts, general corporation, tangible or intangible personal property,
privilege, or license taxes (but not including any taxes asserted with respect
to, and as of the date of, the sale, transfer and assignment of the Leases to
Lease Finance and of the Trust Assets to the LLC or the issuance and original
sale of the Notes, or asserted with respect to ownership of the Leases or the
Trust Assets, which shall be indemnified by Vendor Services pursuant to clause
(e) below), or federal, state or other income taxes, arising out of
distributions on the Notes or transfer taxes arising in connection with the
transfer of the Notes) and costs and expenses in defending against the same,
arising or imposed against such Persons by reason of the acts to be performed by
Vendor Services under this Agreement;
(e) any taxes which may at any time be asserted against such Persons
with respect to, and as of the date of, the conveyance or ownership of the
Leases and the conveyance or ownership of the Trust Assets under the Transfer
Agreement or the Contribution and Servicing Agreement or the issuance and
original sale of the Notes, including, without limitation, any sales, gross
receipts, personal property, tangible or intangible personal property, privilege
or license taxes (but not including any federal or other income taxes, including
franchise taxes, arising out of the transactions contemplated hereby or transfer
taxes arising in connection with the transfer of Notes) and costs and expenses
in defending against the same, arising or imposed against such Persons;
(f) any and all costs, expenses, losses, claims, damages, and
liabilities to the extent that such cost, expense, loss, claim, damage, or
liability arose out of, or was imposed upon Lease Finance, the LLC, the Trustee
and the Noteholders through the negligence, willful misfeasance, or bad faith of
Vendor Services in the performance of its duties under this Agreement or by
reason of reckless disregard of the obligations and duties of Vendor Services
under this Agreement;
(g) any loss, liability or expense incurred by reason of the violation
by Vendor Services or any of its Affiliates of federal or state securities laws
in connection with the registration or the sale of the Notes;
(h) any loss, liability or expense imposed upon, or incurred by, Lease
Finance, the LLC, the Trustee or the Noteholders as a result of the failure of
any Lease, or the sale of the related Equipment, to comply with all requirements
of applicable law, but only to the extent such loss, liability or expense is not
covered by the repurchase of such Lease and Equipment as required by Section
5.1; and
(i) any loss, liability or expense imposed upon, or incurred by, Lease
Finance, the LLC, the Trustee or the Noteholders as a result of any actions
taken by or in the name of Lease Finance, the LLC or the Trustee at the request
of Vendor Services pursuant to the last sentence of Section 5.2.
Indemnification under this Section 4.4 shall include reasonable fees
and expenses of counsel and expenses of litigation and shall survive termination
of the Indenture. The
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indemnity obligations hereunder shall be in addition to any obligation that
Vendor Services may otherwise have.
Promptly after receipt by an indemnified party under this Section 4.4
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
SECTION 4.5 Further Assurances. Following the Closing Date, Vendor
Services shall, at the reasonable request of Lease Finance or the Trustee, and
at Vendor Services' expense, execute and deliver any further instruments of
transfer or other documents, and shall take all such other actions that may be
necessary, appropriate or desirable, to fully convey the Leases and the
Equipment (subject to Section 4.1(a)(ii)) to the Issuer or otherwise to
evidence, effectuate or implement the transactions contemplated hereby. In
addition, Vendor Services, as agent for Lease Finance, shall defend the Leases
and the Equipment against any and all claims and demands of all Persons at any
time claiming the same or any interest therein adverse to that of the Lease
Finance.
SECTION 4.6 Negative Covenant. Vendor Services (a) shall not engage
in any transaction or series of transactions or otherwise take any action or
omit to take any action which could result in a determination that Vendor
Services shall have received less than reasonably equivalent value for the
transfer and conveyance of the Leases and the other property described in
Section 2.1(a) to Lease Finance either on the Closing Date or thereafter and (b)
in any event, shall not use the proceeds received from the transfer and
conveyance of the Leases and the other property described in Section 2.1(a)
either on the Closing Date or thereafter (i) to pay any dividend or make any
distribution on or in respect of its capital stock or (ii) to purchase, redeem
or otherwise acquire or retire for value any of its capital stock or the capital
stock of any of its
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affiliates (other than any of its wholly owned subsidiaries), if, in the case of
either (i) or (ii), at the time of any such action and after giving effect
thereto (x) the present fair saleable value of the assets of Vendor Services is
less than the amount that would be required to be paid on or in respect of
Vendor Services's total liabilities (including a reasonable estimate of its
contingent liabilities (net of tax benefits to the extent reasonably likely to
be realized)), (y) the assets of Vendor Services constitute an unreasonably
small capital to carry out Vendor Services's business as it is then conducted or
as Vendor Services then intends to conduct its business or (z) Vendor Services
has incurred, intends to incur, or believes that it will incur, debts that would
be beyond Vendor Services's ability to pay as they mature.
ARTICLE V
REPURCHASES
SECTION 5.1 Repurchase of Leases Upon Breach of Representation or
Warranty. Upon the occurrence of a Repurchase Event, Vendor Services shall,
unless such breach shall have been cured in all material respects by the end of
the second Collection Period after the date on which Vendor Services becomes
aware of or receives written notice from the Trustee or the Servicer of such
breach, (i) repurchase (or substitute a Substitute Lease for) such Lease from
the LLC and the related Equipment from Lease Finance and (ii) on or before the
related Deposit Date, Vendor Services shall either pay the Purchase Amount to
the Servicer on behalf of the LLC and Lease Finance pursuant to Section 2.6 of
the Contribution and Servicing Agreement or deliver a Substitute Lease pursuant
to Article IX of the Contribution and Servicing Agreement. It is understood and
agreed that, except as set forth in the following paragraph, the obligation of
Vendor Services to repurchase any Lease and the related Equipment as to which a
breach has occurred and is continuing shall, if such obligation is fulfilled,
constitute the sole remedy against Vendor Services for such breach available to
Lease Finance, the LLC, the Noteholders or the Trustee on behalf of the
Noteholders. The provisions of this Section 5.1 are intended to grant the LLC
and the Trustee a direct right against Vendor Services to demand performance
hereunder, and in connection therewith, Vendor Services waives any requirement
of prior demand against Lease Finance with respect to such repurchase
obligation. Notwithstanding any other provision of this Agreement or the
Contribution and Servicing Agreement to the contrary, the obligation of Vendor
Services under this Section shall not terminate upon a termination of Vendor
Services as Servicer under the Contribution and Servicing Agreement and shall be
performed by Vendor Services in accordance with the terms hereof notwithstanding
the failure of the Servicer or Lease Finance to perform any of their respective
obligations with respect to such Lease under the Contribution and Servicing
Agreement.
In addition to the foregoing and notwithstanding whether the related
Lease and the related Equipment shall have been purchased by Vendor Services,
Vendor Services shall indemnify Lease Finance, the LLC, the Trustee and the
Noteholders against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such breach.
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SECTION 5.2 Reassignment of Purchased Leases and Equipment. Upon
deposit in the Collection Account of the Purchase Amount of any Lease and the
related Equipment (if applicable) repurchased by Vendor Services under Section
5.1, or upon delivery of a Substitute Lease, Lease Finance and the LLC shall
take such steps as may be reasonably requested by Vendor Services in order to
assign to Vendor Services all of Lease Finance's and the LLC's right, title and
interest in and to such Lease and the related Equipment (if applicable) and all
security and documents conveyed to Lease Finance and the LLC directly relating
thereto, without recourse, representation or warranty, except as to the absence
of liens, charges or encumbrances created by or arising as a result of actions
of Lease Finance or the LLC. Such assignment shall be a sale and assignment
outright, and not for security. If, following the reassignment of a Purchased
Lease and the related Equipment (if applicable), in any enforcement suit or
legal proceeding, it is held that Vendor Services may not enforce any such Lease
on the ground that it shall not be a real party in interest or a holder entitled
to enforce the Lease, Lease Finance and the LLC shall, at the expense of Vendor
Services, take such steps as Vendor Services deems reasonably necessary to
enforce the Lease, including bringing suit in Lease Finance's or the LLC's name
or the name of the Trustee on behalf of the Noteholders.
SECTION 5.3 Waivers. No failure or delay on the part of Lease
Finance or the LLC in exercising any power, right or remedy under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or remedy preclude any other or future exercise thereof or
the exercise of any other power, right or remedy.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Reserved.
SECTION 6.2 Merger or Consolidation of Vendor Services or Lease
Finance. Any corporation or other entity (i) into which Vendor Services or Lease
Finance may be merged or consolidated, (ii) resulting from any merger or
consolidation to which Vendor Services or Lease Finance is a party or (iii)
succeeding to the business of Vendor Services or Lease Finance, shall be the
successor to Vendor Services or Lease Finance, as the case may be (without
relieving Vendor Services or Lease Finance of its responsibilities hereunder, if
it survives such merger or consolidation) without the execution or filing of any
document or any further act by any of the parties to this Agreement. Vendor
Services or Lease Finance shall promptly inform the other parties, the LLC and
the Trustee of such merger, consolidation or purchase and assumption.
Notwithstanding the foregoing, as a condition to the consummation of the
transactions referred to in clauses (i), (ii) and (iii) above, (x) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Sections 3.1 (other than subsections (b) and (i)) and 3.2 (other
than subsections (a) and (h)) of this Agreement shall have been breached (for
purposes hereof, such representations and warranties shall speak as of the date
of the consummation of such transaction), (y) Vendor Services or Lease Finance,
as applicable, shall have delivered written notice of such consolidation, merger
or purchase and assumption to the Rating Agencies prior to the consummation of
such transaction and shall have delivered to the LLC and the
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Trustee an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section 6.2 and that all conditions precedent, if any, provided for in
this Agreement, relating to such transaction have been complied with, and (z)
Vendor Services or Lease Finance, as applicable, shall have delivered to the LLC
and the Trustee an Opinion of Counsel, stating that, in the opinion of such
counsel, either (A) all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary to preserve
and protect the interest of the LLC in the Trust Assets and reciting the details
of the filings or (B) no such action shall be necessary to preserve and protect
such interest.
SECTION 6.3 Limitation on Liability of Vendor Services and Others.
(a) Except with respect to the Representations and Warranties herein
and in the Schedule of Representations, and the indemnification obligations set
forth in Section 4.4 herein, Vendor Services may rely in good faith on the
advice of counsel or on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising under this Agreement.
Vendor Services shall not be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to its obligations under this
Agreement or its Related Documents and that in its reasonable judgment may
involve it in any expense or liability.
(b) Any officer, director, employee or agent of Vendor Services may
rely in good faith on the advice of counsel or on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising under this Agreement. Vendor Services shall be under no obligation to
appear in, prosecute or defend any legal action that is not incidental to its
obligations under this Agreement or its Related Documents and that in its
reasonable judgment may involve it in any expense or liability.
SECTION 6.4 Vendor Services May Own Notes. Subject to the provisions
of the Contribution and Servicing Agreement, Vendor Services, and any Affiliate
of Vendor Services, may in its individual or any other capacity become the owner
or pledgee of Notes with the same rights as it would have if it were not Vendor
Services or an Affiliate thereof (except as provided in Section 1.5).
SECTION 6.5 Amendment.
(a) This Agreement may be amended by Vendor Services and Lease Finance
without the consent of the LLC, the Trustee or the Noteholders (i) to cure any
ambiguity; (ii) to correct or supplement any provisions in this Agreement that
may be inconsistent with any other provisions herein; or (iii) to make any other
provisions with respect to matters or questions arising under this Agreement
that are not inconsistent with the provisions hereof, provided, however, that
such action shall not, as evidenced by an Opinion of Counsel delivered to the
LLC and the Trustee, adversely affect in any material respect the interests of
the Noteholders.
(b) This Agreement may also be amended from time to time by Vendor
Services and Lease Finance, with the prior written consent of a Note Majority
(which consent of
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any Holder of a Note given pursuant to this Section or pursuant to any other
provision of this Agreement shall be conclusive and binding on such Holder and
on all future Holders of such Note and of any Note issued upon the transfer
thereof or in exchange thereof or in lieu thereof whether or not notation of
such consent is made upon the Note), for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Agreement, or of modifying in any manner the rights of the Noteholders;
provided, however, that no such amendment shall (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Leases, distributions that shall be required to be made on any Note
or the applicable rate of interest payable thereon, (ii) amend any provisions of
Section 5.06 or 8.03 of the Indenture in such a manner as to affect the priority
of payment of interest or principal to Noteholders, or (iii) reduce the
aforesaid percentage required to consent to any such amendment or any waiver
hereunder, without the consent of the Holders of all Notes then Outstanding and
affected thereby; and provided, further, that no such amendment shall be
effective unless and until the Rating Agency Condition has been satisfied.
(c) Promptly after the execution of any such amendment or consent, the
LLC or the Trustee, as applicable, shall furnish written notification of the
substance of such amendment or consent to each Noteholder.
(d) It shall not be necessary for the consent of Noteholders pursuant
to this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of
Noteholders provided for in this Agreement) and of evidencing the authorization
of the execution thereof by Noteholders shall be subject to such reasonable
requirements as the LLC or the Trustee, as applicable, may prescribe, including
the establishment of record dates. The consent of any Holder of a Note given
pursuant to this Section or pursuant to any other provision of this Agreement
shall be conclusive and binding on such Holder and on all future Holders of such
Note and of any Note issued upon the transfer thereof or in exchange thereof or
in lieu thereof whether or not notation of such consent is made upon the Note.
SECTION 6.6 Notices. All demands, notices and communications to
Vendor Services or Lease Finance hereunder shall be in writing, personally
delivered, or sent by telecopier (subsequently confirmed in writing), reputable
overnight courier or mailed by certified mail, return receipt requested, and
shall be deemed to have been given upon receipt:
(a) in the case of Vendor Services, to 1100 Landmark Towers, 345 St.
Peter Street, St. Paul, Minnesota 55102, Attention: General Counsel, or such
other address as shall be designated by Vendor Services in a written notice
delivered to the other parties and to the LLC and the Trustee; and
(b) in the case of Lease Finance, to 1100 Landmark Towers, 345 St.
Peter Street, St. Paul, Minnesota 55102, Attention: General Counsel, or such
other address as Lease Finance shall be designated by a written notice delivered
to the other parties and to the LLC and the Trustee.
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SECTION 6.7 Merger and Integration. Except as specifically stated
otherwise herein, this Agreement and the Related Documents set forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement and the
Related Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.
SECTION 6.8 Severability of Provisions. If any one or more of the
covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
SECTION 6.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
SECTION 6.10 Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
SECTION 6.11 Conveyance of the Leases to the Trust. Vendor Services
acknowledges that Lease Finance intends, pursuant to the Contribution and
Servicing Agreement, to convey the Leases, the Residual Realizations and the
other items described in Section 2.1(a), together with its rights under this
Agreement, to the LLC on the Closing Date. Vendor Services acknowledges and
consents to such conveyance and waive any further notice thereof and covenants
and agrees that the representations and warranties of Vendor Services contained
in this Agreement and the rights of Lease Finance hereunder are intended to
benefit the LLC, the Trustee and the Noteholders. In furtherance of the
foregoing, Vendor Services covenants and agrees to perform its duties and
obligations hereunder, in accordance with the terms hereof, for the benefit of
the LLC, the Trustee and the Noteholders and that, notwithstanding anything to
the contrary in this Agreement, Vendor Services shall be directly liable to the
LLC and the Trustee (notwithstanding any failure by the Servicer or Lease
Finance to perform its duties and obligations hereunder or under the
Contribution and Servicing Agreement) and that the LLC and the Trustee may
enforce the duties and obligations of Vendor Services under this Agreement
against Vendor Services for the benefit of the Noteholders.
SECTION 6.12 Nonpetition Covenant. Neither Vendor Services nor Lease
Finance shall petition or otherwise invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the LLC (or, in the case of Vendor Services, against Lease Finance) 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 LLC (or Lease Finance, as applicable) or any substantial part of its
property, or
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ordering the winding up or liquidation of the affairs of the LLC (or, in the
case of Vendor Services, of Lease Finance).
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IN WITNESS WHEREOF, the parties have caused this Transfer Agreement to
be duly executed by their respective officers as of the day and year first above
written.
GREEN TREE LEASE FINANCE II, INC.,
as Purchaser
By /s/ Joel H. Gottesman
---------------------------------------
Name: Joel H. Gottesman
Title: Senior Vice President & Secretary
GREEN TREE VENDOR SERVICES
CORPORATION,
In its individual capacity and as Servicer
By /s/ Joel H. Gottesman
---------------------------------------
Name: Joel H. Gottesman
Title: Senior Vice President & Secretary
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SCHEDULE A
SCHEDULE OF LEASES AND EQUIPMENT
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SCHEDULE B
SCHEDULE OF REPRESENTATIONS AND WARRANTIES
OF VENDOR SERVICES
With respect to each Lease as of the Initial Cut-Off Date, and
regarding each Substitute Lease as of the applicable Cut-Off Date, Vendor
Services represents and warrants as follows :
A. Characteristics of Leases. Each Lease (i) constitutes a valid,
binding and enforceable payment obligation of the Obligor in accordance with its
terms (except as may be limited by applicable bankruptcy, insolvency or other
similar laws affecting the enforceability of creditors' rights generally and the
availability of equitable remedies), (ii) has been duly and properly sold,
assigned and conveyed by Vendor Services to Lease Finance, (iii) was originated
by Vendor Services in the ordinary course of its business, or (in the case of
any Lease purchased by Vendor Services) was acquired by Vendor Services for
proper consideration and was validly assigned to Vendor Services by the
originator of such Lease, and (iv) contains customary and enforceable provisions
adequate to enable realization against the Obligor and/or the related Equipment
(although no representation or warranty is made with respect to the perfection
or priority of any security interest in such related Equipment).
B. No Waivers. No provisions of any Lease have been waived, altered
or modified in any material respect, except as indicated in the Lease File.
C. No Consumer Leases. No Lease is a "consumer lease" as defined in
Article 2A of the Uniform Commercial Code, except for a de minimis number of
Leases.
D. Acceptance of Equipment. To the best of Vendor Services's
knowledge, each Obligor has accepted the related Equipment and has had
reasonable opportunity to inspect and test such Equipment.
E. Compliance with Law. All requirements of applicable Federal,
state and local laws, and regulations thereunder, in respect of all of the
Leases, have been complied with in all material respects.
F. No Default. There is no known default, breach, violation or
event permitting cancellation or termination of the Lease by the lessor under
the terms of any Lease (other than Scheduled Payment delinquencies (in excess of
10% of the Scheduled Payment due) of not more than 59 days), and (except for
payment extensions and waivers of Administrative Fees in accordance with Vendor
Services's servicing and collection policies and procedures) there has been no
waiver of any of the foregoing; and as of the Cut-Off Date, no related Equipment
had been repossessed.
G. The Obligors. Each Obligor (i) is located in the United States,
and (ii) is not (a) the United States of America or any State or local
government or any agency, department,
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subdivision or instrumentality thereof (except for Leases representing no more
than 1% of the Initial Pool Principal Balance) or (b) Vendor Services or any
Affiliate thereof.
H. Obligor Bankruptcy. Each Lease was entered into by an Obligor
who, at the Cut-Off Date, had not been identified on the records of Vendor
Services as being the subject of a current bankruptcy proceeding.
I. Delinquencies. No Lease has a Scheduled Payment delinquency (in
excess of 10% of the Scheduled Payment due) of more than 59 days past due as of
the Cut-Off Date.
J. Assignment to the LLC. Each Lease may be sold, assigned and
transferred by Vendor Services to Lease Finance, and may be assigned and
transferred by Lease Finance to the LLC, without the consent of, or prior
approval from, or any notification to, the applicable Obligor, other than (i)
certain Leases (which, in proportion to the aggregate of all of the Leases, are
not material) that require notification of the assignment to the Obligor, which
notification will be given by the Servicer not later than 10 days following the
Closing Date, and (ii) Leases (which, in proportion to the aggregate of all of
the Leases, are not material) that require the consent of the Obligor, which
consent will be obtained not more than 10 days following the Closing Date.
K. Lease Not Assumable. Each Lease prohibits the sale, assignment
or transfer of the Obligor's interest therein, the assumption of the Lease by
another person in a manner that would release the Obligor thereof from the
Obligor's obligation, or any sale, assignment or transfer of the related
Equipment, without the prior consent of the lessor, other than Leases which may
(i) permit assignment to a subsidiary, corporate parent or other affiliate, (ii)
permit the assignment to a third party, provided the Obligor remains liable
under the Lease, or (iii) permit assignment to a third party with a credit
standing (determined by Vendor Services in accordance with its underwriting
policy and practice at the time for an equivalent contract type, term and
amount) equal to or better than the original Obligor.
L. Payments in United States Dollars. The Obligor under each Lease
is required to make payments thereunder (i) in United States dollars, and (ii)
in fixed amounts and on fixed and predetermined dates.
M. Maintenance and Repair. Each Lease requires the Obligor to
assume responsibility for payment of all expenses in connection with the
maintenance and repair of the related Equipment, the payment of all premiums for
insurance of such Equipment and the payment of all taxes (including sales and
property taxes) relating to such Equipment.
N. Scheduled Payments. Each Lease requires the Obligor thereunder
to make all Scheduled Payments thereon under all circumstances and regardless of
the condition or suitability of the related Equipment and notwithstanding any
defense, set-off or counterclaim that the Obligor may have against the
manufacturer, lessor or lender (as the case may be).
O. Repair or Replacement of Damaged Equipment. Under each Lease, if
the Equipment is damaged or destroyed, the Obligor is required either (i) to
repair such Equipment,
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(ii) to make a termination payment to the lessor in an amount not less than the
Required Payoff Amount, or (iii) in some cases, to replace such damaged or
destroyed Equipment with other equipment of comparable use and value.
P. No Termination by Lessee. None of the Leases permit the Obligor
to terminate the Lease prior to the latest Stated Maturity Date or to otherwise
prepay the amounts due and payable thereunder, except for a de minimis number of
Leases which allow for an early termination or prepayment upon payment of an
amount which is not less than the Required Payoff Amount.
Q. No Transfer of Title Required. It is not a precondition to the
valid transfer or assignment of Vendor Services interest in any of the Equipment
related to any Lease that title to such Equipment be transferred on the records
of any governmental or quasi-governmental agency, body or authority.
R. Good Title. Immediately prior to the sale, assignment and
conveyance of each Lease by Vendor Services to Lease Finance, Vendor Services
had good title to such Lease and Vendor Services's interest in the related
Equipment (subject to the terms of such Lease) and was the sole owner thereof,
free of any Lien.
S. No Impairment. No person has a participation in or other right
to receive Scheduled Payments under any Lease, and neither Lease Finance nor
Vendor Services has taken any action to convey any right to any Person that
would result in such Person having a right to Scheduled Payments received with
respect to any Lease.
T. Lawful Assignment. The sale, transfer and assignment of such
Lease and Vendor Services interest in the related Equipment to Lease Finance
under this Agreement, and the transfer and conveyance of such Lease from, and
the grant of rights to the related Residual Realizations by, Lease Finance to
the LLC under the Contribution and Servicing Agreement, are not unlawful, void
or voidable under the laws of the jurisdiction applicable to such Lease.
U. All Filings Made. All filings and other actions required to be
made, taken or performed by any Person in any jurisdiction to give the LLC a
first priority perfected lien or ownership interest in the Leases and a first
priority perfected security interest in Vendor Services's interest in the
Equipment have been made, taken or performed.
V. Lease Files Complete. There exists a Lease File pertaining to
each Lease, and such Lease File contains the Lease or a facsimile copy thereof.
W. One Original. There is only one original executed copy of each
Lease, and such original executed copy is in the possession of Vendor Services.
X. Chattel Paper. The Leases constitute chattel paper within the
meaning of the UCC as in effect in the States of Minnesota and Delaware (other
than those Leases in which the lessor is financing exclusively the Obligor's
software license or maintenance contract for Equipment, which Leases, in
proportion to the Initial Pool Principal Balance, are not material).
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Y. Marking Records. By the Closing Date, the portions of the
electronic master record of Vendor Services relating to the Leases will have
been clearly and unambiguously marked to show that the Leases constitute part of
the Trust Assets and are owned by the LLC in accordance with the terms of the
Contribution and Servicing Agreement.
Z. Computer Tape. The Computer Tape containing information with
respect to the Leases that was made available by Vendor Services to the Trustee
on the Closing Date and was used to select the Leases was complete and accurate
in all material respects as of the Cut-Off Date and includes a description of
the same Leases that are described in the Schedule of Leases to the Contribution
and Servicing Agreement.
AA. Schedule of Leases. The information with respect to the Leases
listed on the Schedule of Leases attached to the Contribution and Servicing
Agreement is true, correct and complete in all material respects.
BB. No Fraud or Misrepresentation. Each Lease was originated by
Vendor Services or acquired by Vendor Services and was sold and assigned by
Vendor Services to Lease Finance without any fraud or misrepresentation on the
part of Vendor Services.
CC. Adverse Selection. No selection procedures adverse to the
Noteholders were utilized in selecting the Lease from those leases owned by
Vendor Services on the Cut-Off Date.
DD. One Payment. The Obligor has made at least one payment under the
Lease.
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Exhibit 4.2
================================================================================
CONTRIBUTION AND SERVICING AGREEMENT
AMONG
GREEN TREE LEASE FINANCE 1998-1, LLC
ISSUER
GREEN TREE LEASE FINANCE II, INC.
CONTRIBUTOR
GREEN TREE VENDOR SERVICES CORPORATION
IN ITS INDIVIDUAL CAPACITY AND AS SERVICER
U.S. BANK TRUST NATIONAL ASSOCIATION
TRUSTEE
--------------------
DATED AS OF DECEMBER 1, 1998
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C> <C>
INTRODUCTION................................................................................... 1
ARTICLE I DEFINITIONS.................................................... 1
SECTION 1.1. Definitions............................................... 1
SECTION 1.2. Usage of Terms............................................ 8
SECTION 1.3. Calculations.............................................. 8
SECTION 1.4. Section References........................................ 8
SECTION 1.5. No Recourse............................................... 8
ARTICLE II CONVEYANCE OF LEASES........................................... 9
SECTION 2.1. Conveyance of Leases and Related Assets................... 9
SECTION 2.2. Custody of Lease Files.................................... 10
SECTION 2.3. Further Assurances........................................ 11
SECTION 2.4. Representations and Warranties of Contributor............. 12
SECTION 2.5. Nonpetition Covenant...................................... 14
SECTION 2.6. Repurchase of Leases Upon Breach of Representations and
Warranties................................................ 14
ARTICLE III ADMINISTRATION AND SERVICING OF LEASES......................... 15
SECTION 3.1. Duties of the Servicer.................................... 15
SECTION 3.2. Collection of Lease Payments; Modifications of Leases..... 16
SECTION 3.3. Realization Upon Leases................................... 18
SECTION 3.4. Insurance, Maintenance and Taxes.......................... 19
SECTION 3.5. Maintenance of Security Interests in Equipment............ 21
SECTION 3.6. Covenants, Representations, and Warranties of Servicer.... 22
SECTION 3.7. Sub-Servicers............................................. 23
SECTION 3.8. Total Servicing Fee; Payment of Expenses by Service....... 24
SECTION 3.9. Servicer's Certificate.................................... 24
SECTION 3.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event......................................... 24
SECTION 3.11. Annual Independent Accountants' Report.................... 25
SECTION 3.12. Access to Certain Documentation and Information
Regarding Leases.......................................... 25
SECTION 3.13. Certain Duties of the Servicer............................ 26
SECTION 3.14. Duties of the Servicer under the Indenture................ 26
SECTION 3.15. Fidelity Bond............................................. 27
ARTICLE IV COLLECTIONS AND DEPOSITS....................................... 27
SECTION 4.1. Initial Deposit........................................... 27
SECTION 4.2. Collections............................................... 27
SECTION 4.3. Application of Collections................................ 28
SECTION 4.4. Net Deposits.............................................. 29
SECTION 4.5. Servicer Advances......................................... 29
</TABLE>
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<TABLE>
<S> <C> <C>
ARTICLE V TERMINATION.................................................... 30
SECTION 5.1. Optional Purchase of All Leases; Liquidation of Trust
Assets.................................................... 30
ARTICLE VI THE CONTRIBUTOR................................................ 30
SECTION 6.1. Liability of Contributor.................................. 30
SECTION 6.2. Merger or Consolidation of, or Assumption of the
Obligations of, Contributor; Amendment of Certificate of
Incorporation............................................. 30
SECTION 6.3. Limitation on Liability of Contributor and Others......... 31
SECTION 6.4. Contributor May Own Notes................................. 31
SECTION 6.5. Covenants of the Contributor.............................. 32
ARTICLE VII THE SERVICER................................................... 32
SECTION 7.1. Liability of Servicer; Indemnities........................ 32
SECTION 7.2. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer.............................. 33
SECTION 7.3. Limitation on Liability of Servicer and Others............ 34
SECTION 7.4. Servicer Not to Resign.................................... 34
SECTION 7.5. Corporate Existence....................................... 34
ARTICLE VIII SERVICER TERMINATION EVENTS.................................... 35
SECTION 8.1. Servicer Termination Event................................ 35
SECTION 8.2. Consequences of a Servicer Termination Event.............. 36
SECTION 8.3. Trustee to Act; Appointment of Successor.................. 37
SECTION 8.4. Notification to Noteholders............................... 37
SECTION 8.5. Waiver of Past Defaults................................... 37
ARTICLE IX SUBSTITUTION OF LEASES......................................... 38
SECTION 9.1. Substitution.............................................. 38
SECTION 9.2. Procedure................................................. 39
SECTION 9.3. Objection and Repurchase.................................. 40
SECTION 9.4. Vendor Services' and Servicer's Subsequent Obligations.... 40
ARTICLE X MISCELLANEOUS PROVISIONS....................................... 40
SECTION 10.1. Amendment................................................. 40
SECTION 10.2. Protection of Title to Trust Assets....................... 41
SECTION 10.3. Governing Law............................................. 43
SECTION 10.4. Severability of Provisions................................ 43
SECTION 10.5. Assignment................................................ 43
SECTION 10.6. Third-Party Beneficiaries................................. 43
SECTION 10.7. Counterparts.............................................. 44
SECTION 10.8. Intention of Parties...................................... 44
SECTION 10.9. Notices................................................... 44
SECTION 10.10. Income Tax Characterization............................... 44
</TABLE>
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EXHIBITS
Exhibit A -- Schedule of Leases and Equipment
Exhibit B -- Form of Servicer's Certificate
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THIS CONTRIBUTION AND SERVICING AGREEMENT, dated as of December 1,
1998, is made among GREEN TREE LEASE FINANCE 1998-1, LLC, a Delaware limited
liability company (the "Issuer"), GREEN TREE LEASE FINANCE II, INC., a Minnesota
corporation, as Contributor (the "Contributor"), GREEN TREE VENDOR SERVICES
CORPORATION, a Delaware corporation, in its individual capacity and as Servicer
(in its individual capacity, "Vendor Services"; in its capacity as Servicer, the
"Servicer"), and U.S. Bank Trust National Association, a national banking
association organized and existing under the laws of the United States of
America, as trustee under the Indenture (the "Trustee").
In consideration of the mutual agreements herein contained, and of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. All terms defined in the Indenture (as
defined below) shall have the same meaning in this Agreement. Whenever
capitalized and used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accountants' Report: The report of a firm of nationally recognized
independent accountants described in Section 3.11.
Accounting Date: With respect to a Payment Date, the last day of the
preceding calendar month.
Adjusted Lease: A Lease that has had one or more terms adjusted or
modified by the Servicer, other than modifications permitted by Section 3.2.
Administrative Fee: With respect to any Collection Period, all
administrative fees, expenses and charges collected in respect of the Leases
during such Collection Period, including late fees, late payment interest,
documentation fees, insurance administration charges and any Extension Fees.
Affiliate: With respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement or "this Agreement": This Contribution and Servicing
Agreement, all amendments and supplements thereto and all exhibits and schedules
to any of the foregoing.
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Book Value: With respect to any Equipment, the value of such
Equipment as shown on the accounting books and records of Vendor Services as of
the Cut-Off Date. The Book Value for each item of Equipment shall be set forth
on Exhibit A hereto (as the same may be revised from time to time).
Business Day: Any day (other than a Saturday, Sunday or legal
holiday) on which commercial banking institutions in St. Paul, Minnesota, or any
other location of any successor Servicer or successor Trustee, are open for
regular business.
Collection Account: The account designated as such in, and
established and maintained pursuant to, Section 8.02 of the Indenture.
Collection Period: With respect to a Payment Date, the calendar month
preceding the month in which such Payment Date occurs (such calendar month being
referred to as the "related" Collection Period with respect to such Payment
Date). With respect to an Accounting Date, the Collection Period in which such
Accounting Date occurs is referred to herein as the "related" Collection Period
with respect to such Accounting Date.
Collection Records: All manually prepared or computer generated
records relating to collection efforts or payment histories with respect to the
Leases.
Contributor: Green Tree Lease Finance II, Inc., a Minnesota
corporation, or its successor in interest pursuant to Section 6.2.
Cut-Off Date: The Initial Cut-Off Date or, in the case of a
Substitute Lease, the first day of the month of transfer of such Substitute
Lease to the Issuer.
Deposit Date: With respect to any Collection Period, the Business Day
immediately preceding the related Determination Date.
Determination Date: With respect to any Collection Period, the first
Business Day immediately preceding the related Payment Date.
Eligible Lease: A Lease satisfying the Representations and
Warranties.
Eligible Servicer: Vendor Services, the Trustee or another Person
which at the time of its appointment as Servicer (i) is servicing a portfolio of
equipment lease contracts, installment sale contracts, promissory notes, loan
and security agreements and/or other similar types of receivables comparable to
the Leases, (ii) is legally qualified and has the capacity to service the
Leases, (iii) has demonstrated the ability professionally and competently to
service a portfolio of equipment lease contracts, installment sale contracts,
promissory notes, loan and security agreements and other similar types of
receivables comparable to the Leases with reasonable skill and care, (iv) has
available software which is adequate to perform its duties and responsibilities
under this Agreement, and (v) satisfies the Rating Agency Condition.
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Equipment: The Equipment subject to a Lease, as more particularly
described on Exhibit A hereto (as the same may be revised from time to time).
Extension Fees: Any fee received by the Servicer in consideration for
the granting of an extension on the payment of any Scheduled Payment due under a
Lease.
Indenture: The Indenture, dated as of December 1, 1998, between the
Issuer and the Trustee, as the same may be amended and supplemented from time to
time.
Initial Cut-Off Date: December 1, 1998.
Initial Pool Principal Balance: $394,619,948.
Insurance, Maintenance and Tax Accounts: The accounts which are
established and maintained pursuant to Section 3.4(a).
Insurance Policy: Any insurance policy benefiting the lessor or
secured party under a Lease providing loss or physical damage, theft or similar
coverage with respect to the Equipment.
Issuer: Green Tree Lease Finance 1998-1, LLC.
