================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) September 30, 1998
-----------------------
Provident Lease Receivables Corporation
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
333-58909 31-1605466
- ----------------------------------- --------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
1023 West Eighth Street, Cincinnati, Ohio 45202
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(513) 579-2867
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Not Applicable
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
================================================================================
<PAGE>
Item 5. Other Events.
The Registrant is filing final forms of the exhibits listed in
Item 7 (c) below.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
No. Document Description
- ------- --------------------
1.1 Underwriting Agreement among Provident Lease Receivables
Corporation, Information Leasing Corporation and Lehman Brothers
Inc., as Representative of the Underwriters, dated
September 25, 1998.
4.1 Indenture between Provident Equipment Lease Trust 1998-A
and Norwest Bank Minnesota, National Association, as
Indenture Trustee, dated as of September 1, 1998.
10.1 Trust Agreement between Provident Lease Receivables Corporation
and First Union Company, National Association as Trustee, dated as
of September 1, 1998.
10.2 Pooling and Servicing Agreement between Provident Equipment Lease
Trust 1998-A, Provident Lease Receivables Corporation and
Information Leasing Corporation, dated as of September 1, 1998.
10.3 Contribution Agreement between Provident Lease Receivables
Corporation and Information Leasing Corporation, dated as of
September 1, 1998.
10.4 Management Agreement among Provident Equipment Lease Trust 1998-A,
Norwest Bank Minnesota, National Association, as Indenture Trustee
and Information Leasing Corporation, dated as of September 1, 1998.
-2-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
PROVIDENT LEASE RECEIVABLES CORPORATION
(Registrant)
Dated: October 6, 1998 By:/s/ John R. Farrenkopf
------------------------------------
Name: John R. Farrenkopf
Title: Treasurer
-3-
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Document Description
- ------- ---------------------
1.1 Underwriting Agreement among Provident Lease Receivables
Corporation, Information Leasing Corporation and Lehman
Brothers Inc., as Representative of the Underwriters,
dated September 25, 1998.
4.1 Indenture between Provident Equipment Lease Trust 1998-A and
Norwest Bank Minnesota, National Association, as Indenture
Trustee, dated as of September 1, 1998.
10.1 Trust Agreement between Provident Lease Receivables
Corporation and First Union Company, National Association as
Trustee, dated as of September 1, 1998.
10.2 Pooling and Servicing Agreement between Provident Equipment
Lease Trust 1998-A, Provident Lease Receivables Corporation
and Information Leasing Corporation, dated as of
September 1, 1998.
10.3 Contribution Agreement between Provident Lease Receivables
Corporation and Information Leasing Corporation, dated as of
September 1, 1998.
10.4 Management Agreement among Provident Equipment Lease Trust
1998-A, Norwest Bank Minnesota, National Association, as
Indenture Trustee and Information Leasing Corporation, dated
as of September 1, 1998.
-4-
EXHIBIT 1.1
PROVIDENT EQUIPMENT LEASE TRUST 1998-A
5.28% CLASS A-1 LEASE-BACKED NOTES
5.78% CLASS A-2 LEASE-BACKED NOTES
5.60% CLASS A-3 LEASE-BACKED NOTES
5.75% CLASS A-4 LEASE-BACKED NOTES
6.20% CLASS B LEASE-BACKED NOTES
UNDERWRITING AGREEMENT
----------------------
September 25, 1998
LEHMAN BROTHERS INC.
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Provident Lease Receivables Corporation, a Delaware corporation
(the "Transferor"), as originator of the Provident Equipment Lease Trust
1998-A, (the "Issuer"), and Information Leasing Corporation, an Ohio
corporation ("ILC"), hereby agree with the Underwriters (defined below) as
follows:
Section 1. Issuance and Sale of Notes. Transferor proposes to
cause Issuer to issue and sell $73,303,000 (the "Class A-1 Initial
Principal Amount") of 5.28% Class A-1 Lease-Backed Notes (the "Class A-1
Notes"); $19,242,000 (the "Class A-2 Initial Principal Amount") of 5.78%
Class A-2 Lease-Backed Notes (the "Class A-2 Notes"); $90,935,000 (the
"Class A-3 Initial Principal Amount") of 5.60% Class A-3 Lease-Backed Notes
(the "Class A-3 Notes"); $18,576,000 (the "Class A-4 Initial Principal
Amount") of 5.75% Class A-4 Lease-Backed Notes (the "Class A-4 Notes");
$7,687,000 (the "Class B Initial Principal Amount"; together with the Class
A-1 Initial Principal Amount, the Class A-2 Initial Principal Amount, the
Class A-3 Initial Principal Amount and the Class A-4 Initial Principal
Amount, the "Initial Principal Amount") of 6.20% Class B Lease-Backed Notes
(the "Class B Notes"; together with the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes and the Class A-4 Notes, the "Notes") and
$6,589,000 of 6.73% Lease-Backed Certificates (the "Certificates"; together
with the Notes, the "Securities"). The Notes will be issued pursuant to an
Indenture, dated as of September 1, 1998 (the "Indenture"), between Issuer
and Norwest Bank Minnesota, National Association, a national
1
<PAGE>
banking association (the "Indenture Trustee"). The Notes are more fully
described in the Final Prospectus (as defined below), a copy of which
Transferor is furnishing to Underwriters. The Notes will evidence secured
obligations of Issuer. The assets of Issuer will include a pool of Leases
and certain interests in the underlying Equipment.
The Notes will be sold by Transferor to the underwriters listed on
Schedule A hereto (the "Underwriters") in accordance with the terms of this
agreement.
Simultaneously with the issuance and sale of the Notes as
contemplated in this Agreement, Transferor will sell the Certificates
pursuant to a certificate purchase agreement dated as of the date hereof
(the "Certificate Purchase Agreement") among Transferor, ILC and Lehman
Brothers Inc.
The terms which follow, when used in this Agreement, shall have
the meanings indicated:
"Effective Date" means each date that the Registration
Statement and any post-effective amendment or amendments thereto
became or become effective under the Securities Act.
"Execution Time" means the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" means any prospectus delivered to
purchasers of the Notes at or before the time of confirmation of
their purchases.
"Preliminary Prospectus" means any preliminary prospectus
included in the Registration Statement, and which, as of the
Effective Date, omits Rule 430A Information.
"Registration Statement" means the registration statement
(Registration Number 333-58909), including amendments,
incorporated documents, exhibits and financial statements, in the
form in which it has or shall become effective and, if any
post-effective amendment thereto becomes effective prior to the
Issuance Date, shall also mean such registration statement as so
amended. Such term shall include Rule 430A Information deemed to
be included therein at the Effective Date as provided by Rule
430A.
"Rule 424" and "Rule 430A" refers to such rules under the
Securities Act.
"Rule 430A Information" means information with respect to
the Notes and the offering thereof permitted, pursuant to Rule
430A, to be omitted from the Registration Statement when it
becomes effective.
"Underwriting Information" has the meaning given to such term
in Section 8(b).
2
<PAGE>
Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in Appendix X to the Indenture.
Section 2. Purchase and Sale of Notes.
---------------------------
(a) Subject to the terms and conditions and in reliance upon the
covenants, representations and warranties set forth herein, each
Underwriter agrees to purchase from Transferor the Initial Principal Amount
of the Notes pursuant to the terms of this Agreement on the Issuance Date
at a purchase price equal to the aggregate of the Initial Principal Amount
of each class of Notes purchased by such Underwriter times the applicable
underwriter's discount (the "Purchase Price") set forth on Schedule A
attached hereto.
(b) The obligations of each of the Underwriters hereunder to
purchase the respective Notes of each Class shall be several and not joint.
Each Underwriter's obligation shall be to purchase the aggregate principal
amount of Notes of the related Class as is indicated with respect to each
Underwriter on Schedule A attached hereto. The rights of the Issuer, ILC
and the non-defaulting Underwriter shall be as set forth in Section 13
hereof.
(c) It is understood that Underwriters propose to offer the Notes
for sale to the public in the manner set forth in the Final Prospectus.
Section 3. Delivery and Payment. (a) Delivery of and payment for
the Notes purchased by Underwriters shall be made at the offices of Mayer,
Brown & Platt, Chicago, Illinois, at 10:00 a.m., Chicago time, on September
30, 1998, or such other place and time as the parties hereto agree (the
"Issuance Date"). Delivery of the Notes shall be made against payment of
the purchase price in immediately available funds drawn to the order
Transferor. The Notes to be so delivered will be initially represented by
one or more Notes registered in the name of Cede & Co., the nominee of DTC.
The interests of beneficial owners of the Notes will be represented by book
entries on the records of DTC and participating members thereof. Definitive
Notes will be available only under limited circumstances described in the
Pooling and Servicing Agreement.
Transferor and ILC agree to have the Notes available for
inspection by Underwriters in Chicago, Illinois, not later than 1:00 p.m.,
Chicago time, on the Business Day prior to the Issuance Date.
Section 4. Representations and Warranties of Transferor.
(a) Transferor hereby represents and warrants to, and agrees with, Underwriters
as follows:
(i) Transferor meets the requirements for use of Form S-1
under the Securities Act of 1933 (the "Securities Act") and has
filed with the Securities and Exchange Commission (the
"Commission") a registration statement (Registration No.
333-58909) on such form, including the Preliminary Prospectus
relating to the Notes, on such Form S-1 for the registration under
the Securities Act of the Notes. Transferor may have filed one or
more amendments thereto, including the related Preliminary
Prospectus, each of
3
<PAGE>
which has previously been furnished to Underwriters. Transferor
will file with the Commission either, (A) prior to the
effectiveness of such Registration Statement, a further amendment
thereto (including the form of Final Prospectus) or (B) after
effectiveness of such Registration Statement, a Final Prospectus
in accordance with Rules 430A and 424(b)(1) or (4). In the case of
clause (B), Transferor will include in such Registration
Statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Securities Act
and the rules thereunder to be included with respect to the Notes
and the offering thereof. As filed, such amendment and form of
Final Prospectus, or such Final Prospectus, shall include all Rule
430A Information and, except to the extent Underwriters shall
agree in writing to a modification, shall be in all substantive
respects in the form furnished to Underwriters prior to the
Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and
other changes (beyond that contained in the latest Preliminary
Prospectus which has previously been furnished to Underwriters) as
Transferor has advised Underwriters, prior to the Execution Time,
will be included or made therein.
(ii) On the Effective Date, the Registration Statement
did or will comply in all material respects with the applicable
requirements of the Securities Act and the rules thereunder; on
the Effective Date and when the Final Prospectus is first filed
(if required) in accordance with Rule 424(b) and on the Issuance
Date, the Final Prospectus will comply in all material respects
with the applicable requirements of the Securities Act and the
rules thereunder; on the Effective Date, the Registration
Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein not misleading; and the Final Prospectus, as of its date
and on the Issuance Date, did not or will not include any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided, that Transferor makes no representations or warranties
as to the Underwriting Information.
(iii) This Agreement has been duly authorized, executed
and delivered by Transferor and constitutes a legal, valid and
binding agreement of Transferor enforceable in accordance with its
terms, except that the provisions hereof relating to
indemnification of Underwriters may be subject to limitations of
public policy.
(iv) Each of the Basic Documents to which Transferor is a
party have been duly authorized by Transferor and, when executed
and delivered by Transferor, will constitute the legal, valid and
binding obligation of Transferor, enforceable in accordance with
its terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may
be brought.
4
<PAGE>
(v) The direction by Transferor to Indenture Trustee to
authenticate the Notes has been duly authorized by Transferor and,
when duly and validly executed by Trustee, authenticated by
Indenture Trustee and delivered in accordance with the Indenture
and this Agreement, will be the legal, valid and binding
obligations of Issuer, enforceable in accordance with their terms,
and entitled to the benefits of the Indenture, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which
any proceeding therefor may be brought.
(vi) The sale of the Notes and the performance of this
Agreement and the Basic Documents to which Transferor is a party
by Transferor will (A) not conflict with or result in a breach of,
and will not constitute a default under any of the provisions of,
its certificate of incorporation or any law, governmental rule or
regulation, or any judgment, decree or order binding on Transferor
or its properties, or any of the provisions of any indenture,
mortgage, deed of trust, contract or other agreement or instrument
to which Transferor is a party or by which it is bound or (B) not
result in the creation or imposition of any adverse claim and no
consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or
body is required for the sale of the Notes or the consummation by
Transferor of the transactions contemplated by this Agreement,
except such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Act and
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Notes by Underwriters.
(vii) Neither Transferor nor Issuer is, and will not, as
of the Issuance Date, be an "investment company" under the
Investment Company Act of 1940 (the "1940 Act").
(viii) Transferor hereby makes and repeats each of the
representations and warranties set forth in Section 3.1 of the
Pooling and Servicing Agreement. Such representations and
warranties are incorporated by reference in this Section 4(a) and
Underwriters may rely thereon as if such representations and
warranties were fully set forth herein.
(b) ILC hereby represents and warrants to and agrees with
Underwriters as follows:
(i) This Agreement has been duly authorized, executed and
delivered, each of the Basic Documents to which ILC is a party has
been duly authorized, and this Agreement constitutes, and when
executed and delivered, each of such Basic Documents will
constitute the legal, valid and binding obligations of ILC,
enforceable in accordance with their respective terms, except that
(A) the enforcement thereof may be subject to (1) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and
(2) general principles of equity and the discretion of the court
before which any proceeding therefor may be
5
<PAGE>
brought, and (B) the provisions hereof relating to indemnification
of Underwriters may be subject to limitations of public policy.
(ii) The performance of each of this Agreement and the
Basic Documents to which ILC is a party by ILC, and the
consummation of ILC of the transactions herein and therein
contemplated, will (A) not conflict with or result in a breach of,
and will not constitute a default under any of the provisions of
its certificate of incorporation or by-laws or any law,
governmental rule or regulation, or any judgment, decree or order
binding on ILC or its properties, or any of the provisions of any
indenture, mortgage, deed of trust, contract or other agreement or
instrument to which ILC is a party or by which it is bound or (B)
not result in the creation or imposition of any adverse claim and
no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body
is required for the consummation by ILC of the transactions
contemplated by this Agreement or the Basic Documents, except such
consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Act and
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Notes by Underwriters.