Lease File: The documents, electronic entries, instruments and
writings listed in Section 2.2 pertaining to a particular Lease.
Lease Pool Principal Balance: With respect to any Payment Date, the
sum of the Principal Balances (computed as of the related Accounting Date) for
all Leases.
Leases: The lease contracts listed on Exhibit A hereto (excluding any
such lease contract which has become a Purchased Lease but including all
Substitute Leases) and all rights and obligations under such contracts,
including, without limitation, all monies at any time paid or payable thereon or
in respect thereof from and after the Cut-Off Date (whether in the form of (i)
Scheduled Payments (including those Scheduled Payments due prior to, but not
received as of, the Cut-Off Date, but excluding those Scheduled Payments due on
or after, but received prior to, the Cut-Off Date), (ii) Prepayments, (iii)
Liquidation Proceeds (including all net proceeds from the disposition of the
related Equipment), (iv) Extension Fees, (v) payments to be applied by the
Servicer to the payment of insurance charges, maintenance, taxes or other
similar obligations, (vi) payments to be retained by the Servicer in payment of
Administrative Fees, or otherwise), and all rights of the lessor in the related
Equipment (other than any ownership interest of the lessor in such Equipment),
Insurance Policies and any other security for the payment of amounts due under
such contracts.
Lien: Any security interest, lien, charge, pledge, preference, equity
or encumbrance of any kind, including tax liens, mechanics' liens and any liens
that attach by operation of law.
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Liquidated Lease: With respect to any Collection Period, (i) a Lease
which, during such Collection Period, was charged off as uncollectible by the
Servicer in accordance with its credit and collection policies and procedures
(which shall be no later than the date as of which the Servicer has repossessed
and disposed of the related Equipment and otherwise collected all proceeds
(including any proceeds of insurance to be applied as described in Section
3.4(c)(ii)) which, in the Servicer's reasonable judgment, can be collected under
such Lease) following a default thereunder or upon damage to or destruction of
such Equipment (if such Equipment is not to be replaced or repaired in
accordance with Section 3.4(c)(i)), or (ii) a Lease as to which, during such
Collection Period, 10% or more of a Scheduled Payment shall have become 180 days
delinquent.
Liquidation Proceeds: All amounts received by the Servicer (i) in
connection with the liquidation of any Lease and disposition of the related
Equipment or (ii) as insurance proceeds with respect to any damaged or destroyed
Equipment to be applied as described in Section 3.4(c)(ii), in each case net of
(a) reasonable out-of-pocket expenses incurred by or on behalf of the Servicer
in connection with the collection of such Lease and the maintenance,
repossession, repair, storage and disposition of the related Equipment
(including taxes and insurance charges, to the extent in excess of amounts
available therefor and relating to such Lease in the Insurance, Maintenance and
Tax Accounts, as well as attorneys' fees) and (b) amounts that are required to
be refunded to the Obligor on such Lease; provided, however, that the
Liquidation Proceeds with respect to any Lease and disposition of the related
Equipment shall in no event be less than zero.
Monthly Records: All records and data maintained by the Servicer with
respect to the Leases in accordance with its customary standards, policies and
procedures.
Note Majority: Holders of Notes representing a majority of the
Principal Balance of each Class of the Notes then Outstanding.
Obligor: The lessee, borrower, purchaser or any other Person or
Persons who are obligated to make payments under a Lease.
Opinion of Counsel: A written opinion of counsel acceptable in form
and substance and from counsel acceptable to the Issuer and, if such opinion or
a copy thereof is required to be delivered to the Trustee, to the Trustee.
Original Term: The term of a Lease as of the Cut-Off Date (which
shall include any renewals or extensions of the original term thereof prior to
the Cut-Off Date), as such term may be extended in accordance with Section
3.2(c) or as a result of a bankruptcy proceeding with respect to the related
Obligor, but excluding, in the case of any Lease, any other extensions or
renewals thereof.
Payment Date: The twentieth day of each calendar month (or, if such
twentieth day is not a Business Day, the next succeeding Business Day),
commencing January 20, 1999.
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Person: Any legal person, including any individual, corporation,
partnership, joint venture, estate, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof, or any other entity.
Pledged Revenues: (i) All Scheduled Payments on the Leases received
on or after the Cut-Off Date (including all Scheduled Payments due prior to, but
not received as of, the Cut-Off Date, but excluding any Scheduled Payments due
on or after, but received prior to, the Cut-Off Date); (ii) any Prepayments
received on the Leases on or after the Cut-Off Date (to the extent Vendor
Services has not delivered a Substitute Lease); (iii) the Purchase Amount of any
Leases repurchased by Vendor Services (to the extent Vendor Services has not
delivered a Substitute Lease) in accordance with Section 2.6 (other than any
portion thereof attributable to the Book Value of the Equipment); (iv) the
amount paid by the Contributor to repurchase the Leases pursuant to Section 5.1;
(v) Liquidation Proceeds received in respect of any Leases and the disposition
of the related Equipment on or after the Cut-Off Date (to the extent Vendor
Services has not delivered a Substitute Lease); and (vi) any earnings on the
investment of amounts credited to the Collection Account.
Predecessor Lease: As defined in Section 9.1.
Prepaid Lease: With respect to any Collection Period, a Lease that has
been prepaid in full, whether pursuant to its terms or with the Servicer's
consent in accordance with Section 3.2(d).
Prepayment: With respect to any Collection Period for any Lease, a
voluntary prepayment during such Collection Period of amounts due and owing
under such Lease.
Principal Balance: As of any Accounting Date,
(1) in the case of any Lease that does not by its terms permit
prepayment or early termination, the present value of the unpaid Scheduled
Payments due on such Lease after such last day of the Collection Period
(excluding all Scheduled Payments due on or prior to, but not received as
of, such last day, as well as any Scheduled Payments due after such last
day and received on or prior thereto), after giving effect to any
Prepayments received on or prior to such last day, discounted monthly
(assuming, for purposes of such calculation, that each Scheduled Payment is
due on the last day of the applicable Collection Period) at the rate of
6.539% per annum;
(2) in the case of any Lease that permits prepayment or early
termination only upon payment of a premium that is at least equal to the
present value (calculated in the manner described in clause (1) above) of
the unpaid Scheduled Payments due on such Lease after the date of such
prepayment, the amount specified in clause (1) above; and
(3) in the case of any Lease that permits prepayment or early
termination without payment of a premium at least equal to the amount
specified in clause (2) above, the lesser of (a) the outstanding principal
balance of such Lease after giving effect to Scheduled Payments due on or
prior to such last day of the Collection Period, whether or
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not received, as well as any Prepayments, and any Scheduled Payments due
after such last day, received on or prior to such last day, and (b) the
amount specified in clause (1) above;
provided that the Principal Balance of any Lease which became a Liquidated Lease
during the related Collection Period or was required to be repurchased by Vendor
Services as of the last day of the related Collection Period in accordance with
Section 2.6, will be deemed to be zero on and after the last day of such
Collection Period.
Purchase Amount: With respect to a Lease and related Equipment
required to be repurchased by Vendor Services in accordance with Section 2.6,
the sum of (i) the Required Payoff Amount for such Lease as of the Accounting
Date on which such obligation to so repurchase arises, plus (ii) the Book Value
(if any) of the related Equipment.
Purchased Lease: As of any Deposit Date, any Lease which Vendor
Services has repurchased (or substituted with a Substitute Lease therefor) as of
the related Accounting Date, as required by Section 2.6.
Related Assets: The assets, in addition to the Leases, transferred by
the Contributor to the Issuer pursuant to Section 2.1(a).
Related Documents: The Indenture, the Underwriting Agreement with the
Underwriters of the Notes, the Notes and the Transfer Agreement. The Related
Documents executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.
Representations and Warranties: As defined in Section 2.6.
Required Payoff Amount: With respect to any Collection Period for any
Lease, the sum of (i) the Scheduled Payment due in such Collection Period,
together with any Scheduled Payments due in prior Collection Periods but not yet
received, plus (ii) the Principal Balance of such Lease (after taking into
account the Scheduled Payment due in such Collection Period, whether or not
received).
Reserve Account: The account designated as such in, and established
and maintained pursuant to, Section 8.07 of the Indenture.
Residual Account: The account designated as such in, and established
and maintained pursuant to, Section 8.06 of the Indenture.
Residual Realizations: Cash flows realized from the sale or re-lease
of the Equipment following the scheduled expiration dates or voluntary early
termination of the Leases, other than Equipment subject to (i) Liquidated Leases
or (ii) Prepaid Leases for which Vendor Services has delivered a Substitute
Lease in accordance with Section 9.2.
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Responsible Officer: When used with respect to the Servicer, the
Contributor or any other Person, the President, any Vice-President or Assistant
Vice-President or the Controller of such Person, or any other officer or
employee having similar functions.
Schedule of Leases: Collectively, the schedules of Leases (which
shall be made available to the parties hereto on a computer disk or other data
storage medium) attached hereto as (or described in) Exhibit A, as such
schedules may be revised from time to time in accordance with Sections 2.6 and
9.2(a).
Scheduled Payment: With respect to any Collection Period for any
Lease during the Original Term of such Lease, the required payment or payments
due under such Lease in such Collection Period other than those portions of such
payments which (i) under such Lease, are to be applied by the Servicer to the
payment of insurance charges, maintenance, taxes and other similar obligations,
or (ii) are retained by the Servicer in payment of Administrative Fees or are
late payments as to which Servicer Advances were made on a Payment Date.
Servicer: Green Tree Vendor Services Corporation, its successor in
interest pursuant to Section 8.2 or, after any termination of the Servicer upon
a Servicer Termination Event, any successor Servicer.
Servicer Advance: As defined in Section 4.5.
Servicer Termination Event: An event described in Section 8.1.
Servicer's Certificate: With respect to each Determination Date, a
certificate, completed by and executed on behalf of the Servicer, in accordance
with Section 3.9, substantially in the form attached hereto as Exhibit B.
Servicing Account: The account designated as such in, and established
and maintained pursuant to, Section 8.05 of the Indenture.
Servicing Fee: With respect to any Collection Period, the fee payable
to the Servicer for services rendered during such Collection Period, which shall
be equal to one-twelfth of the Servicing Fee Rate multiplied by the Lease Pool
Principal Balance determined as of the last day of the second preceding
Collection Period (or, in the case of the Servicing Fee with respect to the
Collection Period commencing on the Initial Cut-Off Date, an amount equal to the
product of (i) the Servicing Fee Rate, (ii) the Initial Lease Pool Principal
Balance, and (iii) a fraction, the numerator of which is 27 and the denominator
of which is 360.
Servicing Fee Rate: 0.75% per annum.
Sub-Servicer: The Person named as servicer or sub-servicer in any
agreement between the Servicer and such Person by which such Person is
contractually obligated to perform on the Servicer's behalf all or a part of the
servicing obligations described herein.
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Substitute Lease: An Eligible Lease substituted by Vendor Services
for (a) a Liquidated Lease, (b) a Prepaid Lease, (c) a Warranty Lease or (d) an
Adjusted Lease, in accordance with Section 9.2.
Total Servicing Fee: The sum of the Servicing Fee, the Administrative
Fees and any earnings on the investment of amounts in the Servicing Account.
Transfer Agreement: The Transfer Agreement, dated as of December 1,
1998, among Vendor Services and the Contributor.
Trust Accounts: The Collection Account, the Servicing Account, the
Residual Account, the Reserve Account, the Insurance, Maintenance and Tax
Accounts and such other accounts as may be established in the name of the Issuer
or the Trustee pursuant to the Indenture or this Agreement.
Trustee: The Person acting as Trustee under the Indenture, its
successors in interest and any successor Trustee under the Indenture.
UCC: The Uniform Commercial Code as in effect in the relevant
jurisdiction.
Vendor Services: Green Tree Vendor Services Corporation, a Delaware
corporation.
Warranty Lease: A Lease subject to repurchase by Vendor Services
pursuant to Section 2.6.
SECTION 1.2. Usage of Terms. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation."
SECTION 1.3. Calculations. All calculations of the Principal Balance
of any Lease and of the amount of the Servicing Fee shall be made on the basis
of a 360-day year consisting of twelve 30-day months. All references to the
Principal Balance of a Lease as of any date shall refer to the close of business
on such date.
SECTION 1.4. Section References. All references to Articles,
Sections, paragraphs, subsections, exhibits and schedules shall be to such
portions of this Agreement unless otherwise specified.
SECTION 1.5. No Recourse. No recourse may be taken, directly or
indirectly, under this Agreement or any certificate or other writing delivered
in connection herewith or
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therewith, against any stockholder, officer or director, as such, of the
Contributor, Vendor Services, the Servicer or the Trustee or of any predecessor
or successor of the Contributor, Vendor Services, the Servicer or the Trustee.
ARTICLE II
CONVEYANCE OF LEASES
SECTION 2.1. Conveyance of Leases and Related Assets. (a) Subject
to the terms and conditions of this Agreement, the Contributor, pursuant to the
mutually agreed upon terms contained herein, hereby transfers, assigns, and
otherwise conveys to the Issuer, without recourse (but without limitation of its
obligations in this Agreement), as of the Closing Date, all of the right, title
and interest, including any security interest, whether now owned or hereafter
acquired, of the Contributor in and to the following:
(i) the Leases, including, without limitation, (A) all monies at any
time paid or payable thereon or in respect thereof from and after the
Initial Cut-Off Date or, in the case of Substitute Leases, the applicable
Cut-Off Date, in the form of (1) Scheduled Payments (including those
Scheduled Payments due prior to, but not received as of, the Cut-Off Date,
but excluding those Scheduled Payments due on or after, but received prior
to, the Cut-Off Date), (2) Prepayments, (3) Liquidation Proceeds (including
all net proceeds from the disposition of the related Equipment), (4)
Extension Fees, (5) payments to be applied by the Servicer to the payment
of insurance charges, maintenance, taxes or other similar obligations, and
(6) payments to be retained by the Servicer in payment of Administrative
Fees, (B) all rights of the lessor or the secured party, as the case may
be, in all present or future leases and other contracts relating to the
Equipment and all revenues, payments, rights to payment, profits, accounts,
chattel paper, products and contract rights arising from or related to such
Equipment or any use thereof or from any such lease or other contract, (C)
all rights of the lessor or secured party, as the case may be, in all
Insurance Policies and any other security (other than any ownership
interest of the lessor in the Equipment) for the payment of amounts due
under the Leases (including all rights, if any, the lessor or the secured
party may have against vendors and other third parties for payments of such
amounts) and (D) all items contained in the related Lease Files and any and
all other documents that are kept on file in accordance with Vendor
Services's customary procedures relating to the Leases;
(ii) all funds on deposit from time to time in the Trust Accounts and
all investments therein and proceeds thereof;
(iii) the Transfer Agreement;
(iv) the Residual Realizations; and
(v) any and all proceeds of the foregoing;
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The foregoing does not constitute, nor is it intended to result in, the creation
or assumption by the Issuer, the Trustee or any Noteholder of any obligation of
the Contributor, the Servicer or any other Person in connection with the Leases
or the related Equipment or any agreement or instrument relating thereto,
including any obligation to the Obligors.
(b) As security for the payment of amounts described in Section
2.1(a)(i)(3) and 2.1(a)(iv), the Contributor hereby grants to the Issuer a
security interest in all of the right, title and interest, whether now owned or
hereafter acquired, of the Contributor in and to the Equipment and all proceeds
thereof.
(c) The execution and delivery of this Agreement shall constitute an
acknowledgment by each of the Contributor and the Issuer that they intend that
each assignment and transfer herein contemplated constitute an assignment
outright, and not for security, of the property described in Section 2.1(a),
conveying good title thereto free and clear of any Liens, from the Contributor
to the Issuer, and that all such property shall not be a part of the estate of
the Contributor in the event of the bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or other proceeding under any federal or
state bankruptcy or similar law, or the occurrence of another similar event, of,
or with respect to the Contributor. In the event that such conveyance is
determined to be made as security for a loan made by the Issuer or the
Noteholders to the Contributor, the Contributor hereby grants to the Issuer a
security interest in all of the Contributor's right, title and interest in and
to the property described in Section 2.1(a) to secure the loan determined to
have been made to the Contributor and the payment and performance of the other
obligations of the Contributor under this Agreement, and agrees that in such
event this Agreement shall constitute a security agreement under applicable law.
SECTION 2.2. Custody of Lease Files.
(a) The Issuer hereby appoints the Servicer, and the Servicer hereby
accepts such appointment, to act as the agent of the Issuer as custodian of the
following documents or instruments (with respect to each Lease), which will be,
as of the Closing Date (or, in the case of a Substitute Lease, as of the date of
substitution in accordance with Section 9.2), in the possession of the Servicer
or its agents:
(i) the fully executed original of the Lease (together with any
agreements modifying the Lease, including, without limitation, any
extension agreements);
(ii) all documents related to the Leases;
(iii) documents evidencing or related to any Insurance Policy,
or copies thereof; and
(iv) such documents, if any, that Vendor Services keeps on file
in accordance with its customary procedures indicating that the Equipment
is owned or leased by the Obligor and subject to the interest of the lessor
or secured party.
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(b) The Servicer agrees to maintain the Lease Files at the locations
where they are currently maintained, or at such other locations as shall from
time to time be identified to the Trustee by written notice. The Servicer may
temporarily move individual Lease Files or any portion thereof without notice as
necessary to conduct collection and other servicing activities in accordance
with its customary practices and procedures.
(c) As custodian, the Servicer shall have and perform the following
powers and duties:
(i) hold the Lease Files on behalf of the Contributor, the
Issuer, the Noteholders and the Trustee, maintain accurate records
pertaining to each Lease to enable it to comply with the terms and
conditions of this Agreement and the Related Documents, maintain a current
inventory thereof and certify to the Trustee annually that it continues to
maintain possession of such Lease Files;
(ii) implement written policies and procedures with respect to
persons authorized to have access to the Lease Files and the receipting for
Lease Files taken from their storage area by an employee of the Servicer
for purposes of servicing or any other purposes; and
(iii) attend to all details in connection with maintaining
custody of the Lease Files on behalf of the Contributor, the Issuer, the
Noteholders and the Trustee.
(d) In performing its duties under this Section, the Servicer agrees
to service the Leases in accordance with customary and usual procedures of
institutions which service equipment Leases, installment sale contracts,
promissory notes, loan and security agreements and other similar types of
receivables comparable to the Leases and, to the extent more exacting, the
degree of skill and attention that the Servicer exercises from time to time with
respect to all comparable such contracts that it services for itself or others.
The Servicer shall promptly report to the Trustee any failure by it to hold the
Lease Files as herein provided and shall promptly take appropriate action to
remedy any such failure. In acting as custodian of the Lease Files, the
Servicer agrees further not to assert any beneficial ownership interests in the
Leases or the Lease Files. The Servicer agrees to indemnify the Contributor,
the Issuer, the Noteholders and the Trustee for any and all liabilities,
obligations, losses, damages, payments, costs or expenses of any kind whatsoever
which may be imposed on, incurred or asserted against the Contributor, the
Issuer, the Noteholders or the Trustee as the result of any act or omission by
the Servicer relating to the maintenance and custody of the Lease Files;
provided, however, that the Servicer will not be liable for any portion of any
such amount resulting from the negligence or willful misconduct of the
Contributor, the Issuer, any Noteholder or the Trustee.
SECTION 2.3. Further Assurances. Following the Closing Date, the
Contributor shall, at the reasonable request of the Trustee or the Servicer, and
at the Contributor's expense, execute and deliver any further instruments of
transfer or other documents, and shall take all such other actions that may be
necessary, appropriate or desirable, to fully convey the Leases and the Related
Assets to the Issuer or otherwise to evidence, effectuate or implement the
transactions contemplated hereby. In addition, the Contributor, as agent for
the Issuer, shall defend the
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Leases and the Related Assets against any and all claims and demands of all
Persons at any time claiming the same or any interest therein adverse to that of
the Issuer.
SECTION 2.4. Representations and Warranties of Contributor. By its
execution of this Agreement, the Contributor makes the following representations
and warranties. Unless otherwise specified, such representations and warranties
speak as of the Closing Date.
(a) Organization and Good Standing. The Contributor has been
duly organized and is validly existing as a corporation in good standing
under the laws of the State of Minnesota, with power and authority to own
its properties and to conduct its business as such properties are currently
owned and such business is currently conducted, and had at all relevant
times, and now has, power, authority and legal right to acquire, own and
transfer the Leases and the other property transferred to the Issuer.
(b) Due Qualification. The Contributor is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions where the failure to
do so would materially and adversely affect the performance of its
obligations under this Agreement and the Related Documents.
(c) Power and Authority. The Contributor has the power and
authority to execute and deliver this Agreement and the Contributor's
Related Documents and to carry out the terms hereof and thereof; the
Contributor has full power and authority to transfer and assign the Trust
Assets to be transferred and assigned to and deposited with the Issuer by
it and has duly authorized such transfer and assignment to the Issuer by
all necessary corporate action; and the execution, delivery and performance
of this Agreement and the Contributor's Related Documents have been duly
authorized by the Contributor by all necessary corporate action.
(d) No Consent Required. No consent, license, approval or
authorization of, or registration or declaration with, any Person or any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of this Agreement and the Related
Documents, except for such as have been obtained, effected or made or as
described in paragraph (n) below.
(e) Valid Transfer; Binding Obligations. This Agreement effects,
as of the Closing Date, a valid transfer and assignment of the Leases and
the other Trust Assets, enforceable against the Contributor and creditors
of and purchasers from the Contributor; and this Agreement and the
Contributor's Related Documents, when duly executed and delivered, shall
constitute legal, valid and binding obligations of the Contributor
enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally
and by equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
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(f) No Violation. The execution and delivery of this Agreement
and the Related Documents, the consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents shall
not conflict with, result in any breach of any of the terms and provisions
of or constitute (with or without notice or lapse of time, or both) a
default under the articles of incorporation or by-laws of the Contributor,
or any indenture, agreement, mortgage, deed of trust or other instrument to
which the Contributor is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or
other instrument, other than this Agreement, or violate any law, order,
rule or regulation applicable to the Contributor of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Contributor or
any of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending or, to the Contributor's knowledge, threatened against the
Contributor, before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality having jurisdiction over the
Contributor or its properties (A) asserting the invalidity of this
Agreement or any of the Related Documents, (B) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or
any of the Related Documents, (C) seeking any determination or ruling that
might materially and adversely affect the performance by the Contributor of
its obligations under, or the validity or enforceability of, this Agreement
or any of the Related Documents, or (D) seeking to adversely affect (i) the
federal income tax or other federal, state or local tax attributes of the
Notes or (ii) the federal, state or local tax treatment of any of the
transactions contemplated by this Agreement and the Related Documents.
(h) Place of Business. The principal executive offices of the
Contributor, and the offices where the Contributor keeps its records
concerning the Leases and related documents, are located at 1100 Landmark
Towers, 345 St. Peter Street, St. Paul, Minnesota 55102.
(i) Registration Statement. No stop order suspending the
effectiveness of the Registration Statement relating to the Notes has been
issued, and no proceeding for that purpose has been instituted or is
threatened, by the Securities and Exchange Commission.
(j) Filings. Since the effective date of the Registration
Statement relating to the Notes, there has occurred no event required to be
set forth in an amendment or supplement to the Registration Statement or
Prospectus that has not been so set forth, and there has been no document
required to be filed under the Securities Exchange Act of 1934 and the
rules and regulations of the Securities and Exchange Commission thereunder
that upon such filing would be deemed to be incorporated by reference in
the Prospectus that has not been so filed.
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(k) Good Title. Immediately prior to the transfer and assignment
of the Leases and Related Assets to the Issuer pursuant to Section 2.1(a),
the Contributor had good title thereto and was the sole owner thereof
(subject, in the case of amounts in the Insurance, Maintenance and Tax
Accounts, to the rights of the Obligors therein), free of any Lien. Upon
the transfer and assignment of the Leases and Related Assets to the Issuer
pursuant to Section 2.1(a), the Issuer will have good title thereto and
will be the sole owner thereof (subject, in the case of amounts in the
Insurance, Maintenance and Tax Accounts, to the rights of the Obligors
therein), free of any Lien.
(l) No Impairment. No person has a participation in or other
right to receive Scheduled Payments under any Lease, and the Contributor
has taken no action to convey any right to any Person that would result in
such Person having a right to Scheduled Payments received with respect to
any Lease.
(m) Lawful Assignment. No Lease was originated in, or is subject
to the laws of, any jurisdiction the laws of which would make unlawful,
void or voidable the transfer and assignment of such Lease from the
Contributor to the Issuer under this Agreement. Each Lease may be sold,
assigned and transferred by the Contributor to the Issuer without the
consent of, or prior approval from, or any notification to, the applicable
Obligor, other than (i) certain Leases (which, in proportion to the
aggregate of all of the Leases, are not material) that require notification
of the assignment to the Obligor, which notification will be given by the
Servicer not later than 10 days following the Closing Date, and (ii)
certain Leases (which, in proportion to the aggregate of all of the Leases,
are not material) that require the consent of the Obligor, which consent
will be obtained by the Servicer not later than 10 days following the
Closing Date.
(n) All Filings Made. All filings and other actions required to
be made, taken or performed by any Person in any jurisdiction to give the
Issuer a first priority perfected lien or ownership interest in the Leases
has been made, taken or performed.
(o) Schedule of Leases Accurate. The information with respect to
the Leases contained in the Schedule of Leases is true and correct in all
material respects.
SECTION 2.5. Nonpetition Covenant. None of the Contributor, the
Servicer, nor Vendor Services shall petition or otherwise invoke the process of
any court or government authority for the purpose of commencing or sustaining a
case against the Issuer or the Contributor under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or the Contributor or any substantial part of its property, or ordering
the winding up or liquidation of the affairs of the Issuer or the Contributor.
SECTION 2.6. Repurchase of Leases Upon Breach of Representations and
Warranties. Concurrently with the execution and delivery of this Agreement,
Vendor Services and the Contributor have entered into the Transfer Agreement,
the rights of the Contributor under which have been assigned by the Contributor
to the Issuer pursuant to Section 2.1(a). Under the
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Transfer Agreement, Vendor Services has made certain representations and
warranties to the Contributor with respect to the Leases (the "Representations
and Warranties"). As of the second Deposit Date following its discovery or its
receipt of notice of any breach of the Representations and Warranties that
materially and adversely affects the value of any Lease (including any
Liquidated Lease), Vendor Services shall, unless such breach shall have been
cured in all material respects, either (A) (i) repurchase such Lease from the
Issuer and (ii) repurchase the related Equipment from the Contributor or (B)
substitute a Substitute Lease for such Lease and the related Equipment. On or
before the related Deposit Date, Vendor Services shall pay the Purchase Amount
to the Servicer and the Contributor, as their interests may appear, or
substitute a Substitute Lease. The obligations of the Contributor with respect
to any such breach of representations and warranties shall be limited to taking
any and all actions necessary to enable the Issuer or the Trustee to enforce
directly the obligations of Vendor Services to repurchase the applicable Lease
and Equipment under the Transfer Agreement. It is understood and agreed that,
except as set forth in the following paragraph, the obligation of Vendor
Services to repurchase or substitute another Lease for any Lease, together with
the related Equipment, as to which a breach has occurred and is continuing
shall, if such obligation is fulfilled, constitute the sole remedy against
Vendor Services for such breach available to the Contributor or the Trustee on
behalf of the Noteholders and to the Contributor, as their interests may appear.
In addition to the foregoing and notwithstanding whether the Lease and
related Equipment shall have been repurchased by Vendor Services, Vendor
Services shall indemnify the Contributor, the Issuer, the Noteholders and the
Trustee against all costs, expenses, losses, damages, claims and liabilities,
including reasonable fees and expenses of counsel, which may be asserted against
or incurred by any of them as a result of third party claims arising out of the
events or facts giving rise to such breach.
ARTICLE III
ADMINISTRATION AND SERVICING OF LEASES
SECTION 3.1. Duties of the Servicer. The Servicer is hereby
authorized to act as agent for the Issuer and the Contributor and in such
capacity shall manage, service, administer and make collections on the Leases,
and perform the other actions required by the Servicer under this Agreement.
The Servicer agrees that its servicing of the Leases shall be carried out in
accordance with customary and usual procedures of institutions which service
equipment lease contracts, installment sale contracts, promissory notes, loan
and security agreements and other similar types of receivables comparable to the
Leases and, to the extent more exacting, the degree of skill and attention that
the Servicer exercises from time to time with respect to all comparable such
contracts that it services for itself or others. In performing such duties, so
long as Vendor Services is the Servicer, it shall comply in all material
respects with its customary standards, policies and procedures in effect from
time to time. The Servicer may at any time change its customary standards,
policies and procedures; provided that any such change shall not materially
impair the collectibility of any Lease nor the Servicer's ability to perform its
obligations under this Agreement and the Related Documents. The Servicer's
duties shall include, without limitation, billing, collection and posting of all
payments, responding to inquiries of Obligors on
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the Leases, investigating delinquencies, sending invoices to Obligors,
accounting for collections and furnishing monthly and annual statements to the
Issuer and the Trustee with respect to distributions, monitoring the status of
Insurance Policies with respect to the Equipment and performing the other duties
specified herein. The Servicer shall also administer and enforce all material
rights and responsibilities of the lessor or secured party under the Leases and
provided for in the Insurance Policies, to the extent that such Insurance
Policies relate to the Leases, the Equipment or the Obligors. To the extent
consistent with the standards, policies and procedures otherwise required
hereby, the Servicer shall follow its customary standards, policies and
procedures and shall have full power and authority to do any and all things in
connection with such managing, servicing, administration and collection that it
may deem necessary or desirable, including the authority to forego collection
efforts under circumstances deemed appropriate by the Servicer in accordance
with its customary standards, policies and procedures. Without limiting the
generality of the foregoing, the Servicer is hereby authorized and empowered by
the Issuer to execute and deliver, on behalf of the Contributor and the Issuer
or either of them, any and all instruments of satisfaction or cancellation, or
of partial or full release or discharge, and all other comparable instruments,
with respect to the Leases and with respect to the Equipment in accordance with
its customary standards, policies and procedures. The Servicer is hereby
authorized to commence, in its own name (or in the name of the Issuer, provided
the Servicer has obtained the Issuer's consent, which consent shall not be
unreasonably withheld), a legal proceeding to enforce a Lease pursuant to
Section 3.3 or to commence or participate in any other legal proceeding
(including, without limitation, a bankruptcy proceeding) relating to or
involving a Lease, an Obligor or the related Equipment. If the Servicer
commences or participates in such a legal proceeding in its own name, the Issuer
shall thereupon be deemed to have automatically assigned such Lease to the
Servicer solely for purposes of commencing or participating in any such
proceeding as a party or claimant, and the Servicer is authorized and empowered
by the Issuer to execute and deliver in the Servicer's name any notices,
demands, claims, complaints, responses, affidavits or other documents or
instruments in connection with any such proceeding. The Issuer shall furnish the
Servicer with any powers of attorney and other documents which the Servicer may
reasonably request and which the Servicer deems necessary or appropriate and
take any other steps which the Servicer may deem necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties under
this Agreement.
SECTION 3.2. Collection of Lease Payments; Modifications of Leases.
(a) Consistent with the standards, policies and procedures required by
this Agreement, the Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Leases as and when the
same shall become due, and shall follow such collection procedures as it follows
with respect to all comparable contracts that it services for itself or others
and otherwise act with respect to the Leases, the related Equipment, the
Insurance Policies and the other Trust Assets in such manner as will, in the
reasonable judgment of the Servicer, maximize the amount to be received by the
Issuer and the Contributor with respect thereto. The Servicer is authorized in
its discretion to waive any Administrative Fees or Extension Fees that may be
collected in the ordinary course of servicing any Lease.
(b) The Servicer may at any time agree to a modification or amendment
of a Lease in accordance with its credit and collection policies and procedures
(it being acknowledged
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that any modification or amendment of a Lease resulting from a bankruptcy
proceeding with respect to the Obligor will not be deemed to have been agreed to
by the Servicer hereunder):
(i) in order to (A) change the Obligor's regular due date to a
date within the Collection Period in which such due date occurs or (B) re-
amortize (over the remainder of the original term) the Scheduled Payments
on a Lease following a partial Prepayment (provided that the sum of such
partial Prepayment and the Principal Balance of the Lease after the re-
amortization is at least equal to the Required Payoff Amount for such Lease
prior to the partial Prepayment), or
(ii) for any other purpose, provided that no such modification or
amendment shall:
(A) change the amount or the due date of any Scheduled Payment
(except as provided in clauses (i)(A) and (B) above, Section 3.2(c) or
Section 3.2(d)),
(B) release the related Equipment from the Lease, unless (1)
equipment of equal or greater value is substituted, (2) the remaining
related Equipment has a value at least equal to the Required Payoff
Amount of the Lease, or (3) the release is pursuant to a partial
Prepayment (which, in the case of a partial Prepayment on a Lease,
meets the requirements of Section 3.2(d)) and the ratio of the value
of the related Equipment to the Principal Balance of the Lease after
such Prepayment and release is at least equal to such ratio prior to
such Prepayment and release;
(C) cause any of the representations or warranties contained in
the Representations and Warranties to cease to be true; or
(D) except as provided in clause (ii)(A) above, result in the
Principal Balance or Required Payoff Amount of the Lease being less
than it would have been absent such modification or amendment.
(c) The Servicer may grant payment extensions on a Lease in accordance
with its credit and collection policies and procedures (it being acknowledged
that any extensions on a Lease resulting from a bankruptcy proceeding with
respect to the Obligor will not be deemed to have been granted by the Servicer
hereunder) if the Servicer believes in good faith that such extension is
necessary to avoid a termination and liquidation of such Lease and will maximize
the amount to be received by the Issuer with respect to such Lease; provided,
however, that:
(i) the aggregate period of all extensions granted on a Lease
shall not exceed six months; and
(ii) in no event may any Lease be extended beyond the Collection
Period immediately preceding the final Stated Maturity Date.
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Nothing in this Section 3.2(c) shall be deemed to prevent the Servicer from
extending or renewing, or otherwise accepting the continued performance by the
Obligor under, a Lease after expiration of its stated term.
(d) The Servicer may, in its discretion, allow a Prepayment, in whole
or in part, of any Lease which, by its terms, is not prepayable, but only if the
amount of such Prepayment (or, in the case of a partial Prepayment, the sum of
such Prepayment and the remaining Principal Balance of the Lease after
application of such Prepayment), together with such additional amounts as are
(i) available to the Servicer for the purpose of prepaying such Lease (excluding
any monies otherwise constituting Pledged Revenues) and (ii) deposited in the
Collection Account in respect of such Lease contemporaneously with the deposit
therein of such Prepayment, is at least equal to the Required Payoff Amount for
such Lease.
(e) The Servicer shall remit all payments by or on behalf of the
Obligors (other than amounts constituting Administrative Fees) received by the
Servicer to the Servicing Account as soon as practicable, but in no event later
than the second Business Day after receipt thereof.