(iii) ILC hereby makes and repeats the representations
and warranties set forth in Articles III and V of the Contribution
Agreement. Such representations and warranties are incorporated by
reference in this Section 4(b), and Underwriters may rely thereon
as if such representations and warranties were fully set forth
herein.
(iv) ILC represents and warrants it has delivered to
Underwriters complete and correct copies of balance sheet and
statements of income and retained earnings reported by The
Provident Bank, of which ILC is a wholly-owned subsidiary for the
fiscal year ended December 31, 1997. Except as set forth in or
contemplated in the Registration Statement and the Final
Prospectus, there has been no material adverse change in the
condition (financial or otherwise) of The Provident Bank, ILC or
any other consolidated subsidiary of the Provident Bank since
December 31, 1997.
(v) Any taxes, fees and other governmental charges
arising from the execution and delivery of this Agreement and the
Basic Documents and in connection with the execution, delivery and
issuance of the Notes and with the transfer of the Leases and the
Equipment, have been paid or will be paid by ILC or Transferor, as
applicable.
(c) Each of Transferor and ILC represents and warrants to
Underwriters, jointly and severally, that:
(i) There is no pending or threatened action, suit or
proceeding against or affecting it in any court or tribunal or
before any arbitrator of any kind or before or by any governmental
authority (A) asserting the invalidity of this Agreement, any
Basic Document or the Notes, (B) seeking to prevent the issuance
of the Notes or the consummation of any of the transactions
contemplated by this Agreement or the Basic
6
<PAGE>
Documents or (C) seeking any determination or ruling that might
materially and adversely affect (x) its performance or its
obligations under this Agreement or the Basic Documents (as
applicable) or (y) the validity or enforceability of this
Agreement, any Basic Document or the Notes.
(ii) Ernst & Young is an independent public accountant
with respect to The Provident Bank, ILC and Transferor within the
meaning of the Securities Act and the rules and regulations
promulgated thereunder.
Section 5. Covenants of Transferor and ILC. Transferor and ILC,
jointly and severally, hereby covenant and agree with Underwriters as
follows:
(a) To use best efforts to cause the Registration Statement, and
any amendment thereto, if not effective as of the date hereof, to become
effective. If the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Final Prospectus is otherwise
required under Rule 424(b), Transferor will file the Final Prospectus,
properly completed, pursuant to Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to Underwriter of such
timely filing. Transferor will promptly advise Underwriters (i) when the
Registration Statement shall have become effective, (ii) when any amendment
thereof shall have become effective, (iii) of any request by the Commission
for any amendment or supplement of the Registration Statement or the Final
Prospectus or for any additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for that purpose, and (v) of the receipt by Transferor of any notification
with respect to the suspension of the qualification of the Notes for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose. Transferor will not file any amendment of the Registration
Statement or supplement to the Final Prospectus to which Underwriters
reasonably object. Transferor and ILC will use best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a Final Prospectus relating to the Notes
is required to be delivered under the Securities Act, any event occurs as a
result of which the Final 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
supplement such Final Prospectus to comply with the Securities Act or the
rules thereunder, Transferor promptly will prepare and file with the
Commission, subject to paragraph (a) of this Section 5, a supplement which
will correct such statement or omission or an amendment which will effect
such compliance.
(c) As soon as practicable, Transferor will make generally
available to Noteholders and to Underwriters an earnings statement or
statements of Issuer which will satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 under the Securities Act.
7
<PAGE>
(d) Issuer will furnish to Underwriters and counsel for
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and, so long as delivery of the prospectus by
either Underwriter or any dealer may be required by the Securities Act, as
many copies of each Final Prospectus relating to the Notes and any
supplement thereto as Underwriters may reasonably request.
(e) ILC and Transferor will take all reasonable actions requested
by Underwriters to arrange for the qualification of the Notes for sale
under the laws of such jurisdictions within the United States or as
necessary to qualify for DTC and as Underwriters may designate, will
maintain such qualifications in effect so long as required for the
completion of the distribution of the Notes; provided, in connection
therewith Transferor shall not be required to qualify as a foreign
corporation doing business in any jurisdiction.
(f) For so long as the Notes are outstanding, Transferor and ILC
shall deliver to Underwriters by first-class mail and as soon as
practicable a copy of all reports and notices delivered to Indenture
Trustee or the Noteholders under the Indenture.
(g) For so long as the Notes are outstanding, Transferor and ILC
will furnish to Underwriters as soon as practicable after filing any other
information concerning Transferor or ILC filed with any government or
regulatory authority which is otherwise publicly available.
(h) To the extent, if any, that any rating provided with respect
to the Notes set forth in Section 6(e) is conditional upon the furnishing
of documents reasonably available to Transferor or ILC, Transferor and ILC
shall furnish such documents.
Section 6. Conditions of Underwriters' Obligation. The obligations
of Underwriters to purchase and pay for the Notes on the Issuance Date
shall be subject to the accuracy in all material respects of the
representations and warranties of Transferor and ILC herein, in each of the
Basic Documents, to the performance by Transferor and ILC in all material
respects of their obligations hereunder and to the following additional
conditions:
(a) Transferor and ILC shall each have delivered a certificate (an
"Officer's Certificate"), dated the Issuance Date, signed by one of its
Authorized Officers to the effect that:
(i) the representations and warranties made by Transferor
or ILC, as applicable, in this Agreement and the Basic Documents
(the "Transaction Documents") are true and correct in all material
respects at and as of the date of such Officer's Certificate as if
made on and as of such date (except to the extent they expressly
relate to an earlier date);
(ii) Transferor or ILC (as the case may be) has complied
with all the agreements and satisfied all the conditions on its
part to be performed or satisfied under the Transaction Documents
at or prior to the date of such Officer's Certificate;
8
<PAGE>
(iii) nothing has come to such officer's attention that
would lead such officer to believe that the Final Prospectus
contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and
(iv) such officer is not aware of (A) any request of the
Commission for further amendment of the Registration Statement or
the Final Prospectus for any additional information, (B) 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 or (C) any
notification with respect to the suspension of the qualification
of the Notes for sale in any jurisdiction or the threatening of
any proceeding for that purpose.
(b) Underwriters shall have received from counsel to ILC and
Transferor, favorable opinions (subject to customary and usual
qualifications), dated the Issuance Date and reasonably satisfactory in
form and substance to Underwriters and their counsel with respect to, or to
the effect that, among other things: (i) the due formation and
qualification of each of Transferor and ILC and that Transferor and ILC, as
applicable, have the corporate power and authority to perform the
Transaction Documents and the transactions contemplated herein and therein;
(ii) the due authorization, execution, delivery and enforceability of this
Agreement and the other Transaction Documents as applicable, by Transferor
and ILC; (iii) each of this Agreement and the other Transaction Documents
are the legal, valid and binding obligation of Transferor and ILC, as
applicable, enforceable against each of them in accordance with its terms
(subject to customary exceptions relating to bankruptcy and laws affecting
creditors' rights); (iv) the Notes have been duly authorized, executed and
delivered to Transferor and constitute the legal, valid and binding
obligations of Issuer, enforceable in accordance with their terms (subject
to customary exceptions as to bankruptcy and laws affecting creditors'
rights) and are entitled to the benefits of the Indenture; (v) the issuance
of the Notes by Issuer, the sale of the Notes by Transferor, the
performance of this Agreement by Transferor and ILC, the compliance by
Transferor and ILC with the terms of the Transaction Documents, as
applicable, and the consummation of the transactions contemplated herein
and therein will not conflict with the organizational documents of
Transferor or ILC, or to the best of any such counsel's knowledge, any
other contracts to which Transferor or ILC is a party or by which either of
them is bound; (vi) to the best of such counsel's knowledge, there is no
legal or governmental proceeding threatened or pending against Transferor
or ILC which would have a material adverse effect on the issuance of the
Notes; (vii) if a court disregarded the intent of the parties and
characterized the transfers as a pledge of collateral, each of the
Contribution Agreement and the Pooling and Servicing Agreement and
accompanying documentation creates a valid security interest in the Leases
and the Equipment (or interests therein) under New York law; (viii)
assuming no prior financing statements covering the Leases are in effect
based on a review of certain UCC searches and that financing statements
covering the Leases and naming (A) Transferor as secured party/purchaser
and ILC as debtor/seller, (B) Transferor as debtor/seller and Issuer as
secured party/purchaser and (c) Issuer as debtor and Indenture Trustee as
secured party, in each case are being filed in the appropriate filing
offices of the State of Ohio, (1) immediately after giving
9
<PAGE>
effect to the transfers contemplated by the Contribution Agreement,
Transferor has a first priority perfected interest in all right, title and
interest of ILC in the Leases, (2) immediately after giving effect to the
transfers contemplated by the Pooling and Servicing Agreement, Issuer has a
first priority perfected interest in all right, title and interest of
Transferor in the Leases, and (3) immediately after giving effect to the
grant contemplated by the Indenture, Indenture Trustee has a first priority
perfected security interest in all right, title and interest of Issuer in
the Leases; (ix) the Trust Agreement is not required to be qualified under
Trust Indenture Act and the Trust is not required to be registered under
the 1940 Act, (x) the Indenture has been duly qualified under the Trust
Indenture Act, (xi) neither the Transferor nor Issuer is an "investment
company" or a company "controlled by" an "investment company" within the
meaning of the 1940 Act and (xii) on the Issuance Date the Registration
Statement is effective, and, that to the best of such counsel's knowledge
no stop order suspending the effectiveness of the Registration Statement
has been issued or is threatened, and that although such counsel is not
passing on the factual accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus, nothing came to
such counsel's attention that leads such counsel to believe that either the
Registration Statement or the Prospectus (as of the Effective Date or the
date of the Prospectus) contained an 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, in light of the circumstances under which
they were made not misleading. In rendering such opinion, counsel may rely,
to the extent deemed proper and as stated therein, as to matters of fact on
certificates of responsible officers of Transferor and ILC and public
officials and as to matters of state law of jurisdictions other than the
jurisdictions in which such counsel is admitted to practice, on opinions of
local counsel satisfactory to Underwriters.
(c) Underwriters shall have received from Mayer, Brown & Platt,
special counsel for Underwriters, such opinion or opinions, dated the
Issuance Date, with respect to the validity of the Notes, the Registration
Statement, the Final Prospectus, true sale, nonconsolidation and other
related matters as Underwriters may require.
(d) At the Execution Time and at the Issuance Date, Ernst & Young
shall have furnished to Underwriters a letter or letters, dated the date of
this Agreement and the Issuance Date, respectively, in form and substance
satisfactory to Underwriters.
(e) The Class A-1 Notes shall have been rated at least P-1 and
F1+/AAA, the Class A-2 notes shall have been rated at least AAA and AAA,
the Class A-3 Notes shall have been rated at least AAA and AAA, the Class
A-4 Notes shall have been rated at least AAA and AAA, and the Class B Notes
shall have been rated at least AA and A by Moody's Investors Service, Inc.
and Fitch IBCA, Inc., respectively, which ratings shall not have been
reduced or withdrawn as evidenced by the Officer's Certificate referred to
in Section 6(a).
(f) Counsel to Indenture Trustee shall have delivered a favorable
opinion (subject to customary and usual exceptions), dated the Issuance
Date, and satisfactory in form and substance to Underwriters and counsel
for Underwriters and to Transferor and ILC and their counsel with respect
to, or to the effect that, among other things: (i) the due incorporation
and valid existence
10
<PAGE>
of Indenture Trustee, (ii) the due authorization, execution and delivery by
Indenture Trustee of the Indenture, (iii) the Indenture is the legal, valid
and bending obligation of Indenture Trustee, enforceable against Indenture
Trustee in accordance with its terms (subject to customary and usual
exceptions), (iv) no approvals or filings with any Governmental Authority
required in connection with the execution, delivery or performance by
Indenture Trustee of the Indenture, (v) the execution, delivery and
performance of the Indenture will not cause any default under Indenture
Trustee's organizational documents or other contracts to which it is a
party or by which it is bound and (vi) the Notes have been duly
authenticated by Indenture Trustee in accordance with the terms of the
Indenture.
(g) Counsel to Trustee shall have delivered a favorable opinion
(subject to customary and usual exceptions), dated the Issuance Date, and
satisfactory in form and substance to Underwriters and counsel for
Underwriters and to Transferor and ILC and their counsel with respect to,
or to the effect that: (i) the due incorporation and valid existence of
Trustee, (ii) the due authorization, execution and delivery by Trustee of
the Trust Agreement, (iii) the Trust Agreement is the legal, valid and
bending obligation of Trustee, enforceable against Trustee in accordance
with its terms (subject to customary and usual exceptions), (iv) no
approvals or filings with any Governmental Authority required in connection
with the execution, delivery or performance by Trustee of the Trust
Agreement, (v) the execution, delivery and performance of the Trust
Agreement will not cause any default under Trustee's organizational
documents or other contracts to which it is a party or by which it is bound
and (vi) the Trust has been duly formed and is validly existing as a
statutory business trust under the laws of the State of Delaware, with full
power and authority to execute, deliver and perform its obligations under
each of the Basic Documents to which the Trust is a party.
(h) Underwriters shall have received the approval of each of their
respective investment committees with respect to the execution, delivery
and performance of this Agreement.
(i) All conditions precedent to the sale of the Certificates
pursuant to the Certificate Purchase Agreement have been fulfilled, and the
Certificates have been sold or will be sold concurrently with the sale of
the Notes.
(j) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall be
reasonably satisfactory in form and substance to Underwriters, and
Underwriters and their counsel shall have received such other information,
certificates and documents as Underwriters or they may reasonably request.