(f) If the Servicer agrees to a modification, amendment or extension
of a Lease not permitted by Sections 3.2(b) or 3.2(c), the Servicer shall, on
the next Deposit Date, either (i) repurchase such Adjusted Lease in accordance
with Section 2.6, or (ii) deliver a Substitute Lease therefor in accordance with
Article IX.
SECTION 3.3. Realization Upon Leases. Consistent with the standards,
policies and procedures required by this Agreement, the Servicer shall, except
as provided in the following paragraph, take such action as is reasonably
necessary (including making commercially reasonable efforts to repossess (or
otherwise comparably convert the ownership of) and dispose of the related
Equipment) to collect from the Obligor or otherwise all amounts payable under
any Lease as to which the Obligor is in default in the making of one or more
Scheduled Payments thereunder, if the Servicer has determined such default is
not likely to be cured. The Servicer will not be required to repossess (or
otherwise comparably convert the ownership of) any Equipment the repossession of
which, in accordance with the Servicer's credit and collection policies and
procedures, and based on the Servicer's good faith estimate of the value of the
Equipment and its availability, would not be reasonable. The Servicer is
authorized to follow such customary practices and procedures as it shall deem
necessary or advisable, consistent with the standard of care required by Section
3.1, which practices and procedures may include the sale of the related
Equipment at public or private sale, the submission of claims under an Insurance
Policy and other actions by the Servicer in order to realize upon such a Lease.
The foregoing is subject to the provision that, in any case in which the
Equipment shall have suffered damage, the Servicer shall not expend funds in
connection with any repair or towards the repossession of such Equipment unless
it shall determine in its reasonable judgment that such repair and/or
repossession shall increase the proceeds of liquidation of the related Lease by
an amount greater than the amount of such expenses. All amounts received upon
liquidation of a Lease (except as otherwise provided below), including any
proceeds derived from the disposition of the related Equipment, shall be
remitted by the Servicer to the Servicing Account as soon as practicable, but in
no event later than the second Business Day after receipt thereof. The Servicer
shall, to the
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extent the proceeds of such liquidation are sufficient therefor, be entitled to
recover all reasonable out-of-pocket expenses incurred by it in the course of
liquidating a Lease, which amounts may be retained by the Servicer from such
proceeds (and shall not be required to be deposited as provided in Section
3.2(e)) to the extent of such expenses. The Servicer shall be entitled to retain
in the Servicing Account, from liquidation proceeds, a reserve for out-of-pocket
liquidation expenses in an amount equal to such expenses, in addition to those
previously incurred, as it reasonably estimates will be incurred. Upon
completion of such liquidation, the remainder of any such reserve, after
reimbursement to the Servicer of all out-of-pocket liquidation expenses, shall
constitute Liquidation Proceeds and be transferred as provided in Section
4.2(a). The Servicer shall, in accordance with Section 3.4(f), pay on behalf of
the Issuer and the Contributor any sales, use, personal property and other taxes
assessed on repossessed Equipment, as well as any sales or similar taxes on the
disposition thereof, and shall be entitled to reimbursement of any such tax from
liquidation proceeds with respect to the related Lease as provided in Section
3.4(b).
The Servicer will use its best efforts to sell or re-lease any
Equipment upon the termination of the Lease to which such Equipment is subject
(whether as a result of early termination following an Obligor default or upon
scheduled expiration of the Lease), in a timely manner and in a manner so as to
maximize, to the extent possible under the prevailing market conditions, the net
proceeds of such Equipment. The Servicer may, in its discretion, choose to
dispose of Equipment through a new lease or in some other manner which provides
for payment for the Equipment over time. In any such event (other than
permitting continued payments by the Obligor beyond the scheduled expiration
date of the Lease), the Servicer will be required to pay from its own funds, and
deposit in the Servicing Account, an amount which, in its reasonable judgment,
is equal to the fair market value of such Equipment (less any related out-of-
pocket liquidation expenses), and the Servicer will be entitled to all payments
received thereafter in respect of such Equipment. Any such amounts so deposited
by the Servicer shall be treated as additional Liquidation Proceeds, or Residual
Realizations, depending on the reason for the disposition of the Equipment, with
respect to the related Lease and Equipment.
SECTION 3.4. Insurance, Maintenance and Taxes.
(a) The Servicer shall establish one or more insurance, maintenance
and tax accounts (collectively, the "Insurance, Maintenance and Tax Accounts")
in the name of the Servicer and for the benefit of the respective Obligors and,
to the extent provided herein, the Issuer and the Contributor. The Servicer
shall deposit into the Insurance, Maintenance and Tax Accounts any payments made
by or on behalf of Obligors which constitute (i) insurance charges paid by an
Obligor to the lessor or secured party under a Lease (unless paid directly by
such insurance company or comparable third party directly to the Obligor), (ii)
any insurance payments or recoveries paid by an insurance company or comparable
third party and related to the damage to, or destruction of, the Equipment
related to such Lease (unless paid directly by such insurance company or
comparable third party directly to the Obligor), (iii) any payments made by or
on behalf of Obligors which constitute amounts paid by an Obligor to the lessor
or secured party under a Lease in respect of the maintenance of the related
Equipment, and (iv) taxes paid by the Obligor with respect to the related Lease
or Equipment (except for any such payments in respect of taxes which were paid
by Vendor Services prior to the Cut-Off Date,
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which payments shall constitute Scheduled Payments hereunder). None of the
foregoing payments shall constitute Pledged Revenues except under the
circumstances described in clause (c)(ii) below.
(b) The Servicer may pay from its own funds, or may withdraw amounts
from the Insurance, Maintenance and Tax Accounts, when and if appropriate, to
pay, when due (i) all insurance charges in the amounts received under clause
(a)(i) above, (ii) any amounts payable under any applicable maintenance contract
or otherwise with respect to the maintenance of the related Equipment in the
amounts received under clause (a)(iii) above, and (iii) all taxes in the amounts
received under clause (a)(iv) above. If the Servicer has paid any such
insurance charges, maintenance costs or taxes from its own funds (including any
such amounts that may have been paid prior to the Closing Date), the Servicer
shall be entitled to reimbursement therefor from any appropriate amounts
available therefor in the Insurance, Maintenance and Tax Accounts, from payments
thereafter received from the applicable Obligor in respect thereof or from
liquidation proceeds in the event such Lease is liquidated. The Servicer is
authorized in its discretion to waive its right to receive reimbursement of any
such amount.
(c) Amounts on deposit in the Insurance, Maintenance and Tax Accounts
which represent amounts received by the Servicer pursuant to clause (a)(ii)
above shall be applied by the Servicer as follows: (i) if equipment is
purchased to replace the Equipment that was damaged or destroyed, and such
replacement equipment is (in the reasonable opinion of the Servicer) of
comparable use and equivalent value to the Equipment that was damaged or
destroyed, or if the Equipment is to be repaired, the Servicer shall release
such amount so received from the insurance company or comparable third party in
payment or reimbursement for such replacement equipment or such repair; and (ii)
if such replacement option is not exercised or the Equipment is not to be
repaired, then the Servicer shall treat such amount as Liquidation Proceeds
(after netting any amounts therefrom as is provided pursuant to the definition
of "Liquidation Proceeds" herein) and transfer such amount from the Insurance,
Maintenance and Tax Accounts to the Collection Account.
(d) The Servicer may sue to enforce or collect upon the Insurance
Policies, in its own name, if possible, or as agent of the Issuer and the
Contributor. If the Servicer elects to commence a legal proceeding to enforce
an Insurance Policy, the act of commencement shall be deemed to be an automatic
assignment of the rights of the Issuer and the Contributor under such Insurance
Policy to the Servicer for purposes of collection only. If, however, in any
enforcement suit or legal proceeding it is held that the Servicer may not
enforce an Insurance Policy on the grounds that it is not a real party in
interest or a holder entitled to enforce the Insurance Policy, the Issuer, on
behalf of the Contributor, shall take such steps as the Servicer deems necessary
to enforce such Insurance Policy, including bringing suit in its name or the
name of the Trustee for the benefit of the Noteholders.
(e) Consistent with its customary standards, policies and procedures,
with respect to each Lease, the Servicer shall maintain insurance against
casualty loss with respect to any Equipment financed by or leased pursuant to
the Lease, to the extent the Lease requires the lessor or secured party under
the Lease to maintain such insurance, and shall otherwise require the Obligor
under the Lease to maintain such insurance, to the extent the Lease requires
that such
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insurance be maintained by the Obligor. The Servicer shall not otherwise be
liable to the Issuer, the Trustee, the Contributor or any Noteholder for any
casualty loss with respect to any Equipment related to a Lease, except to the
extent otherwise explicitly provided in this Agreement.
(f) The Servicer shall determine and pay when due all sales, use,
personal property and other taxes payable in respect of the Equipment related to
each Lease. To the extent the Servicer has previously received from the related
Obligor payments with respect to such taxes and has deposited such payments in
the Insurance, Maintenance and Tax Accounts in accordance with clause (a)(iv)
above, the Servicer shall, in accordance with clause (b)(iii) above, either (i)
pay such taxes from amounts withdrawn from the Insurance, Maintenance and Tax
Accounts, or (ii) pay such taxes from its own funds and thereafter reimburse
itself from amounts withdrawn from the Insurance, Maintenance and Tax Accounts.
In the event the Servicer has not previously received payments from the Obligor
for this purpose, or to the extent any such payments received were insufficient
to pay the taxes due, the Servicer shall nonetheless pay such taxes from its own
funds and shall bill the Obligor for any amounts so paid. The Servicer shall be
entitled to reimbursement for any taxes so paid from its own funds, as provided
in clause (b)(iii) above. Failure on the part of the Servicer to perform its
duties in a timely fashion under this clause shall constitute a breach of this
Agreement by the Servicer for which indemnity will be available in accordance
with Section 7.1.
(g) The Servicer shall give prompt written notice to the Trustee of
the Servicer's failure to pay when due any insurance charge or tax payment
required to be paid pursuant to this Section 3.4 and the reason for such
failure. Upon receipt of any such notice, or if the Trustee has otherwise
received notice of any such failure to pay an insurance charge or tax payment,
the Trustee shall take such actions as are reasonably necessary (including the
withdrawal of monies, if any, available therefor in the Insurance, Maintenance
and Tax Accounts and attributable to payments previously made by the related
Obligor and payment of such insurance charge or tax payment) to cause any such
amounts to be paid. The Trustee shall be permitted to withdraw monies from the
Insurance, Maintenance and Tax Accounts for purposes of performing its
obligations under this paragraph, but shall not, in any event, be required to
use its own funds for such purposes.
SECTION 3.5. Maintenance of Security Interests in Equipment. To the
extent the Servicer's credit and collection policies and procedures in this
regard would so require (it being acknowledged that, in certain instances, such
credit and collection policies and procedures would not so require), the
Servicer shall take such steps as are necessary to maintain perfection of any
security interest created by each Lease in the related Equipment on behalf of
the Issuer and the Contributor, including, but not limited to, obtaining the
execution by the Obligors and the recording, registering, filing, re-recording,
re-filing, and re-registering of all security agreements, financing statements
and continuation statements as are necessary to maintain such security interest
granted by the Obligors under the respective Leases. The Issuer hereby
authorizes the Servicer, and the Servicer agrees (to the extent the Servicer's
credit and collection policies and procedures in this regard would so require),
to take any and all steps necessary to re-perfect such security interest on
behalf of the Issuer and the Contributor as necessary because of the relocation
of Equipment or for any other reason.
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SECTION 3.6. Covenants, Representations, and Warranties of Servicer.
By its execution and delivery of this Agreement, the Servicer makes the
following representations, warranties and covenants.
(a) The Servicer covenants as follows:
(i) Liens in Force. The Equipment securing each Lease shall not
be released in whole or in part from any interest the lessor or secured
party may have in such Equipment under the terms of the Lease, except upon
payment in full of the Lease or as otherwise contemplated herein;
(ii) No Impairment. The Servicer shall do nothing to impair the
rights of the Issuer, the Contributor or the Noteholders in the Leases, the
Insurance Policies or the other Trust Assets; and
(iii) No Amendments. The Servicer shall not extend or
otherwise amend the terms of any Lease with respect to the Scheduled
Payments thereon, except (A) in accordance with Section 3.2, or (B) at such
time as the Notes are no longer Outstanding, with the consent of the
Issuer.
(b) The Servicer represents, warrants and covenants as of the
date of execution and delivery of this Agreement:
(i) Organization and Good Standing. The Servicer has been duly
organized and is validly existing and in good standing under the laws of
its jurisdiction of organization, with power, authority and legal right to
own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and now has, power, authority and legal right to enter into
and perform its obligations under this Agreement and the Servicer's Related
Documents;
(ii) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions where the failure to
do so would materially and adversely affect the performance of its
obligations under this Agreement and the Related Documents;
(iii) Power and Authority. The Servicer has the power
and authority to execute and deliver this Agreement and to carry out the
terms hereof; and the execution, delivery and performance of this Agreement
and the Servicer's Related Documents have been duly authorized by the
Servicer by all necessary corporate action;
(iv) Binding Obligation. This Agreement and the Servicer's
Related Documents shall each constitute the legal, valid and binding
obligation of the Servicer enforceable in accordance with its terms, except
as enforceability
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may be limited by bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies, regardless
of whether such enforceability is considered in a proceeding in equity or
at law;
(v) No Violation. The execution and delivery of this Agreement,
the consummation of the transactions contemplated by this Agreement and the
Servicer's Related Documents, and the fulfillment of the terms hereof,
shall not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time, or
both) a default under, the articles of incorporation or bylaws of the
Servicer, or any indenture, agreement, mortgage, deed of trust or other
instrument to which the Servicer is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument, other than this Agreement or any Related
Document, or violate any law, order, rule or regulation applicable to the
Servicer of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or any of its properties;
(vi) No Proceedings. There are no proceedings or investigations
pending or, to the Servicer's knowledge, threatened against the Servicer,
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having jurisdiction over the Servicer or
its properties (A) asserting the invalidity of this Agreement or any of the
Servicer's Related Documents, (B) seeking to prevent the issuance of the
Notes or the consummation of any of the transactions contemplated by this
Agreement or any of the Servicer's Related Documents, or (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement or any of the Servicer's Related
Documents or (D) seeking to adversely affect (i) the federal income tax or
other federal, state or local tax attributes of the Notes or (ii) the
federal, state or local tax treatment of any of the transactions
contemplated by this Agreement and the Related Documents; and
(vii) No Consents. The Servicer is not required to
obtain the consent of any other party or any consent, license, approval or
authorization, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the
Servicer's Related Documents.
SECTION 3.7. Sub-Servicers. The Servicer may, without the Issuer's
or the Trustee's consent, maintain or enter into one or more agreements with
Sub-Servicers for the servicing and administration of the Leases by such Sub-
Servicers. Notwithstanding the terms or existence of any such agreement between
the Servicer and a Sub-Servicer, the Servicer shall not be relieved of any of
its obligations under this Agreement by reason of such agreement and shall
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be obligated to the same extent and under the same terms and conditions as if
the Servicer alone was servicing and administering the Leases, and neither the
Issuer nor the Trustee shall have any obligation to deal with anyone other than
the Servicer with respect to the servicing of the Leases.
SECTION 3.8. Total Servicing Fee; Payment of Expenses by Servicer.
On each Payment Date, the Servicer shall be entitled to receive out of the
Collection Account the Servicing Fee for the related Collection Period and any
unreimbursed Servicer Advances in respect of a prior Payment Date, pursuant to
Section 8.03 of the Indenture. The Servicer shall be entitled to retain, as
additional servicing compensation under this Agreement, any Administrative Fees
and any earnings on the investment of amounts in the Servicing Account. The
Servicer shall be required to pay all expenses incurred by it in connection with
its activities under this Agreement (including taxes imposed on the Servicer and
all expenses incurred in connection with reports to Noteholders). In addition,
the Servicer shall pay to the Trustee, and the Trustee shall be entitled to,
certain annual fees and shall reimburse the Trustee for all ordinary and
reasonable out-of-pocket expenses incurred or made by it in connection with the
performance of its duties under the Indenture (excluding those incurred or made
in the performance of its duties under Article V of the Indenture, as referred
to in Section 6.07(b) of the Indenture).
SECTION 3.9. Servicer's Certificate. No later than 10:00 a.m. St.
Paul, Minnesota time on each Determination Date, the Servicer shall deliver to
the Issuer, the Trustee and each Rating Agency a Servicer's Certificate executed
by a Responsible Officer of the Servicer containing, among other things, (i) all
information necessary to enable the Trustee to make the withdrawals and
distributions required by Section 8.03 of the Indenture, (ii) all information
necessary to enable the Trustee to send the statements to Noteholders required
by Section 7.05 of the Indenture, and (iii) all information necessary to enable
the Trustee to reconcile all deposits to, and withdrawals from, the Servicing
Account, the Collection Account, the Residual Account and the Reserve Account
for the related Collection Period and Payment Date, including the accounting
required by Section 4.4. Leases repurchased (or for which a Substitute Lease
was substituted) by Vendor Services on the related Deposit Date or by the
Contributor on the related Accounting Date and each Lease which became a
Liquidated Lease or which was paid in full during the related Collection Period,
shall be identified by account number (as set forth in the Schedule of Leases),
and information regarding each Substitute Lease shall be provided. A copy of
such certificate may be obtained by any Noteholder (or by any Note Owner, upon
certification that such Person is a Note Owner and payment of any expenses
associated with the distribution thereof) by a request in writing to the Trustee
addressed to the Corporate Trust Office.
SECTION 3.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event.
(a) The Servicer shall deliver to the Issuer, the Trustee and each
Rating Agency, on or before March 31 (or 90 days after the end of the Servicer's
fiscal year, if other than December 31) of each year, beginning on March 31,
1999, a certificate signed by any Responsible Officer of the Servicer, dated as
of December 31 (or other applicable date) of the immediately preceding year,
stating that (i) a review of the activities of the Servicer during the preceding
12-month period (or such other period as shall have elapsed from the Closing
Date to
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the date of the first such certificate) and of its performance under this
Agreement has been made under such officer's supervision, and (ii) to such
officer's knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement throughout such period, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof.
(b) The Servicer shall deliver to the Issuer, the Trustee and each
Rating Agency, promptly after having obtained knowledge thereof, but in no event
later than two Business Days thereafter, written notice in a certificate signed
by any Responsible Officer of the Servicer of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Termination Event
under Section 8.1(a). The Contributor or the Servicer shall deliver to the
Issuer, the Trustee, the Servicer or the Contributor (as applicable) and each
Rating Agency promptly after having obtained knowledge thereof, but in no event
later than three Business Days thereafter, written notice in a certificate
signed by any Responsible Officer of the Servicer of any event which with the
giving of notice or lapse of time, or both, would become a Servicer Termination
Event under any other clause of Section 8.1.
SECTION 3.11. Annual Independent Accountants' Report.
(a) On or before May 1 of each year, commencing May 1, 1999, the
Servicer at its expense shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants to
issue to the Servicer a report that such firm has examined selected documents,
records and management's assertions relating to leases and loans serviced by the
Servicer and stating that, on the basis of such examination, such servicing has
been conducted in compliance with the minimum servicing standards identified in
the Mortgage Bankers Association of America's Uniform Single Attestation Program
for Mortgage Bankers, or any successor uniform program, except for such
significant exceptions or errors in records that, in the opinion of such firm,
generally accepted attestation standards requires it to report.
(b) The Accountants' Report shall also indicate that the firm is
independent of the Contributor and the Servicer within the meaning of the Code
of Professional Ethics of the American Institute of Certified Public
Accountants.
(c) A copy of the Accountants' Report may be obtained by any
Noteholder (or by any Note Owner, upon certification that such Person is a Note
Owner and payment of any expenses associated with the distribution thereof) by a
request in writing to the Trustee addressed to the Corporate Trust Office.
SECTION 3.12. Access to Certain Documentation and Information
Regarding Leases. The Servicer shall provide to representatives of the Issuer
and the Trustee reasonable access to the documentation regarding the Leases. In
each case, such access shall be afforded without charge but only upon reasonable
request and during normal business hours. Nothing in this Section shall
derogate from the obligation of the Servicer to observe any applicable law, rule
or contractual provision with an Obligor prohibiting disclosure of information
regarding the
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Obligors, and the failure of the Servicer to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of this
Section.
SECTION 3.13. Certain Duties of the Servicer. The Servicer shall,
and hereby agrees that it will, monitor the Issuer's compliance with all
applicable provisions of federal securities laws, notify the Issuer of any
actions to be taken by the Issuer necessary for compliance with such laws and
prepare on behalf of the Issuer all notices, filings or other documents or
instruments required to be filed under such laws.
SECTION 3.14. Duties of the Servicer under the Indenture. The
Servicer shall, and hereby agrees that it will, perform on behalf of the Issuer
the following duties of the Issuer under the Indenture (references are to the
applicable Sections in the Indenture):
(a) the direction to the Paying Agents, if any, to deposit moneys
with the Trustee (Section 3.03);
(b) the obtaining and preservation of the Issuer's qualification
to do business in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of the Indenture,
the Notes and each other instrument and agreement included in the Trust
Estate (Section 3.04);
(c) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance and
other instruments, in accordance with Section 3.05 of the Indenture,
necessary to protect the Trust Estate (Section 3.05);
(d) the annual delivery of Opinions of Counsel, in accordance
with Section 3.06 of the Indenture, as to the Trust Estate, and the annual
delivery of the 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);
(e) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the
Indenture (Section 4.01);
(f) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officers' Certificate and the obtaining of the Opinion of Counsel and the
Independent Certificate relating thereto (Section 4.01);
(g) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee and
any written instruments necessary in connection with the resignation or
removal of any co-trustee or separate trustee (Sections 6.08 and 6.11);
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(h) the opening of one or more accounts in the Issuer'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, 8.04, 8.05 and
8.06);
(i) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures (Sections 9.01, 9.02 and 9.03);
(j) the preparation of all Officers' Certificates, Opinions of
Counsel and Independent Certificates with respect to any requests by the
Issuer to the Trustee to take any action under the Indenture (Section
11.01); and
(k) the recording of the Indenture, if applicable (Section
11.15).
SECTION 3.15. Fidelity Bond. Within 30 days after the Closing Date,
the Servicer shall obtain, and shall thereafter maintain, (i) a policy or
policies of insurance covering errors and omissions by the Servicer, and (ii) a
fidelity bond. Such policy or policies and such fidelity bond shall be in such
form and amount as is generally customary among persons that service a portfolio
of equipment lease contracts, installment sale contracts, promissory notes, loan
and security agreements and/or other similar types of receivables having an
unpaid balance of at least $100,000,000 and which are generally regarded as
servicers acceptable to institutional investors. Each such policy shall name
the Issuer, the Trustee and the Contributor as parties insured thereunder as
their respective interests may appear.
ARTICLE IV
COLLECTIONS AND DEPOSITS
SECTION 4.1. Initial Deposit. No later than the second Business Day
following the Closing Date, the Servicer shall deposit in the Servicing Account
(i) all Scheduled Payments and Prepayments of Leases received by the Servicer on
or after the Initial Cut-Off Date (including those Scheduled Payments due prior
to, but not received as of, the Initial Cut-Off Date, but excluding those
Scheduled Payments due on or after, but received prior to, the Cut-Off Date) and
on or prior to the second Business Day immediately preceding such date and (ii)
all Liquidation Proceeds (including proceeds of Insurance Policies to be treated
as such in accordance with Section 3.4) realized in respect of the Leases and
related Equipment and applied by the Servicer on and after the Initial Cut-Off
Date.
SECTION 4.2. Collections.
(a) Pursuant to the Indenture, the Trustee has established the
Servicing Account. The Servicer shall make deposits to and transfers from the
Servicing Account, and shall be entitled to make withdrawals therefrom, as
provided in this Agreement. The Servicer shall remit to the Servicing Account
all payments by or on behalf of the Obligors on the Leases
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(other than amounts constituting Administrative Fees), all Residual Realizations
and all Liquidation Proceeds (including (1) proceeds of Insurance Policies to be
treated as such in accordance with Section 3.4 and (2) deficiency amounts paid
by the Servicer with respect to the disposition of Equipment to be treated as
such in accordance with the last paragraph of Section 3.3) received by the
Servicer, in each case, as soon as practicable, but in no event later than the
second Business Day after receipt thereof. Within three Business Days after the
deposit of such payments and proceeds therein, the Servicer shall transfer all
amounts credited to the Servicing Account on account of such payments and
proceeds (i) to the extent they constitute Pledged Revenues, to the Collection
Account and (ii) to the extent they represent Residual Realizations, to the
Residual Account. Notwithstanding the foregoing, the Servicer may utilize an
alternative remittance schedule acceptable to the Servicer if the Servicer
provides to the Trustee written confirmation from each Rating Agency that such
alternative remittance schedule will not result in the downgrading or withdrawal
by the Rating Agency of the rating then assigned to the Notes. Amounts from time
to time in the Servicing Account shall be invested in accordance with Section
8.07 of the Indenture, and the Servicer shall be entitled to any earnings on
such investments as additional servicing compensation hereunder. In the event of
any losses on such investments, the Servicer shall deposit in the Servicing
Account the amount thereof, net of any earnings otherwise distributable to the
Servicer.
(b) The Servicer shall remit to the Collection Account (i) no later
than the second Business Day prior to a Payment Date, that portion of any
Purchase Amount relating to the Required Payoff Amount received by the Servicer
upon the repurchase by Vendor Services of any Lease pursuant to Section 2.6, and
(ii) that portion of the amount paid by the Contributor to repurchase the Leases
pursuant to Section 5.1 as is required to be deposited in the Collection Account
pursuant to such Section.
(c) Notwithstanding the provisions of subsections (a) and (b) hereof,
the Servicer will be entitled to be reimbursed from amounts on deposit in the
Servicing Account or the Collection Account with respect to a Collection Period
for amounts previously deposited in the Servicing Account or the Collection
Account but later determined by the Servicer in good faith to (i) have resulted
from mistaken deposits or postings or checks returned for insufficient funds, or
(ii) be required to be repaid to an Obligor. The amount to be reimbursed
hereunder may be retained pursuant to Section 4.4 at any time or may otherwise
be paid to the Servicer on the related Payment Date pursuant to Section 8.03(i)
of the Indenture upon certification by the Servicer of such amounts and the
provision of such information to the Trustee as may be necessary to verify the
accuracy of such certification.
SECTION 4.3. Application of Collections. For the purposes of this
Agreement, all collections for a Collection Period shall be applied by the
Servicer as follows:
(a) With respect to each Lease, payments by or on behalf of the
Obligor thereof (other than Administrative Fees with respect to such Lease,
to the extent collected) shall be applied to Scheduled Payments and
Prepayments in accordance with the terms of such Lease and the Servicer's
credit and collection policies and procedures. With respect to each
Liquidated Lease, the Liquidation Proceeds shall be applied, for purposes
of this Agreement and the Indenture only, to Scheduled Payments and
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Prepayment on the Lease as if the Liquidation Proceeds had been paid by the
Obligor on the Accounting Date, and then to any other amounts due and
payable with respect to such Lease. The Servicer shall not be entitled to
any Administrative Fees with respect to a Liquidated Lease unless the
Required Payoff Amount for such Lease has been deposited in the Collection
Account.
(b) With respect to each Lease that has become a Purchased Lease
as of any Deposit Date, the Purchase Amount shall be applied, for purposes
of this Agreement and the Indenture only, to Scheduled Payments and
Prepayment on the Lease as if the Purchase Amount had been paid by the
Obligor on the related Accounting Date. All payments by or on behalf of an
Obligor received with respect to any Purchased Lease after the Accounting
Date immediately preceding the Deposit Date on which the Purchase Amount
was paid by Vendor Services, shall be paid to Vendor Services and shall not
be included in Pledged Revenues.
(c) With respect to each Lease that has been repurchased by the
Contributor pursuant to Section 5.1, the purchase price shall be applied,
for purposes of this Agreement and the Indenture only, to Scheduled
Payments and Prepayments on the Lease as if such purchase price had been
paid by the Obligor on the Accounting Date. All payments by or on behalf
of an Obligor received with respect to any Lease so repurchased after the
Accounting Date on which the purchase price was paid by the Contributor,
shall be paid to the Contributor and shall not be included in the Amount
Available.
SECTION 4.4. Net Deposits. So long as no Servicer Termination Event
shall have occurred and be continuing with respect to the Servicer, the Servicer
may make the remittances or transfers to be made by it pursuant to Section 4.2
net of amounts (which amounts may be netted prior to any such remittance or
transfer) that would otherwise be distributed to it pursuant to Section 8.03(i)
of the Indenture; provided, however, that the Servicer shall account for all of
such amounts in the related Servicer's Certificate as if such amounts were
deposited and distributed separately. If an error is made by the Servicer in
calculating the amount to be deposited or retained by it, with the result that
an amount less than required is deposited in the Collection Account, the
Servicer shall make a payment of the deficiency to the Collection Account
immediately upon becoming aware, or receiving notice from the Trustee, of such
error.
SECTION 4.5. Servicer Advances. On each Determination Date, the
Servicer may, but will not be required to, advance and remit to the Trustee, in
such manner as will ensure that the Trustee will have immediately available
funds on account thereof by 11:00 a.m. St. Paul, Minnesota time on the second
Business Day prior to the next succeeding Payment Date, an amount (a "Servicer
Advance") equal to any Scheduled Payments due during the prior Collection Period
but unpaid prior to such Determination Date with respect to any Lease. In
consideration of each Servicer Advance the Servicer will be entitled to retain
any late payment fees recovered from the Obligor with respect to any Lease
Payment covered by a Servicer Advance. In addition, the Servicer will be
reimbursed for Servicer Advances from funds in the Collection Account in
accordance with the Indenture on the second following Payment Date.
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ARTICLE V
TERMINATION
SECTION 5.1. Optional Purchase of All Leases; Liquidation of Trust
Assets.
(a) At such time as the sum of the Aggregate Principal Balance of the
Notes is less than 10% of the Initial Pool Principal Balance, the Contributor
shall have the option to purchase all of the Leases from the Issuer; provided,
however, that the amount to be paid for such purchase (as set forth in the
following sentence) shall, in any event, be sufficient to pay the full amount of
unpaid principal of and interest payable on the Notes on the related Payment
Date. To exercise such option, the Contributor shall, on any Accounting Date,
pay to the Servicer the aggregate purchase price for the Leases (which shall be
an amount equal to the sum of the Required Payoff Amounts for all of the
Leases), plus the appraised value of any other property (including the right to
receive any future recoveries) held as Trust Assets, such appraisal to be
conducted by an appraiser mutually agreed upon by the Contributor and the
Trustee (or, if the Notes are no longer Outstanding, the Issuer), and shall
succeed to all interests in and to the Trust Assets. The fees and expenses
related to such appraisal shall be paid by the Contributor. The Servicer shall
immediately deposit the purchase price so paid into the Collection Account, to
be treated as Available Pledged Revenues and distributed in accordance with
Section 8.03 of the Indenture.
(b) Notice of any termination of the Issuer shall be given by the
Servicer to the Issuer and the Trustee as soon as practicable (but in no event
more than three Business Days) after the Servicer has received notice thereof.
ARTICLE VI
THE CONTRIBUTOR
SECTION 6.1. Liability of Contributor. The Contributor shall be
liable hereunder only to the extent of the obligations in this Agreement
specifically undertaken by the Contributor and the representations made by the
Contributor.
SECTION 6.2. Merger or Consolidation of, or Assumption of the
Obligations of, Contributor; Amendment of Certificate of Incorporation.
(a) The Contributor shall not merge or consolidate with any other
Person or permit any other Person to become the successor to the Contributor's
business except in accordance with the requirements of this Section. The
certificate of incorporation of any corporation (i) into which the Contributor
may be merged or consolidated, (ii) resulting from any merger or consolidation
to which the Contributor shall be a party, or (iii) succeeding to the business
of Contributor, shall contain provisions relating to limitations on business and
other matters substantively identical to those contained in the Contributor's
certificate of incorporation. Any such successor corporation shall execute an
agreement of assumption of every obligation of
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the Contributor under this Agreement and each Related Document and, whether or
not such assumption agreement is executed, shall be the successor to the
Contributor under this Agreement without the execution or filing of any document
or any further act on the part of any of the parties to this Agreement. The
Contributor shall provide prompt notice of any merger, consolidation or
succession pursuant to this Section 6.2 to the Issuer, the Trustee and the
Rating Agencies. Notwithstanding the foregoing, the Contributor shall not merge
or consolidate with any other Person or permit any other Person to become a
successor to the Contributor's business, unless (w) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 2.4 shall have been breached (for purposes hereof, such representations
and warranties shall speak as of the date of the consummation of such
transaction) and no event that, after notice or lapse of time, or both, would
become an Event of Default or a Servicer Termination Event shall have occurred
and be continuing, (x) the Contributor shall have delivered to the Issuer and
the Trustee a certificate of a Responsible Officer of the Contributor and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section 6.2 and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, (y) the Contributor shall have delivered to
the Issuer and the Trustee an Opinion of Counsel, stating that, in the opinion
of such counsel, either (A) all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary to
preserve and protect the interest of the Issuer in the Trust Assets and reciting
the details of the filings or (B) no such action shall be necessary to preserve
and protect such interest, and (z) the Rating Agency Condition shall have been
satisfied.
(b) The Contributor hereby agrees that it shall not (i) take any
action prohibited by Article VIII of its certificate of incorporation or (ii)
without the prior written consent of the Issuer and the Trustee and without
satisfaction of the Rating Agency Condition, amend Article III, Article V,
Article VI or Article VIII of its certificate of incorporation.
SECTION 6.3. Limitation on Liability of Contributor and Others. The
Contributor and any director or officer or employee or agent of the Contributor
may rely in good faith on the advice of counsel or on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising under this Agreement. The Contributor shall not be under any obligation
to appear in, prosecute or defend any legal action that is not incidental to its
obligations as transferor of the Leases under this Agreement and that in its
opinion may involve it in any expense or liability.
SECTION 6.4. Contributor May Own Notes. Each of the Contributor and
any Affiliate of the Contributor may in its individual or any other capacity
become the owner or pledgee of Notes with the same rights as it would have if it
were not the Contributor or an Affiliate thereof except as otherwise
specifically provided herein or in the Related Documents. Notes so owned by or
pledged to the Contributor or such Affiliate shall have an equal and
proportionate benefit under the provisions of this Agreement or any Related
Document, without preference, priority, or distinction as among all of Notes;
provided that any Notes owned by the Contributor or any Affiliate thereof,
during the time such Notes are owned by them, shall be without voting rights for
any purpose set forth in this Agreement or any Related Document. The
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Contributor shall notify the Issuer and the Trustee promptly after it or any of
its Affiliates become the owner or pledgee of a Note.