Section 7. Reimbursement of Expenses. If (x) no closing of the
sale of the Notes occurs by the Issuance Date through no fault of
Transferor or ILC or because the conditions set forth in Sections 6(c),(d),
(e), (f), (g) or (h) have not been met, or (y) Underwriters terminate the
engagement pursuant to Section 10 or because any conditions precedent in
Section 6 (other than Section 6(d)) have not been fulfilled, then
Transferor or ILC's liability to Underwriters shall be limited to the
reimbursement of Underwriters' expenses incurred through the date of
termination
11
<PAGE>
for its reasonable out-of-pocket and incidental expenses. In addition, whether
or not the Notes are issued or sold:
(a) Transferor or ILC shall pay the reasonable fees and expenses
associated with the transactions contemplated hereby not paid by
Underwriters in accordance with the provisions of Section 7(b) including,
without limitation, the following fees and expenses:
(i) rating agency fees payable with respect to their ratings
of the Notes;
(ii) fees charged by the firm of independent public
accountants referred to in Section 6(d);
(iii) filing fees in connection with the transactions
contemplated hereby including, but not limited to, the Commission;
(iv) fees and expenses of counsel to Underwriters;
(v) Indenture Trustee's and Trustee's fees and fees of
counsel to Indenture Trustee and Trustee;
(vi) the costs and expenses of printing the Registration
Statement and the Prospectus;
(vii) the costs of printing or reproducing this Agreement,
the Blue Sky Survey and any other documents in connection with the
offer, sale and delivery of the Notes;
(viii) all expenses in connection with the qualification
of the Notes under state securities laws as provided in Section
4(a)(vi), including the fees and disbursements of counsel in
connection with the Blue Sky Survey;
(ix) the cost of preparing the Notes;
(x) the cost or expenses of any transfer agent or registrar;
and
(xi) all other costs and expenses incident to the
performance of their obligations hereunder which are not otherwise
specifically provided for in this Section 7; provided, that
neither ILC nor Transferor waives any rights to reimbursement from
Underwriters in the event of either Underwriter's failure to
perform in accordance with this Agreement.
(b) It is understood and agreed that, except as provided in
Section 8 and 9, Underwriters will pay securities transfer taxes on resale
of any of the Notes by them, and any advertising expenses connected with
any offers they may make.
12
<PAGE>
Section 8. Indemnification and Contribution. (a) Transferor and
ILC, jointly and severally, will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities
(or acts in respect thereof) arise out of or are base upon an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Preliminary Prospectus or the Final Prospectus,
or any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will promptly reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating, preparing to defend or defending, or appearing as a
third-party witness in connection with, any such action or claim; provided,
that Transferor and ILC shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, the Preliminary Prospectus or
the Final Prospectus or any such amendment or supplement, in reliance upon
and in conformity with the Underwriting Information (defined below).
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless Transferor and ILC against any losses, claims,
damages or liabilities to which Transferor and ILC may become subject,
under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or acts in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Final Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made to the Registration Statement or the Final Prospectus or
any such amendment or supplement, in reliance upon and in conformity with
written information furnished to Transferor or ILC by or on behalf of such
Underwriter expressly for use therein; and will reimburse Transferor or ILC
for any legal or other expenses reasonably incurred by Transferor or ILC in
connection with the investigating, preparing to defend or defending, or
appearing as a third-party witness in connection with, any such action or
claim. Transferor and ILC acknowledge that the statements set forth in the
last paragraph of the cover page and under the heading "Underwriting" in
the Registration Statement, the Preliminary Prospectus and the Final
Prospectus constitute the only information furnished in writing by or on
behalf of Underwriters for inclusion in the Registration Statement or the
Final Prospectus (the "Underwriting Information"), and Underwriters confirm
that such statements are correct.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) 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
13
<PAGE>
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; provided, that if the defendants in any such action include both the
indemnified party and the indemnifying party, and the indemnified party
shall have been advised by counsel that representation of such indemnified
party and the indemnifying party may be inappropriate under applicable
standards of professional conduct due to actual or potential differing
interests between them, the indemnified party or parties shall have the
right to select separate counsel to defend such action on behalf of such
indemnified party or parties. It is understood that the indemnifying party
shall, in connection with any such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys together with appropriate
local counsel at any time from all indemnified parties not having actual or
potential differing interest with any other indemnified party. Upon receipt
of notice from the indemnifying party to such indemnified party of its
election so to appoint counsel to defend such action and approval by the
indemnified party of such counsel, the indemnifying party will not be
liable for any settlement entered into without its consent and will not be
liable to such indemnified party under this Section 8 for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the next
preceding sentence, (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party;
and except that, if clause (i) or (iii) is applicable, such liability shall
be only in respect of the counsel referred to in such clause (i) or (iii).
Notwithstanding the immediately preceding sentence and the first sentence
of this paragraph, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with
such request prior to the date of such settlement.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) in respect of any losses, claims, damages or
liabilities (or actions or proceeding in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) in
such proportion as is appropriate to reflect the relative benefits received
by Transferor and ILC on the one hand and Underwriters on the other from
the offering of the Notes. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under
14
<PAGE>
subsection (c), then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of Transferor or ILC on the one hand and Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof), as well as any other relevant equitable considerations.
The relative benefits received by Transferor or ILC on the one hand and
Underwriters on the other shall be deemed to be in the same proportion that
the total net proceeds from the offering (before deducting expenses)
received by Transferor and ILC bear to the total underwriting discounts and
commissions received by Underwriters, in each case as set forth in the
table on the cover page of the Final 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
Transferor or ILC on the one hand or Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. Transferor, ILC and
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation or
by any other method of allocation which does not take into account the
equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, preparing to defend or defending,
or appearing as a third-party witness in connection with, any such action
or claim. Notwithstanding the provision for this subsection (d),
Underwriters shall not be required to contribute any amount in excess of
the total underwriting discount as set forth on the cover page of the
Prospectus. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of Transferor and ILC under this Section 8
shall be in addition to any liability which Transferor or ILC may otherwise
have and shall extend, upon the same terms and conditions, to each person,
if any, who controls either Underwriter within the meaning of the
Securities Act; and the obligations of Underwriters under this Section 8
shall be in addition to any liability which Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of Transferor and ILC and to each person, if any, who controls
Transferor or ILC within the meaning of the Securities Act.
Section 9. Survival. The respective representations, warranties
and agreements of Transferor, ILC and Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect,
notwithstanding any investigation heretofore or hereafter made by or on
behalf of Transferor, ILC or Underwriters, and such representations,
warranties and agreements made by Transferor and ILC shall survive the
delivery and payment for the Notes. The provisions of Sections 7 and 8
shall survive the termination or cancellation of this Agreement.
15
<PAGE>
Section 10. Termination. (a) This Agreement may be terminated by
Underwriters at any time upon the giving of notice at any time prior to the
Issuance Date: (i) if there has been, since December 31, 1997, any material
adverse change in the condition, financial or otherwise, of ILC or
Transferor, or in the earnings, business affairs or business prospects of
ILC or Transferor, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any outbreak or escalation of
hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in your
reasonable judgment, impracticable to market the Notes or enforce contracts
for the sale of the Notes, or (iii) if trading generally on either the
American Stock Exchange or the New York Stock Exchange has been suspended,
or minimum or maximum prices for trading have been fixed, or maximum ranges
for prices for securities have been required, by either of said exchanges
or by order of the Commission or any other governmental authority, or (iv)
if a banking moratorium has been declared by either federal or New York
authorities. In the event of any such termination, no party will have any
liability to any other party hereto, except as otherwise provided in
Sections 7 or 8.
(b) This Agreement may not be terminated by Transferor or ILC,
except in accordance with law, without the written consent of Underwriters.
(c) Notwithstanding anything herein to the contrary, if Transferor
or ILC does not perform any obligation under this Agreement or any
representation and warranty hereunder is incomplete or inaccurate in any
material respect, this Agreement and all of Underwriters' obligations
hereunder may be immediately canceled by Underwriters by notice thereof to
Transferor or ILC. Any such cancellation shall be without liability of any
party to any other party except that the provisions of Sections 8 and 9
shall survive any such cancellation.
Section 11. Notices. All communications provided for or permitted
hereunder shall be in writing and shall be deemed to have been duly given
if personally delivered to or mailed by certified or registered mail,
postage prepaid, or transmitted by telex or telegraph and confirmed by a
similar mailed writing, if to Underwriters, addressed to Underwriters, c/o
Lehman Brothers Inc., at the address first stated in this Agreement, or to
such other address as Lehman Brothers Inc. may designate in writing to
Transferor or ILC; if to ILC, addressed to ILC at 1023 West Eighth Street,
Cincinnati, Ohio, 45203, facsimile no.: (513) 579-2861; if to Transferor,
addressed to Transferor at 1023 West Eighth Street, Cincinnati, Ohio, 45203
facsimile no: (513) 579-2861; or such other address as Transferor or ILC
may have designated in writing to you.
Section 12. Successors; Actions by Underwriters. This Agreement
will inure to the benefit of and be binding upon Transferor and ILC and
their successors and assigns and Underwriters and their successors and
assigns. Any action by Underwriters hereunder may be taken by the
Underwriters jointly or by Lehman Brothers Inc. alone on behalf of the
Underwriters, and any such action taken by Lehman Brothers Inc. alone shall
be binding upon the Underwriters.
16
<PAGE>
Section 13. Default by Either Underwriter. If either Underwriter
shall fail on the Issuance Date to purchase the Notes which it is obligated
to purchase hereunder (the "Defaulted Notes"), the remaining Underwriter
(the "Non-Defaulting Underwriter") shall have the right, but not the
obligation, within one (1) Business Day thereafter, to make arrangements to
purchase all, but not less than all, of the Defaulted Notes upon the terms
herein set forth; if, however, the Non-Defaulting Underwriter shall not
have completed such arrangements within such one (1) Business Day period,
then this Agreement shall terminate without liability on the part of the
Non-Defaulting Underwriter.
No action taken pursuant to this Section 13 shall relieve the
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, any of the Non-Defaulting Underwriter,
Transferor or ILC shall have the right to postpone the Issuance Date for a
period not exceeding seven days in order to effect any required changes in
the Registration Statement or Prospectus or in any other documents or
arrangements.
Section 14. Entire Agreement. This Agreement and the documents
referred to herein and to be delivered pursuant hereto constitute the
entire agreement between the parties pertaining to the subject matter
hereof and supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties.
Section 15. Governing Law. (a) THIS AGREEMENT IS TO BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO
CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
(b) TRANSFEROR AND ILC HEREBY SUBMIT TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND
EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS
THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE
ADDRESS SET FORTH IN SECTION 11 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S.
MAILS, POSTAGE PREPAID. TRANSFEROR AND ILC HEREBY WAIVE ANY OBJECTION BASED
ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS
SECTION SHALL AFFECT THE RIGHT OF TRANSFEROR OR ILC TO SERVE LEGAL PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT EITHER'S RIGHT TO BRING ANY
ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.
17
<PAGE>
(c) TRANSFEROR AND ILC HEREBY WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN CONNECTION
WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 16. Counterparts. This Agreement may be executed in two or
more counterparts, each of which when so executed and delivered shall be an
original, but all of which together shall constitute one and the same
instrument.
Section 17. Miscellaneous. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought. The headings in
this Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof.
If you are in agreement with the foregoing, please sign a
counterpart hereof and return the same to Transferor or ILC, whereupon this
Agreement shall become a binding agreement between Underwriters, Transferor
and ILC.
18
<PAGE>
Very truly yours,
INFORMATION LEASING CORPORATION
By: /s/ Vincent D. Rinaldi
----------------------------------------
Name: Vincent D. Rinaldi
Title: President
PROVIDENT LEASE RECEIVABLES CORPORATION
By: /s/ John R. Farrenkopf
-----------------------------------------
Name: John R. Farrenkopf
Title: Treasurer
The foregoing Agreement
is hereby accepted and
entered into as of the
date hereof.
LEHMAN BROTHERS INC.
By: /s/ Martin P. Harding
--------------------------
Name: Martin P. Harding
Title: Managing Director
19
<PAGE>
SCHEDULE A
Underwriters and Purchase Price
Principal Principal Principal Principal
Amount of Amount of Amount of Amount of
Underwriters of the Class A-1 Class A-2 Class A-3 Class A-4
Class A Notes Notes Notes Notes Notes
- -------------------- --------- --------- --------- ----------
Lehman Brothers Inc. $58,642,400 $15,393,600 $72,748,000 $14,860,800
Prudential Securities
Incorporated $14,660,000 $3,848,400 $18,187,000 $3,715,200
Underwriter's Discount 0.22% 0.30% 0.40% 0.50%
Underwriter of the Class Principal Amount of Class B Notes
B Notes -----------------------------------
--------
Lehman Brothers Inc. $7,687,000
Underwriter's Discount 0.55%
20
EXHIBIT 4.1
================================================================================
PROVIDENT EQUIPMENT LEASE TRUST 1998-A,
Issuer
AND
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
Indenture Trustee
INDENTURE
Dated as of September 1, 1998
$73,303,000 of 5.28% Class A-1 Lease-Backed Notes
$19,242,000 of 5.78% Class A-2 Lease-Backed Notes
$90,935,000 of 5.60% Class A-3 Lease-Backed Notes
$18,576,000 of 5.75% Class A-4 Lease-Backed Notes
$7,687,000 of 6.20% Class B Lease-Backed Notes
<PAGE>
PROVIDENT EQUIPMENT LEASE TRUST 1998-A
Reconciliation and Tie between the Indenture dated as of September
1, 1998 and the Trust Indenture Act of 1939, as amended
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
310(a)(1) Section 7.8
(a)(2) 7.8
(a)(3) 7.8
(a)(4) Not Applicable
(b) 7.8; 7.9; 6.7; 1.5; 1.6
(c) Not Applicable
311(a) 7.14
(b) 7.14
312(a) 2.11
(b) 11.2
(c) 11.2
313(a) 7.15
(b)(1) 7.15
(b)(2) 7.15
(c) 7.15; 1.6
(d) 7.15
314(a) 8.12; 8.9; 1.6
(b) Not Applicable
(c)(1) 11.3
(c)(2) 11.3
(c)(3) 11.1
(d) 11.1
(e) 11.4
(f) Not Applicable
315(a) 7.1(a)
(b) 7.2; 1.6
(c) 7.1(b)
(d) 7.1(c)
(e) 6.14
316(a)(last sentence) 2.12
(a)(1)(A) 6.12
(a)(1)(B) 6.13
(a)(2) Not Applicable
317(a)(1) 6.3(c)
(a)(2) 6.4
(b) 8.3(b)
318(a) 11.1
(c) 11.1
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions; Interpretive Provisions........................3
SECTION 1.2. Compliance Certificates and Opinions........................3
SECTION 1.3. Form of Documents Delivered to Indenture Trustee............4
SECTION 1.4. Acts of Noteholders, etc....................................5
SECTION 1.5. Notices, etc., to Indenture Trustee, Servicer, Issuer
and Rating Agencies.........................................6
SECTION 1.6. Notice to Noteholders; Waiver...............................7
SECTION 1.7. Effect of Headings and Table of Contents....................8
SECTION 1.8. Successors and Assigns......................................8
SECTION 1.9. GOVERNING LAW...............................................8
SECTION 1.10. Legal Holidays..............................................8
SECTION 1.11. Execution in Counterparts...................................8
SECTION 1.12. Survival of Representations and Warranties..................8
ARTICLE 2.
THE NOTES
SECTION 2.1. General Provisions..........................................9
SECTION 2.2. Execution, Authentication, Delivery, and Dating............11
SECTION 2.3. Transfer and Exchange......................................11
SECTION 2.4. Mutilated, Destroyed, Lost and Stolen Notes................12
SECTION 2.5. Book-Entry Registration of Class A Notes and
Class B Notes..............................................13
SECTION 2.6. Notice to Clearing Agency..................................14
SECTION 2.7. Definitive Class A Notes and Definitive Class B Notes......15
SECTION 2.8. Payment of Interest and Principal; Rights Preserved........16
SECTION 2.9. Persons Deemed Owners......................................16
SECTION 2.10. Cancellation...............................................17
SECTION 2.11. Noteholder Lists...........................................17
SECTION 2.12. Treasury Securities........................................17
-i-
<PAGE>
ARTICLE 3.
ACCOUNTS; INVESTMENT OF MONEYS;
COLLECTION AND APPLICATION OF MONEYS; REPORTS
SECTION 3.1. Trust Accounts; Investments by Indenture Trustee........18
SECTION 3.2. Collection of Moneys....................................19
SECTION 3.3. Collection Account; Payments............................19
SECTION 3.4. Reports by Indenture Trustee; Notices of Certain
Payments................................................20
SECTION 3.5. Indenture Trustee May Rely on Certain Information
from Servicer...........................................21
ARTICLE 4.
RELEASE OF COLLATERAL
SECTION 4.1. Release of Collateral...................................22
SECTION 4.2. Release of Leases Upon Final Lease Payment..............22
SECTION 4.3. Execution of Documents..................................23
SECTION 4.4. Officer's Certificates..................................23
ARTICLE 5.
SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER
SECTION 5.1. Servicer Events of Default.................................23
SECTION 5.2. Substitute Servicer........................................24
ARTICLE 6.
EVENTS OF DEFAULT; REMEDIES
SECTION 6.1. Events of Default.........................................24
SECTION 6.2. Acceleration of Maturity; Rescission and Annulment........25
SECTION 6.3. Remedies..................................................26
SECTION 6.4. Indenture Trustee Shall File Proofs of Claim..............27
SECTION 6.5. Indenture Trustee May Enforce Claims Without
Possession of Notes.......................................28
SECTION 6.6. Application of Money Collected............................28
SECTION 6.7. Limitation on Suits.......................................29
SECTION 6.8. Unconditional Right of Noteholders to Receive
Principal and Interest....................................30
SECTION 6.9. Restoration of Rights and Remedies........................31
-ii-
<PAGE>
SECTION 6.10. Rights and Remedies Cumulative...........................31
SECTION 6.11. Delay or Omission Not Waiver.............................31
SECTION 6.12. Control by Noteholders...................................31
SECTION 6.13. Waiver of Events of Default..............................32
SECTION 6.14. Undertaking for Costs....................................32
SECTION 6.15. Waiver of Stay or Extension Laws.........................33
SECTION 6.16. Sale of Trust Estate.....................................33
ARTICLE 7.
THE TRUSTEE
SECTION 7.1. Certain Duties and Responsibilities.......................35
SECTION 7.2. Notice of Defaults or Events of Default...................36
SECTION 7.3. Certain Rights of Indenture Trustee.......................36
SECTION 7.4. Not Responsible for Recitals or Issuance of Notes.........37
SECTION 7.5. May Hold Notes............................................37
SECTION 7.6. Money Held in Trust.......................................38
SECTION 7.7. [Reserved.]...............................................38
SECTION 7.8. Corporate Indenture Trustee Required; Eligibility.........38
SECTION 7.9. Resignation and Removal; Appointment of Successor.........39
SECTION 7.10. Acceptance of Appointment by Successor....................40
SECTION 7.11. Merger, Conversion, Consolidation or Succession to
Business..................................................41
SECTION 7.12. Co-trustees and Separate Indenture Trustees...............41
SECTION 7.13. Acceptance by Indenture Trustee...........................43
SECTION 7.14. Preferential Collection of Claims Against Issuer..........43
SECTION 7.15. Reports by Indenture Trustee to Noteholders...............43
SECTION 7.16. No Proceedings............................................43
ARTICLE 8.
COVENANTS
SECTION 8.1. Payment of Principal and Interest.........................44
SECTION 8.2. Maintenance of Office or Agency; Chief Executive
Office....................................................44
SECTION 8.3. Money for Payments to Noteholders to be Held in Trust.....44
SECTION 8.4. Corporate Existence; Merger; Consolidation, etc...........45
SECTION 8.5. Protection of Trust Estate; Further Assurances............47
SECTION 8.6. [Reserved]................................................48
SECTION 8.7. Performance of Obligations; Pooling and Servicing
Agreement.................................................48
SECTION 8.8. Negative Covenants........................................49
-iii-
<PAGE>
SECTION 8.9. Notice of Events of Default..............................50
SECTION 8.10. Taxes....................................................50
SECTION 8.11. Indemnification..........................................50
SECTION 8.12. Commission Reports; Reports to Indenture Trustee;
Reports to Noteholders...................................51
ARTICLE 9.
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders...52
SECTION 9.2. Supplemental Indentures with Consent of Noteholders......52
SECTION 9.3. Execution of Supplemental Indentures.....................53
SECTION 9.4. Effect of Supplemental Indentures........................54
SECTION 9.5. Reference in Notes to Supplemental Indentures............54
SECTION 9.6. Compliance with Trust Indenture Act......................54
ARTICLE 10.
SATISFACTION AND DISCHARGE
SECTION 10.1. Satisfaction and Discharge of Indenture..................54
SECTION 10.2. Application of Trust Money...............................56
ARTICLE 11.
MISCELLANEOUS
SECTION 11.1. Trust Indenture Act Controls.............................56
SECTION 11.2. Communication by Noteholders with Other Noteholders......56
SECTION 11.3. Officers' Certificate and Opinion of Counsel as to
Conditions Precedent.....................................56
SECTION 11.4. Statements Required in Certificate or Opinion............57
SECTION 11.5. Nonpetition..............................................57
SECTION 11.6. ERISA Matters............................................57
SECTION 11.7. Lessees..................................................57
-iv-
<PAGE>
SCHEDULES
SCHEDULE 1 Leases
EXHIBITS
EXHIBIT A Forms of Notes and Form of Indenture Trustee's Certificate
of Authentication
APPENDIX
APPENDIX X Definitions
-v-
<PAGE>
INDENTURE
This INDENTURE dated as of September 1, 1998, is between PROVIDENT
EQUIPMENT LEASE TRUST 1998-A (herein called the "Issuer"), and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as
indenture trustee (the "Indenture Trustee").
RECITALS OF THE COMPANY
Issuer has duly authorized the issuance of $209,743,000 in
aggregate principal amount of its Lease-Backed Notes, Series 1998-A,
consisting of $73,303,000 aggregate principal amount of 5.28% Class A-1
Lease-Backed Notes (the "Class A-1 Notes"), $19,242,000 aggregate principal
amount of 5.78% Class A-2 Lease-Backed Notes (the "Class A-2 Notes"),
$90,935,000 aggregate principal amount of 5.60% Class A-3 Lease-Backed
Notes (the "Class A-3 Notes"), $18,576,000 aggregate principal amount of
5.75% Class A-4 Lease-Backed Notes (the "Class A-4 Notes", together with
the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, the
"Class A Notes") and $7,687,000 aggregate principal amount of 6.20% Class B
Lease-Backed Notes (the "Class B Notes", the Class A Notes and the Class B
Notes are referred to collectively as the "Notes"), of substantially the
tenor hereinafter set forth, and to provide therefor Issuer has duly
authorized the execution and delivery of this Indenture. The Class A Notes
and the Class B Notes shall be entitled to payments of interest and
principal as set forth herein.
All things necessary to make the Notes, when executed by Issuer
and authenticated and delivered hereunder, the valid obligations of Issuer,
and to make this Indenture a valid agreement of Issuer, in accordance with
its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the holders thereof, it is mutually covenanted and agreed, for the
benefit of all Noteholders, as follows:
GRANTING CLAUSE
Issuer hereby Grants to Indenture Trustee on the Issuance Date,
for the benefit and security of the Noteholders, all of Issuer's right,
title and interest in and to:
-1-
<PAGE>
(a) the Leases listed in Schedule 1 to the Pooling and Servicing
Agreement, as such Schedule 1 is amended or supplemented from time to time,
including all instruments, documents, books and other records relating
thereto,
(b) all Lease Payments, Casualty Payments, Termination Payments
and other amounts not collected with respect thereto on or prior to the
Cut-Off Date (other than any prepayments of rent required pursuant to the
terms of any Lease at or before the commencement of the Lease), all
Payaheads relating to payments on the Leases due or becoming due after the
Cut-Off Date and all Substitute Leases and all Lease Payments, Casualty
Payments, Termination Payments and other amounts not collected with respect
thereto prior to the effective date of their respective substitution (other
than any prepayments of rent required by the terms of any Substitute Lease
at or before the commencement of the Substitute Lease) and all Payaheads
relating to payments on the Substitute Leases due or becoming due after the
effective date of their respective substitution,
(c) all rights of Issuer to or under any guarantees of or
collateral (including all rights of Issuer in any security deposits) for
the Lessee's obligations under any Lease and all UCC financing statements
relating to such collateral,
(d) all interests of Issuer in the Equipment at any time subject
to any Lease, including any security interest of Issuer in the Equipment,
(e) any proceeds with respect to the Leases from claims on
insurance policies covering the Equipment or Lessees,
(f) all moneys from time to time on deposit in any of the Trust
Accounts, including all investments and income from the investment of such
moneys,
(g) all rights of Issuer under the Pooling and Servicing Agreement
and the Contribution Agreement, including the right of Issuer to cause
Transferor and ILC to repurchase Leases under the Pooling and Servicing
Agreement and Contribution Agreement, respectively; and
(h) all proceeds of the foregoing, whether by voluntary or
involuntary conversion thereof (collectively, the "Granted Assets"). Such
Grant is made in trust to secure (i) the payment of all amounts due on the
Class A Notes and the Class B Notes, in accordance with their terms,
equally and ratably without prejudice, priority, or distinction among any
of the Class A Notes and the Class B Notes, respectively, by reason of
differences in time of issuance or otherwise, (ii) the payment of all other
sums payable under this Indenture with respect to the Notes and (iii)
compliance with the provisions of this Indenture with respect to the Notes.
-2-
<PAGE>
Indenture Trustee acknowledges such Grant, accepts the trusts
hereunder in accordance with the provisions hereof, and agrees to perform
the duties herein required to the best of its ability and to the end that
the interests of the Noteholders may be adequately and effectively
protected as hereinafter provided.
ARTICLE 1.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions; Interpretive Provisions. (a) Capitalized
terms used and not otherwise defined herein shall have the meanings ascribed to
such terms in Appendix X to this Indenture.
(b) The other interpretive provisions specified in Appendix X to
the Indenture shall apply to this Agreement.
(c) It is understood and agreed that all transfers of Leases made
pursuant to the Contribution Agreement shall be made as contributions by
ILC to the capital of Transferor. Each reference herein to any "purchase"
of leases by Transferor from ILC, or "sale" of leases by ILC to Transferor
or similar terms shall be deemed to refer to such capital contributions.
Each reference to Leases "sold" by ILC or "purchased" by Transferor shall
be deemed to refer to Leases that are contributed by ILC to the capital of
Transferor. All other terms of this Indenture shall be construed in a
manner consistent with the foregoing.
SECTION 1.2. Compliance Certificates and Opinions.
-------------------------------------
Upon any written application or request (or oral application with
prompt written or telecopied confirmation) by Issuer to Indenture Trustee
to take any action under any provision of this Indenture, other than any
request that (a) Indenture Trustee authenticate the Notes specified in such
request, (b) Indenture Trustee invest moneys in any of the Trust Accounts
pursuant to the written directions specified in such request, or (c)
Indenture Trustee pay moneys due and payable to Issuer hereunder to the
Issuer's assignee specified in such request, Indenture Trustee shall
require Issuer to furnish to Indenture Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and that
the request otherwise is in accordance with the terms of the Indenture, and
an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the
case of any such requested action as to which other evidence of
satisfaction of the conditions precedent thereto is specifically required
by any provision of this Indenture, no additional certificate or opinion
need be furnished.
-3-
<PAGE>
SECTION 1.3. Form of Documents Delivered to Indenture Trustee.
-------------------------------------------------
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one
such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some
matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an Authorized Officer of Issuer
delivered to Indenture Trustee 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 or opinion and any 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 Servicer, Transferor, or
the Manager as to such factual matters unless such officer or 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. Any Opinion of Counsel may be based on the written opinion of
other counsel, in which event such Opinion of Counsel shall be accompanied
by a copy of such other counsel's opinion and shall include a statement to
the effect that such counsel believes that such counsel and Indenture
Trustee may reasonably rely upon the opinion of such other counsel.
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.
Wherever in this Indenture, in connection with any application or
certificate or report to Indenture Trustee, it is provided that Issuer
shall deliver any document as a condition of the granting of such
application, or as evidence of 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 Issuer to have such
application granted or to the sufficiency of such certificate or report.
The foregoing shall not, however, be construed to affect Indenture
Trustee's right to rely upon the truth and accuracy of any statement or
opinion contained in any such document as provided in Section 7.1(a)(ii).
-4-
<PAGE>
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default or Servicer
Event of Default is a condition precedent to the taking of any action by
Indenture Trustee at the request or direction of Issuer, then,
notwithstanding that the satisfaction of such condition is a condition
precedent to the Issuer's right to make such request or direction,
Indenture Trustee shall be protected in acting in accordance with such
request or direction if it does not have knowledge of the occurrence and
continuation of such Default or Event of Default or Servicer Event of
Default. For all purposes of this Indenture, Indenture Trustee shall not be
deemed to have knowledge of any Default or Event of Default nor shall
Indenture Trustee have any duty to monitor or investigate to determine
whether a default has occurred (other than an Event of Default of the kind
described in Section 6.1(a)) or Servicer Event of Default unless a
Responsible Officer of Indenture Trustee shall have actual knowledge
thereof or shall have been notified in writing thereof by Issuer, Servicer,
Transferor, or any Noteholder.