SECTION 6.5. Covenants of the Contributor. The Contributor hereby
covenants that:
(a) Separate Business. The Contributor will not permit its assets to
be commingled with those of Vendor Services and the Contributor shall maintain
separate corporate records, books of accounts and bank accounts from those of
Vendor Services. The Contributor will not conduct its business in the name of
Vendor Services and will cause Vendor Services to conduct its business solely in
its own name so as not to mislead others as to the identity of the entity with
which those others are concerned. The Contributor will provide for its own
operating expenses and liabilities from its own funds, except that the
organizational expenses of the Contributor may be paid by Vendor Services. The
Contributor will not hold itself out, or permit itself to be held out, as having
agreed to pay, or as generally being liable for, the debts of Vendor Services.
The Contributor shall cause Vendor Services not to hold itself out, or permit
itself to be held out, as having agreed to pay, or as generally being liable
for, the debts of the Contributor except that the organizational expenses of the
Contributor may be paid by Vendor Services. The Contributor will maintain an
arm's length relationship with Vendor Services with respect to any transactions
between the Contributor, on the one hand, and Vendor Services, on the other.
(b) Adequate Capitalization. The Contributor shall at all times
remain adequately capitalized for the normal obligations reasonably foreseeable
in the conduct of its business, and shall not make any dividend or other
distribution to its shareholders unless the net worth of the Contributor
following such distribution is adequate for the normal obligations reasonably
foreseeable in the conduct of its business.
ARTICLE VII
THE SERVICER
SECTION 7.1. Liability of Servicer; Indemnities.
(a) The Servicer (in its capacity as such and, in the case of Vendor
Services, without limitation of its obligations under the Transfer Agreement)
shall be liable hereunder only to the extent of the obligations in this
Agreement specifically undertaken by the Servicer and the representations made
by the Servicer.
(b) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Trustee, the Contributor, their respective officers, directors, agents and
employees and the Noteholders from and against any and all costs, expenses,
losses, claims, damages and liabilities to the extent that such cost, expense,
loss, claim, damage or liability arose out of, or was imposed upon the Issuer,
the Trustee, the Contributor or the Noteholders through the Servicer's breach of
this Agreement, the gross negligence, willful misfeasance or bad faith of the
Servicer in the
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performance of its duties under this Agreement or by reason of reckless
disregard of its obligations and duties under this Agreement.
(c) The Servicer shall indemnify, defend and hold harmless the Issuer,
in its individual capacity, its officers, directors, agents and employees, from
and against all costs, taxes, expenses, losses, claims, damages and liabilities
arising out of or incurred in connection with the acceptance or performance of
the trusts and duties contained in the Related Documents, except to the extent
that such cost, taxes (other than income taxes), expense, loss, claim, damage or
liability is due to the willful misfeasance or gross negligence of the Issuer.
(d) Indemnification under this Article shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Servicer has made any indemnity payments pursuant to this Article and the
recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts collected to the Servicer, together with any
interest earned thereon.
(e) Vendor Services, in its individual capacity, hereby acknowledges
that the indemnification provisions in the Transfer Agreement benefiting the
Issuer and the Trustee are enforceable by each hereunder.
(f) The provisions of this Section shall survive the termination of
the Related Documents.
SECTION 7.2. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. The Servicer shall not merge or consolidate with
any other Person, convey, transfer or lease substantially all its assets as an
entirety to another Person, or permit any other Person to become the successor
to the Servicer's business unless, after the merger, consolidation, conveyance,
transfer, lease or succession, the successor or surviving entity shall be an
Eligible Servicer and shall be capable of fulfilling the duties of the Servicer
contained in this Agreement. Any corporation (i) into which the Servicer may be
merged or consolidated, (ii) resulting from any merger or consolidation to which
the Servicer shall be a party, (iii) which acquires by conveyance, transfer, or
lease substantially all of the assets of the Servicer, or (iv) succeeding to the
business of the Servicer, in any of the foregoing cases shall execute an
agreement of assumption to perform every obligation of the Servicer under this
Agreement and, whether or not such assumption agreement is executed, shall be
the successor to the Servicer under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties to this
Agreement, anything in this Agreement to the contrary notwithstanding; provided,
however, that nothing contained herein shall be deemed to release the Servicer
from any obligation. The Servicer shall provide notice of any merger,
consolidation or succession pursuant to this Section to the Issuer, the Trustee
and each Rating Agency. Notwithstanding the foregoing, the Servicer shall not
merge or consolidate with any other Person or permit any other Person to become
a successor to the Servicer's business, unless (a) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 3.6 shall have been breached (for purposes hereof, such representations
and warranties shall speak as of the date of the consummation of such
transaction) and no event that, after notice or lapse of time, or both, would
become a Servicer Termination Event shall have occurred and be continuing, (b)
the
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Servicer shall have delivered to the Issuer and the Trustee a certificate of
a Responsible Officer of the Servicer and an Opinion of Counsel each stating
that such consolidation, merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent, if any, provided for
in this Agreement relating to such transaction have been complied with, (c) the
Servicer shall have delivered to the Issuer and the Trustee an Opinion of
Counsel, stating that, in the opinion of such counsel, either (1) all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary to preserve and protect the interest of the Issuer
in the Trust Assets and reciting the details of the filings or (2) no such
action shall be necessary to preserve and protect such interest, and (d) the
Rating Agency Condition has been satisfied.
SECTION 7.3. Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Issuer, the Contributor, the
Noteholders or the Trustee except as provided in this Agreement, for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement; provided, however, that this provision shall not protect the
Servicer or any such person against any liability that would otherwise be
imposed by reason of a breach of this Agreement or willful misfeasance, bad
faith or gross negligence (excluding errors in judgment) in the performance of
duties, by reason of reckless disregard of obligations and duties under this
Agreement or any violation of law by the Servicer or such person, as the case
may be; provided further, that this provision shall not affect any liability to
indemnify the Issuer and the Trustee for costs, taxes, expenses, claims,
liabilities, losses or damages paid by the Issuer or the Trustee, each in its
individual capacity. The Servicer and any director, officer, employee or agent
of the Servicer may rely in good faith on the advice of counsel or on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising under this Agreement.
SECTION 7.4. Servicer Not to Resign. Subject to the provisions of
Section 7.2, the Servicer shall not resign from the obligations and duties
imposed on it by this Agreement as Servicer except upon a determination that by
reason of a change in legal requirements the performance of its duties under
this Agreement would cause it to be in violation of such legal requirements in a
manner which would have a material adverse effect on the Servicer, and a Note
Majority does not elect to waive the obligations of the Servicer to perform the
duties which render it legally unable to act or to delegate those duties to
another Person. Any such determination permitting the resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Issuer and the Trustee. No resignation of the Servicer shall become
effective until a successor Servicer that is an Eligible Servicer shall have
assumed the responsibilities and obligations of the Servicer; provided, however,
that in the event a successor Servicer is not appointed within 60 days after the
Servicer has given notice of its resignation and has provided the Opinion of
Counsel required by this Section, the Servicer may petition a court for its
removal.
SECTION 7.5. Corporate Existence. The Servicer shall maintain its
existence, rights and franchises as a corporation under the laws of the
jurisdiction of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which the failure to so qualify would have an adverse effect on the validity or
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enforceability of any Lease or this Agreement or on the ability of the Servicer
to perform its duties under this Agreement.
ARTICLE VIII
SERVICER TERMINATION EVENTS
SECTION 8.1. Servicer Termination Event. For purposes of this
Agreement, each of the following shall constitute a "Servicer Termination
Event":
(a) Any failure by the Servicer to deposit within the time
periods specified in this Agreement in the Collection Account for
distribution to Noteholders, or to distribute to the Contributor, any
proceeds or payment required to be so deposited or distributed under the
terms of this Agreement (or, if Vendor Services is the Servicer, the
Transfer Agreement) that continues unremedied for a period of five Business
Days (three Business Days with respect to payment of Purchase Amounts)
after written notice is received by the Servicer from the Trustee or after
discovery of such failure by a Responsible Officer of the Servicer; or
(b) Failure by the Servicer to deliver to the Trustee and the
Issuer the Servicer's Certificate by the third Business Day prior to the
related Payment Date, or failure on the part of the Servicer to observe its
covenants and agreements set forth in Section 7.2; or
(c) Failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement (or, if Vendor Services is the
Servicer, the Transfer Agreement), which failure (i) materially and
adversely affects the rights of the Issuer or Noteholders, and (ii)
continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Issuer, the Trustee or any
Noteholder; or
(d) (i) The commencement of an involuntary case under the federal
bankruptcy laws, as now or hereinafter in effect, or another present or
future federal or state bankruptcy, insolvency or similar law and such case
is not dismissed within 60 days; or (ii) the entry of a decree or order for
relief by a court or regulatory authority having jurisdiction in respect of
the Servicer in an involuntary case under the federal bankruptcy laws, as
now or hereafter in effect, or another present or future, federal or state,
bankruptcy, insolvency or similar law, or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Servicer or of any substantial part of their respective
properties or ordering the winding up or liquidation of the affairs of the
Servicer; or
(e) The commencement by the Servicer of a voluntary case under
the federal bankruptcy laws, as now or hereafter in effect, or any other
present or future,
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federal or state, bankruptcy, insolvency or similar law, or the consent by
the Servicer to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Servicer or of any substantial part of its property or the
making by the Servicer of an assignment for the benefit of creditors or the
failure by the Servicer generally to pay its debts as such debts become due
or the taking of corporate action by the Servicer in furtherance of any of
the foregoing; or
(f) Any representation, warranty or statement of the Servicer
made in this Agreement or any certificate, report or other writing
delivered by the Servicer pursuant hereto shall prove to be incorrect in
any material respect as of the time when the same shall have been made, the
incorrectness of such representation, warranty or statement has a material
adverse effect on the Issuer or Noteholders, and, within 30 days after
written notice thereof shall have been given to the Servicer or the
Contributor by the Issuer, the Trustee or any Noteholder, the circumstances
or condition in respect of which such representation, warranty or statement
was incorrect shall not have been eliminated or otherwise cured.
SECTION 8.2. Consequences of a Servicer Termination Event. If a
Servicer Termination Event shall occur and be continuing, the Trustee may, and
at the direction of a Note Majority shall, by notice given in writing to the
Servicer and the Issuer, terminate all of the rights and obligations of the
Servicer under this Agreement. On or after the receipt by the Servicer of such
written notice, all authority, power, obligations and responsibilities of the
Servicer under this Agreement, whether with respect to the Notes, the Trust
Assets or otherwise, shall be terminated and automatically shall pass to, be
vested in and become obligations and responsibilities of the Trustee (unless and
until a successor Servicer is appointed in accordance with Section 8.3);
provided, however, that the Trustee shall have no liability with respect to any
obligation which was required to be performed by the terminated Servicer prior
to the date that the Trustee becomes the Servicer or any claim of a third party
based on any alleged action or inaction of the terminated Servicer. The Trustee
is authorized and empowered by this Agreement to execute and deliver, on behalf
of the terminated Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination.
The terminated Servicer agrees to cooperate with the Trustee in effecting the
termination of the responsibilities and rights of the terminated Servicer under
this Agreement, including, without limitation, the transfer to the Trustee for
administration by it of all cash amounts that shall at the time be held by the
terminated Servicer for deposit, or have been deposited by the terminated
Servicer, in any of the Trust Accounts or thereafter received with respect to
the Leases and the delivery to the Trustee of all Lease Files, Monthly Records
and Collection Records and a computer tape in readable form as of the most
recent Business Day containing all information necessary to enable the Trustee
or a successor Servicer to service the Leases and the other Trust Assets. The
terminated Servicer shall grant the Issuer, the Trustee and the successor
Servicer reasonable access to the terminated Servicer's premises at the
terminated Servicer's expense.
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SECTION 8.3. Trustee to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 8.2, the Trustee shall be the successor in all
respects to the Servicer in its capacity as servicer under this Agreement and
the transactions set forth or provided for in this Agreement, and shall be
subject to all the responsibilities, restrictions, duties, liabilities and
termination provisions relating thereto placed on the Servicer by the terms and
provisions of this Agreement. As compensation therefor, the Trustee shall be
entitled to receive the Total Servicing Fee. The Issuer and the Trustee shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
(b) Notwithstanding the foregoing, the Trustee may, if it shall be
unwilling to so act, or shall, if it is legally unable to so act, appoint, or
petition a court of competent jurisdiction to appoint, any Eligible Servicer as
the successor to the Servicer hereunder in the performance of all or any part of
the responsibilities, duties or liabilities of the Servicer hereunder. Pending
appointment of a successor pursuant to the preceding sentence, the Trustee shall
act as successor Servicer unless it is legally unable to do so, in which event
the outgoing Servicer shall continue to act as Servicer until a successor has
been appointed and accepted such appointment.
(c) In connection with such appointment and assumption, the Trustee
may make such arrangements for the compensation of such successor out of
payments on the Leases as it and such successor shall agree; provided, however,
that no such monthly compensation shall, without the written consent of the
Contributor and 100% of the Noteholders, exceed the Total Servicing Fee. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(d) If a successor Servicer is acting as Servicer hereunder, it shall
be subject to termination under Section 8.2 upon the occurrence of any Servicer
Termination Event applicable to it as Servicer.
SECTION 8.4. Notification to Noteholders. Upon any termination of,
or appointment of a successor to, the Servicer pursuant to this Article VIII,
the Issuer shall give prompt written notice thereof to each Rating Agency, and
the Trustee shall give prompt written notice thereof to Noteholders at their
respective addresses appearing in the Note Register.
SECTION 8.5. Waiver of Past Defaults. A Note Majority may waive any
default by the Servicer in the performance of its obligations hereunder and its
consequences. Upon any such waiver of a past default, such default shall cease
to exist, and any Servicer Termination Event arising therefrom shall be deemed
to have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon.
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ARTICLE IX
SUBSTITUTION OF LEASES
SECTION 9.1. Substitution.
(a) Subject to the satisfaction of the requirements set forth in
Section 9.1(b) hereof, the Contributor will have the right (but not the
obligation) at any time to substitute one or more Substitute Leases for a Lease
(for purposes of this Section 9.1, such Lease referred to as a "Predecessor
Lease") if:
(i) the Predecessor Lease became (A) a Liquidated Lease, (B) a
Prepaid Lease, (C) a Warranty Lease or (D) an Adjusted Lease during
the immediately preceding Collection Period; and
(ii) the aggregate Principal Balance of the Liquidated Leases,
Adjusted Leases and Warranty Leases that are Predecessor Leases shall
not in the aggregate exceed 10% of the Initial Pool Principal Balance.
(b) Each transfer of Substitute Leases will be subject to the
satisfaction of the following conditions precedent:
(i) after giving effect to such substitutions and any adjustments
pursuant to Section 3.2, the aggregate Book Value of such Leases must
be not less than 90% of the Book Value of the Leases substituted or
adjusted since the Closing Date.
(ii) either the final payment on such Substitute Lease must be on
or prior to September 30, 2005 or, to the extent the final payment on
such Lease is due subsequent to September 30, 2005 only scheduled
payments due on or prior to such date may be included in the Principal
Balance of such Lease for the purpose of making any calculation under
the Indenture.
(iii) the Lease Pool Principal Balance, after giving effect to
such adjustments and substitutions, must not be less than the Lease
Pool Principal Balance prior to such adjustment or substitution
(without giving effect to the proviso to the definition of "Principal
Balance").
(iv) the weighted average life of the Notes, after giving effect
to such adjustments and substitutions, must not differ materially from the
weighted average life of the Notes prior to such adjustments and
substitutions.
(v) after giving effect to such adjustments and substitutions,
the aggregate Principal Balance of the Leases that were originated by
Vendor Services must not be less than the aggregate Principal Balance
of the Leases that were originated by Vendor Services prior to such
adjustment or substitution.
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SECTION 9.2. Procedure.
(a) By 11:00 a.m. on the Business Day prior to each Deposit Date, the
Contributor shall give written notice to the Servicer of any substitution of
Substitute Leases for Predecessor Leases during the preceding Collection Period.
By 11:00 a.m. on the Deposit Date, the Contributor shall deliver to the Servicer
and the Trustee and, to the extent not included in the Servicer's Certificate,
the Trustee shall promptly deliver to each Rating Agency (i) a supplement to
Exhibit A hereto setting forth the information shown thereon for each such
Substitute Lease, (ii) an Officer's Certificate (A) certifying that each such
Substitute Lease is an Eligible Lease, (B) specifying each Predecessor Lease for
which a substitution has been made and the Principal Balance and the Book Value
under each such Predecessor Lease and the Principal Balance and the Book Value
under each Substitute Lease being transferred thereby and (C) that all
conditions precedent to such addition or substitution have been satisfied and
(iii) such additional information concerning such Substitute Leases or
Predecessor Leases as may be needed for the Servicer to prepare its Servicer's
Certificates pursuant to Section 3.9 and to otherwise carry out its duties as
servicer hereunder.
(b) Subject to the provisions of Section 9.3, the delivery of any
Officer's Certificate and supplement to Exhibit A pursuant to Section 9.2(a)
shall be conclusive evidence, without further act or deed, that during the
immediately preceding Collection Period and as of the related Cut-Off Date (i)
Vendor Services assigned to the Contributor pursuant to Section 2.2 of the
Transfer Agreement all of Vendor Services' right, title and interest in and to
the Substitute Leases identified in such supplement and the related rights
described in Section 2.1(a) of the Transfer Agreement, (ii) Vendor Services
transferred to the Contributor, as a contribution to capital pursuant to Section
2.2 of the Transfer Agreement, all of Vendor Services' right, title and interest
in and to the Equipment subject to such Substitute Leases and the related rights
described in Section 2.1(a) of the Transfer Agreement, and (iii) the Contributor
assigned and transferred to Vendor Services, without representation or warranty,
all of the Contributor's right, title and interest in and to the Predecessor
Leases identified in such Officer's Certificate and the Equipment subject
thereto. The Contributor shall promptly deliver or cause to be delivered to the
Servicer the original executed copy of each Substitute Lease assigned to the
Contributor pursuant to Section 9.1 hereof and the related Lease File and the
Contributor shall promptly request the Servicer to deliver to Vendor Services
the original executed copy of each Predecessor Lease for which substitution has
been made pursuant to Section 9.1 hereof and the related Lease File.
(c) Subject to the provisions of Section 9.3, the delivery of any
Officer's Certificate and supplement to Exhibit A pursuant to Section 9.2(a)
shall be conclusive evidence, without further act or deed, that during the
immediately preceding Collection Period and as of the related Cut-Off Date (i)
the Contributor assigned to the Issuer pursuant to Section 9.1 hereof all of the
Contributor's right, title and interest in and to the Substitute Leases
identified in such supplement and the related rights described in Section 2.1
hereof, (ii) the Contributor transferred to the Issuer, as a contribution to
capital, all of the Contributor's right, title and interest in and to the rights
described in Section 2.1 hereof as they relate to the Equipment subject to such
Substitute Leases, and (iii) the Issuer assigned and transferred to the
Contributor, without representation or warranty, all of the Issuer's right,
title and interest in and to the Predecessor Leases identified in such Officer's
Certificate and the Equipment subject thereto. Upon such
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assignment of a Substitute Lease, the Issuer shall be deemed to have appointed
and the Servicer shall be deemed to have accepted appointment as Custodian of
the related Lease File pursuant to Section 2.2.
SECTION 9.3. Objection and Repurchase. If any holder of the Notes
objects to any substitution of Leases within ten days of receipt of the
Servicer's Certificate providing notice thereof pursuant to Section 3.9, on the
grounds either that any Substitute Lease is not an Eligible Lease or that such
substitution or addition is otherwise not permitted under the provisions of
Section 9.1 hereof, the Contributor shall be entitled to present such additional
information as it deems appropriate in an effort to demonstrate that such Lease
is an Eligible Lease and that such substitution is permitted under the
provisions of Section 9.1 hereof. Following such presentation, the substitution
shall remain effective if each person originally objecting to the substitution
withdraws his objection. If the conditions specified in the preceding sentence
are not satisfied, or if at any time it is established that any lease was not,
at the time of substitution, an Eligible Lease, then Vendor Services shall be
required to repurchase such Lease in accordance with the provisions of Section
2.6 hereof.
SECTION 9.4. Vendor Services' and Servicer's Subsequent Obligations.
Upon any substitution of Leases in accordance with the provisions of this
Section 9, Vendor's Services', the Contributor and the Servicer's obligations
hereunder with respect to the Predecessor Lease shall cease but Vendor Services,
the Contributor and the Servicer shall each thereafter have the same obligations
with respect to the Substitute Lease substituted as it has with respect to all
other Leases subject to the terms hereof.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendment.
(a) This Agreement may be amended by the Contributor, the Servicer,
the Issuer and the Trustee without the consent of any of the Noteholders, (i) to
cure any ambiguity, (ii) to correct or supplement any provisions in this
Agreement that may be inconsistent with any other provision herein, or (iii) to
make any other provisions with respect to matters or questions arising under
this Agreement that are not inconsistent with the provisions hereof; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of the Noteholders.
(b) This Agreement may also be amended from time to time by the
Contributor, the Servicer, the Issuer and the Trustee with the consent of a Note
Majority (which consent of any Holder of a Note given pursuant to this Section
or pursuant to any other provision of this Agreement shall be conclusive and
binding on such Holder and on all future Holders of such Note and of any Note
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Note) for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this
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Agreement, or of modifying in any manner the rights of the Holders of Notes;
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Leases or distributions required to be made on any Note or the rate
of interest payable thereon, (b) amend any provisions of Section 5.06 or 8.03 of
the Indenture in such a manner as to affect the priority of payment of interest
or principal to Noteholders, or (c) reduce the aforesaid percentage required to
consent to any such amendment or any waiver hereunder, without the consent of
the Holders of all Notes then Outstanding and affected thereby; and provided,
further, that no such amendment shall be effective unless and until the Rating
Agency Condition has been satisfied.
(c) Promptly after the execution of any such amendment or consent, the
Issuer or the Trustee, as appropriate, shall furnish written notification of the
substance of such amendment or consent to each Noteholder.
(d) It shall not be necessary for the consent of Noteholders pursuant
to Section 10.1(b) to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of
Noteholders provided for in this Agreement) and of evidencing the authorization
of the execution thereof by Noteholders shall be subject to such reasonable
requirements as the Issuer or Trustee, as applicable, may prescribe, including
the establishment of record dates.
(e) Prior to the execution of any amendment to this Agreement, the
Issuer 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, in addition to the Opinion of Counsel referred to in Section 10.2(h).
The Issuer may, but shall not be obligated to, enter into any such amendment
which affects the Issuer's own rights, duties or immunities under this Agreement
or otherwise.
SECTION 10.2. Protection of Title to Trust Assets.
(a) The Contributor shall execute and file such financing statements
and cause to be executed and filed such continuation and other statements
(including those prepared by the Servicer pursuant to Section 3.14(c)), all in
such manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of the Issuer, the Issuer and the Trustee in
the Trust Assets and in the proceeds thereof; except that (i) UCC-1 financing
statements and continuation statements, listing the Obligor as debtor and the
related Equipment as collateral, need be filed only as required by Section 3.5;
and (ii) no assignments of any such financing statements relating to the
Equipment shall be filed to reflect the assignment of the Leases by Vendor
Services to the Contributor and by the Contributor to the Issuer. The
Contributor shall deliver (or cause to be delivered) to the Issuer and the
Trustee file-stamped copies of, or filing receipts for, any document filed as
provided above, as soon as available following such filing.
(b) Neither the Contributor nor the Issuer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed by the Contributor in
accordance with paragraph (a) above seriously
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misleading within the meaning of Section 9-402(7) of the UCC, unless it shall
have given the Issuer and the Trustee at least 60 days' prior written notice
thereof, and shall promptly file appropriate amendments to all previously filed
financing statements and continuation statements.
(c) Each of the Contributor, the Servicer and the Issuer shall give
the Issuer and the Trustee at least 60 days' prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement. The Servicer shall at all times maintain each office from
which it services Leases and its principal executive office within the United
States of America.
(d) The Servicer shall maintain accounts and records as to each Lease
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Lease, 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 Lease and the amounts from time to
time deposited in the Collection Account in respect of such Lease.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of transfer and assignment under this Agreement of the Leases to
the Issuer, the Servicer's master computer records (including any backup
archives) that refer to any Lease indicate clearly that the Lease is owned by
the Issuer. Indication of the Issuer's ownership of a Lease shall be deleted
from or modified on the Servicer's computer systems when, and only when, the
Lease has been paid in full, liquidated (including receipt of all recoveries
reasonably expected to be collected), a Substitute Lease substituted therefor,
or purchased by the Contributor or Vendor Services.
(f) Upon receipt by the Servicer of reasonable prior notice, Servicer
shall permit the Issuer, the Trustee and their respective agents, at any time
during the Servicer's normal business hours to inspect, audit and make copies of
and abstracts from the Servicer's records regarding any Leases or any other
portion of the Trust Assets.
(g) The Servicer shall furnish to the Issuer and the Trustee at any
time upon request a list (which may, at the option of the Servicer, be on a
computer disk or other electronic storage medium) of all Leases then held as
part of the Trust Assets, together with a reconciliation of such list to the
Schedule of Leases and to each of the Servicer's Certificates furnished before
such request indicating removal of Leases from the Issuer. Upon request, the
Servicer shall furnish a copy of any list to the Contributor. Subject to the
following sentence, the Issuer shall hold any such list and Schedule of Leases
for examination by interested parties during normal business hours at the
Corporate Trust Office upon reasonable notice by such Persons of their desire to
conduct an examination. The Issuer shall and shall cause its representatives to
hold in confidence all information thereon relating to the identity of the
Obligors except to the extent disclosure may be required by (S) 9-208 of the UCC
or by other applicable law (and all reasonable applications for confidential
treatment are unavailing) and except to the extent that the Issuer may
reasonably determine that such disclosure is consistent with its obligations
under the Indenture.
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(h) The Contributor and the Servicer shall deliver to the Issuer and
the Trustee simultaneously with the execution and delivery of this Agreement and
of each amendment thereto and upon the occurrence of the events giving rise to
an obligation to give notice pursuant to Section 10.2(b) or (c), an Opinion of
Counsel either (a) stating that, in the opinion of such Counsel, all financing
statements and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Issuer and the
Trustee in the Leases and the other Trust Assets, and reciting the details of
such filings or referring to prior Opinions of Counsel in which such details are
given, or (b) stating that, in the opinion of such counsel, no such action is
necessary to preserve and protect such interest.
(i) The Servicer shall deliver to the Issuer and the Trustee, within
90 days after the beginning of each calendar year beginning with the first
calendar year beginning more than three months after the Closing Date, an
Opinion of Counsel, either (a) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the Issuer and
the Trustee in the Leases, and reciting the details of such filings or referring
to prior Opinions of Counsel in which such details are given, or (b) stating
that, in the opinion of such counsel, no action shall be necessary to preserve
and protect such interest.
SECTION 10.3. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
SECTION 10.4. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Notes or the
respective rights of the Holders thereof.
SECTION 10.5. Assignment. Notwithstanding anything to the contrary
contained in this Agreement, except as provided in Section 7.2 or Section 8.2
(and as provided in the provisions of the Agreement concerning the resignation
of the Servicer), this Agreement may not be assigned by the Contributor or the
Servicer without (i) the prior written consent of the Issuer, the Trustee and a
Note Majority, and (ii) satisfaction of the Rating Agency Condition.
SECTION 10.6. Third-Party Beneficiaries. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any benefit or any legal or equitable right, remedy or
claim under this Agreement.
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SECTION 10.7. Counterparts. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
SECTION 10.8. Intention of Parties. The parties hereto intend that,
in the event that the conveyance of the Leases and other Trust Assets pursuant
to this Agreement is determined to be made as security for a loan made by the
Issuer or the Noteholders to the Contributor, the Contributor hereby grants to
the Issuer to secure such loan a first priority security interest in all of the
Contributor's right, title and interest in and to the rights and property
intended to be conveyed to the Issuer pursuant to Section 2.1(a). This
Agreement shall, in such event, constitute a security agreement under applicable
law.
SECTION 10.9. Notices. All demands, notices and communications under
this Agreement shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, or by facsimile transmission, and shall be deemed
to have been duly given upon receipt (a) in the case of Vendor Services, the
Contributor, the Issuer or the Servicer, at the following address: 1100
Landmark Towers, 345 St. Peter Street, St. Paul, Minnesota 55102, Attention:
General Counsel and (b) in the case of the Trustee, at its Corporate Trust
Office, or at such other address as shall be designated by any such party in a
written notice to the other parties.
SECTION 10.10. Income Tax Characterization. The Contributor has
structured the Indenture and the Notes with the intention that the Notes will
qualify under applicable federal, state, local and foreign tax law as
indebtedness of the Contributor secured by the Leases. The Contributor and the
Servicer agree to treat and to take no action inconsistent with the treatment of
the Notes as such indebtedness for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income.
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<PAGE>
IN WITNESS WHEREOF, the Issuer, the Contributor, Vendor Services, the
Servicer and the Trustee have caused this Contribution and Servicing Agreement
to be duly executed by their respective officers as of the day and year first
above written.
ISSUER:
GREEN TREE LEASE FINANCE 1998-1, LLC
By GREEN TREE LEASE FINANCE II, INC.
By /s/ Joel H. Gottesman
----------------------------------------
Name: Joel H. Gottesman
-------------------------------------
Title: Senior Vice President and Secretary
------------------------------------
CONTRIBUTOR:
GREEN TREE LEASE FINANCE II, INC.
By /s/ Joel H. Gottesman
----------------------------------------
Name: Joel H. Gottesman
-------------------------------------
Title: Senior Vice President and Secretary
------------------------------------
GREEN TREE VENDOR SERVICES
CORPORATION
In its individual capacity and as Servicer
By /s/ Joel H. Gottesman
----------------------------------------
Name: Joel H. Gottesman
-------------------------------------
Title: Senior Vice President and Secretary
------------------------------------
TRUSTEE:
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By /s/ Tamara Schultz-Fugh
----------------------------------------
Name: Tamara Schultz-Fugh
-------------------------------------
Title: Assistant Vice President
------------------------------------
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<PAGE>
EXHIBIT A
SCHEDULE OF LEASES AND EQUIPMENT
--------------------------------
A-1
<PAGE>
EXHIBIT B
FORM OF SERVICER'S CERTIFICATE
------------------------------
The undersigned, on behalf of Green Tree Vendor Services Corporation,
in its capacity as servicer (the "Servicer") under the Contribution and
Servicing Agreement, dated as of December 1, 1998 (the "Contribution and
Servicing Agreement"), among Green Tree Lease Finance 1998-1, LLC, Green Tree
Lease Finance II, Inc., U.S. Bank Trust National Association, as trustee under
the Indenture, and Green Tree Vendor Services Corporation, in its individual
capacity and as Servicer, DOES HEREBY CERTIFY that he/she is a Responsible
Officer of the Servicer and, pursuant to Section 3.9 of the Contribution and
Servicing Agreement, DOES HEREBY FURTHER CERTIFY the following with respect to
the Payment Date occurring on ___________________________________:
B-1
<PAGE>
This Certificate shall constitute the Servicer's Certificate required
by Section 3.9 of the Contribution and Servicing Agreement with respect to the
above Payment Date. Any term capitalized but not defined herein shall have the
meaning ascribed thereto in the Contribution and Servicing Agreement.
IN WITNESS WHEREOF the undersigned has hereunto set his/her hand this
_______________ day of ____________________________, ____________.
GREEN TREE VENDOR SERVICES
CORPORATION
By
------------------------------------
Name:
-------------------------------
Title:
-------------------------------
B-2
<PAGE>
EXHIBIT 4.3
GREEN TREE LEASE FINANCE 1998-1, LLC
5.201% LEASE-BACKED NOTES, CLASS A-1
5.55% LEASE-BACKED NOTES, CLASS A-2
5.60% LEASE-BACKED NOTES, CLASS A-3
5.74% LEASE-BACKED NOTES, CLASS A-4
6.66% LEASE-BACKED NOTES, CLASS B
7.63% LEASE-BACKED NOTES, CLASS C
INDENTURE
DATED AS OF DECEMBER 1, 1998
U.S. BANK TRUST NATIONAL ASSOCIATION
TRUSTEE
<PAGE>
CROSS REFERENCE TABLE
TIA Indenture
Section Section
- ------- ---------
310(a)(1)........................................................ 6.11
(a)(2)........................................................ 6.11
(a)(3)........................................................ 6.10
(a)(4)........................................................ N.A./2/
(a)(5)........................................................ 6.11
(b)........................................................... 6.08; 6.11
(c)........................................................... N.A.
311(a)........................................................... 6.12
(b)........................................................... 6.12
(c)........................................................... N.A.
312(a)........................................................... 7.01
(b)........................................................... 7.02
(c)........................................................... 7.02
313(a)........................................................... 7.04
(b)(1)........................................................ 7.04
(b)(2)........................................................ 7.04
(c)........................................................... 11.05
(d)........................................................... 7.04
314(a)........................................................... 7.03
(b)........................................................... 3.06;11.15
(c)(1)........................................................ 11.01
(c)(2)........................................................ 11.01
(c)(3)........................................................ 11.01
(d)........................................................... 11.01
(e)........................................................... 11.01
(f)........................................................... 11.01
315(a)........................................................... 6.01
(b)........................................................... 6.05;11.05
(c)........................................................... 6.01
(d)........................................................... 6.01
(e)........................................................... 5.14
316(a)(last sentence)............................................ 1.01
(a)(1)(A)..................................................... 5.12
(a)(1)(B)..................................................... 5.13
(a)(2)........................................................ N.A.
(b)........................................................... 5.08
(c)........................................................... N.A.