SECTION 1.4. Acts of Noteholders, etc.
-------------------------
(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 otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to Indenture Trustee and, where it is hereby
expressly required, to Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are 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 7.1) conclusive in favor of Indenture Trustee and Issuer, if made
in the manner provided in this Section 1.4.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than such signer's individual capacity, such certificate or affidavit
shall also constitute sufficient proof of such signer's authority. The fact
and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which Indenture Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of Holder of any Note shall bind every future
Holder of the same Note
-5-
<PAGE>
and the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefore or in lieu thereof in respect of anything
done, omitted or suffered to be done by Indenture Trustee or Issuer in
reliance thereon, whether or not notation of such action is made upon such
Note.
(d) By accepting the Notes issued pursuant to this Indenture, each
Noteholder irrevocably appoints Indenture Trustee hereunder as the special
attorney-in-fact for such Noteholder vested with full power on behalf of
such Noteholder to effect and enforce the rights of such Noteholder and the
revisions pursuant hereto for the benefit of such Noteholder; provided that
nothing contained in this Section 1.4(d) shall be deemed to confer upon
Indenture Trustee any duty or power to vote on behalf of the Noteholders
with respect to any matter on which the Noteholders have a right to vote
pursuant to the terms of this Indenture.
SECTION 1.5. Notices, etc., to Indenture Trustee, Servicer, Issuer
and Rating Agencies.
--------------------
Any request, demand, authorization, direction, notice, consent,
waiver, Act of Noteholders, or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with, Indenture
Trustee, Issuer or Servicer shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid or certified mail return receipt requested, or
sent by private courier or confirmed telecopy. Unless otherwise
specifically provided herein, no such request, demand, authorization,
direction, notice, consent, waiver, Act of Noteholders or other document
shall be effective until received and any provision hereof requiring the
making, giving, furnishing, or filing of the same on any date shall be
interpreted as requiring the same to be sent or delivered in such fashion
that it will be received on such date. Any such request, demand,
authorization, direction, notice, consent, waiver, Act of Noteholders, or
other document shall be sent or delivered to the following addresses:
(a) if to Indenture Trustee, at the Corporate Trust Office,
Attention: Corporate Trust Services/Asset-Backed Administration (Number
for telecopy: (612) 667-3539, or at any other address previously
furnished in writing to Issuer and Servicer by Indenture Trustee; or
(b) if to Issuer, at Provident Equipment Lease Trust
1998-A, in care of Trustee, Attention: Corporate Trust
Administration (Number for telecopy: (302) 888-7544), with copies
to Servicer at the address set forth in clause (c), or at any
other addresses previously furnished in writing to Indenture
Trustee and Servicer by Issuer; or
(c) if to Servicer, Information Leasing Corporation, c/o The
Provident Bank, at One East Fourth Street, Cincinnati, Ohio 45202,
-6-
<PAGE>
Attention: Treasury Services Department (Number for telecopy: (513)
579-2233), or at any other address previously furnished in writing to
Indenture Trustee and Issuer by Servicer.
(d) if to the Rating Agencies: to Fitch IBCA, Inc., 1 State
Street Plaza, New York, New York 10004 Attn: Surveillance (Number for
telecopy: (212) 514-9879) and to Moody's Investors Service, Inc.,
99 Church Street, New York, New York 10007, Attention: ABS Monitoring
Department (Number for telecopy: (212) 553-4948.
SECTION 1.6. Notice to Noteholders; Waiver.
------------------------------
(a) Where this Indenture provides for notice to Noteholders of any
event, or the mailing of any report to Noteholders, such notice or report
shall be sufficiently given (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid or certified mail return
receipt requested, or sent by private courier or confirmed telecopy to each
Noteholder affected by such event or to whom such report is required to be
mailed, at its address as it appears in the Note Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice or the mailing of such report. In any case where a
notice or report to Noteholders is mailed, neither the failure to mail such
notice or report, nor any defect in any notice or report so mailed, to any
particular Noteholder shall affect the sufficiency of such notice or report
with respect to other Noteholders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the 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 Indenture Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon
such waiver.
(b) In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to mail or send
notice to Noteholders, in accordance with Section 1.6(a), of any event or
any report to Noteholders when such notice or report is required to be
delivered pursuant to any provision of this Indenture, then such
notification or delivery as shall be made with the approval of Indenture
Trustee shall constitute a sufficient notification for every purpose
hereunder.
(c) Indenture Trustee shall have no liability to any Noteholder or
Note Owner that fails to respond to any notice or request delivered by
Indenture Trustee within the time period set forth in such notice or
request for any action taken pursuant to the direction of the required
percentage of Noteholders in accordance with the terms of this Indenture.
-7-
<PAGE>
SECTION 1.7. Effect of Headings and Table of Contents.
-----------------------------------------
The Article and Section headings herein and in the Table of
Contents are for convenience only and shall not affect the construction
hereof.
SECTION 1.8. Successors and Assigns.
All covenants and agreements in this Indenture by Issuer or
Indenture Trustee shall bind its respective successors and permitted
assigns, whether so expressed or not.
SECTION 1.9. GOVERNING LAW.
--------------
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THIS INDENTURE IS
SUBJECT TO THE TRUST INDENTURE ACT OF 1939 AND SHALL BE GOVERNED THEREBY
AND CONSTRUED IN ACCORDANCE THEREWITH.
SECTION 1.10. Legal Holidays.
---------------
In any case where any Payment Date or the Stated Maturity or any
other date on which principal of or interest on any Note is proposed to be
paid shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or of the Notes) such 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 such Payment Date, Stated Maturity, or other
date on which principal of or interest on any Note is proposed to be paid,
provided that no interest shall accrue for the period from and after such
Payment Date, Stated Maturity, or any other date on which principal of or
interest on any Note is proposed to be paid, as the case may be, until such
next succeeding Business Day.
SECTION 1.11. Execution in 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 1.12. Survival of Representations and Warranties.
-------------------------------------------
The representations, warranties and certifications of the Issuer
made in this Indenture or in any certificate or other writing delivered by
Issuer pursuant hereto shall survive the authentication and delivery of the
Notes hereunder.
-8-
<PAGE>
ARTICLE 2.
THE NOTES
SECTION 2.1. General Provisions.
-------------------
(a) The Notes shall consist of $73,303,000 principal amount of
Class A-1 Notes, $19,242,000 principal amount of Class A-2 Notes,
$90,935,000 principal amount of Class A-3 Notes, $18,576,000 principal
amount of Class A-4 Notes and $7,687,000 principal amount of Class B Notes,
and the forms thereof and of Indenture Trustee's certificate of
authentication shall be in substantially the forms set forth in Exhibit A
hereto, with such appropriate insertions, omissions, substitutions, and
other variations as are required or permitted by this Indenture.
The aggregate principal amount of Notes which may be authenticated
and delivered under this Indenture is limited to $209,743,000, except for
Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes pursuant to Section 2.3, 2.4, or
9.5. The Notes shall be issuable only in registered form and only in
minimum denominations of at least $1,000 with respect to the Class A Notes
and the Class B Notes; provided that the foregoing shall not restrict or
prevent the transfer in accordance with Section 2.3 of any Note having a
remaining Outstanding Principal Amount of other than an integral multiple
of $1,000, or the issuance of a single Class A Note and a single Class B
Note with a denomination less than $1,000.
(b) For each Payment Date, payments of principal (the "Principal
Payments") on the Notes will be made in accordance with Sections 3.3(b) or
6.6, as applicable; it being understood that unless the Notes are
accelerated pursuant to Section 6.2, prior to the Stated Maturity of any
class of Notes, principal payments shall be due on such class of Notes only
to the extent of Available Funds available to make payments on principal of
such class in accordance with the priorities set forth in Section 3.3(b).
Except as otherwise provided in Section 6.2, no part of the principal of
any Note shall be paid prior to the Payment Date on which such principal is
due in accordance with the preceding provisions of this Section 2.1(b),
except that Issuer may redeem the Notes in their entirety, without premium,
as of any Payment Date on which the Discounted Present Value of the
Performing Leases (after giving effect to all Principal Payments on such
Payment Date) is less than or equal to five percent (5%) of the aggregate
Discounted Present Value of the Leases as of the Cut-Off Date. Issuer will
give notice of any such redemption to each Noteholder and Indenture Trustee
at least 30 days before the Payment Date fixed for such prepayment by
certified mail return receipt requested, hand delivery or overnight
courier. Notice of such prepayment having been so given, the remaining
unpaid principal as of the Payment Date fixed for prepayment together with
all interest
-9-
<PAGE>
accrued and unpaid to such Payment Date, shall become due and payable on
such Payment Date.
(c) For each Payment Date, the interest due and payable (the
"Interest Payments") with respect to the Notes will be the interest that
has accrued on the respective Notes since the last Payment Date or, in the
case of the first Payment Date, since the Closing Date, at the Class A-1
Interest Rate, Class A-2 Interest Rate, Class A-3 Interest Rate, Class A-4
Interest Rate and Class B Interest Rate, respectively, applied to the then
Outstanding Principal Amounts of the Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes, Class A-4 Notes and Class B Notes, respectively, on the
preceding Payment Date. Interest Payments will be made in accordance with
Sections 3.3(b) and 6.6, as applicable.
(d) All payments made with respect to any Note shall be made 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 and shall
be applied first to the interest then due and payable on such Notes, then
to the principal thereof, and finally to premium, if any.
(e) All Class A-1 Notes issued under this Indenture shall be in
all respects equally and ratably entitled to the benefits hereof without
preference, priority or distinction on account of the actual time or times
of authentication and delivery, all in accordance with the terms and
provisions of this Indenture. Payments of principal and interest on the
Class A-1 Notes shall be made pro rata among all Outstanding Class A-1
Notes, without preference or priority of any kind.
(f) All Class A-2 Notes issued under this Indenture shall be in
all respects equally and ratably entitled to the benefits hereof without
preference, priority or distinction on account of the actual time or times
of authentication and delivery, all in accordance with the terms and
provisions of this Indenture. Payments of principal and interest on the
Class A-2 Notes shall be made pro rata among all Outstanding Class A-2
Notes, without preference or priority of any kind.
(g) All Class A-3 Notes issued under this Indenture shall be in
all respects equally and ratably entitled to the benefits hereof without
preference, priority or distinction on account of the actual time or times
of authentication and delivery, all in accordance with the terms and
provisions of this Indenture. Payments of principal and interest on the
Class A-3 Notes shall be made pro rata among all Outstanding Class A-3
Notes, without preference or priority of any kind.
(h) All Class A-4 Notes issued under this Indenture shall be in
all respects equally and ratably entitled to the benefits hereof without
preference, priority or distinction on account of the actual time or times
of authentication and delivery, all in accordance with the terms and
provisions of this Indenture. Payments of principal
-10-
<PAGE>
and interest on the Class A-4 Notes shall be made pro rata among all
Outstanding Class A-4 Notes, without preference or priority of any kind.
(i) The Class B Notes shall be subordinated to the Class A Notes
to the extent set forth herein. All Class B Notes issued under this
Indenture shall be in all respects equally and ratably entitled to the
benefits hereof without preference, priority or distinction on account of
the actual time or times of authentication and delivery, all in accordance
with the terms and provisions of this Indenture. Payments of principal and
interest on the Class B Notes shall be made pro rata among all Outstanding
Class B Notes, without preference or priority of any kind.
SECTION 2.2. Execution, Authentication, Delivery, and Dating.
------------------------------------------------
(a) The Notes shall be manually executed on behalf of Issuer by
any of its Authorized Officers. The signature of any such Authorized
Officer on the Notes may be manual or facsimile.
(b) Any Note bearing the signature of an individual who was at the
time of execution thereof an Authorized Officer of Issuer shall bind
Issuer, notwithstanding that such individual ceases to hold such office
prior to the authentication and delivery of such Note or did not hold such
office at the date of such Note.
(c) 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 Indenture Trustee by manual signature, and such
certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered
hereunder. Each Note shall be dated the date of its authentication.
(d) The Notes may from time to time be executed by Issuer and
delivered to Indenture Trustee for authentication together with an Issuer
Request to Indenture Trustee directing the authentication and delivery of
such Notes and thereupon the same shall be authenticated and delivered by
Indenture Trustee in accordance with such Trust Request.
SECTION 2.3. Transfer and Exchange.
----------------------
(a) Issuer shall cause to be kept at the Corporate Trust Office a
register (the "Note Register") in which, subject to such reasonable
regulations as Indenture Trustee may prescribe, Issuer shall provide for
the registration of Notes and of transfers of Notes. Indenture Trustee is
hereby appointed "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. Upon any
-11-
<PAGE>
resignation of any Note Registrar, 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 Indenture Trustee is appointed by Issuer as
Note Registrar, Issuer will give Indenture Trustee prompt written notice of
the appointment of such Note Registrar and of the location, and any change
in the location, of Note Register, and Indenture Trustee shall have the
right to inspect Note Register at all reasonable times, to obtain copies
thereof and to rely upon a certificate executed on behalf of Note Registrar
by an executive officer thereof as to the names and addresses of Holders of
Notes and the principal amounts and number of such Notes.
(b) Subject to Section 2.3(a), upon surrender for registration of
transfer of any Note at the office of Issuer designated pursuant to Section
8.2 for such purpose, Issuer shall execute and Indenture Trustee upon
request shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate original principal amount. Indenture
Trustee shall make a notation on any such new Note of the amount of
principal, if any, that has been paid on such Note.
(c) All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of 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.
(d) Every Note presented or surrendered for registration of
transfer or for exchange shall (if so required by Issuer or Indenture
Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to Issuer and Indenture Trustee duly
executed, by the Holder thereof or his attorney duly authorized in writing.
(e) No service charge shall be made for any registration of
transfer or exchange of Notes, but Issuer or Indenture Trustee may require
payment by the transferor 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
9.5 not involving any transfer.
SECTION 2.4. Mutilated, Destroyed, Lost and Stolen Notes.