317(a)(1)........................................................ 5.03
(a)(2)........................................................ 5.03
(b)........................................................... 3.03
318(a)........................................................... 11.07
- ----------
1 Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
2 N.A. means Not Applicable.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I Definitions and Incorporation by Reference ................................... 4
SECTION 1.01. Definitions .......................................................... 4
SECTION 1.02. Incorporation by Reference of Trust Indenture Act .................... 23
SECTION 1.03. Rules of Construction ................................................ 24
ARTICLE II The Notes .................................................................... 24
SECTION 2.01. Form ................................................................. 24
SECTION 2.02. Execution, Authentication and Delivery ............................... 25
SECTION 2.03. Temporary Notes ...................................................... 25
SECTION 2.04. Registration; Registration of Transfer and Exchange .................. 26
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes ........................... 27
SECTION 2.06. Person Deemed Owner .................................................. 28
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest ................ 28
SECTION 2.08. Cancellation ......................................................... 29
SECTION 2.09. Book-Entry Notes ..................................................... 29
SECTION 2.10. Notices to Depository ................................................ 30
SECTION 2.11. Definitive Notes ..................................................... 30
SECTION 2.12. Calculations ......................................................... 30
ARTICLE III Covenants .................................................................... 30
SECTION 3.01. Payment of Principal and Interest .................................... 30
SECTION 3.02. Maintenance of Office or Agency ...................................... 30
SECTION 3.03. Money for Payments To Be Held in Trust ............................... 31
SECTION 3.04. Existence ............................................................ 32
SECTION 3.05. Protection of Trust Estate ........................................... 32
SECTION 3.06. Opinions as to Trust Estate .......................................... 33
SECTION 3.07. Performance of Obligations; Servicing of Leases ...................... 34
SECTION 3.08. Negative Covenants ................................................... 35
SECTION 3.09. Annual Statement as to Compliance .................................... 35
SECTION 3.10. Issuer May Consolidate or Merge Only on Certain Terms ................ 36
SECTION 3.11. Successor or Transferee .............................................. 37
SECTION 3.12. No Other Business .................................................... 38
SECTION 3.13. No Borrowing ......................................................... 38
SECTION 3.14. Servicer's Obligations ............................................... 38
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities .................... 38
SECTION 3.16. Income Tax Characterization .......................................... 38
SECTION 3.17. Restricted Payments .................................................. 39
SECTION 3.18. Notice of Events of Default. ......................................... 39
SECTION 3.19. Further Instruments and Acts ......................................... 39
SECTION 3.20. Compliance with Laws ................................................. 39
SECTION 3.21. Amendments of Contribution and Servicing Agreement ................... 39
SECTION 3.22. Issuer Obligation .................................................... 39
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE IV Satisfaction and Discharge ................................................... 40
SECTION 4.01. Satisfaction and Discharge of Indenture .............................. 40
SECTION 4.02. Application of Trust Money ........................................... 41
SECTION 4.03. Repayment of Moneys Held by Paying Agent ............................. 41
SECTION 4.04. Release of Trust Estate .............................................. 41
ARTICLE V Remedies ..................................................................... 41
SECTION 5.01. Events of Default .................................................... 41
SECTION 5.02. Rights upon Event of Default ......................................... 42
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Trustee; Authority of Trustee ..................................... 43
SECTION 5.04. Remedies ............................................................. 44
SECTION 5.05. Optional Preservation of the Leases .................................. 45
SECTION 5.06. Priorities ........................................................... 46
SECTION 5.07. Limitation of Suits .................................................. 47
SECTION 5.08. Unconditional Rights of Noteholders To Receive Principal and
Interest ............................................................. 47
SECTION 5.09. Restoration of Rights and Remedies ................................... 47
SECTION 5.10. Rights and Remedies Cumulative ....................................... 48
SECTION 5.11. Delay or Omission Not a Waiver ....................................... 48
SECTION 5.12. Control by Noteholders ............................................... 48
SECTION 5.13. Waiver of Past Defaults .............................................. 48
SECTION 5.14. Undertaking for Costs ................................................ 49
SECTION 5.15. Waiver of Stay or Extension Laws ..................................... 49
SECTION 5.16. Action on Notes ...................................................... 49
SECTION 5.17. Performance and Enforcement of Certain Obligations ................... 49
ARTICLE VI The Trustee .................................................................. 50
SECTION 6.01. Duties of Trustee .................................................... 50
SECTION 6.02. Rights of Trustee .................................................... 52
SECTION 6.03. Individual Rights of Trustee ......................................... 53
SECTION 6.04. Trustee's Disclaimer ................................................. 54
SECTION 6.05. Notice of Defaults ................................................... 54
SECTION 6.06. Reports by Trustee to Holders ........................................ 54
SECTION 6.07. Compensation and Indemnity ........................................... 54
SECTION 6.08. Replacement of Trustee ............................................... 55
SECTION 6.09. Successor Trustee by Merger .......................................... 56
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee ........................ 56
SECTION 6.11. Eligibility; Disqualification ........................................ 57
SECTION 6.12. Preferential Collection of Claims Against Issuer ..................... 58
SECTION 6.13. Representations and Warranties of the Trustee ........................ 58
SECTION 6.14. Servicer's Obligations ............................................... 58
ARTICLE VII Noteholders' Lists and Reports ............................................... 58
SECTION 7.01. Note Registrar To Furnish Trustee Names and Addresses to
Noteholders .......................................................... 58
SECTION 7.02. Preservation of Information; Communications to Noteholders ........... 59
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SECTION 7.03. Reports by Issuer .................................................... 59
SECTION 7.04. Reports by Trustee ................................................... 59
SECTION 7.05. Statements to Noteholders ............................................ 60
ARTICLE VIII Trust Accounts, Disbursements and Releases ................................... 60
SECTION 8.01. Collection of Money .................................................. 60
SECTION 8.02. Collection Account ................................................... 60
SECTION 8.03. Distributions ........................................................ 60
SECTION 8.04. [Reserved] ........................................................... 62
SECTION 8.05. Servicing Account .................................................... 62
SECTION 8.06. Residual Account ..................................................... 62
SECTION 8.07. Reserve Account ...................................................... 63
SECTION 8.08. General Provisions Regarding Servicing Account, Collection
Account, Residual Account and Reserve Account......................... 64
ARTICLE IX Supplemental Indentures ...................................................... 65
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders ............... 65
SECTION 9.02. Supplemental Indentures With Consent of Noteholders .................. 67
SECTION 9.03. Execution of Supplemental Indentures ................................. 68
SECTION 9.04. Effect of Supplemental Indenture ..................................... 68
SECTION 9.05. Conformity With Trust Indenture Act .................................. 69
SECTION 9.06. Reference in Notes to Supplemental Indentures ........................ 69
ARTICLE X Redemption of Notes .......................................................... 69
SECTION 10.01. Redemption ........................................................... 69
SECTION 10.02. Form of Redemption Notice ............................................ 69
SECTION 10.03. Notes Payable on Redemption Date ..................................... 70
ARTICLE XI Miscellaneous ................................................................ 70
SECTION 11.01. Compliance Certificates and Opinions, etc. ........................... 70
SECTION 11.02. Form of Documents Delivered to Trustee ............................... 72
SECTION 11.03. Acts of Noteholders .................................................. 73
SECTION 11.04. Notices, etc., to Trustee, Issuer and Rating Agencies ................ 73
SECTION 11.05. Notices to Noteholders; Waiver ....................................... 74
SECTION 11.06. Alternate Payment and Notice Provisions .............................. 74
SECTION 11.07. Conflict with Trust Indenture Act .................................... 74
SECTION 11.08. Effect of Headings and Table of Contents ............................. 75
SECTION 11.09. Successors and Assigns ............................................... 75
SECTION 11.10. Severability ......................................................... 75
SECTION 11.11. Benefits of Indenture ................................................ 75
SECTION 11.12. Legal Holidays ....................................................... 75
SECTION 11.13. Governing Law ........................................................ 75
SECTION 11.14. Counterparts ......................................................... 75
SECTION 11.15. Recording of Indenture ............................................... 75
SECTION 11.16. No Petition .......................................................... 76
SECTION 11.17. Inspection ........................................................... 76
</TABLE>
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<PAGE>
Testimonium, Signatures and Seals ................................. 85
Exhibit A Form of Depository Agreement
Exhibit B Form of Monthly Statements to Noteholders
Exhibit C-1 Form of Class A Note
Exhibit C-2 Form of Class B Note
Exhibit C-3 Form of Class C Note
-iv-
<PAGE>
INDENTURE, dated as of December 1, 1998, between GREEN TREE LEASE FINANCE
1998-1, LLC, a limited liability company formed pursuant to the laws of the
State of Delaware (the "Issuer"), and U.S. Bank Trust National Association, a
national banking association organized and existing under the laws of the United
States of America, in its capacity as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Issuer's 5.201% Lease- Backed
Notes, Class A-1 (the "Class A-1 Notes"), 5.55% Lease-Backed Notes, Class A-2
(the "Class A-2 Notes"), 5.60% Lease-Backed Notes, Class A-3 (the "Class A-3
Notes"), 5.74% Lease-Backed Notes, Class A-4 (the "Class A-4 Notes" and,
together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes,
the "Class A Notes"), 6.66% Lease-Backed Notes, Class B (the "Class B Notes")
and 7.63% Lease-Backed Notes, Class C (the "Class C Notes" and, together with
the Class A Notes and the Class B Notes, the "Notes"):
As security for the payment and performance by the Issuer of its
obligations under this Indenture and the Notes, the Issuer hereby Grants to the
Trustee, on behalf of and for the benefit of the Noteholders to secure the
payment and performance of the Secured Obligations, the following (collectively,
the "Trust Estate"):
GRANTING CLAUSE FIRST
All rights, title, interest (including security interests) and privileges
of the Issuer, whether now owned or hereafter acquired, whether now existing or
hereafter arising and wherever located, in and to:
(a) the Leases, including, without limitation, (A) all monies at any
time paid or payable thereon or in respect thereof from and after the
Initial Cut-Off Date or, in the case of Substitute Leases, the applicable
Cut-Off Date, in the form of (1) Scheduled Payments (including those
Scheduled Payments due prior to, but not received as of, the Cut-Off Date,
but excluding those Scheduled Payments due on or after, but received prior
to, the Cut-Off Date), (2) Prepayments, and (3) Liquidation Proceeds
(including all net proceeds from the disposition of the related Equipment);
(b) the Pledged Revenues;
(c) all rights of the lessor or the secured party, as the case may be,
in all present or future leases and other contracts relating to the
Equipment and all revenues, payments, rights to payment, profits, accounts,
chattel paper, products and contract rights arising from or related to such
Equipment or any use thereof or from any such lease or other contract;
(d) all rights of the lessor or secured party, as the case may be, in
all Insurance Policies and any other security (other than any ownership
interest of the lessor in the Equipment) for the payment of amounts due
under the Leases (including all rights, if any,
<PAGE>
the lessor or the secured party may have against vendors and other third
parties for payments of such amounts);
(e) all items contained in the related Lease Files and any and all
other documents that are kept on file in accordance with Vendor Services's
customary procedures relating to the Leases;
(f) the Residual Realizations;
(g) the Trust Accounts, including amounts on deposit in the Residual
Account and Reserve Account;
(h) the Insurance, Maintenance and Tax Accounts;
(i) the Contribution and Servicing Agreement, including (i) any deemed
loan made by the Issuer to the SPC and the security therefor, including the
security interest granted by the SPC to the Issuer to secure such deemed
loan, as described in Section 2.1(c) of the Contribution and Servicing
Agreement, and (ii) the obligation of the SPC pursuant to Section
2.1(a)(i)(3) of the Contribution and Servicing Agreement to cause payment
of the Residual Realizations to the Issuer and the security interest in the
Equipment granted by the SPC to the Issuer pursuant to Section 2.1(b) of
the Contribution and Servicing Agreement;
(j) the Transfer Agreement, including (i) any Purchase Amount paid and
(ii) any deemed loan made by the SPC to Vendor Services and the security
therefor, including the security interest in the Leases and Equipment
granted by Vendor Services to the SPC to secure such deemed loan, as
described in Section 2.2 of the Transfer Agreement; and
(k) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion,
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivables, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any
time constitute all or part of or are included in the proceeds of any of
the foregoing.
GRANTING CLAUSE SECOND
All other property of every name and nature from time to time
hereafter by delivery or by writing of any kind conveyed, pledged, assigned or
transferred, as and for additional security hereunder by the Issuer or by anyone
in its behalf or with its written consent to the Trustee, which is hereby
authorized to receive any and all such property at any and all times and to hold
and apply the same subject to the terms hereof.
-2-
<PAGE>
The Trustee, for the benefit of the Holders of the Notes, acknowledges
such Grant. The Trustee, on behalf of the Holders of the Notes, accepts the
trusts under this Indenture in accordance with the provisions of this Indenture
and agrees to perform its duties required in this Indenture to the best of its
ability to the end that the interests of the Holders of the Notes may be
adequately and effectively protected.
-3-
<PAGE>
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
All terms defined in the Contribution and Servicing Agreement (as defined
below) shall have the same meaning in this Indenture. Except as otherwise
specified herein or as the context may otherwise require, the following terms
have the respective meanings set forth below for all purposes of this Indenture.
"Accounting Date" means, with respect to a Payment Date, the last day of
the preceding calendar month.
"Act" has the meaning specified in Section 11.03(a).
"Additional Principal" with respect to each Payment Date is an amount equal
to (a) the Monthly Principal Amount, less (b) the Class A Principal Payment, the
Class B Principal Payment and the Class C Principal Payment to be paid on such
Payment Date.
"Affiliate" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Aggregate Principal Amount" means, as of any date, the aggregate of the
Outstanding Principal Amounts of each Class of Notes.
"Amount Available" means, with respect to any Payment Date, the sum of (i)
the Available Pledged Revenues for such Payment Date, (ii) Servicer Advances,
(iii) funds on deposit in the Residual Account and (iv) funds on deposit in the
Reserve Account.
"Authorized Officer" means, with respect to the Issuer, any officer of the
Issuer who is authorized to act for the Issuer and who is identified on the list
of Authorized Officers delivered by the Issuer to the Trustee on the Closing
Date (as such list may be modified or supplemented from time to time
thereafter).
"Available Funds Shortfall" has the meaning specified in Section 8.06(c).
"Available Pledged Revenues" means, with respect to any Payment Date, the
sum of (i) those Scheduled Payments due during the related Collection Period and
on deposit in the Collection Account as of the immediately preceding Deposit
-4-
<PAGE>
Date, (ii) prepayments and Liquidation Proceeds received by the Servicer during
the related Collection Period, (iii) all Purchase Amounts on deposit in the
Collection Account as of the immediately preceding Deposit Date, (iv) the amount
paid by the SPC to purchase the Leases pursuant to Section 5.1 of the
Contribution and Servicing Agreement on deposit in the Collection Account as of
the immediately preceding Deposit Date and (v) all net income from investments
of funds in the Collection Account since the preceding Deposit Date.
"Available Reserve Amount" means the amount on deposit in the Reserve
Account.
"Book-Entry Note" means any Note registered in the name of the Depository
or its nominee, ownership of which is reflected on the books of the Depository
or on the books of a person maintaining an account with such Depository
(directly or as an indirect participant in accordance with the rules of such
Depository).
"Business Day" means any day (other than a Saturday, Sunday or legal
holiday) on which commercial banking institutions in St. Paul, Minnesota, or any
other location of any successor Servicer or successor Trustee, are open for
regular business.
"Class" means, when used with respect to the Notes, all Notes of a given
Class.
"Class A Notes" means, collectively, the Class A-1 Notes, the Class A- 2
Notes, the Class A-3 Notes and the Class A-4 Notes.
"Class A Percentage" is 85.4862%.
"Class A Principal Payment" means (a) while the Class A-1 Notes are
outstanding, (i) on all Payment Dates prior to the January 2000 Payment Date,
the lesser of (1) the amount necessary to reduce the Outstanding Principal
Amount on the Class A-1 Notes to zero and (2) the Monthly Principal Amount, and
(ii) on the January 2000 Payment Date, the entire Outstanding Principal Amount
on the Class A-1 Notes and (b) after the Class A-1 Notes have been paid in full,
the amount necessary to reduce the aggregate Outstanding Principal Amount of the
Class A Notes to the Class A Target Investor Principal Amount.
"Class A Target Investor Principal Amount" means, with respect to each
Payment Date, an amount equal to the product of (a) the Class A Percentage and
(b) the Lease Pool Principal Balance with respect to such Payment Date.
"Class A-1 Interest Carryover Shortfall" means, with respect to any Payment
Date, the excess, if any, of the Class A-1 Interest Distributable Amount for the
preceding Payment Date over the amount that was actually distributed in respect
of interest on the Class A-1 Notes on such preceding Payment Date, plus, to the
extent permitted by law, an amount equal to the product of (i) the Class A-1
Interest Rate, (ii) such excess, and (iii) a fraction, the numerator of which is
the actual number of days elapsed since the preceding Payment Date (or the
Closing Date, in the case of the first Payment Date) and the denominator of
which is 360.
-5-
<PAGE>
"Class A-1 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-1 Monthly Interest Distributable Amount and
the Class A-1 Interest Carryover Shortfall for such Payment Date.
"Class A-1 Interest Rate" means 5.201% per annum.
"Class A-1 Monthly Interest Distributable Amount" means, with respect to
any Payment Date, an amount equal to the product of (i) the Class A-1 Interest
Rate, (ii) the Outstanding Principal Amount of the Class A-1 Notes for such
Payment Date (or, in the case of the first Payment Date, the Original Principal
Amount of the Class A-1 Notes), and (iii) a fraction, the numerator of which is
the actual number of days elapsed since the preceding Payment Date (or the
Closing Date, in the case of the first Payment Date) and the denominator of
which is 360.
"Class A-1 Notes" means the 5.201% Lease-Backed Notes, Class A-1,
substantially in the form of Exhibit C-1.
"Class A-1 Stated Maturity Date" means January 14, 2000 (or, if such day is
not a Business Day, the next succeeding Business Day thereafter).
"Class A-2 Interest Carryover Shortfall" means, with respect to any Payment
Date, the excess, if any, of the Class A-2 Interest Distributable Amount for the
preceding Payment Date over the amount that was actually distributed in respect
of interest on the Class A-2 Notes on such preceding Payment Date, plus, to the
extent permitted by law, an amount equal to one-twelfth of the product of (i)
the Class A-2 Interest Rate and (ii) such excess.
"Class A-2 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-2 Monthly Interest Distributable Amount and
the Class A-2 Interest Carryover Shortfall for such Payment Date.
"Class A-2 Interest Rate" means 5.55% per annum.
"Class A-2 Monthly Interest Distributable Amount" means, with respect to
any Payment Date other than the first Payment Date, an amount equal to one-
twelfth of the product of (i) the Class A-2 Interest Rate and (ii) the
Outstanding Principal Amount of the Class A-2 Notes for such Payment Date, and,
in the case of the first Payment Date, an amount equal to the product of (i) the
Class A-2 Interest Rate, (ii) the Original Principal Amount of the Class A-2
Notes, and (iii) a fraction, the numerator of which is 27 and the denominator of
which is 360.
"Class A-2 Notes" means the 5.55% Lease-Backed Notes, Class A-2,
substantially in the form of Exhibit C-1.
"Class A-2 Stated Maturity Date" means December 20, 2000 (or, if such day
is not a Business Day, the next succeeding Business Day thereafter).
-6-
<PAGE>
"Class A-3 Interest Carryover Shortfall" means, with respect to any Payment
Date, the excess, if any, of the Class A-3 Interest Distributable Amount for the
preceding Payment Date over the amount that was actually distributed in respect
of interest on the Class A-3 Notes on such preceding Payment Date, plus, to the
extent permitted by law, an amount equal to one-twelfth of the product of (i)
the Class A-3 Interest Rate and (ii) such excess.
"Class A-3 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-3 Monthly Interest Distributable Amount and
the Class A-3 Interest Carryover Shortfall for such Payment Date.
"Class A-3 Interest Rate" means 5.60% per annum.
"Class A-3 Monthly Interest Distributable Amount" means, with respect to
any Payment Date other than the first Payment Date, an amount equal to one-
twelfth of the product of (i) the Class A-3 Interest Rate and (ii) the
Outstanding Principal Amount of the Class A-3 Notes for such Payment Date, and,
in the case of the first Payment Date, an amount equal to the product of (i) the
Class A-3 Interest Rate, (ii) the Original Principal Amount of the Class A-3
Notes, and (iii) a fraction, the numerator of which is 27 and the denominator of
which is 360.
"Class A-3 Notes" means the 5.60% Lease-Backed Notes, Class A-3,
substantially in the form of Exhibit C-1.
"Class A-3 Stated Maturity Date" means July 20, 2002 (or, if such day is
not a Business Day, the next succeeding Business Day thereafter).
"Class A-4 Interest Carryover Shortfall" means, with respect to any Payment
Date, the excess, if any, of the Class A-4 Interest Distributable Amount for the
preceding Payment Date over the amount that was actually distributed in respect
of interest on the Class A-4 Notes on such preceding Payment Date, plus, to the
extent permitted by law, an amount equal to one-twelfth of the product of (i)
the Class A-4 Interest Rate and (ii) such excess.
"Class A-4 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-4 Monthly Interest Distributable Amount and
the Class A-4 Interest Carryover Shortfall for such Payment Date.
"Class A-4 Interest Rate" means 5.74% per annum.
"Class A-4 Monthly Interest Distributable Amount" means, with respect to
any Payment Date other than the first Payment Date, an amount equal to one-
twelfth of the product of (i) the Class A-4 Interest Rate and (ii) the
Outstanding Principal Amount of the Class A-4 Notes for such Payment Date, and,
in the case of the first Payment Date, an amount equal to the product of (i) the
Class A-4 Interest Rate, (ii) the Original Principal Amount of the Class A-4
Notes, and (iii) a fraction, the numerator of which is 27 and the denominator of
which is 360.
"Class A-4 Notes" means the 5.74% Lease-Backed Notes, Class A-4,
substantially in the form of Exhibit C-1.
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"Class A-4 Stated Maturity Date" means January 20, 2004 (or, if such day is
not a Business Day, the next succeeding Business Day thereafter).
"Class B Floor" with respect to each Payment Date means (a) 4.25% of the
Initial Pool Principal Balance, plus (b) the Cumulative Loss Amount with respect
to such Payment Date, minus (c) the Outstanding Principal Amount of the Class C
Notes as of such Payment Date and the amount on deposit in the Reserve Account
after giving effect to withdrawals to be made on such Payment Date.
"Class B Interest Carryover Shortfall"means, with respect to any Payment
Date, the excess, if any, of the Class B Interest Distributable Amount for the
preceding Payment Date over the amount that was actually distributed in respect
of interest on the Class B Notes on such preceding Payment Date, plus, to the
extent permitted by law, an amount equal to one-twelfth of the product of (i)
the Class B Interest Rate and (ii) such excess.
"Class B Interest Distributable Amount" means, with respect to any Payment
Date, the sum of the Class B Monthly Interest Distributable Amount and the Class
B Interest Carryover Shortfall for such Payment Date.
"Class B Interest Rate" means 6.66% per annum.
"Class B Monthly Interest Distributable Amount" means, with respect to any
Payment Date other than the first Payment Date, an amount equal to one- twelfth
of the product of (i) the Class B Interest Rate and (ii) the Outstanding
Principal Amount of the Class B Notes for such Payment Date, and, in the case of
the first Payment Date, an amount equal to the product of (i) the Class B
Interest Rate, (ii) the Original Principal Amount of the Class B Notes, and
(iii) a fraction, the numerator of which is 27 and the denominator of which is
360.
"Class B Notes" means the 6.66% Lease-Backed Notes, Class B, substantially
in the form of Exhibit C-2.
"Class B Percentage" is 9.4340%.
"Class B Principal Payment" shall equal (a) while the Class A-1 Notes are
outstanding, zero and (b) after the Outstanding Principal Amount on the Class
A-1 Notes has been reduced to zero, the amount necessary to reduce the
Outstanding Principal Amount of the Class B Notes to the greater of the Class B
Target Investor Principal Amount and the Class B Floor.
"Class B Stated Maturity Date" means October 20, 2004 (or, if such day is
not a Business Day, the next succeeding Business Day thereafter).
"Class B Target Investor Principal Amount" with respect to each Payment
Date is an amount equal to the product of (a) the Class B Percentage and (b) the
Lease Pool Principal Balance with respect to such Payment Date.
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"Class C Floor" with respect to each Payment Date means (a) 2.75% of the
Initial Pool Principal Balance, plus (b) the Cumulative Loss Amount with respect
to such Payment Date minus (c) the amount on deposit in the Reserve Account
after giving effect to withdrawals to be made on such Payment Date; provided
that if the Outstanding Principal Amount of the Class B Notes is equal to the
Class B Floor on such Payment Date, the Class C Floor will equal the Outstanding
Principal Amount of the Class C Notes of the Class C Notes on such Payment Date.
"Class C Interest Carryover Shortfall"means, with respect to any Payment
Date, the excess, if any, of the Class C Interest Distributable Amount for the
preceding Payment Date over the amount that was actually distributed in respect
of interest on the Class C Notes on such preceding Payment Date, plus, to the
extent permitted by law, an amount equal to one-twelfth of the product of (i)
the Class C Interest Rate and (ii) such excess.
"Class C Interest Distributable Amount" means, with respect to any Payment
Date, the sum of the Class C Monthly Interest Distributable Amount and the Class
C Interest Carryover Shortfall for such Payment Date.
"Class C Interest Rate" means 7.63% per annum.
"Class C Monthly Interest Distributable Amount" means, with respect to any
Payment Date other than the first Payment Date, an amount equal to one- twelfth
of the product of (i) the Class C Interest Rate and (ii) the Outstanding
Principal Amount of the Class C Notes for such Payment Date, and, in the case of
the first Payment Date, an amount equal to the product of (i) the Class C
Interest Rate, (ii) the Original Principal Amount of the Class C Notes, and
(iii) a fraction, the numerator of which is 27 and the denominator of which is
360.
"Class C Notes" means the 7.63% Lease-Backed Notes, Class C, substantially
in the form of Exhibit C-3.
"Class C Percentage" is 5.0798%.
"Class C Principal Payment" shall equal (a) while the Class A-1 Notes are
outstanding, zero and (b) after the Outstanding Principal Amount on the Class
A-1 Notes has been reduced to zero, the amount necessary to reduce the
Outstanding Principal Amount of the Class C Notes to the greater of the Class C
Target Investor Principal Amount and the Class C Floor.
"Class C Stated Maturity Date" means October 20, 2006 (or, if such day is
not a Business Day, the next succeeding Business Day thereafter).
"Class C Target Investor Principal Amount" with respect to each Payment
Date is an amount equal to the product of (a) the Class C Percentage and (b) the
Lease Pool Principal Balance with respect to such Payment Date.
"Closing Date" means December 23, 1998.
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"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collection Account" means the Eligible Account or Accounts established and
maintained by the Trustee in accordance with Section 8.02.
"Collection Period" means, with respect to any Payment Date, the calendar
month preceding the month in which such Payment Date occurs (such calendar month
being referred to as the "related" Collection Period with respect to such
Payment Date). With respect to an Accounting Date, the Collection Period in
which such Accounting Date occurs is referred to herein as the "related"
Collection Period with respect to such Accounting Date.
"Contribution and Servicing Agreement" means the Contribution and Servicing
Agreement, dated as of December 1, 1998, among the SPC, the Servicer, the
Trustee and the Issuer.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered, which
office at date of the execution of this Agreement is located at 180 East Fifth
Street, St. Paul, Minnesota 55101, Attention: Corporate Trust Administration,
Structured Finance; or at such other address as the Trustee may designate from
time to time by notice to the Noteholders and the Issuer, or the principal
corporate trust office of any successor Trustee (the address of which the
successor Trustee will notify the Noteholders and the Issuer).
"Cumulative Loss Amount" means, with respect to each Payment Date, an
amount equal to the excess, if any, of (a) the total of (i) the Aggregate
Principal Amount for such Payment Date, minus (ii) the lesser of (A) the Monthly
Principal Amount and (B) the Amount Available remaining after the payment of
amounts owing to the Servicer (other than the Servicing Fee to the extent that
Vendor Services is the Servicer) and in respect of interest on the Notes on such
Payment Date, over (b) the Lease Pool Principal Balance with respect to such
Payment Date.
"Cumulative Loss Percentage" means, with respect to each Payment Date, the
percentage equivalent of a fraction (a) the numerator of which is an amount
equal to the Discounted Present Value of all Leases that have become Liquidated
Leases since the Initial Closing Date, less any recoveries received by the
Issuer in respect thereof and (b) the denominator of which is the Initial Pool
Principal Balance.
"Cut-Off Date" means the Initial Cut-Off Date or, in the case of a
Substitute Lease, the first day of the month of transfer to the Issuer.
"Default" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"Definitive Notes" means any Note evidenced by a definitive, fully
registered Note and any Note issued in lieu of a Book-Entry Note pursuant to
Section 2.11.
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"Delinquent Lease" means, as of any Determination Date, any Lease (other
than a Lease that became a Liquidated Lease prior to such Determination Date)
with respect to which the Obligor has failed to make a required Scheduled
Payment in an amount equal to at least 90% of the required Scheduled Payment
within 30 days of the due date.
"Deposit Date" means, with respect to any Collection Period, the Business
Day immediately preceding the related Determination Date.
"Depository" means the initial Depository, The Depository Trust Company,
the nominee of which is Cede & Co., as the registered Holder of the Class A
Notes, the Class B Notes and the Class C Notes as of the Closing Date, and any
permitted successor depository. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Minnesota UCC.
"Depository Agreement" means the agreement among the Issuer, the Trustee
and The Depository Trust Company, as the initial Depository, dated as of the
Closing Date, relating to the Notes, substantially in the form of Exhibit A.
"Depository Participant" means a broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date" means, with respect to any Collection Period, the
first Business Day immediately preceding the related Payment Date.
"Eligible Account" means (i) an account maintained at an Eligible
Institution; (ii) an account or accounts the deposits in which are fully insured
by either the Bank Insurance Fund or the Savings Association Insurance Fund of
the FDIC; (iii) a trust account (which shall be a "segregated trust account")
maintained with the corporate trust department of a federal or state chartered
depository institution or trust company with trust powers and acting in its
fiduciary capacity for the benefit of the Trustee, which depository institution
or trust company (or, if such depository institution or trust company is a
subsidiary of a bank holding company, such bank holding company) shall have
capital and surplus of not less than $50,000,000 and the securities of such
depository institution or trust company (or, if such depository institution or
trust company is a subsidiary of a bank holding company and has no securities
which are rated, the securities of such bank holding company) shall have a
credit rating from each of the Rating Agencies (if rated by such Rating Agency)
in one of its generic credit rating categories which signifies investment grade;
or (iv) an account that will not cause any Rating Agency to downgrade or
withdraw its then-current rating assigned to the Notes, as confirmed in writing
by such Rating Agency.
"Eligible Institution" means any depository institution (which may be the
Trustee or an Affiliate of the Trustee) organized under the laws of the United
States or any state, the deposits of which are insured to the full extent
permitted by law by the Bank Insurance Fund of the FDIC, which is subject to
supervision and examination by federal or state authorities and whose short-term
deposits, commercial paper or other short-term debt obligations have been
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rated at least A-1 by S&P and F1 by Fitch (if rated by Fitch) or whose unsecured
long- term debt has been rated in one of the two highest rating categories by
each Rating Agency (if rated by such Rating Agency).
"Eligible Investments" means any one or more of the following types of
investments:
(i) direct obligations of, and obligations fully guaranteed as to
timely receipt of principal and interest by, the United States of America,
or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the United
States of America;
(ii) demand and time deposits in, certificates of deposit of, bankers'
acceptances issued by, or federal funds sold by any depository institution
or trust company (including the Trustee or any Affiliate of the Trustee,
acting in its commercial capacity) incorporated under the laws of the
United States of America or any state thereof and subject to supervision
and examination by federal or state authorities, so long as, at the time of
such investment or contractual commitment providing for such investment,
the short-term deposits, commercial paper or other short-term debt
obligations of such depository institution or trust company are rated at
least A-1+ by S&P and F1+ by Fitch (if rated by Fitch);
(iii) shares of an investment company registered under the Investment
Company Act of 1940, whose shares are registered under the Securities Act
of 1933, as amended, and have the highest credit rating then available from
Fitch (if rated by Fitch) and are rated AAAm or AAAm-G by S&P and whose
only investments are in securities described in clauses (i) and (ii) above
and (iv) below;
(iv) repurchase obligations with respect to (A) any security described
in clause (i) above or (B) any other security issued or guaranteed by an
agency or instrumentality of the United States of America, in either case
entered into with a depository institution or trust company (acting as
principal) described in clause (ii)(A) above;
(v) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any state thereof which, at the time of such investment, have a credit
rating of at least AAA from S&P and AAA from Fitch (if rated by Fitch);
(vi) commercial paper having a rating of at least A-1+ by S&P and F1+
by Fitch (if rated by Fitch) at the time of such investment;
(vii) investments in money market funds rated in the highest rating
category by each of S&P and Fitch (if rated by Fitch); and
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(viii) any other investment which will not cause any Rating Agency to
downgrade or withdraw its then-current rating assigned to the Notes, as
confirmed in writing by such Rating Agency.
Eligible Investments may be purchased by or through the Trustee or any of its
Affiliates.
"Equipment" means the property which is leased pursuant to a Lease, or
which otherwise provides security for the payment of amounts payable thereunder.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, any Responsible Officer, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.
"Fitch" means Fitch IBCA, Inc., or any successor thereto.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Trust Estate or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Trust Estate and all other moneys
payable thereunder, to give and receive notices and other communications, to
make waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Green Tree" means Green Tree Financial Corporation, a Delaware
corporation.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indebtedness" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
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deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; or (h) obligations of such Person
under any interest rate or currency exchange agreement.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Independent" means, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the SPC, the Servicer and any Affiliate of any of the foregoing Persons,
(b) does not have any direct financial interest or any material indirect
financial interest in the Issuer, any such other obligor, the SPC, the Servicer
or any Affiliate of any of the foregoing Persons and (c) is not connected with
the Issuer, any such other obligor, the SPC, the Servicer or any Affiliate of
any of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered to
the Trustee under the circumstances described in, and otherwise complying with,
the applicable requirements of Section 11.01, made by an Independent appraiser
or other expert appointed by an Issuer Order and approved by the Trustee in the
exercise of reasonable care, and such opinion or certificate shall state that
the signer has read the definition of "Independent" in this Indenture and that
the signer is Independent within the meaning thereof.
"Initial Cut-Off Date" means December 1, 1998.
"Initial Pool Principal Balance" is $394,619,948.
"Interest Rate" means the Class A-1 Interest Rate, the Class A-2 Interest
Rate, the Class A-3 Interest Rate, the Class A-4 Interest Rate, the Class B
Interest Rate and the Class C Interest Rate, as applicable.
"Issuer" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
Notes.
"Issuer Order" and "Issuer Request" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Trustee.
"Lease Pool Principal Balance" means, with respect to any Payment Date, the
sum of the Principal Balances (computed as of the related Accounting Date) for
all Leases.
"Leases" means the lease contracts listed on the Schedule of Leases.
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"Lien" means any security interest, lien, charge, pledge, preference,
equity or encumbrance of any kind, including tax liens, mechanics' liens and any
liens that attach by operation of law.
"Liquidated Lease" means, with respect to any Collection Period, (i) a
Lease which, during such Collection Period, was charged off as uncollectible by
the Servicer in accordance with its credit and collection policies and
procedures (which shall be no later than the date as of which the Servicer has
repossessed and disposed of the related Equipment and otherwise collected all
proceeds (including any proceeds of insurance to be applied as described in
Section 3.4(c)(ii) of the Contribution and Servicing Agreement) which, in the
Servicer's reasonable judgment, can be collected under such Lease) following a
default thereunder or upon damage to or destruction of such Equipment (if such
Equipment is not to be replaced in accordance with Section 3.4(c)(i) of the
Contribution and Servicing Agreement), or (ii) a Lease as to which, during such
Collection Period, 10% or more of a Scheduled Payment shall have become 180 days
delinquent.
"Liquidation Proceeds" means all amounts received by the Servicer (i) in
connection with the liquidation of any Lease and disposition of the related
Equipment or (ii) as insurance proceeds with respect to any damaged or destroyed
Equipment to be applied as described in Section 3.4(c)(ii) of the Contribution
and Servicing Agreement, in each case net of (a) reasonable out-of-pocket
expenses incurred by or on behalf of the Servicer in connection with the
collection of such Lease and the maintenance, repossession, repair, storage and
disposition of the related Equipment (including taxes and insurance charges, to
the extent in excess of amounts available therefor and relating to such Lease in
the Insurance, Maintenance and Tax Accounts, as well as attorneys' fees) and (b)
amounts that are required to be refunded to the Obligor on such Lease; provided,
however, that the Liquidation Proceeds with respect to any Lease and disposition
of the related Equipment shall in no event be less than zero.
"Minnesota UCC" means the UCC as in effect in the State of Minnesota from
time to time.
"Monthly Delinquency Percentage" means, with respect to any Payment Date,
the percentage equivalent of a fraction (a) the numerator of which is the
Principal Balance of the Delinquent Leases determined as of the related
Accounting Date and (b) the denominator of which is the Lease Pool Principal
Balance as of such Payment Date.
"Monthly Loss Percentage" means, with respect to any Payment Date, the
percentage equivalent of a fraction (a) the numerator of which is the Principal
Balance of all Leases that have become Liquidated Leases during the preceding
Collection Period less Liquidation Proceeds and (b) the denominator of which is
the Lease Pool Principal Balance on the first day of such preceding Collection
Period.
"Monthly Principal Amount" means, with respect to any Payment Date, the
excess, if any, of (i) the sum of the Aggregate Principal Amount for such
Payment Date, over (ii) the Lease Pool Principal Balance with respect to such
Payment Date.
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"Monthly Servicer Realization Percentage" means, with respect to any
Payment Date, the percentage equivalent of a fraction (a) the numerator of which
is the aggregate cumulative amount of Residual Realizations collected on all
Leases as to which the Servicer determined during the related Collection Period
that all Residual Realizations to be received with respect to the related
Equipment have been collected and (b) the denominator of which is equal to the
aggregate Book Value with respect to such Leases.
"Nonrecoverable Servicer Advance" means any Servicer Advance previously
made by the Servicer which the Servicer has determined based on its sole
discretion will not be reimbursed from recoveries on the Lease with respect to
which the Servicer Advance was made.
"Note" means a Class A-1 Note, Class A-2 Note, Class A-3 Note, Class A-4
Note, Class B Note or Class C Note, as applicable.
"Note Majority" means Holders representing a majority of the Outstanding
Principal Amount of each Class of the Notes then Outstanding.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
the beneficial owner of such Book-Entry Note, as reflected on the books of the
Depository, or on the books of a Person maintaining an account with such
Depository (directly or as an indirect participant, in each case in accordance
with the rules of such Depository) and with respect to any Definitive Notes, the
Holder.
"Note Register" and "Note Registrar" have the respective meanings specified
in Section 2.04.
"Notes" means the Class A Notes, the Class B Notes and the Class C Notes.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to
the Trustee. Unless otherwise specified, any reference in this Indenture to an
Officer's Certificate shall be to an Officer's Certificate of any Authorized
Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who may,
except as otherwise expressly provided in this Indenture, be employees of or
counsel to the Issuer or the Servicer and which shall comply with any applicable
requirements of Section 11.01.
"Original Principal Amount" means (i) with respect to the Class A-1 Notes,
$122,726,804, (ii) with respect to the Class A-2 Notes, $51,695,213, (iii) with
respect to the Class A-3 Notes, $122,332,184, (iv) with respect to the Class A-4
Notes, $58,403,752, (v) with respect to the Class B Notes, $25,650,297 and (vi)
with respect to the Class C Notes, $13,811,698.
"Outstanding" means, as of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:
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(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Notes (provided, however,
that if such Notes are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor, satisfactory
to the Trustee, has been made); 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 Trustee is presented that any such Notes are held by a
bona fide purchaser;
provided, however, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Related Document,
Notes owned by the Issuer, any other obligor upon the Notes, the SPC or any
Affiliate of any of the foregoing Persons shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that the Trustee knows to be so owned
shall be so disregarded. Notes so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Notes, the SPC or any
Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the Aggregate Principal Amount of the Notes, or
the Outstanding Principal Amount of a Class of Notes, as applicable, Outstanding
at the date of determination.
"Outstanding Principal Amount" means, as of any date, when used with
respect to a Class of Notes, the Original Principal Amount of such Class, less
all distributions previously made to such Class in respect of principal (before
giving effect to distributions of principal made on such date).
"Paying Agent" means the Trustee or any other Person that meets the
eligibility standards for the Trustee specified in Section 6.11 and is
authorized by the Issuer to make the distributions from the Collection Account,
including payment of principal of or interest on the Notes on behalf of the
Issuer.
"Payment Date" means the twentieth day of each calendar month (or, if such
twentieth day is not a Business Day, the next succeeding Business Day),
commencing January 20, 1999; provided, that if the Class A-1 Notes have not been
paid in full on or before the Payment Date in December 1999, the Payment Date in
January 2000 for the Class A-1 Notes will be January 14, 2000.
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"Performing Lease" means, as of any Determination Date, any Lease with
respect to which the Obligor has paid all payments then due.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Pledged Revenues" means (i) all Scheduled Payments on the Leases received
on or after the Cut-Off Date and due during the term of the Leases without
giving effect to end-of-term extensions or renewals thereof (including all
Scheduled Payments due prior to, but not received as of, the Cut-Off Date, but
excluding any Scheduled Payments due on or after, but received prior to, the
Cut-Off Date); (ii) any Prepayments of Scheduled Payments received on or after
the Cut-Off Date; (iii) the Purchase Amount of any Leases purchased by Vendor
Services in accordance with Section 2.6 of the Contribution and Servicing
Agreement (to the extent Vendor Services has not delivered Substitute Leases);
(iv) the amount paid by the SPC to repurchase the Leases pursuant to Section 5.1
of the Contribution and Servicing Agreement; (v) all Liquidation Proceeds
received in respect of any Leases and the related Equipment on or after the Cut-
Off Date; and (vi) any earnings on the investment of amounts credited to the
Collection Account.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Prepayment" means, with respect to any Collection Period for any Lease, a
voluntary prepayment during such Collection Period of amounts due and owing
under such Lease.
"Principal Balance" means, as of any Accounting Date,
(1) in the case of any Lease that does not by its terms permit
prepayment or early termination, the present value of the unpaid Scheduled
Payments due on such Lease after such last day of the Collection Period
(excluding all Scheduled Payments due on or prior to, but not received as
of, such last day, as well as any Scheduled Payments due after such last
day and received on or prior thereto), after giving effect to any
Prepayments received on or prior to such last day, discounted monthly
(assuming, for purposes of such calculation, that each Scheduled Payment is
due on the last day of the applicable Collection Period) at the rate of
6.539% per annum;
(2) in the case of any Lease that permits prepayment or early
termination only upon payment of a premium that is at least equal to the
present value (calculated in the manner described in clause (1) above) of
the unpaid Scheduled Payments due on such Lease after the date of such
prepayment, the amount specified in clause (1) above; and
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(3) in the case of any Lease that permits prepayment or early
termination without payment of a premium at least equal to the amount
specified in clause (2) above, the lesser of (a) the outstanding principal
balance of such Lease after giving effect to Scheduled Payments due on or
prior to such last day of the Collection Period, whether or not received,
as well as any Prepayments, and any Scheduled Payments due after such last
day, received on or prior to such last day, and (b) the amount specified in
clause (1) above;
provided that, for purposes of computing the Monthly Principal Amount for a
given Payment Date (as well as all Payment Dates thereafter), the Principal
Balance of any Lease which became a Liquidated Lease during the related
Collection Period or was required to be purchased by Vendor Services as of the
last day of the related Collection Period in accordance with Section 2.6, will
be deemed to be zero on and after the last day of such Collection Period.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase Amount" means, with respect to a Lease and related Equipment
required to be purchased by Vendor Services in accordance with Section 2.6 of
the Contribution and Servicing Agreement, the sum of (i) the Required Payoff
Amount for such Lease as of the Accounting Date on which such obligation to so
purchase arises, plus (ii) the Book Value (if any) of the related Equipment.
"Purchased Lease" means, as of any Deposit Date, any Lease which Vendor
Services has purchased (or substituted a Substitute Lease for) as of the related
Accounting Date, as required by Section 2.6 of the Contribution and Servicing
Agreement.
"Rating Agency" means each of S&P and Fitch, so long as such Persons
maintain a rating on the Notes; and, if neither S&P nor Fitch maintains a rating
on the Notes, such other nationally recognized statistical rating organization,
if any, selected by the SPC.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof and that each
of the Rating Agencies shall have notified the Issuer, the Servicer, the
Trustee, and the SPC in writing that such action will not result in a reduction,
qualification or withdrawal of the then-current rating of the Notes.
"Record Date" means, with respect to a Payment Date or Redemption Date, the
close of business on the last Business Day immediately preceding such Payment
Date or Redemption Date (so long as the Notes are Book-Entry Notes), or the last
day of the prior calendar month (if Definitive Notes have been issued).
"Redemption Date" means, in the case of a redemption of the Notes pursuant
to Section 10.01, the Payment Date specified by the Servicer or the Issuer
pursuant to Section 10.01.
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"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 on the principal amount of each Class of Notes
at the respective Interest Rate for each such Class of Notes being so redeemed
to but excluding the Redemption Date.
"Registered Holder" means the Person in whose name a Note is registered on
the Note Register on the applicable Record Date.
"Related Documents" means the Notes, the Contribution and Servicing
Agreement, the Transfer Agreement, the Depository Agreement and the underwriting
agreements between the SPC, the Issuer and the underwriters of the Notes. The
Related Documents executed by any party are referred to herein as "such party's
Related Documents," "its Related Documents" or by a similar expression.
"Required Payments" has the meaning specified in Section 8.06(c).
"Remaining Available Funds Shortfall" has the meaning specified in Section
8.07.
"Required Payoff Amount" means, with respect to any Collection Period for
any Lease, the sum of (i) the Scheduled Payment due in such Collection Period,
together with any Scheduled Payments due in prior Collection Periods but not yet
received, plus (ii) the Principal Balance of such Lease (after taking into
account the Scheduled Payment due in such Collection Period, whether or not
received).
"Required Reserve Amount" means the lesser of (a) 2.50% of the Initial Pool
Principal Balance and (b) the Outstanding Principal Amount of the Notes.
"Reserve Account" means the account designated as such in, and established
and mentioned pursuant to, Section 8.07.
"Reserve Account Initial Deposit" means $9,865,499.
"Residual Account" means the account designated as such in, and established
and maintained pursuant to, Section 8.06.
"Residual Event" means the occurrence of one or more of the following:
(a) Vendor Services is no longer the Servicer;
(b) with respect to the March 1999 Collection Period and each
Collection Period thereafter, the Three-Month Servicer Realization
Percentage calculated on any Determination Date is less than 100%;
(c) with respect to the March 1999 Collection Period and each
Collection Period thereafter, the Three-Month Delinquency Percentage is
greater than 6.0%;
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(d) with respect to the February 1999 Collection Period and each
Collection Period thereafter, the Three-Month Loss Percentage is greater
than 4.0%;
(e) on any Payment Date occurring since the Closing Date to and
including the December 1999 Collection Period, the Cumulative Loss
Percentage is greater than 4.0%;
(f) on any Payment Date occurring from the January 2000 Collection
Period to and including the December 2000 Collection Period, the Cumulative
Loss Percentage is greater than 5.0%; or
(g) on any Payment Date occurring after the December 2000 Collection
Period, the Cumulative Loss Percentage is greater than 6.0%;
provided, however, that the Residual Event referred to in
(I) clause (b) may be cured if the Three-Month Servicer Realization
Percentage is greater than or equal to 100% for three consecutive months
thereafter;
(II) clause (c) may be cured if the Three Month Delinquency Percentage
for any Collection Period thereafter is less than or equal to 5.5%;
(III) clause (d) may be cured if the Three Month Loss Percentage for
any Collection Period thereafter is less than or equal to 3.5%; and
(IV) clauses (e), (f) or (g) may be cured if the Cumulative Loss
Percentage for any Collection Period falling within the time frame
specified in such subsection and which follows the occurrence of any
Residual Event thereunder is less than or equal to the percentage specified
in such subsection less 0.5%.
"Residual Realizations" means cash flows realized from the sale or re-
lease of the Equipment following the scheduled expiration dates or voluntary
early termination of the Leases, other than Equipment subject to (i) Liquidated
Leases or (ii) Prepaid Leases for which Vendor Services has delivered a
Substitute Lease in accordance with Section 9.2 of the Contribution and
Servicing Agreement.
"Responsible Officer" means, with respect to the Trustee, any officer of
the Trustee assigned by the Trustee to administer its corporate trust affairs
relating to the Trust Estate.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.
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"Schedule of Leases" means, collectively, the schedules of Leases (which
shall be made available to the parties to the Contribution and Servicing
Agreement on a computer disk or other data storage medium) attached to the
Contribution and Servicing Agreement as (or described in) Exhibit A, as the same
may be revised from time to time in accordance with the Contribution and
Servicing Agreement.
"Scheduled Payment" means, with respect to any Collection Period for any
Lease during the Original Term of such Lease, the scheduled payment or payments
due under such Lease in such Collection Period (other than those portions of
such payments which, under such Lease, are to be (i) applied by the Servicer to
the payment of insurance charges, maintenance, taxes and other similar
obligations, (ii) retained by the Servicer in payment of Administrative Fees, or
(iii) are late payments as to which Servicer Advances were made on a Payment
Date), received on or after the Cut-Off Date and due during the term of the
Leases, without giving effect to end-of-term extensions or renewals thereof.
"Secured Obligations" means all amounts and obligations which the Issuer
may at any time owe to or on behalf of the Trustee for the benefit of the
Noteholders under this Indenture.
"Servicing Account" means the Eligible Account or Accounts established and
maintained pursuant to Section 8.05.
"SPC" means Green Tree Lease Finance II, Inc., a Minnesota corporation.
"State" means any one of the 50 states of the United States of America or
the District of Columbia.
"Stated Maturity Date" means the Class A-1 Stated Maturity Date, the Class
A-2 Stated Maturity Date, the Class A-3 Stated Maturity Date, the Class A- 4
Stated Maturity Date, the Class B Stated Maturity Date and the Class C Stated
Maturity Date, as appropriate.
"Termination Date" means the date on which the Trustee shall have received
payment and performance of all Secured Obligations.
"Three-Month Delinquency Percentage" means, with respect to any Payment
Date, the percentage equivalent of fraction, (a) the numerator of which is the
sum of the Monthly Delinquency Percentage for such Payment Date and the two
immediately preceding Payment Dates and (b) the denominator of which is three.
"Three-Month Loss Percentage" means, with respect to any Payment Date, the
percentage equivalent of a fraction, (a) the numerator of which is the sum of
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the Monthly Loss Percentage for such Payment Date and the two immediately
preceding Payment Dates and (b) the denominator of which is three.
"Three-Month Servicer Realization Percentage" means, with respect to any
Payment Date, the percentage equivalent of a fraction, (a) the numerator of
which is the sum of the Monthly Servicer Realization Percentage for such Payment
Date and the two immediately preceding Payment Dates and (b) the denominator of
which is three.
"Transfer Agreement" means the Transfer Agreement, dated as of December 1,
1998, between Vendor Services and the SPC.
"Trust Accounts" means the Servicing Account, the Collection Account, the
Residual Account and the Reserve Account, and such other accounts as may be
established in the name of the Issuer or the Trustee pursuant to the
Contribution and Servicing Agreement.
"Trust Estate" means the Trust Estate as described in the Granting Clauses
hereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended, as in force on the date hereof, unless otherwise specifically provided.
"Trustee" means U.S. Bank Trust National Association, a national banking
association organized and existing under the laws of the United States of
America, as Trustee under this Indenture, or any successor Trustee under this
Indenture.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
"Vendor Services" means Green Tree Vendor Services Corporation, a Minnesota
corporation.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
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SECTION 1.03. Rules of Construction. Unless otherwise specified:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in
effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the plural
include the singular; and
(vi) references to Sections, Subsections, Schedules and Exhibits shall
refer to such portions of this Indenture.
Unless the context shall clearly indicate otherwise, or may otherwise
require, in this Indenture the terms "herein," "hereunder," "hereby," "hereto,"
"hereof" and any similar terms refer to this Indenture as a whole and not to any
particular article, section or subdivision hereof.
ARTICLE II
The Notes
SECTION 2.01. Form. Each Class of Class A Notes, Class B Notes and Class C
Notes, in each case together with the Trustee's certificate of authentication,
shall be in substantially the forms set forth in Exhibits C-1, C-2 and C-3,
respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
The terms of the Notes set forth in Exhibits C-1, C-2 and C-3 are part of
the terms of this Indenture.
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SECTION 2.02. Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Trustee shall upon receipt of an Issuer Order authenticate and deliver
Class A-1 Notes for original issue in an aggregate principal amount of
$122,726,804, Class A-2 Notes for original issue in an aggregate principal
amount of $51,695,213, Class A-3 Notes for original issue in an aggregate
principal amount of $122,332,184, Class A-4 Notes for original issue in an
aggregate principal amount of $58,403,752, Class B Notes for original issue in
an aggregate principal amount of $25,650,297 and Class C Notes in an aggregate
principal amount of $13,811,698. The aggregate principal amount of Class A-1
Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class B Notes and
Class C Notes outstanding at any time may not exceed such respective amounts
except as provided in Section 2.05.
Each Note shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes in the minimum denomination of $10,000 and in
integral multiples of $1 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Trustee by the manual signature of one of its authorized signatories, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.
SECTION 2.03. Temporary Notes. Pending the preparation of definitive Notes,
the Issuer may execute, and upon receipt of an Issuer Order the Trustee shall
authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the definitive
Notes in lieu of which they are issued and with such variations not inconsistent
with the terms of this Indenture as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause definitive Notes to be
prepared without unreasonable delay. After the preparation of definitive Notes,
the temporary Notes shall be exchangeable for definitive Notes upon surrender of
the temporary Notes at the office or agency of the Issuer to be maintained as
provided in Section 3.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes, the Issuer shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Notes of authorized denominations. Until so exchanged, the
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as definitive Notes.
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SECTION 2.04. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Trustee shall be the initial "Note Registrar" for the purpose of registering
Notes and transfers of Notes as herein provided. The Issuer may revoke the
appointment of, and remove, any Note Registrar if the Issuer determines in its
sole discretion that such Note Registrar failed to perform its obligations under
this Indenture in any material respect. Any Note Registrar shall be permitted to
resign as Note Registrar upon 30 days' notice to the Issuer and, if the Note
Registrar is not the Trustee, to the Trustee; provided, however, that such
resignation shall not be effective and such Note Registrar shall continue to
perform its duties as Note Registrar until the Issuer has appointed a successor
Note Registrar or elected to assume such duties. Upon any resignation of any
Note Registrar, the Issuer shall promptly appoint a successor or, if it elects
not to make such an appointment, assume the duties of Note Registrar.
If a Person other than the Trustee is appointed by the Issuer as Note
Registrar, the Issuer will give the Trustee prompt written notice of the
appointment of such Note Registrar and of the location, and any change in the
location, of the Note Register, and the Trustee shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof, and the
Trustee shall have the right to rely upon a certificate executed on behalf of
the Note Registrar by an Executive Officer thereof as to the names and addresses
of the Holders of the Notes and the principal amounts and number of such Notes.
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, the Issuer
shall execute, and the Trustee shall authenticate and the Noteholder shall
obtain from the Trustee, in the name of the designated transferee or
transferees, one or more new Notes of the same Class in any authorized
denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes in any
authorized denominations, of a like aggregate principal amount, upon surrender
of the Notes to be exchanged at such office or agency. Whenever any Notes are so
surrendered for exchange, the Issuer shall execute, and the Trustee shall
authenticate and the Noteholder shall obtain from the 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 Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in a "signature guarantee program" determined by the Note
Registrar in accordance with the Exchange Act, and such other documents as the
Trustee may require.
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No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer or the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Section 2.03 or 9.06 not involving any
transfer.
The preceding provisions of this Section notwithstanding, the Issuer shall
not be required to make and the Note Registrar need not register transfers or
exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Trustee, or the Trustee receives evidence
to its satisfaction of the destruction, loss or theft of any Note, and (ii)
there is delivered to the Trustee such security or indemnity as may be required
by the Trustee to hold the Issuer and the Trustee harmless, then, in the absence
of notice to the Issuer, the Note Registrar or the Trustee that such Note has
been acquired by a bona fide purchaser, the Issuer shall execute and upon its
request the Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Note, a replacement Note;
provided, however, that if any such destroyed, lost or stolen Note, but not a
mutilated Note, shall have become or within seven days shall be due and payable,
or shall have been called for redemption, instead of issuing a replacement Note,
the Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the Issuer or
the Trustee may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Trustee or the Note Registrar) connected therewith.
Every replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
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The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. Person Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee and any agent of
the Issuer or the Trustee may treat the Person in whose name any Note is
registered (as of the day of determination) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
none of the Issuer, the Trustee nor any agent of the Issuer or the Trustee shall
be affected by notice to the contrary.
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest.
(a) The Notes shall accrue interest as provided in the forms of the Class A
Notes, the Class B Note and the Class C Note set forth in Exhibits C-1, C-2 and
C-3, respectively, and such interest shall be payable on each Payment Date as
specified therein, subject to Section 3.01. Any installment of interest or
principal, if any, payable on any Note which is punctually paid or duly provided
for by the Issuer on the applicable Payment Date shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered on the
Record Date, by check mailed first-class, postage prepaid to such Person's
address as it appears on the Note Register on such Record Date, except that,
unless Definitive Notes have been issued pursuant to Section 2.11, with respect
to Notes registered on the Record Date in the name of the nominee of the
Depository, payment will be made by wire transfer in immediately available funds
to the account designated by such nominee and except for the final installment
of principal payable with respect to such Note on a Payment Date, which shall be
payable as provided below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on each
Payment Date as provided in the forms of the Class A Notes, the Class B Notes
and the Class C Notes set forth in Exhibits C-1, C-2 and C-3, respectively.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable, if not previously paid, on the date on which an Event
of Default shall have occurred and be continuing and the Notes have been
declared immediately due and payable in the manner provided in Section 5.02. All
principal payments on a Class of Notes shall be made pro rata to the Noteholders
of such Class entitled thereto. The Trustee shall notify the Person in whose
name a Note is registered at the close of business on the Record Date preceding
the Payment Date on which the Issuer expects that the final installment of
principal of and interest on such Note will be paid. Such notice shall be mailed
no later than five days prior to such final Payment Date and shall specify that
such final installment will be payable only upon presentation and surrender of
such Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment. Notices in connection with
redemptions of Notes shall be mailed to Noteholders as provided in Section
10.02.
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SECTION 2.08. Cancellation. All Notes surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled by
the Trustee. The Issuer may at any time deliver to the Trustee for cancellation
any Notes previously authenticated and delivered hereunder which the Issuer may
have acquired in any manner whatsoever, and all Notes so delivered shall be
promptly canceled by the Trustee. No Notes shall be authenticated in lieu of or
in exchange for any Notes canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Notes may be held or
disposed of by the 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 returned to it, provided that such Issuer Order
is timely and the Notes have not been previously disposed of by the Trustee.
SECTION 2.09. Book-Entry Notes. The Notes, upon original issuance, will be
issued in the form of a typewritten Note or Notes representing the Book- Entry
Notes, to be delivered to The Depository Trust Company, the initial Depository,
by, or on behalf of, the Issuer. Each such Note shall initially be registered on
the Note Register in the name of Cede & Co., the nominee of the initial
Depository, and no Note Owner will receive a Definitive Note representing such
Note Owner's interest in such Note, except as provided in Section 2.11. Unless
and until Definitive Notes have been issued to Note Owners pursuant to Section
2.11:
(i) the provisions of this Section shall be in full force and effect;
(ii) the Note Registrar and the Trustee shall be entitled to deal with
the Depository for all purposes of this Indenture (including the payment of
principal of and interest on the Notes and the giving of instructions or
directions hereunder) as the sole holder of the Notes, and shall have no
obligation to the Note Owners;
(iii) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section
shall control;
(iv) the rights of Note Owners shall be exercised only through the
Depository and shall be limited to those established by law and agreements
between such Note Owners and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until
Definitive Notes are issued pursuant to Section 2.11, the initial
Depository will make book-entry transfers among the Depository Participants
and receive and transmit payments of principal of and interest on the Notes
to such Depository Participants; and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Outstanding Amount of the Notes, the Depository
shall be deemed to represent such percentage only to the extent that it has
received instructions to such effect from Note Owners and/or Depository
Participants owning or representing, respectively, such required percentage
of the beneficial interest in the Notes and has delivered such instructions
to the Trustee.
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SECTION 2.10. Notices to Depository. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.11, the Trustee shall give all such notices and communications specified
herein to be given to Holders of the Notes to the Depository and shall have no
obligation to the Note Owners.
SECTION 2.11. Definitive Notes. If (i) the SPC advises the Trustee in
writing that the Depository is no longer willing or able properly to discharge
its responsibilities with respect to the Notes, and the SPC is unable to locate
a qualified successor, (ii) the SPC at its option advises the Trustee in writing
that it elects to terminate the book-entry system through the Depository or
(iii) after the occurrence of an Event of Default, a Note Majority advises the
Trustee and the Depository in writing that the continuation of a book-entry
system through the Depository is no longer in the best interests of the Note
Owners, then the Depository shall notify all Note Owners and the Trustee of the
occurrence of any such event and of the availability of Definitive Notes to Note
Owners requesting the same. Upon surrender to the Trustee of the Note or Notes
representing the Book-Entry Notes by the Depository, accompanied by registration
instructions, the Issuer shall execute and the Trustee shall authenticate the
Definitive Notes in accordance with the instructions of the Depository. None of
the Issuer, the Note Registrar or the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Notes, all references herein to obligations imposed upon or to be performed by
the Depository shall be deemed to be imposed upon and performed by the Trustee
or a Paying Agent (if other than the Trustee), to the extent applicable with
respect to such Definitive Notes, and the Trustee shall recognize the Holders of
the Definitive Notes as Noteholders.
SECTION 2.12. Calculations. Interest on the Class A-1 Notes will be
calculated on the basis of actual days elapsed in a year of 360 days. All
calculations of the amount of interest accrued on the Class A-2, Class A-3,
Class A-4, Class B and Class C Notes, and all calculations of the amount of the
Servicing Fee, shall be made on the basis of a 360-day year consisting of twelve
30-day months.
ARTICLE III
Covenants
SECTION 3.01. Payment of Principal and Interest. The Issuer will duly and
punctually pay the principal and interest on the Notes in accordance with the
terms of the Notes and this Indenture. Without limiting the foregoing, the
Issuer will cause to be distributed all amounts on deposit in the Collection
Account on a Payment Date in accordance with Section 8.03. Amounts properly
withheld under the Code by any Person from a payment to any Noteholder of
interest and/or principal shall be considered as having been paid by the Issuer
to such Noteholder for all purposes of this Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will maintain in
the City of St. Paul, Minnesota, an office or agency where Notes may be
surrendered for
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registration of transfer or exchange, and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the Trustee of the
location, and of any change in the location, of any such office or agency. If at
any time the Issuer shall fail to maintain any such office or agency or shall
fail to furnish the Trustee with the address thereof, such surrenders, notices
and demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Trustee as its agent to receive all such surrenders, notices
and demands.
SECTION 3.03. Money for Payments To Be Held in Trust. As provided in
Section 8.03, all payments of amounts due and payable with respect to any Notes
that are to be made from amounts withdrawn from the Collection Account pursuant
to Section 8.03(b) shall be made on behalf of the Issuer by the Trustee or by
another Paying Agent, and no amounts so withdrawn from the Collection Account
for payments of Notes shall be paid over to the Issuer.
On or before the Business Day preceding each Payment Date and Redemption
Date, the Issuer shall deposit or cause to be deposited in the Collection
Account an aggregate sum sufficient to pay the amounts then becoming due, such
sum to be held in trust for the benefit of the Persons entitled thereto and
(unless the Paying Agent is the Trustee) shall promptly notify the Trustee of
its action or failure so to act.
The Issuer will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee (and if the Trustee acts as Paying Agent, it hereby so agrees),
subject to the provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Trustee notice of any default (of which it has actual
knowledge) by the Issuer (or any other obligor upon the Notes) in the
making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Trustee all sums held by it in trust for the payment of Notes if at any
time it ceases to meet the standards required to be met by a Paying Agent
at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed
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thereon and with respect to any applicable reporting requirements in
connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
any Paying Agent to pay to the Trustee all sums held in trust by such Paying
Agent, such sums to be held by the Trustee upon the same trusts as those upon
which the sums were held by such Paying Agent; and upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held
by the Trustee or any Paying Agent in trust for the payment of any amount due
with respect to any Note and remaining unclaimed for two years after such amount
has become due and payable shall be discharged from such trust and upon Issuer
Request shall be deposited by the Trustee in the Collection Account; and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Issuer cause to be published once,
in a newspaper published in the English language, customarily published on each
Business Day and of general circulation in St. Paul, Minnesota, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to or for the account of the
Issuer. The Trustee may also adopt and employ, at the expense of the Issuer, any
other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose Notes have been
called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Trustee or of any Paying Agent, at the last address of record for
each such Holder).
SECTION 3.04. Existence. The Issuer will keep in full effect its existence,
rights and franchises as a limited liability company 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 Leases and each other
instrument or agreement included in the Trust Estate.
SECTION 3.05. Protection of Trust Estate. The Issuer intends the security
interest Granted pursuant to this Indenture in favor of the Trustee to be prior
to all other liens in respect of the Trust Estate, and the Issuer shall take all
actions necessary to obtain and maintain, in favor of the Trustee, for the
benefit of the Noteholders, a first lien on and a first priority, perfected
security interest in the Trust Estate. The Issuer will from time to time execute
and deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, all as prepared
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by the Servicer and delivered to the Issuer, and will take such other action
necessary or advisable to:
(i) grant more effectively all or any portion of the Trust Estate;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) in favor of the Trustee for the benefit of the Trustee
created by this Indenture or carry out more effectively the purposes
hereof;
(iii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iv) enforce any of the Leases and each other instrument or agreement
included in the Trust Estate;
(v) preserve and defend title to the Trust Estate and the rights of
the Trustee in such Trust Estate against the claims of all persons and
parties; or
(vi) pay all taxes or assessments levied or assessed upon the Trust
Estate when due.
The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute any financing statement, continuation statement or other instrument
required by the Trustee pursuant to this Section 3.05.
SECTION 3.06. Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer shall furnish to the Trustee an Opinion
of Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the first priority
lien and security interest in favor of the Trustee, for the benefit of the
Trustee, created by this Indenture and reciting the details of such action, or
stating that, in the opinion of such counsel, no such action is necessary to
make such lien and security interest effective.
(b) On or before April 30 in each calendar year, beginning in 1999, the
Issuer shall furnish to the Trustee an Opinion of Counsel with respect to each
jurisdiction in which the Leases are located or a Uniform Commercial Code
financing statement has been filed by the Servicer either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution and filing of any financing statements and continuation statements as
is necessary to maintain the first priority lien and security interest created
by this Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain such lien and
security interest. Such Opinion of Counsel shall also describe the recording,
filing, re-
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recording and refiling of this Indenture, any indentures supplemental hereto and
any other requisite documents and the execution and filing of any financing
statements and continuation statements that will, in the opinion of such
counsel, be required to maintain the lien and security interest of this
Indenture until April 30 in the following calendar year.
SECTION 3.07. Performance of Obligations; Servicing of Leases.
(a) The Issuer will not take any action and will use its best efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument or
agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Contribution and Servicing Agreement
or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Trustee in an Officer's Certificate of the Issuer shall be
deemed to be action taken by the Issuer. Initially, the Issuer has contracted
with the Servicer to assist the Issuer in performing its duties under this
Indenture.
(c) The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Related Documents and in the
instruments and agreements included in the Trust Estate, including but not
limited to filing or causing to be filed all UCC financing statements and
continuation statements required to be filed by the terms of this Indenture and
the Contribution and Servicing Agreement in accordance with and within the time
periods provided for herein and therein. Except as expressly provided herein,
the Issuer shall not waive, amend, modify, supplement or terminate any of its
Related Documents or any provision thereof without the consent of the Trustee or
a Note Majority.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Termination Event under the Contribution and Servicing Agreement, the Issuer
shall promptly notify the Trustee and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Issuer is taking with respect of
such default. If a Servicer Termination Event shall arise from the failure of
the Servicer to perform any of its duties or obligations under the Contribution
and Servicing Agreement with respect to the Leases, the Issuer shall take all
reasonable steps available to it to remedy such failure.
(e) Upon any termination of the Servicer's rights and powers pursuant to
the Contribution and Servicing Agreement, the Issuer shall promptly notify the
Rating Agencies.
(f) The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the SPC of their respective duties under the
Related Documents if the effect thereof would adversely affect the Holders of
the Notes.
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SECTION 3.08. Negative Covenants. Until the Termination Date, the Issuer
shall not:
(i) except as expressly permitted by this Indenture, sell, transfer,
exchange or otherwise dispose of any of the properties or assets of the
Issuer, including those included in the Trust Estate, unless directed to do
so by the Trustee;
(ii) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code or applicable state law) or
assert any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust Estate;
(iii) dissolve or liquidate in whole or in part;
(iv) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien in favor of the Trustee created by this
Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture except as may be
expressly permitted hereby;
(v) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien in favor of the Trustee
created by this Indenture) to be created on or extend to or otherwise arise
upon or burden the Trust Estate or any part thereof or any interest therein
or the proceeds thereof (other than tax liens, mechanics' liens and other
liens that arise by operation of law, in each case on the Equipment and
arising solely as a result of an action or omission of the related
Obligor);
(vi) permit the lien in favor of the Trustee created by this Indenture
not to constitute a valid first priority (other than with respect to any
such tax, mechanics' or other lien described in clause (v) above) security
interest in the Trust Estate; or
(vii) amend, modify or fail to comply with the provisions of the
Related Documents without the prior written consent of the Trustee.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will deliver to
the Trustee, within 120 days after the end of each fiscal year of the Issuer
(commencing with the fiscal year ended December 31, 1999), an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that
(i) a review of the activities of the Issuer during such year and of
performance under this Indenture has been made under such Authorized
Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a default in the
compliance of any such condition or
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covenant, specifying each such default known to such Authorized Officer and
the nature and status thereof.
SECTION 3.10. Issuer May Consolidate or Merge Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form and substance satisfactory to the Trustee, the due and
punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this Indenture
and each other Related Document on the part of the Issuer to be performed
or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel which shall
be delivered to and shall be satisfactory to the Trustee to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer or any Noteholder;
(v) any action as is necessary to maintain the lien and security
interest created in favor of the Trustee by this Indenture shall have been
taken;
(vi) the Issuer shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel (which shall describe the actions
taken as required by clause (a)(v) of this Section or state that no such
actions will be taken) each stating that such consolidation or merger and
such supplemental indenture comply with this Article III and that all
conditions precedent herein provided for relating to such transaction have
been compiled with (including any filing required by the Exchange Act); and
(vii) the Issuer or the Person (if other than the Issuer) formed by or
surviving such consolidation or merger has a net worth, immediately after
such consolidation or merger, that is (a) greater than zero and (b) not
less than the net worth of the Issuer immediately prior to giving effect to
such consolidation or merger.