--------------------------------------------
(a) If any mutilated Note is surrendered to Indenture Trustee,
Issuer shall execute and Indenture Trustee shall authenticate and deliver
in exchange therefore a replacement Note of like tenor and principal amount
and bearing a number not contemporaneously outstanding.
-12-
<PAGE>
(b) If there shall be delivered to Issuer and Indenture Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Note and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence
of actual notice to Issuer or Indenture Trustee that such Note has been
acquired by a bona fide purchaser, Issuer shall execute and upon its
request Indenture Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Note, a replacement Note of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
(c) In case the final installment of principal on any such
mutilated, destroyed, lost or stolen Note has become or will at the next
Payment Date become due and payable, Issuer in its discretion may, instead
of issuing a replacement Note, pay such Note.
(d) Upon the issuance of any replacement Note under this Section,
Issuer or Indenture Trustee may require the payment by the Noteholder of a
sum sufficient to cover any tax or other governmental charge that may be
imposed as a result of the issuance of such replacement Note.
(e) Every replacement Note issued pursuant to this Section 2.4 in
lieu of any destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of Issuer, whether or not the 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.
(f) The provisions of this Section 2.4 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 2.5. Book-Entry Registration of Class A Notes and Class
B Notes.
--------
Each of the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes,
Class A-4 Notes and the Class B Notes, upon original issuance, shall be
issued in the form of one or more typewritten Class A-1 Notes, Class A-2
Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes, respectively,
(the "Book-Entry Class A-1 Notes," "Book-Entry Class A-2 Notes,"
"Book-Entry Class A-3 Notes," "Book-Entry Class A-4 Notes" and "Book-Entry
Class B Notes", respectively) to be delivered to The Depository Trust
Company, the initial Clearing Agency, by, or on behalf of, Issuer. Each of
the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes , Class A-4 Notes and
Class B Notes shall initially be registered on the Note Register in the
name of Cede & Co., the nominee of The Depository Trust Company, as the
initial Clearing Agency, and no Class A-1 Note Owner, Class A-2 Note Owner,
Class A-3 Note Owner, Class A-4 Note Owner or Class B Note Owner will
receive a definitive note
-13-
<PAGE>
representing such Note Owner's interest in the Class A-1 Notes, Class A-2
Notes, Class A-3 Notes, Class A-4 Notes or Class B Notes, as the case may
be, except as provided in Section 2.7. Unless and until Definitive Class
A-1 Notes, Definitive Class A-2 Notes, Definitive Class A-3 Notes,
Definitive Class A-4 Notes and/or Definitive Class B Notes have been issued
to the applicable Note Owners pursuant to Section 2.7:
(a) the provisions of this Section 2.5 shall be in full force and
effect with respect to the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes, Class A-4 Notes or the Class B Notes, as the case may be;
(b) Issuer, Servicer and Indenture Trustee may deal with the
Clearing Agency and the Clearing Agency Participants for all purposes with
respect to the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4
Notes or Class B Notes, as the case may be, (including the making of
distributions on the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes,
Class A-4 Notes and the Class B Notes, as the case may be) as the
authorized representatives of the respective Note Owners;
(c) to the extent that the provisions of this Section 2.5 conflict
with any other provisions of this Indenture, the provisions of this Section
2.5 shall control; and
(d) the rights of the respective Note Owners shall be exercised
only through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between such
respective Note Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Depository Agreement, unless and until
Definitive Class A-1 Notes, Definitive Class A-2 Notes, Definitive Class
A-3 Notes, Definitive Class A-4 Notes or Definitive Class B Notes, as the
case may be, are issued pursuant to Section 2.7, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal and
interest on the related Class A-1 Notes, Class A-2 Notes, Class A-3 Notes,
Class A-4 Notes and Class B Notes, as the case may be, to such Clearing
Agency Participants.
(e) 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 Principal Amount of the Notes (or
a class of Notes), the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to such
effect from Note Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the Notes (or class of Notes) and has delivered such
instructions to Indenture Trustee.
SECTION 2.6. Notice to Clearing Agency.
--------------------------
-14-
<PAGE>
Whenever notice or other communication to the Class A-1
Noteholders, Class A-2 Noteholders, Class A-3 Noteholders, Class A-4
Noteholders or Class B Noteholders is required under this Agreement, unless
and until Definitive Class A-1 Notes, Definitive Class A-2 Notes,
Definitive Class A-3 Notes, Definitive Class A-4 Notes or Definitive Class
B Notes shall have been issued to the related Note Owners pursuant to
Section 2.7, Indenture Trustee shall give all such notices and
communications specified herein to be given to such Noteholders to the
applicable Clearing Agency which shall give such notices and communications
to the related Class A-1 Note Owners, Class A-2 Note Owners, Class A-3 Note
Owners, Class A-4 Note Owners and Class B Note Owners in accordance with
its applicable rules, regulations and procedures.
SECTION 2.7. Definitive Class A Notes and Definitive Class B
Notes.
------
If (a) (i) Manager advises Indenture Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities under the Depository Agreement with respect to the Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and/or the
Class B Notes and (ii) Indenture Trustee or Manager is unable to locate a
qualified successor, (b) Manager, at its option, advises Indenture Trustee
in writing that it elects to terminate the book-entry system with respect
to the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes
and/or the Class B Notes through the Clearing Agency or (c) after the
occurrence of a Servicer Event of Default, Class A-1 Note Owners, Class A-2
Note Owners, Class A-3 Note Owners, Class A-4 Note Owners and Class B Note
Owners, with respect to the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes, Class A-4 Notes and Class B Notes evidencing not less than a
majority of the aggregate unpaid Outstanding Principal Amount of the Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B
Notes, respectively, advise Indenture Trustee and the Clearing Agency
through the Clearing Agency Participants in writing that the continuation
of a book-entry system with respect to the Class A-1 Notes, Class A-2
Notes, Class A-3 Notes, Class A-4 Notes or the Class B Notes, respectively,
through the Clearing Agency is no longer in the best interests of the Class
A-1 Note Owners, Class A-2 Note Owners, Class A-3 Note Owners, Class A-4
Note Owners or Class B Note Owners, as the case may be, Indenture Trustee
shall notify all Class A-1 Note Owners, Class A-2 Note Owners, Class A-3
Note Owners, Class A-4 Note Owners and Class B Note Owners with respect to
the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and
Class B Notes, respectively, through the Clearing Agency, of the occurrence
of any such event and of the availability of Definitive Class A-1 Notes,
Definitive Class A-2 Notes, Definitive Class A-3 Notes, Definitive Class
A-4 Notes and Definitive Class B Notes to Class A-1 Note Owners, Class A-2
Note Owners, Class A-3 Note Owners, Class A-4 Note Owners and Class B Note
Owners, respectively, requesting the same. Upon surrender to Indenture
Trustee of the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4
Notes
-15-
<PAGE>
or Class B Notes, as the case may be, by the Clearing Agency, accompanied
by registration instructions from the Clearing Agency for registration,
Issuer shall execute and Indenture Trustee shall authenticate and deliver
the Definitive Class A-1 Notes, Definitive Class A-2 Notes, Definitive
Class A-3 Notes, Definitive Class A-4 Notes or Definitive Class B Notes, as
the case may be. Neither Manager nor Indenture Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on,
and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Class A-1 Notes, Definitive Class A-2 Notes, Definitive Class
A-3 Notes, Definitive Class A-4 Notes or Definitive Class B Notes, as the
case may be, all references herein to obligations imposed upon or to be
performed by the Clearing Agency shall be deemed to be imposed upon and
performed by Indenture Trustee, to the extent applicable with respect to
such Definitive Class A-1 Notes, Definitive Class A-2 Notes, Definitive
Class A-3 Notes, Definitive Class A-4 Notes or Definitive Class B Notes,
respectively, and Indenture Trustee shall recognize the Holders of the
Definitive Class A-1 Notes as Class A-1 Noteholders, Holders of the
Definitive Class A-2 Notes as Class A-2 Noteholders, Holders of the
Definitive Class A-3 Notes as Class A-3 Noteholders, Holders of the
Definitive Class A-4 Notes as Class A-4 Noteholders and/or the Holders of
the Definitive Class B Notes as Class B Noteholders hereunder.
SECTION 2.8. Payment of Interest and Principal; Rights Preserved.
----------------------------------------------------
(a) Any installment of interest or principal, payable on any Note
that is punctually paid or duly provided for by Issuer on the applicable
Payment Date shall be paid to the Person in whose name such Note was
registered at the close of business on the Record Date for such Payment
Date by wire transfer of federal funds to the account and number specified
in the Note Register on such Record Date for such Person or, if no such
account or number is so specified, then by check mailed to such Person's
address as it appears in the Note Register on such Record Date.
(b) All reductions in the principal amount of a Note effected by
payments of installments of principal made on any Payment Date shall be
binding upon all Holders of such Note and of any Note issued upon the
registration of transfer thereof or in exchange therefore or in lieu
thereof, whether or not such payment is noted on such Note. All payments on
the Notes shall be paid without any requirement of presentment but each
Holder of any Note shall be deemed to agree, by its acceptance of the same,
upon at least ten (10) days notice from Indenture Trustee to surrender such
Note at the Corporate Trust Office against payment of the final installment
of principal of such Note.
SECTION 2.9. Persons Deemed Owners.
Prior to due presentment of a Note for registration of transfer,
Issuer, Indenture Trustee, and any agent of Issuer or Indenture Trustee may
treat the
-16-
<PAGE>
Noteholder as the owner of such Note for the purpose of receiving payment
of principal of and interest on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and neither Issuer,
Indenture Trustee, nor any agent of Issuer or Indenture Trustee shall be
affected by notice to the contrary.
SECTION 2.10. Cancellation.
-------------
All Notes surrendered for registration of transfer or exchange or
following final payment shall, if surrendered to any Person other than
Indenture Trustee, be delivered to Indenture Trustee and shall be promptly
cancelled by it. Issuer may at any time deliver to Indenture Trustee for
cancellation any Notes previously authenticated and delivered hereunder
which Issuer may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly cancelled by Indenture Trustee. No Notes shall
be authenticated in lieu of or in exchange for any Notes cancelled as
provided in this Section, except as expressly permitted by this Indenture.
All cancelled Notes held by Indenture Trustee may be disposed of in the
normal course of its business or as directed by an Issuer Order.
SECTION 2.11. Noteholder Lists.
-----------------
Indenture Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names
and addresses of Noteholders and shall otherwise comply with Section 312(a)
of the Trust Indenture Act. In the event Indenture Trustee no longer serves
as the Note Registrar, Issuer (or any other obligor upon the Notes) shall
furnish to Indenture Trustee at least five Business Days before each
interest payment date (and in all events in intervals of not more than 6
months) and at such other times as Indenture Trustee may request in writing
a list in such form and as of such date as Indenture Trustee may reasonably
require of the names and addresses of Noteholders, and Issuer shall
otherwise comply with Section 312(a) of the Trust Indenture Act. Three or
more Holders or one or more Holders of the Notes evidencing at least 25% of
the Outstanding Principal Amount of the Notes may, by written request to
Indenture Trustee, obtain access to the list of all Holders maintained by
Indenture Trustee for the purpose of communicating with other Holders with
respect to their rights under the Indenture or under the Notes. Indenture
Trustee may elect not to afford the requesting Holders access to the list
of Holders if it agrees to mail the desired communication or proxy, on
behalf of and at the expense of the requesting Holders, to all Holders.
SECTION 2.12. Treasury Securities.
--------------------
In determining whether the Noteholders of the required Outstanding
Principal Amount of the Notes have concurred in any direction, waiver or
consent, Notes owned by Issuer, Transferor, ILC, any other obligor upon the
Notes or an Affiliate of Transferor shall be considered as though not
outstanding, except that for the
-17-
<PAGE>
purposes of determining whether Indenture Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes which a
Responsible Officer knows are so owned shall be so disregarded.
ARTICLE 3.
ACCOUNTS; INVESTMENT OF MONEYS;
COLLECTION AND APPLICATION OF MONEYS; REPORTS
SECTION 3.1. Trust Accounts; Investments by Indenture Trustee.
-------------------------------------------------
(a) On or before the Issuance Date, Issuer shall cause Servicer to
establish in the name of Indenture Trustee for the benefit of the
Noteholders and the Certificateholders, to the extent of their interests
therein as provided in this Indenture, the Pooling and Servicing Agreement
and the Trust Agreement, the Trust Accounts as provided in Section 6.1 of
the Pooling and Servicing Agreement.
(b) Indenture Trustee shall not have any right of set-off with
respect to any Trust Account or any investment therein. So long as no Event
of Default shall have occurred and be continuing, all or a portion of the
amounts in the Trust Account shall be invested and reinvested by the
Indenture Trustee pursuant to an Issuer Order or Servicer Order in one or
more Eligible Investments in accordance with Section 6.1 of the Pooling and
Servicing Agreement.
(c) If either (i) Issuer or Servicer, as the case may be, shall
have failed to give investment directions to Indenture Trustee by 9:30
a.m., New York City time on any Business Day on which there may be
uninvested cash or (ii) an Event of Default shall be continuing, Indenture
Trustee shall promptly invest and reinvest the funds then in the Trust
Accounts to the fullest extent practicable in the investment described in
clause (d) of the definition of Eligible Investment. All investments made
by Indenture Trustee shall mature no later than the maturity date therefore
permitted by Section 3.1(d) unless Indenture Trustee shall have received
written confirmation from each Rating Agency, that the liquidation of such
Eligible Investments prior to their respective maturity dates has satisfied
the Rating Agency Condition.
(d) No investment of any amount held in any Trust Account shall
mature later than the Business Day immediately preceding the Payment Date
which is scheduled to occur immediately following the date of investment.
All income or other gains (net of losses) from the investment of moneys
deposited in the Trust Accounts shall be deposited by Indenture Trustee in
such account immediately upon receipt.
(e) If any amounts are needed for disbursement from any Trust
Account and sufficient uninvested funds are not collected and available
therein to make such
-18-
<PAGE>
disbursement, in the absence of an Issuer Order or Servicer Order for the
liquidation of investments held therein in an amount sufficient to provide
the required funds, Indenture Trustee shall select and cause to be sold or
otherwise converted to cash a sufficient amount of the investments in such
accounts.