(b) The Issuer shall not convey or transfer all or substantially all of its
properties or assets, including those included in the Trust Estate, to any
Person (except as expressly permitted by the Indenture or the Contribution and
Servicing Agreement), unless
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(i) the Person that acquires by conveyance or transfer the properties
and assets of the Issuer shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any State, (B) expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form and substance satisfactory
to the Trustee, the due and punctual payment of the principal of and
interest on all Notes and the performance or observance of every agreement
and covenant of this Indenture and each Related Document on the part of the
Issuer to be performed or observed, all as provided herein, (C) expressly
agree by means of such supplemental indenture that all right, title and
interest so conveyed or transferred shall be subject and subordinate to the
rights of Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agree to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense arising
under or related to this Indenture and the Notes and (E) expressly agree by
means of such supplemental indenture that such Person (or if a group of
Persons, then one specified Person) shall make all filings with the
Commission (and any other appropriate Person) required by the Exchange Act
in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel which shall
be delivered to and shall be satisfactory to the Trustee to the effect that
such transaction will not have any material adverse tax consequence to the
Trust or any Noteholder;
(v) any action as is necessary to maintain the lien and security
interest created in favor of the Trustee by this Indenture shall have been
taken;
(vi) the Issuer shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel (which shall describe the actions
taken as required by clause (b)(v) of this Section or that no such actions
will be taken) each stating that such conveyance or transfer and such
supplemental indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act); and
(vii) the Person acquiring by conveyance or transfer the properties or
assets of the Issuer has a net worth, immediately after such conveyance or
transfer, that is (a) greater than zero and (b) not less than the net worth
of the Issuer immediately prior to giving effect to such conveyance or
transfer.
SECTION 3.11. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer)
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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), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Trustee stating that the Issuer is to be so released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Leases and the related Equipment in the manner contemplated by this Indenture
and the Related Documents and activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes and (ii) any other Indebtedness permitted
by or arising under the Related Documents. The proceeds of the Notes shall be
used exclusively to fund the Depositor's purchase of the Leases and the other
assets specified in the Contribution and Servicing Agreement and to pay the
Issuer's organizational, transactional and start-up expenses.
SECTION 3.14. Servicer's Obligations. The Issuer shall monitor the
performance of the Servicer under the Contribution and Servicing Agreement, and
shall use its reasonable good faith efforts to cause the Servicer duly and
punctually to perform all of its duties and obligations thereunder.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by the Contribution and Servicing Agreement or this Indenture, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuming another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, any other interest in, or make any capital
contribution to, any other Person.
SECTION 3.16. Income Tax Characterization. The SPC has structured this
Indenture and the Notes with the intention that the Notes will qualify under
applicable federal, state, local and foreign tax law as indebtedness of the SPC
secured by the Leases. The SPC, the Servicer, each Noteholder and each Note
Owner agree to treat and to take no action inconsistent with the treatment of
the Notes as such indebtedness for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income.
Each Noteholder and each Note Owner, by acceptance of its Note or beneficial
interest therein, agrees to be bound by the provisions of this Section. Each
Noteholder agrees that it will cause any Note Owner acquiring an interest in a
Note through it to comply with this Indenture as to treatment as indebtedness
under applicable tax law, as described in this Section.
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SECTION 3.17. Restricted Payments. Except as expressly permitted by this
Indenture or the Contribution and Servicing Agreement, the Issuer shall not,
directly or indirectly, (i) make any distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, to
any owner of a membership interest in the Issuer or otherwise with respect to
any ownership or equity interest or security in or of the Issuer or to the
Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such
ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose. The Issuer will not, directly or
indirectly, make payments to or distributions from any of the Trust Accounts
except in accordance with this Indenture and the Related Documents.
SECTION 3.18. Notice of Events of Default. The Issuer agrees to give the
Trustee and the Rating Agencies prompt written notice of each Event of Default
hereunder and each default on the part of the Servicer or the SPC of its
obligations under the Contribution and Servicing Agreement.
SECTION 3.19. Further Instruments and Acts. Upon request of the Trustee,
the Issuer will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purpose of this Indenture.
SECTION 3.20. Compliance with Laws. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Related Document.
SECTION 3.21. Amendments of Contribution and Servicing Agreement. The
Issuer shall not agree to any amendment to Section 9.1 of the Contribution and
Servicing Agreement to eliminate the requirements thereunder that the Trustee or
the Holders of the Notes consent to amendments thereto as provided therein.
SECTION 3.22. Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer or the Trustee on the
Notes or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of the
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer or the Trustee or of any successor or assign of the Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Trustee has no such obligations in its 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.
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ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture shall
cease to be of further effect with respect to the Notes except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal and interest thereon, (iv) Sections 3.03, 3.04, 3.05, 3.07, 3.08,
3.10, 3.12, 3.13, 3.16, 3.20 and 3.21, (v) the rights, obligations and
immunities of the Trustee hereunder (including the rights of the Trustee under
Section 6.07 and the obligations of the Trustee under Section 4.02) and (vi) the
rights of Noteholders as beneficiaries hereof with respect to the property so
deposited with the Trustee payable to all or any of them, and the Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.05 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated
and held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have been
delivered to the Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
Date within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as part of the Trust Estate cash or direct obligations of or
obligations guaranteed by the United States of America (which will
mature prior to the date such amounts are payable), in trust in an
Eligible Account in the name of the Trustee for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such
Notes not theretofore delivered to the Trustee for cancellation when
due to their Stated Maturity Date or Redemption Date (if Notes shall
have been called for redemption pursuant to Section 10.01(a)), as the
case may be;
(B) the Issuer has paid or caused to be paid all Secured Obligations;
and
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(C) the Issuer has delivered to the Trustee an Officer's Certificate,
an Opinion of Counsel and (if required by the TIA or the Trustee) an
Independent Certificate from a firm of certified public accountants, each
meeting the applicable requirements of Section 11.01(a) and each stating
that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with and
the Rating Agency Condition has been satisfied.
SECTION 4.02. Application of Trust Money. All moneys deposited with the
Trustee pursuant to Section 4.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent, as the Trustee may determine, to
the Holders of the particular Notes for the payment or redemption of which such
moneys have been deposited with the Trustee, of all sums due and to become due
thereon for principal and interest; but such moneys need not be segregated from
other funds except to the extent required herein or in the Contribution and
Servicing Agreement or required by law.
SECTION 4.03. Repayment of Moneys Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
moneys then held by any Paying Agent other than the Trustee under the provisions
of this Indenture with respect to such Notes shall, upon demand of the Issuer,
be paid to the Trustee to be held and applied according to Section 3.03 and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.
SECTION 4.04. Release of Trust Estate. The Trustee shall, on or after the
Termination Date, release any remaining portion of the Trust Estate from the
lien created by this Indenture and deposit in the Collection Account any funds
then on deposit in any other Trust Account. The Trustee shall release property
from the lien created by this Indenture pursuant to this Section only upon
receipt of an Issuer Request accompanied by an Officer's Certificate, an Opinion
of Counsel and (if required by the TIA) Independent Certificates in accordance
with TIA (S)(S) 314(c) and 314(d)(1) meeting the applicable requirements of
Section 11.01.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest on any Note when the same
becomes due and payable, and such default shall continue for a period of
five days; or
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(ii) default in the payment of the principal of any Note on the
Redemption Date or Stated Maturity Date applicable thereto; or
(iii) default in the observance or performance in any material respect
of any covenant or agreement of the Issuer made in this Indenture (other
than a covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture or in any
certificate or other writing delivered pursuant hereto or in connection
herewith proving to have been incorrect in any material respect as of the
time when the same shall have been made, and such default shall continue or
not be cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been eliminated
or otherwise cured, for a period of 30 days after there shall have been
given, by registered or certified mail, to the Issuer by the Trustee or to
the Issuer and the Trustee by the Holders of at least 25% of the
Outstanding Amount of the Notes, a written notice specifying such default
or incorrect representation or warranty and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(iv) the commencement of an involuntary case against the Issuer or the
SPC under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, and such case is not dismissed
within 60 days; or
(v) (A) the commencement by the Issuer or the SPC of a voluntary case
under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, (B) the entry of an order for
relief in an involuntary case against the Issuer or the SPC under any such
law, (C) the consent by the Issuer or the SPC to the entry of any such
order for relief, (D) the consent by the Issuer or the SPC to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or the
SPC or for any substantial part of the Trust Estate, (E) the making by the
Issuer or the SPC of any general assignment for the benefit of creditors,
(F) the failure by the Issuer or the SPC generally to pay its debts as such
debts become due, (G) the liquidation of the Issuer or the SPC, or (H) the
taking of action by the Issuer or the SPC, as applicable, in furtherance of
any of the foregoing.
The Issuer shall deliver to the Trustee, within five days after obtaining
knowledge of the occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (iii) or (iv), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.02. Rights upon Event of Default.
If an Event of Default shall have occurred and be continuing, a Note
Majority or the Trustee may, upon prior written notice to the Rating Agencies,
declare by written notice to the Issuer that the Notes become, whereupon they
shall become, immediately due and payable at par, together with accrued interest
thereon. Notwithstanding anything to the contrary in this
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Section, if an Event of Default specified in Section 5.01(iv) or (v) shall occur
and be continuing, the Notes shall become immediately due and payable at par,
together with accrued interest thereon. If an Event of Default shall have
occurred and be continuing, the Trustee may exercise any of the remedies
specified in Sections 5.03 and 5.04.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee; Authority of Trustee.
(a) The Issuer covenants that if any Notes are accelerated following the
occurrence of an Event of Default, the Issuer will, upon demand of the Trustee,
pay to it, for the benefit of the Holders of such Notes, the whole amount then
due and payable on such Notes for principal and interest, with interest upon the
overdue principal, and, to the extent payment at such rate of interest shall be
legally enforceable, upon overdue installments of interest, at the applicable
Interest Rate and in addition thereto such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee and its agents
and counsel.
(b) If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Noteholders, by such appropriate Proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Trustee by this Indenture or by law.
(c) In case there shall be pending, relative to the Issuer, the SPC or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, Proceedings under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer, the SPC or such other obligor
or Person, or its property, or in case of any other comparable judicial
Proceedings relative to the Issuer, the SPC or other obligor upon the Notes, or
to the creditors or property of the Issuer, the SPC or such other obligor, the
Trustee, irrespective of whether the principal of any Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee, except as a result of negligence or bad
faith) and of the Noteholders allowed in such Proceedings;
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(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Trustee on their
behalf; and
(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee or the
Holders of Notes allowed in any judicial proceedings relative to the
Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Trustee such
amounts as shall be sufficient to cover reasonable compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence or bad
faith.
(d) Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar Person.
(e) All rights of action and of asserting claims under this Indenture or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes or the production thereof in any trial or other Proceedings
relative thereto, and any such action or Proceedings instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment, subject to the payment of the expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Notes.
(f) In any Proceedings brought by the Trustee (including any Proceedings
involving the interpretation of any provision of this Indenture), the Trustee
shall be held to represent all the Holders of the Notes, and it shall not be
necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.04. Remedies. If an Event of Default shall have occurred and be
continuing, the Trustee may (subject to Section 5.05) and, in the case of an
Event of Default described in Section 5.01(iv) or (v), shall, as to the actions
described in the following clauses (i), (ii) and (iii):
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(i) institute Proceedings in its own name and as or on behalf of a
trustee of an express trust for the collection of all amounts then payable
on the Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect from
the Issuer and any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and any
other remedy available to the Trustee and take any other appropriate action
to protect and enforce the rights and remedies of the Trustee on behalf of
the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law; provided, however, that the
Trustee may not sell or otherwise liquidate the Trust Estate following an
Event of Default unless
(A) the Holders of 100% of the Outstanding Amount of the Notes
consent thereto,
(B) the proceeds of such sale or liquidation distributable to the
Noteholders will be sufficient to discharge in full all amounts then
due and unpaid upon such Notes for principal and interest, or
(C) the Trustee determines that the Trust Estate will not
continue to provide sufficient funds for the payment of principal of
and interest on the Notes as they would have become due if the Notes
had not been declared due and payable, and the Trustee provides prior
written notice to the Rating Agencies and obtains the consent of
Holders of 66-2/3% of the Outstanding Amount of the Notes.
In determining such sufficiency or insufficiency with respect to clause (B) or
(C), the Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
SECTION 5.05. Optional Preservation of the Leases. If any Notes have been
declared to be due and payable under Section 5.02 following an Event of Default
and such declaration and its consequences have not been rescinded and annulled,
the Trustee may, but need not, elect to maintain possession of the Trust Estate.
It is the desire of the parties hereto and the Noteholders that there be at all
times sufficient funds for the payment of principal of and interest on the
Notes, and the Trustee shall take such desire into account when determining
whether or not to maintain possession of the Trust Estate. In determining
whether to maintain possession of the Trust Estate, the Trustee may, but need
not, obtain and rely upon an opinion of
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an Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
SECTION 5.06. Priorities.
If the Trustee collects any money or property pursuant to this Article V,
including any money or property in respect of liquidation of the Trust Estate
pursuant to Section 5.04(a)(iv), the Trustee shall pay as promptly as
practicable out the money or property in the following order:
FIRST: amounts due and owing and required to be distributed to the
Servicer pursuant to priority (i) of Section 8.03 and not previously
distributed;
SECOND: amounts due and owing to the Trustee pursuant to Section 6.07;
THIRD: to Class A Noteholders for amounts unpaid on the Class A Notes
for interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Class A Notes for interest;
FOURTH: to Class B Noteholders for amounts due and unpaid on the Class
B Notes for interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Class B Notes for interest;
FIFTH: to Class C Noteholders for amounts due and unpaid on the Class
C Notes for interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Class C Notes for interest;
SIXTH: to Class A Noteholders for amounts 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;
SEVENTH: to Class B Noteholders for amounts 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;
EIGHTH: to Class C Noteholders for amounts unpaid on the Class C Notes
for principal, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Class C Notes for
principal;
NINTH: amounts due and owing and required to be distributed to the
Servicer pursuant to priority (vi) of Section 8.03 and not distributed; and
TENTH: the remainder, if any, to the Issuer.
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SECTION 5.07. Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount of the
Notes have made written request to the Trustee to institute such Proceeding
in respect of such Event of Default in its own name as Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
complying with such request;
(iv) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute such Proceedings; and
(v) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority of
the Outstanding Amount of the Notes;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Trustee shall receive conflicting or inconsistent requests
and indemnity from two or more groups of Holders of Notes, each representing
less than a majority of the Outstanding Amount of the Notes, the Trustee may
conclusively rely on and act upon the request of the group representing the
largest Outstanding Amount of the Notes.
SECTION 5.08. Unconditional Rights of Noteholders To Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest on such Note on or after the respective
due dates thereof expressed in such Note or in this Indenture (or, in the case
of redemption, on or after the Redemption Date) and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any
Noteholder has instituted any Proceeding to enforce any right or remedy under
this Indenture and such Proceeding has been discontinued or abandoned for any
reason or has been determined adversely to the Trustee or to such Noteholder,
then and in every such case the Issuer, the Trustee and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally
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and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Trustee or to the Noteholders is intended to
be exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 5.11. Delay or Omission Not a Waiver. No delay or omission of the
Trustee or any Holder of any Note to exercise any right or remedy accruing upon
any Default or Event of Default shall impair any such right or remedy or
constitute a waiver of any such Default or Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law to the Trustee
or to the Noteholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Noteholders, as the case may be.
SECTION 5.12. Control by Noteholders. The Holders of a majority of the
Outstanding Amount of the Notes shall have the right to direct the time, method
and place of conducting any Proceeding for any remedy available to the Trustee
with respect to the Notes or exercising any trust or power conferred on the
Trustee; provided that
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to
the Trustee to sell or liquidate all or any portion of the Trust Estate
shall be by the Holders of Notes representing not less than 100% of the
Outstanding Amount of the Notes; and
(iii) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction; provided, however,
that, subject to Section 6.01, the Trustee need not take any action that it
determines might involve it in liability or might materially adversely
affect the rights of any Noteholders not consenting to such action.
SECTION 5.13. Waiver of Past Defaults.
The Holders of Notes of not less than a majority of the Outstanding Amount
of the Notes may waive any past Default or Event of Default and its consequences
except a Default (a) in payment of principal of or interest on any of the Notes
or (b) in respect of a covenant or provision hereof which cannot be modified or
amended without the consent of the Holder of each Note. In the case of any such
waiver, the Issuer, the Trustee and the Holders of the Notes shall be restored
to their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereto.
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Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.14. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by such Holder's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to (a)
any suit instituted by the Trustee, (b) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10% of
the Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
SECTION 5.15. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantages of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 5.16. Action on Notes. The Trustee's right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Trustee or the Noteholders shall be impaired by the recovery of any judgment
by the Trustee against the Issuer or by the levy of any execution under such
judgment upon any portion of the Trust Estate or upon any of the assets of the
Issuer.
SECTION 5.17. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Trustee to do so and at the
Depositor's expense, the Issuer agrees to take all such lawful action as the
Trustee may request to compel or secure the performance and observance by the
SPC or the Servicer, as applicable, of each of their obligations to the Issuer
under or in connection with the Contribution and Servicing Agreement in
accordance with the terms thereof, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with the Contribution and Servicing Agreement to the extent and in the manner
directed by the Trustee, including the transmission of notices of default on the
part of the SPC or the Servicer thereunder
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and the institution of legal or administrative actions or proceedings to compel
or secure performance by the SPC or the Servicer of each of their obligations
under the Contribution and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the Trustee may,
and at the direction (which direction shall be in writing, including facsimile)
of the Holders of at least 66-2/3% of the Outstanding Amount of the Notes shall,
exercise all rights, remedies, powers, privileges and claims of the Issuer
against the SPC or the Servicer under or in connection with the Contribution and
Servicing Agreement, including the right or power to take any action to compel
or secure performance or observance by the SPC 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 Contribution and Servicing
Agreement, and any right of the Issuer to take such action shall be suspended.
ARTICLE VI
The Trustee
SECTION 6.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture with the
same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; however,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture and, if
applicable, the Trustee's other Related Documents.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
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(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.12.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received by
it.
(f) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law or the terms of this Indenture or the
Contribution and Servicing Agreement.
(g) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayments of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(h) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.
(i) In no event shall the Trustee be required to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer, or any
other party, under the Contribution and Servicing Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, powers, duties and privileges of the Servicer, in accordance with the
terms of the Contribution and Servicing Agreement.
(j) The Trustee shall, and hereby agrees that it will, perform all of the
obligations and duties required of it under the Contribution and Servicing
Agreement.
(k) Without limiting the generality of this Section, the Trustee shall have
no duty (i) to see to any recording, filing or depositing of this Indenture or
any agreement referred to herein or any financing statement evidencing a
security interest in the Equipment, or to see to the maintenance of any such
recording or filing or depositing or to any recording, refiling or redepositing
of any thereof, (ii) to see to any insurance of the Equipment or Obligors or to
effect or maintain any such insurance, (iii) except as specifically provided in
the Contribution and Servicing Agreement, to see to the payment or discharge of
any tax, assessment or other governmental charge or any Lien or encumbrance of
any kind owing with respect to, assessed or levied against any part of the Trust
Estate, (iv) to confirm or verify the contents (other than compliance as to
form) of any reports or certificates delivered to the Trustee pursuant to this
Indenture or the Contribution and Servicing Agreement believed by the Trustee to
be genuine
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and to have been signed or presented by the proper party or parties, or (v) to
inspect the Equipment at any time or ascertain or inquire as to the performance
of observance of any of the Issuer's, the Depositor's or the Servicer's
representations, warranties or covenants or the Servicer's duties and
obligations as Servicer under the Contribution and Servicing Agreement.
(l) Except for actions expressly authorized by this Indenture or the
Contribution and Servicing Agreement or taken by the Trustee pursuant to Section
6.01(a), the Trustee shall take no action reasonably likely to impair (i) the
interests of the Trust Estate in any contract or agreement now existing or
hereafter created or (ii) the value of any contract or agreement now existing or
hereafter created.
(m) The Trustee shall have no power to vary the corpus of the Trust Estate,
except as expressly provided in this Indenture.
(n) In the event that the Note Registrar or the Paying Agent (if other than
the Trustee) shall fail to perform any obligation, duty or agreement in the
manner or on the day required to be performed by the Note Registrar or the
Paying Agent, as the case may be, under this Indenture, the Trustee shall be
obligated, as soon as possible upon knowledge of a Responsible Officer thereof
and receipt of appropriate records, if any, to perform such obligation, duty or
agreement in the manner so required.
(o) The Trustee shall not be required to take notice or be deemed to have
notice or knowledge of any Event of Default (other than an Event of Default
pursuant to Section 5.01(i) or (ii)) unless a Responsible Officer of the Trustee
shall have received written notice thereof or otherwise has actual knowledge
thereof. In the absence of receipt of such notice or knowledge, the Trustee may
conclusively assume that there is no Event of Default.
SECTION 6.02. Rights of Trustee.
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need
not (except under the circumstances described in paragraph (g) below)
investigate any fact or matter stated in the document;
(b) before the Trustee acts or refrains from acting, it may require an
Officer's Certificate (with respect to factual matters) or an Opinion of
Counsel, as applicable. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on the Officer's
Certificate or Opinion of Counsel, as applicable, or as directed by the
requisite amount of Note Owners as provided herein;
(c) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Trustee shall not be
responsible for any misconduct or negligence on
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the part of, or for the supervision of, any such agent, attorney, custodian
or nominee appointed with due care by it hereunder;
(d) the Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute willful misconduct, negligence or bad faith;
(e) the 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 suffered by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel;
(f) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders of Notes, pursuant to the provisions of
this Indenture, unless such Holders of Notes shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby; provided, however,
that the Trustee shall, upon the occurrence of an Event of Default (that
has not been cured), exercise the rights and powers vested in it by this
Indenture with the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs;
(g) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so by
the Holders of Notes evidencing not less than 25% of the Outstanding Amount
thereof; provided, however, that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture or the Contribution and Servicing Agreement, the
Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to so proceeding; the reasonable expense of every
such examination shall be paid by the Person making such request, or, if
paid by the Trustee, shall be immediately reimbursed by the Person making
such request upon demand; and
(h) The right of the Trustee to perform any discretionary act
enumerated in this Indenture shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.
SECTION 6.03. Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the Issuer or its Affiliates with the same rights it would have if it
were not Trustee. Any Paying Agent, Note Registrar, co- registrar or co-paying
agent may do the same with like rights. However, the Trustee is required to
comply with Sections 6.11 and 6.12.
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SECTION 6.04. Trustee's Disclaimer. The Trustee shall not be responsible
for and, except as provided in Section 6.13, makes no representation as to the
validity or adequacy of this Indenture, the Trust Estate or the Notes, it shall
not be accountable for the Issuer's use of the proceeds from the Notes, and it
shall not be responsible for any statement of the Issuer in the Indenture or in
any document issued in connection with the sale of the Notes or in the Notes
other than the Trustee's certificate of authentication.
SECTION 6.05. Notice of Defaults. If a Default occurs and is continuing and
if it is known to a Responsible Officer of the Trustee, the Trustee shall mail
to each Noteholder notice of the Default within 90 days after it occurs. Except
in the case of a Default in payment of principal of or interest on any Note
(including payments pursuant to the mandatory redemption provisions of such
Note), the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of Noteholders.
SECTION 6.06. Reports by Trustee to Holders. The Trustee shall provide or
cause to be provided to each Noteholder all such tax information as may be
required by law to be distributed to enable such holder to prepare its federal
and state income tax returns.
SECTION 6.07. Compensation and Indemnity.
(a) The Servicer, pursuant to the Contribution and Servicing Agreement, has
covenanted and agreed to pay to the Trustee, and the Trustee shall be entitled
to, certain annual fees and to reimburse the Trustee for all ordinary and
reasonable out-of-pocket expenses incurred or made by it in connection with the
performance of its duties hereunder (excluding those incurred or made in the
performance of its duties under Article V, as referred to in paragraph (b)
below). Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts.
(b) The Trustee shall also be entitled to reimbursement, from moneys
available therefor in accordance with Section 5.06, for all reasonable out-of-
pocket expenses (including the reasonable fees of any attorneys, investment
bankers and public accountants) incurred or made by it in connection with the
performance of its duties under Article V. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 5.01(iv) or (v) with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or similar law. Notwithstanding anything
else set forth in this Indenture or the Related Documents, the Trustee agrees
that the obligations of the Issuer to the Trustee hereunder and under the
Related Documents shall be recourse to the Trust Estate only. In addition, the
Trustee agrees that its recourse to the Issuer or the Trust Estate shall be
limited to the right to receive the reimbursement referred to in the first
sentence of this paragraph.
(c) The Trustee and any director, officer, employee or agent of the Trustee
shall be indemnified by the Issuer and held harmless against any loss, liability
or reasonable expense incurred in connection with this Indenture or the Notes,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance by
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the Trustee of its duties hereunder or any loss, liability or expense incurred
by the Trustee in connection with the performance of its duties pursuant to
Section 6.01, including, without limitation, any such loss, liability or expense
incurred in connection with any legal action or resulting from any error in any
tax or information return prepared by any Person other than the Trustee.
SECTION 6.08. Replacement of Trustee. The Trustee may resign at any time by
so notifying the Issuer in writing. The Issuer may remove the Trustee if:
(i) the Trustee fails to comply with Section 6.11;
(ii) a court having jurisdiction in the premises in respect of the
Trustee in an involuntary case or proceeding under federal or state banking
or bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law,
shall have entered a decree or order granting relief or appointing a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or similar official) for the Trustee or for any substantial
part of the Trustee's property, or ordering the winding-up or liquidation
of the Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws, as now or
hereafter in effect, or another present or future federal or state
bankruptcy, insolvency or similar law is commenced with respect to the
Trustee and such case is not dismissed within 60 days;
(iv) the Trustee commences a voluntary case under any federal or state
banking or bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or
consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, conservator, sequestrator (or
other similar official) for the Trustee or for any substantial part of the
Trustee's property, or makes any assignment for the benefit of creditors or
fails generally to pay its debts as such debts become due or takes any
corporate action in furtherance of any of the foregoing;
(v) the Trustee otherwise becomes incapable of acting; or
(vi) the rating assigned to the long-term unsecured debt obligations
of the Trustee (or the holding company thereof) by the Rating Agencies
shall be lowered below an investment grade rating or be withdrawn by any
Rating Agency.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Issuer shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee, to the Issuer and to each Rating Agency. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights,
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powers and duties of the Trustee under this Indenture. The successor Trustee
shall mail a notice of its succession to Noteholders. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Holders of a majority in Outstanding Amount of the Notes may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.11, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor Trustee pursuant to
this Section and payment of all fees and expenses owed to the retiring Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section, the
retiring Trustee shall be entitled to payment or reimbursement of such amounts
as such Person is entitled pursuant to Section 6.07.
SECTION 6.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee; provided that no such merger,
conversion or consolidation shall relieve the Trustee of its obligation to
comply with Section 6.11. The Trustee shall provide the Rating Agencies prompt
notice of any such transaction.
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any time,
for the purpose of meeting any legal requirement of any jurisdiction in which
any part of the Trust may at the time be located, the Trustee shall have the
power and may execute and deliver all instruments to appoint one or more Persons
to act as a co-trustee or co-trustees, or separate trustee or separate trustees,
of all or any part of the Trust, and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders, such title to the Trust, or any
part hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and
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trusts as the Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor Trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08.
(b) Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the 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 Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Trustee shall at all times
satisfy the requirements of TIA (S) 310(a). The Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA (S)
310(b), including the optional provision permitted by the
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second sentence of TIA (S) 310(b)(9); provided, however, that there shall be
excluded from the operation of TIA (S) 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 (S) 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The Trustee
shall comply with TIA (S) 311(a), excluding any creditor relationship listed in
TIA (S) 311(b). A Trustee who has resigned or been removed shall be subject to
TIA (S) 311(a) to the extent indicated.
SECTION 6.13. Representations and Warranties of the Trustee. The Trustee
represents and warrants as of the Closing Date that:
(i) the Trustee is a national banking association organized, existing
and in good standing under the laws of the United States of America;
(ii) the Trustee has full power, authority and right to execute,
deliver and perform this Indenture and each of the Trustee's Related
Documents, and has taken all necessary action to authorize the execution,
delivery and performance by it of this Indenture and each such Related
Document; and
(iii) each of this Indenture and the Trustee's Related Documents has
been duly executed and delivered by the Trustee and represents a legal,
valid and binding obligation of the Trustee enforceable against the Trustee
in accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity).
SECTION 6.14. Servicer's Obligations. The Trustee shall, subject to Section
6.01, use its reasonable good faith efforts to cause the Servicer duly and
punctually to perform all of its duties and obligations under the Contribution
and Servicing Agreement.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Note Registrar To Furnish Trustee Names and Addresses
to Noteholders. The Note Registrar will furnish or cause to be furnished to the
Trustee (a) not more than five days after the earlier of (i) each Record Date
and (ii) three months after the last Record Date, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Notes as of such Record Date, (b) at such other times as the Trustee may request
in writing, within 30 days after receipt by the Note Registrar of any such
request, a list of similar form and content as of a date not more than 10 days
prior to the time such list is furnished; provided, however, that so long as the
Trustee is the Note Registrar, no such list shall be required to be furnished.
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SECTION 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Trustee as provided in Section 7.01 and the
names and addresses of Holders of Notes received by the Trustee in its capacity
as Note Registrar. The Trustee may destroy any list furnished to it as provided
in such Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA (S) 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Trustee and the Note Registrar shall have the
protection of TIA (S) 312(c).
SECTION 7.03. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Trustee, within 15 days after the Issuer is required
to file the same with the Commission, copies of the annual reports and of
the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Issuer may be required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Trustee and the Commission in accordance with rules
and regulations prescribed from time to time by the Commission such
additional information, documents and reports with respect to compliance by
the Issuer with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(iii) supply to the Trustee a sufficient number of copies (and the
Trustee shall transmit by mail to all Noteholders described in TIA (S)
313(c)) of such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of this
paragraph as may be required by rules and regulations prescribed from time
to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year. In the event the Issuer changes
its fiscal year, it shall promptly notify the Trustee.
SECTION 7.04. Reports by Trustee. If required by TIA (S) 313(a),
within 60 days after each March 31 beginning with March 31, 1999, the Trustee
shall mail to each Noteholder as required by TIA (S) 313(c) a brief report dated
as of such date that complies with TIA (S) 313(a). The Trustee also shall comply
with TIA (S) 313(b).
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A copy of each report at the time of its mailing to Noteholders shall
be filed by the Trustee with the Commission and each stock exchange, if any, on
which the Notes are listed. The Issuer shall notify the Trustee if and when the
Notes are listed on any other stock exchange.
SECTION 7.05. Statements to Noteholders.
(a) On each Payment Date, the Trustee shall include with each
distribution to each Noteholder, a statement (which statement shall also be
provided to each Rating Agency), based solely on information in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section 3.9
of the Contribution and Servicing Agreement, in substantially the form attached
hereto as Exhibit B.
(b) Note Owners may obtain copies of the statements delivered by the
Trustee pursuant to subsection (a) above upon written request to the Trustee at
its Corporate Trust Office (together with a certification that such Person is a
Note Owner and payment of any expenses associated with the distribution
thereof).
ARTICLE VIII
Trust Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Trustee pursuant to this Indenture. The Trustee shall apply
all such money received by it as provided in this Indenture. Except as
otherwise expressly provided in this Indenture, if any default occurs in the
making of any payment or performance under any agreement or instrument that is
part of this Indenture or the Notes, the Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.02. Collection Account. On or prior to the Closing Date,
the Trustee shall establish the Collection Account in the name of the Trustee
for the benefit of the Noteholders. The Collection Account shall be an Eligible
Account and initially shall be a segregated trust account established with the
Trustee and maintained with the Trustee, into which the Servicer shall deposit
or cause to be deposited all amounts described in Sections 4.1 and 5.1 of the
Contribution and Servicing Agreement.
SECTION 8.03. Distributions. No later than 3:00 p.m., St. Paul,
Minnesota time, on each Payment Date, the Trustee shall (based solely on the
information contained in the Servicer's Certificate delivered on the related
Determination Date, upon which the Trustee may conclusively rely) distribute the
following amounts and in the order of priority specified below. Within each
order of priority, amounts shall be deemed withdrawn first from Available
Pledged
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Revenues plus any Servicer Advances, second (but only as to amounts
described in clauses (i) through (v) below) from amounts on deposit in the
Residual Account and third, from amounts on deposit in the Reserve Account (but
only as to amounts described in clauses (i) through (iv) below:
(i) first, from the Available Pledged Revenues then on deposit in the
Collection Account, to the Servicer (if Vendor Services or an Affiliate is
no longer the Servicer), the Servicing Fee for the related Collection
Period, and any amounts specified in Section 4.2(c) of the Contribution and
Servicing Agreement, to the extent the Servicer has not reimbursed itself
in respect of such amounts pursuant to Section 4.4 of the Contribution and
Servicing Agreement;
(ii) second, from the Amount Available then remaining on deposit in
the Collection Account, to reimburse the Servicer for unreimbursed
Nonrecoverable Servicer Advances made with respect to a prior Payment Date;
(iii) third, from the Amount Available then remaining on deposit in
the Collection Account, interest on the Notes in the following order of
priority:
(A) to the Class A-1 Noteholders, the Class A-1 Interest
Distributable Amount, to the Class A-2 Noteholders, the Class A-2
Interest Distributable Amount, to the Class A-3 Noteholders, the Class
A-3 Interest Distributable Amount and to the Class A-4 Noteholders,
the Class A-4 Interest Distributable Amount or, if the remaining
amount on deposit in the Collection Account is less than the sum of
the amounts specified in this clause (A), such remaining amount pro
rata to each of such Classes based their respective entitlements to
interest pursuant to this clause (A);
(B) to the Class B Noteholders, the Class B Interest
Distributable Amount; and
(C) to the Class C Noteholders, the Class C Interest
Distributable Amount;
(iv) fourth, from the Amount Available then remaining on deposit in
the Collection Account, principal on the Notes in the following order of
priority:
(A) (i) to the Class A-1 Noteholders only, until the Outstanding
Principal Amount on the Class A-1 Notes has been reduced to zero, the
Class A Principal Payment, then (ii) to the Class A-2 Noteholders, the
Class A-3 Noteholders and the Class A-4 Noteholders, sequentially, the
Class A Principal Payment, in that order, until the Outstanding
Principal Amount of each such Class has been reduced to zero;
(B) to the Class B Noteholders, the Class B Principal Payment;
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(C) to the Class C Noteholders, the Class C Principal Payment;
(D) to the extent that the Class B Floor exceeds the Class B
Target Investor Principal Amount and the Class C Floor exceeds the
Class C Target Investor Principal Amount, Additional Principal shall
be distributed, sequentially, as an additional principal payment, to
the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the
Class B Notes and the Class C Notes, the Additional Principal, until
the Outstanding Principal Amount of each Class has been reduced to
zero; and
(E) to the extent the Class C Floor exceeds the Class C Target
Investor Principal Amount, but the Class B Floor does not exceed the
Class B Target Investor Principal Amount, Additional Principal shall
be distributed as an additional principal payment on the Class A and
Class B Notes, pro rata (and among the Class A Notes, sequentially on
the Class A-2, Class A-3 and Class A-4 Notes, in that order), until
the Outstanding Principal Amount of each such Class has been reduced
to zero;
(v) fifth, from Available Pledged Revenues and amounts (if any) on
deposit in the Residual Account, to the Reserve Account, an amount equal to
the excess, if any, of the Required Reserve Amount over the Available
Reserve Amount;
(vi) sixth, from the Available Pledged Revenues then on deposit in the
Collection Account, to the Servicer (if Vendor Services or an Affiliate is
the Servicer), the Servicing Fee for the related Collection Period; and
(vii) seventh, the remainder of Available Pledged Revenues, if any,
to the Issuer.
SECTION 8.04. [Reserved].
SECTION 8.05. Servicing Account. On or prior to the Closing Date,
the Trustee shall establish the Servicing Account in the name of the Trustee for
the benefit of the Noteholders and the SPC. The Servicing Account shall be an
Eligible Account. The Servicer shall deposit or cause to be deposited in the
Servicing Account all amounts described in Sections 4.1 and 4.2 of the
Contribution and Servicing Agreement, subject to Section 4.4 thereof. The
Servicer shall make transfers from the Servicing Account, and shall be entitled
to make withdrawals from the Servicing Account, as provided in the Contribution
and Servicing Agreement.
SECTION 8.06. Residual Account.
(a) On or prior to the Closing Date, the Trustee shall establish the
Residual Account in the name of the Trustee for the benefit of the Noteholders
and the Issuer. The Residual Account shall be an Eligible Account. The
Servicer shall deposit or cause to be
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deposited in the Residual Account all Residual Realizations pursuant to Section
4.2 of the Collection and Servicing Agreement.
(b) If on any Payment Date, the Available Pledged Revenues for such
Payment Date are insufficient to permit on such Payment Date all distributions
required by Section 8.03 (i) through (v) (such shortfall, an "Available Funds
Shortfall"), then the Trustee shall transfer from the Residual Account to the
Collection Account, an amount equal to the lesser of (i) the Available Funds
Shortfall and (ii) the amount, if any, on deposit in the Residual Account.
(c) On each Payment Date, unless a Residual Event has occurred and is
continuing, any funds on deposit in the Residual Account after making required
withdrawals, if any, on such Payment Date pursuant to Section 8.06(b) shall be
released to the Issuer.
(d) On each Payment Date on which a Residual Event has occurred or is
continuing, any funds on deposit in the Residual Account after making required
withdrawals, if any, on such Payment Date pursuant to Section 8.06(b) shall be
retained in the Residual Account.
SECTION 8.07. Reserve Account.
(a) On or prior to the Closing Date, the Trustee shall establish the
Reserve Account in the name of the Trustee for the benefit of the Noteholders
and the Issuer, and shall deposit the Reserve Account Initial Deposit in the
Reserve Account. The Reserve Account shall be an Eligible Account.
(b) On each Payment Date, the Trustee shall transfer to the Reserve
Account from the Collection Account such amounts as shall be required by Section
8.03(v).
(c) If on any Payment Date, the Available Pledged Revenues for such
Payment Date, together with amounts to be withdrawn from the Residual Account
pursuant to Section 8.06(b), are insufficient to permit on such Payment Date all
distributions required by Section 8.03 (i) through (iv) (such shortfall, a
"Remaining Available Funds Shortfall"), then the Trustee shall transfer from the
Reserve Account to the Collection Account, an amount equal to the lesser of (i)
the Remaining Available Funds Shortfall and (ii) the Available Reserve Amount.
(d) If any Payment Date the Available Reserve Amount, after giving
effect to any withdrawals to be made pursuant to Section 8.07(c), exceeds the
Required Reserve Amount, the Trustee shall release such excess to the Issuer.
(e) Upon termination of this Indenture, any balance remaining in the
Reserve Account, after all obligations to the Noteholders hereunder have been
fully satisfied, shall be applied to reimburse the Trustee for any amounts owing
to it arising from the performance of its obligations under this Indenture and,
then, to the Issuer.
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SECTION 8.08. General Provisions Regarding Servicing Account,
Collection Account, Residual Account and Reserve Account.
(a) So long as no Default or Event of Default shall have occurred and
be continuing, all amounts held in the Servicing Account, the Collection
Account, the Residual Account and the Reserve Account shall, to the extent
permitted by applicable laws, rules and regulations, be invested, as directed by
the Servicer, in Eligible Investments that mature not later than one Business
Day prior to the Payment Date for the Collection Period to which such amounts
relate. Any such written direction shall certify that any such investment is
authorized by this Section. Investments in Eligible Investments shall be made
in the name of the Trustee on behalf of the Trust, and such investments shall
not be (1) purchased at a price in excess of the principal amount thereof plus
accrued interest thereon, nor (2) sold or disposed of prior to their maturity at
a price less than the principal amount thereof plus accrued interest thereon.
Any investment of funds in the Servicing Account, the Collection Account, the
Residual Account or the Reserve Account shall be made in Eligible Investments
held by a financial institution in accordance with the following requirements:
(i) all Eligible Investments shall be held in an account with such
financial institution in the name of the Trustee;
(ii) with respect to securities held in such account, such securities
shall be:
(A) certificated securities (as such term is used in Minnesota
UCC (S) 8-102(a)(4)), securities deemed to be certificated securities
under applicable regulations of the United States government, or
uncertificated securities issued by an issuer organized under the laws
of the State of New York or the State of Delaware,
(B) either (I) in the possession of such institution, (II) in the
possession of a "clearing corporation" (as such term is used in
Section 8-102(a)(5) of the Minnesota UCC), registered in the name of
such clearing corporation or its nominee, not endorsed for collection
or surrender or any other purpose not involving transfer, not
containing any evidence of a right or interest inconsistent with the
Trustee's security interest therein, and held by such clearing
corporation in an account of such institution, (III) held in an
account of such institution with the Federal Reserve Bank of New York,
or (IV) in the case of uncertificated securities, issued in the name
of such institution, and
(C) identified, by book entry or otherwise, as held for the
account of, or pledged to, the Trustee on the records of such
institution, and such institution shall have sent the Trustee a
confirmation thereof;
(iii) with respect to repurchase obligations held in such account,
such repurchase obligations shall be identified by such institution, by
book entry or otherwise, as held for the account of, or pledged to, the
Trustee on the records of such institution,
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and the related securities shall be held in accordance with the
requirements of clause (ii) above; and
(iv) with respect to other Eligible Investments other than securities
and repurchase agreements, such Eligible Investments shall be held in a
manner acceptable to the Trustee.
Subject to the other provisions hereof, the Trustee shall have sole control over
each such investment and the income thereon, and any certificate or other
instrument evidencing any such investment, if any, shall be delivered directly
to the Trustee or its agent, together with each document of transfer, if any,
necessary to transfer title to such investment to the Trustee in a manner which
complies with this Section. All interest, dividends, gains upon transfer and
other income from, or earnings on, investments of funds in the Collection
Account shall be deposited in the Collection Account and distributed on the next
Payment Date in accordance with Section 8.03. All interest, dividends, gains
upon transfer and other income from, or earnings on, investments of funds in the
Servicing Account shall be retained therein until distributed to the Servicer as
additional servicing compensation in accordance with Section 3.8 of the
Contribution and Servicing Agreement. All interest, dividends, gains upon
transfer or other income from, or earnings on, investments of funds in the
Reserve Account and the Residual Account shall be added to the balance of such
account.
(b) Subject to Section 6.01(c), the Trustee shall not in any way be
held liable by reason of any insufficiency in any of the Servicing Account, the
Collection Account, the Residual Account or the Reserve Account resulting from
any loss on any Eligible Investment included therein except for losses
attributable to the Trustee's failure to make payments on such Eligible
Investments issued by the Trustee in accordance with their terms.
(c) The Trustee, in holding all funds in the Servicing Account, the
Collection Account, the Residual Account and the Reserve Account, and in making
distributions as provided in this Agreement, shall act solely on behalf of and
as agent for the Noteholders.
(d) Any account which is required to be established as an Eligible
Account pursuant to this Indenture and which ceases to be an Eligible Account
shall within five Business Days (or such longer period, not to exceed 30 days,
as to which each Rating Agency may consent) be established by the Trustee as a
new account which shall be an Eligible Account, and any cash and/or any
investments shall be transferred to such new account.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of
Noteholders.
(a) Without the consent of the Holders of any Notes, but with prior
notice to the Rating Agencies, the Issuer and the Trustee, when authorized by an
Issuer Order, at any time
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and from time to time, may enter into one or more indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act as in force at
the date of the execution thereof), in form satisfactory to the Trustee, for any
of the following purposes:
(i) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Trustee any property subject to, or required to be
subjected to, the lien created by this Indenture, or to subject to the lien
created by this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another Person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Trustee;
(v) to cure any ambiguity or to correct or supplement any provision
herein which may be inconsistent with any other provision herein;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI;
(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar Federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA;
(viii) to avoid a reduction, qualification or withdrawal of any
rating on the Notes; or
(ix) upon satisfaction of the Rating Agency Condition, to amend the
definition of "Residual Event" or of the terms used in such definition.
The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Trustee, when authorized by an Issuer Order,
may, also without the consent of any of the Holders of the Notes, but upon
satisfaction of the Rating Agency Condition, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this
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Indenture or of modifying in any manner the rights of the Holders of the Notes
under this Indenture; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Noteholder.
SECTION 9.02. Supplemental Indentures With Consent of Noteholders.
(a) The Issuer and the Trustee, when authorized by an Issuer Order,
also may, with prior notice to the Rating Agencies and the consent of a Note
Majority of each Class affected thereby, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that, no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Note affected thereby:
(i) change the date, timing or method of determination of payment of
any installment of principal of or interest on any Note, or reduce the
principal amount thereof, the interest rate thereon or the Redemption Price
with respect thereto, change the provision of this Indenture relating to
the application of collections on, or the proceeds of the sale of, the
Trust Estate to payment of principal of or interest on the Notes, or change
any place of payment where, or the coin or currency in which, any Note or
the interest thereon is payable, or impair the right to institute suit for
the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to the
payment of any such amount due on the Notes on or after the respective due
dates thereof (or, in the case of redemption, on or after the Redemption
Date);
(ii) impair the right of the Holder to institute suit pursuant to
Section 5.08;
(iii) reduce the percentage of the Outstanding Amount of the Notes,
the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iv) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Trustee to direct the Issuer to sell or liquidate
the Trust Estate pursuant to Section 5.04;
(vi) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Related Documents cannot be modified or
waived without the consent of the Holder of each Outstanding Note affected
thereby;
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(vii) permit the creation of any lien ranking prior to or on a parity
with the lien created by this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien created by this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security provided
by the lien created by this Indenture; or
(viii) result in a reduction, qualification or withdrawal of the
rating of any class of Notes.
Any supplemental indenture to be entered into in accordance with this
Section shall be deemed to affect all Outstanding Notes other than any Class of
Notes with respect to which an Opinion of Counsel for the Issuer is addressed
and delivered to the Trustee to the effect that the interests of the Holders of
Notes of such Class are not affected in any material respect by the supplemental
indenture.
It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof. The
manner of obtaining such approvals shall be subject to such reasonable
requirements as the Trustee may prescribe.
(b) Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Holders of the Notes to which such amendment or supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the 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 Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the 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 is deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Trustee, the Issuer, 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.
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SECTION 9.05. Conformity With Trust Indenture Act. Every amendment
of this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Trustee shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Trustee shall so determine, new
notes so modified as to conform, in the opinion of the Trustee and the Issuer,
to any such supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Trustee in exchange for Outstanding
Notes.
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption. In the event that the SPC pursuant to
Section 5.1 of the Contribution and Servicing Agreement purchases the corpus of
the Trust, the Notes are subject to redemption in whole, but not in part, on the
Payment Date on which such repurchase occurs, for a purchase price equal to the
Redemption Price; provided, however, that the Issuer has available funds
sufficient to pay the Redemption Price. The SPC, the Servicer or the Issuer
shall furnish the Rating Agencies notice of such redemption. If the Notes are
to be redeemed pursuant to this paragraph, the Servicer or the Issuer shall
furnish notice of such election to the Trustee not later than 25 days (or such
lesser number of days as shall be satisfactory to the Trustee) prior to the
Redemption Date, and the Issuer shall deposit, or cause to be deposited, into
the Collection 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.
SECTION 10.02. Form of Redemption Notice.
(a) Notice of redemption under Section 10.01(a) shall be given by the
Trustee not less than five days prior to the applicable Redemption Date by
first-class mail, postage prepaid, mailed to each Holder of Notes, as of the
close of business on the Record Date with respect to the Payment Date
immediately preceding the applicable Redemption Date, at such Holder's address
appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
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(iii) the place where such Notes are to be surrendered for payment of
the Redemption Price (which shall be the office or agency of the Issuer to
be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Trustee in the
name and at the expense of the Issuer. Failure to give notice of redemption, or
any defect therein, to any Holder of any Note shall not impair or affect the
validity of the redemption of any other Note.
(b) Prior notice of redemption under Section 10.01(b) is not required
to be given to Noteholders.
SECTION 10.03. Notes Payable on Redemption Date. The Notes or
portions thereof to be redeemed shall, following notice of redemption (if any)
as required by Section 10.02, on the Redemption Date, become due and payable at
the Redemption Price 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 Trustee to
take any action under any provision of this Indenture, the Issuer shall furnish
to the Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
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(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any property or securities with the
Trustee that is to be made the basis for the release of any property
subject to the lien created by this Indenture, the Issuer shall, in
addition to any obligation imposed in Section 11.01(a) or elsewhere in this
Indenture, furnish to the Trustee (1) an Officer's Certificate certifying
or stating the opinion of each person signing such certificate as to the
fair value (within 90 days of such deposit) to the Issuer of the property
or securities to be so deposited, (2) an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been taken with
respect to the recording and filing of this Indenture and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, as are necessary to
perfect and make effective the first priority lien and security interest in
favor of the Trustee, for the benefit of the Trustee, created by this
Indenture in the property or securities to be so deposited, and reciting
the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and security
interest effective, and (3) evidence that the Rating Agency Condition has
been satisfied.
(ii) Whenever the Issuer is required to furnish to the Trustee an
Officer's Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (i) above, the Issuer shall
also deliver to the Trustee an Independent Certificate as to the same
matters, if the fair value to the Issuer of the property to be so deposited
and of all other such property made the basis of any such withdrawal or
release since the commencement of the then-current fiscal year of the
Issuer, as set forth in the certificates delivered pursuant to clause (i)
above and this clause (ii), is 10% or more of the Outstanding Amount of the
Notes, but such a certificate need not be furnished with respect to any
property so deposited, if the fair value thereof to the Issuer as set forth
in the related Officer's Certificate is less than $25,000 or less than one
percent of the Outstanding Amount of the Notes.
(iii) Other than with respect to any release described in clause (A)
or (B) of Section 11.01(b)(v), whenever any property or securities are to
be released from the lien created by this Indenture, the Issuer shall also
furnish to the Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed to
be released and stating that in the opinion of such person the proposed
release will not impair the security created by this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Trustee an
Officer's Certificate certifying or stating the opinion of any signer
thereof as to the matters
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described in clause (iii) above, the Issuer shall also furnish to the
Trustee an Independent Certificate as to the same matters if the fair value
of the property or securities and of all other property or securities
(other than property described in clauses (A) or (B) of Section
11.01(b)(v)) released from the lien created by this Indenture since the
commencement of the then current fiscal year, as set forth in the
certificates required by clause (iii) above and this clause (iv), equals
10% or more of the Outstanding Amount of the Notes, but such certificate
need not be furnished in the case of any release of property or securities
if the fair value thereof as set forth in the related Officer's Certificate
is less than $25,000 or less than one percent of the then Outstanding
Amount of the Notes.
(v) Notwithstanding any other provision of this Section, the Issuer
may, without compliance with the other provisions of this Section, (A)
collect, liquidate, sell or otherwise dispose of Leases as and to the
extent permitted or required by the Related Documents (including as
provided in Section 3.1 of the Contribution and Servicing Agreement) and
(B) make cash payments out of the Trust Accounts as and to the extent
permitted or required by the Related Documents.
SECTION 11.02. Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the SPC or the Issuer, stating that the information with respect
to such factual matters is in the possession of the Servicer, the SPC or the
Issuer, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such
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application granted or to the sufficiency of such certificate or report. The
foregoing shall not, however, be construed to affect the Trustee's right to rely
upon the truth and accuracy of any statement or opinion contained in any such
document as provided in Article VI.
SECTION 11.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 11.04. Notices, etc., to Trustee, Issuer and Rating Agencies.
Any request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other documents provided or permitted by this Indenture to be
made upon, given or furnished to or filed with:
(a) the Trustee by any Noteholder or by the Issuer shall be sufficient
for every purpose hereunder if in writing and mailed, first-class, postage
prepaid, to the Trustee at its Corporate Trust Office, or
(b) the Issuer by the Trustee or by any Noteholder shall be sufficient
for every purpose hereunder if in writing and mailed, first-class, postage
prepaid, to the Issuer addressed to: Green Tree Lease Finance 1998-1, LLC,
1100 Landmark Towers, 345 St. Peter Street, St. Paul, Minnesota 55102-1639,
or at any other address previously furnished in writing to the Trustee by
the Issuer. The Issuer shall promptly transmit any notice received by it
from the Noteholders to the Trustee.
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Notices required to be given to the Rating Agencies by the Issuer or
the Trustee shall be in writing, personally delivered or mailed by certified
mail, return receipt requested to (i) in the case of Fitch, at the following
address: One State Street Plaza, New York, New York 10004, Attention: ABS
Surveillance Group and (ii) in the case of S&P, at the following address: 25
Broadway, New York, New York 10004; or as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
SECTION 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid, to each Noteholder affected by such
event, at his address as it appears on the Note Register. In any case where
notice to Noteholders is given by mail, neither the failure to mail such notice
nor any defect in any notice so mailed to any particular Noteholder shall affect
the sufficiency of such notice with respect to other Noteholders, and any notice
that is mailed in the manner herein provided shall conclusively be presumed to
have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event of Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any reasonable manner of
giving such notice as shall be satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
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, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Trustee or any Paying 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 Trustee
a copy of each such agreement and the 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 Trust
Indenture Act, such required provision shall control.
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The provisions of TIA (S)(S) 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns. All covenants and agreements
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not.
All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 11.10. Severability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and 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 MINNESOTA, WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject
to recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Trustee or any other counsel reasonably
acceptable to the Trustee) to the effect that such recording is necessary either
for the protection of the Noteholders or any other Person secured hereunder or
for the enforcement of any right or remedy granted to the Trustee under this
Indenture.
-75-
<PAGE>
SECTION 11.16. No Petition. The Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the SPC or the Issuer, or join
in any institution against the SPC or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Related Documents.
SECTION 11.17. Inspection. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Trustee shall
and shall cause its representatives to hold in confidence all such information
(including the identity of the Obligors on the Leases) except to the extent
disclosure may be required by (S)9-208 of the UCC or by any other applicable law
(and all reasonable applications for confidential treatment are unavailing) and
except to the extent that the Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
-76-
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
GREEN TREE LEASE FINANCE 1998-1, LLC
By: GREEN TREE LEASE FINANCE II, INC.
By /s/ Joel H. Gottesman
--------------------------------------
Name: Joel H. Gottesman
Title: Senior Vice President & Secretary
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee,
By /s/ Tamara Schultz-Fugh
--------------------------------------
Name: Tamara Schultz-Fugh
--------------------------------
Title: Assistant Vice President
-------------------------------
-77-
<PAGE>
EXHIBIT A
Form of Depository Agreement
A-1
<PAGE>
EXHIBIT B
Form of Monthly Statements to Noteholders
B-1
<PAGE>
EXHIBIT C-1
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.
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.
GREEN TREE LEASE FINANCE 1998-1, LLC
[5.201][5.55][5.60][5.74]% LEASE-BACKED NOTE, CLASS A-[1][2][3][4]
Green Tree Lease Finance 1998-1, LLC, a limited liability company
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 [ ] payable on each
Payment 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 $__________ [INSERT INITIAL CLASS A-
[1][2][3][4] PRINCIPAL BALANCE] by (ii) the aggregate amount, if any, payable
from the Collection Account in respect of principal on the Class A-[1][2][3][4]
Notes pursuant to Section 8.03(iv)(A) of the Indenture hereinafter referred to;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earliest of the Payment Date occurring in [January
2000][December 2000][July 2002][January 2004] (the "Class A-[1][2][3][4] Stated
Maturity Date") and the Redemption Date, if any, pursuant to Section 10.01(a) or
(b) of the Indenture. The Issuer will pay interest on this Note on each Payment
Date in an amount equal to [one-twelfth of] the product of (i) the rate per
annum shown above [calculated on the basis of actual days elapsed in a year of
360 days] [calculated on the
- ----------------
*Denominations of $10,000 and integral multiples of $1 in excess thereof.
C-1-1
<PAGE>
basis of a 360-day year comprised of twelve 30-day months] and (ii) the
principal amount of this Note outstanding on the preceding Payment Date (after
giving effect to all payments of principal made on the preceding Payment Date)
or, with respect to the first Payment Date, the original principal amount of
this Note. 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 Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: GREEN TREE LEASE FINANCE 1998-1, LLC
By
--------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
C-1-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee,
By
----------------------------------------
Authorized Signatory
C-1-3
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer
(herein called the "Notes"), issued in four classes designated as its 5.201%
Lease-Backed Notes, Class A-1, 5.55% Lease-Backed Notes, Class A-2, 5.60% Lease-
Backed Notes, Class A-3, 5.74% Lease-Backed Notes, Class A-4, 6.66% Lease-Backed
Notes, Class B, and 7.63% Lease-Backed Notes, Class C, respectively, all issued
under an Indenture dated as of December 1, 1998 (such indenture, as supplemented
or amended, herein called the "Indenture"), between the Issuer and U.S. Bank
Trust National Association, as trustee (the "Trustee," which term includes any
successor 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 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 secured by the collateral pledged as
security therefor as provided in the Indenture.
Principal of the Class A-[1][2][3][4] Notes will be payable on each
Payment Date in an amount described on the face hereof. "Payment Date" means
the twentieth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing in January 1999; provided, that if the
Class A-1 Notes have not been paid in full on or before the Payment Date in
December 1999, the Payment Date in January 2000 for the Class A-1 Notes will be
January 14, 2000.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earliest of the Class A-[1][2][3][4] Stated
Maturity Date 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 Trustee or a Note Majority 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 Class A-
[1][2][3][4] Notes shall be made pro rata to the Class A-[1][2][3][4]
Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment
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 Depository (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) affected by any payments made
on any Payment Date shall be binding upon
C-1-4
<PAGE>
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 of the then remaining unpaid principal amount of this Note on a
Payment Date, then the 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
with respect to the Payment Date immediately preceding such Redemption Date by
notice mailed within five days of such Redemption Date and the amount then due
and payable shall be payable only upon presentation and surrender of this Note
at the Trustee's principal Corporate Trust Office or at the office of the
Trustee's agent appointed for such purposes located in St. Paul, Minnesota.
The Issuer shall pay interest on overdue installments of interest at
the Class A-[1][2][3][4] Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.01(a) of the Indenture, in whole, but not in part, at the option of
the SPC on any Payment Date on or after the date on which the sum of the
Aggregate Principal Amount of the Notes is less than or equal to 10% of the
Initial Pool Principal 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
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in a "signature guarantee program" determined by the
Note Registrar in accordance with the Exchange Act, and such other documents as
the Trustee may require, 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 or the Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
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 Trustee in its individual capacity, any holder of a beneficial
interest in the Issuer or the Trustee or of any successor or assign of the
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.
C-1-5
<PAGE>
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 and such Note that such Noteholder or
Note Owner will not at any time institute against the SPC or the Issuer, or join
in any institution against the SPC or the Issuer, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
United States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Related Documents.
The SPC has structured the Indenture and the Notes with the intention
that the Notes will qualify under applicable federal, state, local and foreign
tax law as indebtedness of the SPC secured by the Leases. The SPC, the
Servicer, each Noteholder and each Note Owner agree to treat and to take no
action inconsistent with the treatment of the Notes as such indebtedness for
purposes of federal, state, local and foreign income or franchise taxes and any
other tax imposed on or measured by income. Each Noteholder and each Note
Owner, by acceptance of its Note or beneficial interest therein, agrees to be
bound by the provisions of this paragraph. Each Noteholder agrees that it will
cause any Note Owner acquiring an interest in a Note through it to comply with
the Indenture as to treatment as indebtedness under applicable tax law, as
described in this paragraph.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and any agent of the Issuer or the 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 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 each class of Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the Outstanding Amount of each class
of 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 or more Predecessor Notes) shall be conclusive and
binding upon such Holders 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 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 Trustee and the Holder of
Notes under the Indenture.
C-1-6
<PAGE>
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 Minnesota, 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.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Related Documents, neither any owner of a beneficiary interest
in the Issuer, nor any of its 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. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Related 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.
C-1-7
<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.
C-1-8
<PAGE>
EXHIBIT C-2
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.
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.
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1 NOTES,
THE CLASS A-2 NOTES, THE CLASS A-3 NOTES AND THE CLASS A-4 NOTES, AS DESCRIBED
IN THE INDENTURE REFERRED TO HEREIN.
GREEN TREE LEASE FINANCE 1998-1, LLC
6.66% LEASE-BACKED NOTE, CLASS B
Green Tree Lease Finance 1998-1, LLC, a limited liability company
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 [ ]
payable on each Payment 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 $25,650,297 by (ii)
the aggregate amount, if any, payable from the Collection Account in respect of
principal on the Class B Notes pursuant to Section 8.03(iv)(B) of the Indenture
hereinafter referred to; provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the earliest of the Payment Date
occurring in October 2004 (the "Class B Stated Maturity Date") and the
Redemption Date, if any, pursuant to Section 10.01(a) or (b) of the Indenture.
The Issuer will
- ---------------------
*Denominations of $10,000 and integral multiples of $1 in excess thereof.
C-2-1
<PAGE>
pay interest on this Note on each Payment Date in an amount equal to one-twelfth
of the product of (i) the rate per annum shown above and (ii) the principal
amount of this Note outstanding on the preceding Payment Date (after giving
effect to all payments of principal made on the preceding Payment Date) or, with
respect to the first Payment Date, the original principal amount of this Note.
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 Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: GREEN TREE LEASE FINANCE 1998-1, LLC
By________________________________________
Name:
Title:
C-2-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee,
By________________________________________
Authorized Signatory
C-2-3
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer
(herein called the "Notes"), issued in four classes designated as its 5.201%
Lease-Backed Notes, Class A-1, 5.55% Lease-Backed Notes, Class A-2, 5.60% Lease-
Backed Notes, Class A-3, 5.74% Lease-Backed Notes, Class A-4, 6.66% Lease-Backed
Notes, Class B, and 7.63% Lease-Backed Notes, Class C, respectively, all issued
under an Indenture dated as of December 1, 1997 (such indenture, as supplemented
or amended, herein called the "Indenture"), between the Issuer and U.S. Bank
Trust National Association, as trustee (the "Trustee," which term includes any
successor 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 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 secured by the collateral pledged as
security therefor as provided in the Indenture.
Principal of the Class B Notes will be payable on each Payment Date in
an amount described on the face hereof. "Payment Date" means the twentieth day
of each month, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing in January 1999.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earliest of the Class B Stated Maturity Date 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 Trustee or a Note Majority 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 Class B Notes shall be made pro
rata to the Class B Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment
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 Depository (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) affected by any payments made
on any Payment 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
C-2-4
<PAGE>
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Payment Date, then the
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 with respect to the
Payment Date immediately preceding such Redemption Date by notice mailed within
five days of such Redemption Date and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Trustee's
principal Corporate Trust Office or at the office of the Trustee's agent
appointed for such purposes located in St. Paul, Minnesota.
The Issuer shall pay interest on overdue installments of interest at
the Class B Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.01(a) of the Indenture, in whole, but not in part, at the option of
the SPC on any Payment Date on or after the date on which the sum of the
Aggregate Principal Amount of the Notes is less than or equal to 10% of the
Initial Pool Principal 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
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in a "signature guarantee program" determined by the
Note Registrar in accordance with the Exchange Act, and such other documents as
the Trustee may require, 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 or the Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
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 Trustee in its individual capacity, any holder of a beneficial
interest in the Issuer or the Trustee or of any successor or assign of the
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
C-2-5
<PAGE>
Indenture and such Note that such Noteholder or Note Owner will not at any time
institute against the SPC or the Issuer, or join in any institution against the
SPC or the Issuer, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the Related Documents.
The SPC has structured the Indenture and the Notes with the intention
that the Notes will qualify under applicable federal, state, local and foreign
tax law as indebtedness of the SPC secured by the Leases. The SPC, the
Servicer, each Noteholder and each Note Owner agree to treat and to take no
action inconsistent with the treatment of the Notes as such indebtedness for
purposes of federal, state, local and foreign income or franchise taxes and any
other tax imposed on or measured by income. Each Noteholder and each Note
Owner, by acceptance of its Note or beneficial interest therein, agrees to be
bound by the provisions of this paragraph. Each Noteholder agrees that it will
cause any Note Owner acquiring an interest in a Note through it to comply with
the Indenture as to treatment as indebtedness under applicable tax law, as
described in this paragraph.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and any agent of the Issuer or the 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 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 each class of Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the Outstanding Amount of each class
of 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 or more Predecessor Notes) shall be conclusive and
binding upon such Holders 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 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 Trustee and the Holder 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.
C-2-6
<PAGE>
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, 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.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Related Documents, neither any owner of a beneficiary interest
in the Issuer, nor any of its 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. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Related 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.
C-2-7
<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.
C-2-8
<PAGE>
EXHIBIT C-3
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.
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.
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1 NOTES,
THE CLASS A-2 NOTES, THE CLASS A-3 NOTES, THE CLASS A-4 NOTES AND THE CLASS B
NOTES, AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
GREEN TREE LEASE FINANCE 1998-1, LLC
7.63% LEASE-BACKED NOTE, CLASS C
Green Tree Lease Finance 1998-1, LLC, a limited liability company
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 [ ]
payable on each Payment 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 $13,811,698 by (ii)
the aggregate amount, if any, payable from the Collection Account in respect of
principal on the Class C Notes pursuant to Section 8.04(iv)(C) of the Indenture
hereinafter referred to; provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the
- ---------------------
*Denominations of $10,000 and integral multiples of $1 in excess thereof.
C-3-1
<PAGE>
earliest of the Payment Date occurring in October 2006 (the "Class C Stated
Maturity Date") and the Redemption Date, if any, pursuant to Section 10.01(a) or
(b) of the Indenture. The Issuer will pay interest on this Note on each Payment
Date in an amount equal to one-twelfth of the product of (i) the rate per annum
shown above and (ii) the principal amount of this Note outstanding on the
preceding Payment Date (after giving effect to all payments of principal made on
the preceding Payment Date) or, with respect to the first Payment Date, the
original principal amount of this Note. 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 Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: GREEN TREE LEASE FINANCE 1998-1, LLC
By____________________________________
Name:
Title:
C-3-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee,
By_______________________________________
Authorized Signatory
C-3-3
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer
(herein called the "Notes"), issued in four classes designated as its 5.201%
Lease-Backed Notes, Class A-1, 5.55% Lease-Backed Notes, Class A-2, 5.60% Lease-
Backed Notes, Class A-3, 5.74% Lease-Backed Notes, Class A-4, 6.66% Lease-Backed
Notes, Class B, and 7.63% Lease-Backed Notes, Class C, respectively, all issued
under an Indenture dated as of December 1, 1998 (such indenture, as supplemented
or amended, herein called the "Indenture"), between the Issuer and U.S. Bank
Trust National Association, as trustee (the "Trustee," which term includes any
successor 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 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 secured by the collateral pledged as
security therefor as provided in the Indenture.
Principal of the Class C Notes will be payable on each Payment Date in
an amount described on the face hereof. "Payment Date" means the twentieth day
of each month, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing in January 1999.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earliest of the Class C Stated Maturity Date 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 Trustee or a Note Majority 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 Class C Notes shall be made pro
rata to the Class C Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment
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 Depository (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) affected by any payments made
on any Payment 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
C-3-4
<PAGE>
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Payment Date, then the
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 with respect to the
Payment Date immediately preceding such Redemption Date by notice mailed within
five days of such Redemption Date and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Trustee's
principal Corporate Trust Office or at the office of the Trustee's agent
appointed for such purposes located in St. Paul, Minnesota.
The Issuer shall pay interest on overdue installments of interest at
the Class C Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.01(a) of the Indenture, in whole, but not in part, at the option of
the SPC on any Payment Date on or after the date on which the sum of the
Aggregate Principal Amount of the Notes is less than or equal to 10% of the
Initial Pool Principal 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
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in a "signature guarantee program" determined by the
Note Registrar in accordance with the Exchange Act, and such other documents as
the Trustee may require, 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 or the Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
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 Trustee in its individual capacity, any holder of a beneficial
interest in the Issuer or the Trustee or of any successor or assign of the
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
C-3-5
<PAGE>
Indenture and such Note that such Noteholder or Note Owner will not at any time
institute against the SPC or the Issuer, or join in any institution against the
SPC or the Issuer, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the Related Documents.
The SPC has structured the Indenture and the Notes with the intention
that the Notes will qualify under applicable federal, state, local and foreign
tax law as indebtedness of the SPC secured by the Leases. The SPC, the
Servicer, each Noteholder and each Note Owner agree to treat and to take no
action inconsistent with the treatment of the Notes as such indebtedness for
purposes of federal, state, local and foreign income or franchise taxes and any
other tax imposed on or measured by income. Each Noteholder and each Note
Owner, by acceptance of its Note or beneficial interest therein, agrees to be
bound by the provisions of this paragraph. Each Noteholder agrees that it will
cause any Note Owner acquiring an interest in a Note through it to comply with
the Indenture as to treatment as indebtedness under applicable tax law, as
described in this paragraph.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and any agent of the Issuer or the 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 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 each class of Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the Outstanding Amount of each class
of 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 or more Predecessor Notes) shall be conclusive and
binding upon such Holders 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 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 Trustee and the Holder 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.
C-3-6
<PAGE>
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, 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.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Related Documents, neither any owner of a beneficiary interest
in the Issuer, nor any of its 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. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Related 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.
C-3-7
<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.
C-3-8