(f) Indenture Trustee shall not in any way be held liable by
reason of any insufficiency in the Collection Account, the Reserve Account,
or the Residual Account resulting from losses on investments made in
accordance with the provisions of this Section 3.1 and Section 6.1 of the
Pooling and Servicing Agreement (but the institution serving as Indenture
Trustee shall at all times remain liable for its own debt obligations, if
any, constituting part of such investments). Indenture Trustee shall not be
liable for any investment made by it in accordance with this Section 3.1
and Section 6.1 of the Pooling and Servicing Agreement on the grounds that
it could have made a more favorable investment or a more favorable
selection for sale of an investment.
SECTION 3.2. Collection of Moneys.
---------------------
Indenture Trustee shall from time to time, in accordance with
instructions of Servicer, withdraw from the Collection Account and pay as
instructed by the Servicer any amounts in the Collection Account which
Servicer advises Indenture Trustee are Other Lease Payments or otherwise
not part of the Trust Estate. Prior to such payment, Indenture Trustee
shall have rights to and an interest in such amounts to the extent (but
only to the extent) it is determined that such amounts actually constitute
Transaction Payment Amounts.
SECTION 3.3. Collection Account; Payments.
-----------------------------
(a) Not later than the Required Deposit Date, Available Funds will
be deposited into the Collection Account as provided in Section 6.2 (c) of
the Pooling and Servicing Agreement. On or before each Payment Date,
Available Funds will be transferred to the Note Distribution Account as
provided in Section 6.3 of the Pooling and Servicing Agreement.
(b) Unless the Notes have been declared due and payable pursuant
to Section 6.2 and moneys collected by Indenture Trustee are being applied
in accordance with Section 6.6, Available Funds on deposit in the Note
Distribution Account shall be distributed on each Payment Date to the
extent of amount due and unpaid on the Notes in the following amounts and
in following order of priority:
(i) concurrently: (A) to make Interest Payments on the
Class A-1 Notes, (B) to make Interest Payments on the Class A-2
Notes, (C) to make Interest Payments on the Class A-3 Notes and
(D) to make Interest Payments on the Class A-4 Notes;
-19-
<PAGE>
(ii) to make Interest Payments on the Class B Notes;
(iii) to make the Class A Principal Payment (i) to the
Class A-1 Noteholders only, until the Outstanding Principal Amount
of the Class A-1 Notes is reduced to zero, then (ii) to the Class
A-2 Noteholders only, until the Outstanding Principal Amount of
the Class A-2 Notes is reduced to zero, then (iii) to the Class
A-3 Noteholders only, until the Outstanding Principal Amount of
the Class A-3 Notes is reduced to zero, then (iv) to the Class A-4
Noteholders only, until the Outstanding Principal Amount of the
Class A-4 Notes is reduced to zero;
(iv) to pay the Class B Principal Payment to the Class B
Noteholders; and
(v) to pay the Additional Principal, if any, as an
additional reduction of principal, first to the Class A
Noteholders receiving the Class A Principal Payment as provided in
clause (iii) until the Outstanding Principal Amount of the Class A
Notes has been reduced to zero, second to the Class B Noteholders
as an additional reduction of principal until the Outstanding
Principal Amount of the Class B Notes has been reduced to zero.
SECTION 3.4. Reports by Indenture Trustee; Notices of Certain
Payments.
---------
(a) Indenture Trustee shall within two Business Days after the
request of Issuer, Servicer or any Noteholder, deliver to the requesting
person a written report setting forth the amounts on deposit in the
Collection Account, the Reserve Account, and the Residual Account and
identifying the investments included therein.
(b) Within five Business Days following each Payment Date or as
promptly as possible thereafter but in no event later than two Business
Days following the receipt of the Monthly Status Report from Servicer
pursuant to Section 4.8 of the Pooling and Servicing Agreement, Indenture
Trustee shall mail to Transferor, each Rating Agency and Servicer and make
available to each Noteholder the following information as provided in the
Monthly Status Report:
(i) the principal amount of all Outstanding Class A-1
Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class
B Notes, respectively, and of the Outstanding Class A-1 Notes,
Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B
Notes respectively, held by each Noteholder on the Record Date
with respect to such Payment Date;
(ii) the amount of Interest Payments and payments in
reduction of principal paid on such Payment Date with respect to
all Class A-1 Notes,
-20-
<PAGE>
Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B
Notes, respectively, and with respect to the Notes held by each
Noteholder;
(iii) the amount of the Servicing Fee and unreimbursed
Servicer Advances paid on such Payment Date pursuant to Section
6.3(b)(i) of the Pooling and Servicing Agreement;
(iv) the Available Residual Amount and the Utilized
Residual Amounts as of the date of the most recent Monthly Status
Report delivered pursuant to Section 4.8 of the Pooling and
Servicing Agreement;
(v) the amounts, if any, paid to Servicer or Transferor
pursuant to Section 6.3(b)(xi) of the Pooling and Servicing
Agreement; and
(vi) the amount on deposit in the Collection Account, the
Reserve Account and the Residual Account, in each case after
giving effect to all of the withdrawals and applications or
transfers required on or before such Payment Date pursuant to
Sections 3.2 and 3.3
With each report of Indenture Trustee furnished pursuant to this
Section 3.4(b) following any Payment Date, Indenture Trustee shall enclose
a copy of the Servicing Report and the report required to be furnished to
Indenture Trustee by Servicer following such Payment Date pursuant to
Section 4.8 of the Pooling and Servicing Agreement or, if such reports have
not been received, a statement to such effect.
SECTION 3.5. Indenture Trustee May Rely on Certain Information
from Servicer.
Pursuant to the Pooling and Servicing Agreement and Section 3.2
hereof, Servicer is required to furnish to Indenture Trustee from time to
time certain information and make various calculations which are relevant
to the performance of Indenture Trustee's duties in Article Three and in
Article Four of this Indenture. Indenture Trustee shall be entitled to rely
in good faith on such information or calculations, and any information or
calculations provided in any other report or document delivered to
Indenture Trustee in accordance with the requirements of the Basic
Documents, in the performance of its duties hereunder (i) unless and until
a Responsible Officer of Indenture Trustee has actual knowledge, or is
advised by any Noteholder (either in writing or orally with prompt written
or telecopied confirmation), that such information or calculations or
reports is or are incorrect, or (ii) unless there is a manifest error in
any such information or reports. Additionally, Indenture Trustee shall have
no obligation to recalculate or independently verify any information in any
report referred to in the preceding sentence.
-21-
<PAGE>
ARTICLE 4.
RELEASE OF COLLATERAL
SECTION 4.1. Release of Collateral.
----------------------
(a) Except as otherwise provided below in this Article IV, the
Indenture Trustee shall release property from the Lien of this Indenture
only upon receipt of an Issuer Request accompanied by an Officers'
Certificate, an Opinion of Counsel and Independent Certificates in
accordance with Trust Indenture Act ss.ss.314(c) and 314(d)(l), or an
Opinion of Counsel in lieu of such Independent Certificates to the effect
that the Trust Indenture Act does not require any such Independent
Certificates.
(b) Subject to the satisfaction of the provisions of Sections 4.2
and 4.4, Indenture Trustee shall release Equipment from the Lien of the
Indenture upon the occurrence of any of the following events: (a) the sale
of such Equipment pursuant to Section 3.3(b) of the Pooling and Servicing
Agreement (unless retained by Issuer for re-leasing), (b) the expiration of
the related Lease upon the payment of the final Lease Payment due and
payable under such Lease and the deposit of any Residual Realization in
respect thereof subject to the Residual Amount Cap, (c) the repurchase of
the related Lease in accordance with the provisions of Section 4 of the
Pooling and Servicing Agreement and upon the substitution of a Substitute
Lease in accordance with the provisions of Section 9 of the Pooling and
Servicing Agreement. The proceeds of any such sale, repurchase or releasing
shall be deposited in the Collection Account for disposition under this
Indenture.
SECTION 4.2. Release of Leases Upon Final Lease Payment.
-------------------------------------------
Subject to the satisfaction of the provisions of Section 4.4, if
Indenture Trustee shall have received notice (either in writing or orally
with prompt written or telecopied confirmation) from Servicer that
Indenture Trustee has received from amounts paid by the Lessee, from the
Lease Repurchase Amount or from the proceeds of the Equipment subject to
any Lease (i) the final Lease Payment due and payable under such Lease and
the deposit of any Residual Realization in respect thereof, (ii) a
Termination Payment in respect of such Lease, and the deposit of any
Residual Realization in respect thereof, (iii) a Casualty Payment under
such Lease (and, following such final Lease Payment, Casualty Payment or
Termination Payment, no further payments on or in respect of such Lease are
or will be due and payable), or (iv) the full amount of any Non-Performing
Lease Pay-Through Amount with respect to such Lease, such Lease shall be
released from the lien of this Indenture.
-22-
<PAGE>
SECTION 4.3. Execution of Documents.
-----------------------
Indenture Trustee shall promptly execute and deliver such
documents, including without limitation partial releases and termination
statements (which shall be furnished to Indenture Trustee by the Servicer),
and take such other actions as Issuer, by Issuer Request, may reasonably
request (including the return of any Lease which has been released) to
fully effectuate the release from this Indenture of any Lease and interests
in the related Equipment required to be so released pursuant to Sections
4.1 or 4.2.
SECTION 4.4. Officer's Certificates.
-----------------------
The Issuer may, without compliance with the requirements of
Section 4.1(a): (A) take all of the actions described in Sections 4.1(b)
and 4.2; (B) collect, liquidate, sell or otherwise dispose of Leases and
Equipment as and to the extent permitted or required by the Pooling and
Servicing Agreement and (B) make cash payments out of the Trust Accounts as
and to the extent permitted or required by the Pooling and Servicing
Agreement, this Indenture and the Trust Agreement so long as the Manager,
on behalf of the Issuer, shall deliver to the Indenture Trustee every six
months, commencing April 30, 1999, an Officers' Certificate of the Issuer
stating that all such dispositions of Granted Assets that occurred since
the execution of the previous such Officers' Certificate (or for the first
such Officers' Certificate, since the Closing Date) were in the ordinary
course of the Issuer's business and that the proceeds thereof were applied
in accordance with the Pooling and Servicing Agreement, this Indenture and
the Trust Agreement.
ARTICLE 5.
SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER
SECTION 5.1. Servicer Events of Default.
---------------------------
If a Servicer Event of Default shall have occurred and be
continuing, Indenture Trustee shall, upon the written request of the
Holders of Notes evidencing at least 662/3% of the then Outstanding
Principal Amount of the Notes, give notice in writing to Servicer of the
termination of all of the rights and obligations of Servicer under the
Pooling and Servicing Agreement. On and after the giving of such written
notice, all rights and obligations of Servicer under the Pooling and
Servicing Agreement, including, Servicer's right thereunder to receive the
Servicing Fee and the Supplemental Servicing Fee, shall pass to, be vested
in, and be assumed by Indenture Trustee, and Indenture Trustee shall be
authorized to, and shall, execute and deliver, on behalf of 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 termination and of such
-23-
<PAGE>
passing, vesting, and assumption; provided that in performing the duties of
Servicer under the Pooling and Servicing Agreement Indenture Trustee shall
at all times be deemed to be acting as Indenture Trustee hereunder and
shall be entitled to the full benefit of all the protections, benefits,
immunities and indemnities provided in this Indenture for or with respect
to Indenture Trustee, including those set forth in Article Seven.
SECTION 5.2. Substitute Servicer.
--------------------
Notwithstanding the provisions of Section 5.1, Indenture Trustee
may, if it shall be unwilling to continue to act as the successor to
Servicer in accordance with Section 5.1, or shall, if it is unable to
continue to so act or is so instructed in writing by the Holders of Notes
evidencing at least 662/3% of the then Outstanding Principal Amount of the
Notes, appoint a successor to Servicer in accordance with the provisions of
Section 8.3 of the Pooling and Servicing Agreement.
ARTICLE 6.
EVENTS OF DEFAULT; REMEDIES
SECTION 6.1. Events of Default.
------------------
"Event of Default," wherever used herein, means any one of the
following (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):
(a) default in making of Principal Payments or Interest Payments
when such become due and payable;
(b) default in the performance, or breach, of any covenant of
Issuer in this Indenture, and continuance of such default or breach for a
period of 30 days after the earliest of (i) any officer of Issuer first
acquiring knowledge thereof, (ii) Indenture Trustee's giving written notice
thereof to Issuer or (iii) the Holders of Notes evidencing at least 25% of
the then Outstanding Principal Amount of the Notes giving written notice
thereof to Issuer and Indenture Trustee;
(c) if any representation or warranty of Issuer made in this
Indenture or any other writing provided to the Holders of the Notes shall
prove to be incorrect in any material respect as of the time when the same
shall have been made; and continuance of such default or breach for a
period of 30 days after the earliest of (i) any officer of Issuer first
acquiring knowledge thereof, (ii) Indenture Trustee's giving written notice
thereof to Issuer or (iii) the Holders of Notes evidencing at least 25%
-24-
<PAGE>
of the then Outstanding Principal Amount of the Notes giving written notice
thereof to Issuer and Indenture Trustee;
(d) the entry by a court having jurisdiction in the premises of
(i) a decree or order for relief in respect of Issuer in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or (ii) a decree or order
adjudging Issuer a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment, or composition of
or in respect of Issuer under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator, or other similar official of Issuer or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(e) the commencement by Issuer of a voluntary case or proceeding
under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of Issuer in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief under
any applicable federal or state law, or the consent by it to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator, or similar official
of Issuer or of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, or Issuer's failure to pay
its debts generally as they become due, or the taking of corporate action
by Issuer in furtherance of any such action.
SECTION 6.2. Acceleration of Maturity; Rescission and Annulment.
---------------------------------------------------
(a) If an Event of Default of the kind specified in Section 6.1(d)
or Section 6.1(e) occurs, the unpaid principal amount of the Notes shall
automatically become due and payable at par together with all accrued and
unpaid interest thereon, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by Issuer. If an Event of Default
(other than an Event of Default of the kind described in Section 6.1(d) and
Section 6.1(e)) occurs and is continuing, then and in every such case
Indenture Trustee may and shall, if so directed by the Holders of Notes
evidencing at least 662/3% of the then Outstanding Principal Amount of
Notes, declare the unpaid principal amount of all the Notes to be due and
payable immediately, by a notice in writing to Issuer (and to Indenture
Trustee if given by Noteholders), and upon any such declaration such
principal amount shall become immediately due and payable together with all
accrued and unpaid interest thereon,
-25-
<PAGE>
without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by Issuer.
(b) At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by Indenture Trustee as hereinafter in this Article provided, the
Holders of Notes evidencing at least 662/3% of the then Outstanding
Principal Amount of Notes, by written notice to Issuer and Indenture
Trustee, may rescind and annul such declaration and its consequences if:
(i) Issuer has paid or deposited with Indenture Trustee
a sum sufficient to pay:
(A) all Principal Payments on any Notes which
have become due otherwise than by such declaration of
acceleration and interest thereon from the date when the
same first became due until the date of payment or
deposit at the appropriate Note Interest Rate,
(B) all Interest Payments due with respect to
any Notes and, to the extent that payment of such
interest is lawful, interest upon overdue interest from
the date when the same first became due until the date of
payment or deposit at a rate per annum equal to the
appropriate Note Interest Rates, and
(C) all sums paid or advanced by Indenture
Trustee hereunder and the reasonable compensation,
expenses, disbursements, and advances of Indenture
Trustee, its agents and counsel; and
(ii) all Events of Default, other than the non-payment of
the Outstanding Principal Amount of the Notes which has become due
solely by such declaration of acceleration, have been cured or
waived as provided in Section 6.13.
No such rescission shall affect any subsequent Event of Default or impair
any right consequent thereon.
SECTION 6.3. Remedies.
---------
(a) If an Event of Default occurs and is continuing of which a
Responsible Officer has actual knowledge, Indenture Trustee shall
immediately give notice to each Noteholder as set forth in Section 7.2 and
shall solicit the Noteholders for advice. Indenture Trustee shall then take
such action as so directed by the Holders of Notes evidencing at least
662/3% of the then Outstanding Notes.
12312134.1 100298 1317C 98438757
-26-
<PAGE>
(b) Following any acceleration of the Notes, Indenture Trustee
shall have all of the rights, powers and remedies with respect to the Trust
Estate as are available to secured parties under the UCC or other
applicable law. Such rights, powers and remedies may be exercised by
Indenture Trustee in its own name as trustee of an express trust.
(c) If an Event of Default specified in Section 6.1(a) occurs and
is continuing, Indenture Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against Issuer for the whole
amount of principal and interest remaining unpaid.
(d) In exercising its rights and obligations under this Section
6.3, Indenture Trustee may sell the Trust Estate; provided that if the
Event of Default involves other than non-payment for five days or more of
principal or interest on the Notes, Indenture Trustee may not sell the
Trust Estate unless: (A) all the Noteholders consent thereto, (B) the
proceeds of such sale or liquidation distributable to the Noteholders are
sufficient to discharge in full all amounts then due and unpaid upon such
Notes for principal and interest or (C) Indenture Trustee determines that
the Trust Estate will not continue to provide sufficient funds for the
payment of principal of and interest on the Notes as they would have become
due if the Notes had not been declared due and payable, and Indenture
Trustee obtains the consent of Holders of Notes evidencing at least 662/3%
of the Outstanding Principal Amount of the Notes.
SECTION 6.4. Indenture Trustee Shall File Proofs of Claim.
---------------------------------------------
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition, or other judicial proceeding relative to Issuer or any other
obligor upon the Notes or the other obligations secured hereby or relating
to the property of Issuer or of such other obligor or their creditors,
Indenture Trustee (irrespective of whether the principal of the Notes shall
then be due and payable as therein expressed or by declaration or otherwise
and irrespective of whether Indenture Trustee shall have made any demand on
Issuer for the payment of overdue principal or interest or any such other
obligation) shall by intervention in such proceeding or otherwise,
(i) file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Notes
and any other obligation secured hereby and to file such other
papers or documents as may be necessary or advisable in order to
have the claims of Indenture Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of
Indenture Trustee, its agents and counsel) and of the Noteholders
allowed in such judicial proceeding, and
-27-
<PAGE>
(ii) collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the
same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator,
or other similar official in any such judicial proceeding is hereby
authorized by each Noteholder to make such payments to Indenture Trustee
and, in the event that Indenture Trustee shall consent to the making of
such payments directly to the Noteholders to pay to Indenture Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of Indenture Trustee, its agents and counsel, and any other
amounts due Indenture Trustee under Section 7.7.
(b) Nothing herein contained shall be deemed to authorize
Indenture Trustee to authorize or consent to 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 Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding.
SECTION 6.5. Indenture Trustee May Enforce Claims Without
Possession of Notes.
---------------------
All rights of action and claims under this Indenture or the Notes
may be prosecuted and enforced by Indenture Trustee without the possession
of any of the Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by Indenture Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of Indenture Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Notes in respect of which such judgment has been recovered.
SECTION 6.6. Application of Money Collected.
-------------------------------
Any money collected by Indenture Trustee pursuant to this Article,
and any moneys that may then be held or thereafter received by Indenture
Trustee shall be applied in the following order, at the date or dates fixed
by Indenture Trustee and, in case of the distribution of the entire amount
due on account of principal or interest, upon presentation of the Notes and
surrender thereof:
first: to the payment of all costs and expenses of collection
incurred by Indenture Trustee and the Noteholders (including the
reasonable fees and expenses of any counsel to Indenture Trustee and
the Noteholders);
second: if the person then acting as Servicer under the
Pooling and Servicing Agreement is not ILC or an Affiliate of ILC, to
the payment of all Servicer's Fees then due to such person;
-28-
<PAGE>
third: first, pro-rata to the payment of all accrued and
unpaid interest on the Outstanding Principal Amount of the Class
A-1 Notes, the Outstanding Principal Amount of the Class A-2
Notes, the Outstanding Principal Amount of the Class A-3 Notes,
and the Outstanding Principal Amount of the Class A-4 Notes,
respectively, to the date of payment thereof, including (to the
extent permitted by applicable law) interest on any overdue
installment of interest and principal from the maturity of such
installment to the date of payment thereof at the rate per annum
equal to the Class A-1 Note Interest Rate, Class A-2 Note Interest
Rate, Class A-3 Note Interest Rate and Class A-4 Note Interest
Rate, respectively, second, to the payment of all accrued and
unpaid interest on the Outstanding Principal Amount of the Class B
Notes to the date of payment thereof, including (to the extent
permitted by applicable law) interest on any overdue installment
of interest and principal from the maturity of such installment to
the date of payment thereof at the rate per annum equal to the
Class B Note Interest Rate, third, to the payment of all accrued
and unpaid interest on the Certificate Balance to the date of
payment thereof, including (to the extent permitted by applicable
law) interest on any overdue installment of interest and principal
from the maturity of such installment to the date of payment
thereof at the rate per annum equal to the Certificate Rate,
fourth, to the payment of the Outstanding Principal Amount of the
Class A-1 Notes, fifth, to the payment of the Outstanding
Principal Amount of the Class A-2 Notes, Class A-3 Notes and Class
A-4 Notes, pro rata, sixth, to the payment of the Outstanding
Principal Amount of the Class B Notes, and seventh, to the payment
of the Certificate Balance; provided, that the Noteholders may
allocate such payments for interest, principal and premium at
their own discretion, except that no such allocation shall affect
the allocation of such amounts or future payments received by any
other Noteholder;
fourth: to the payment of amounts then due Indenture Trustee
hereunder and the Trustee under the Trust Agreement;
fifth: if the person then acting as Servicer is ILC or an
Affiliate of ILC, to the payment of all Servicer's Fees then due to
such Person; and
sixth: to the payment of the remainder, if any, to Transferor
or any other Person legally entitled thereto.
SECTION 6.7. Limitation on Suits.
--------------------
None of the Noteholders 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:
-29-
<PAGE>
(i) such Noteholder has previously given written notice
to Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the then
Outstanding Principal Amount of the Notes shall have made written
request to Indenture Trustee to institute proceedings in respect
of such Event of Default in its own name as Indenture Trustee
hereunder;
(iii) such Noteholder or Noteholders have offered to
Indenture Trustee adequate indemnity against the costs, expenses
and liabilities to be incurred in compliance with such request;
(iv) Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to
institute any such proceeding; and
(v) so long as any of the Notes remain Outstanding, no
direction inconsistent with such written request has been given to
Indenture Trustee during such 60-day period by the Holders of
Notes evidencing at least 662/3% of the then Outstanding Principal
Amount of the Notes;
it being understood and intended that no one or more Noteholders shall have
any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb, or prejudice the rights of
any other Noteholders, or to obtain or to seek to obtain priority or
preference over any other Noteholders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and
ratable benefit of all the Noteholders. Nothing in this Section 6.7 shall
be construed as limiting the rights of otherwise qualified Noteholders to
petition a court for the removal of a Indenture Trustee pursuant to Section
7.9(h) hereof.
SECTION 6.8. Unconditional Right of Noteholders to Receive
Principal and Interest.
- -----------------------
Notwithstanding any other provision in this Indenture, other than
the provisions hereof limiting the right to recover amounts due on the
Notes to recoveries from the property of Trust Estate, the Holder of any
Note shall have the absolute and unconditional right to receive payment of
the principal of and interest on such Note on the Maturities for such
payments, including the Stated Maturity, and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired
without the consent of such Noteholder.
-30-
<PAGE>
SECTION 6.9. Restoration of Rights and Remedies.
-----------------------------------
If Indenture Trustee or any Noteholder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to Indenture Trustee or to such Noteholder, then and
in every such case, subject to any determination in such proceeding,
Issuer, Indenture Trustee and the Noteholders shall be restored severally
and respectively to their former positions hereunder and thereafter all
rights and remedies of Indenture Trustee and the Noteholders continue as
though no such proceeding had been instituted.
SECTION 6.10. Rights and Remedies Cumulative.
-------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost, or stolen Notes in Section 2.4(f),
no right or remedy herein conferred upon or reserved to Indenture Trustee
or to the Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 6.11. Delay or Omission Not Waiver.
-----------------------------
No delay or omission of Indenture Trustee or of any Holder of any
Note to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy given
by this Article or by law to Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by
Indenture Trustee or by the Noteholders, as the case may be.
SECTION 6.12. Control by Noteholders.
-----------------------
Except as may otherwise be provided in this Indenture, until such
time as the conditions specified in Sections 10.1(a)(i) and (ii) have been
satisfied in full, the Holders of Notes evidencing at least 662/3% of the
then Outstanding Principal Amount of the Notes shall have the right to
direct the time, method and place of conducting any proceeding for any
remedy available to Indenture Trustee or exercising any trust or power
conferred on Indenture Trustee. Notwithstanding the foregoing,
-31-
<PAGE>
(i) no such direction shall be in conflict with any rule of
law or with this Indenture;
(ii) Indenture Trustee shall not be required to follow
any such direction which Indenture Trustee reasonably believes
might result in any personal liability on the part of Indenture
Trustee for which Indenture Trustee is not adequately indemnified;
and
(iii) Indenture Trustee may take any other action deemed
proper by Indenture Trustee which is not inconsistent with any
such direction; provided that Indenture Trustee shall give notice
of any such action to each Noteholder.
SECTION 6.13. Waiver of Events of Default.
----------------------------
(a) The Holders of Notes evidencing at least 662/3% of the then
Outstanding Principal Amount of the Notes may, by one or more instruments
in writing, waive any Event of Default hereunder and its consequences,
except a continuing Event of Default:
(i) in respect of the payment of the principal of or
premium or interest on any Note (which may only be waived by the
Holder of such Note), or
(ii) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the
consent of the Holder of each Outstanding Note affected (which
only may be waived by the Holders of all Outstanding Notes
affected).
(b) A copy of each waiver pursuant to Section 6.13(a) shall be
furnished by Issuer to Indenture Trustee. Upon any such waiver, such Event
of Default shall cease to exist and shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent
thereon.
SECTION 6.14. Undertaking for Costs.
----------------------
All parties to this Indenture agree (and each Holder of any Note
by its 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 Indenture Trustee
for any action taken, suffered or omitted by it as Indenture Trustee, the
filing by any party litigant in such suit of an undertaking to pay the
costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
-32-
<PAGE>
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 any suit instituted by Indenture Trustee,
to any suit instituted by any Noteholder, or group of Noteholders, holding
in the aggregate more than 10% of the then Outstanding Principal Amount of
the Notes, or to any suit instituted by any Noteholder for the enforcement
of the payment of the principal of or interest on any Note on or after the
Maturities for such payments, including the Stated Maturity as applicable.
SECTION 6.15. Waiver of Stay or Extension Laws.
---------------------------------
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, which may affect
the covenants or the performance of this Indenture; and Issuer (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to Indenture Trustee, but
will suffer and permit the execution of every such power as though no such
law had been enacted.
SECTION 6.16. Sale of Trust Estate.
---------------------
(a) The power to effect any sale of any portion of the Trust
Estate pursuant to Section 6.3 shall not be exhausted by any one or more
sales as to any portion of the Trust Estate remaining unsold, but shall
continue unimpaired until the entire Trust Estate shall have been sold or
all amounts payable on the Notes shall have been paid. Indenture Trustee
may from time to time, upon directions in accordance with Section 6.12,
postpone any public sale by public announcement made at the time and place
of such sale. For any public sale of the Trust Estate, Indenture Trustee
shall have provided each Noteholder with notice of such sale at least two
weeks in advance of such sale which notice shall specify the date, time and
location of such sale.
(b) To the extent permitted by applicable law, Indenture Trustee
shall not in any private sale sell to a third party the Trust Estate, or
any portion thereof unless,
(i) until such time as the conditions specified in
Sections 10.1(a)(i) and (ii) have been satisfied in full, the
Holders of Notes evidencing at least 662/3% of the then
Outstanding Principal Amount of each Class of the Notes voting
separately consent to or direct Indenture Trustee in writing to
make such sale; or
-33-
<PAGE>
(ii) the proceeds of such sale would be not less than the
sum of all amounts due to Indenture Trustee hereunder and the
entire unpaid principal amount of the Notes and interest due or to
become due thereon in accordance with Section 6.6 on the Payment
Date next succeeding the date of such sale.
The foregoing provisions shall not preclude or limit the ability of
Indenture Trustee to purchase all or any portion of the Trust Estate at a
private sale.
(c) In connection with a sale of all or any portion of Trust
Estate:
(i) any one or more Noteholders may bid for and purchase
the property offered for sale, and upon compliance with the terms
of sale may hold, retain, and possess and dispose of such
property, without further accountability, and any Noteholder may,
in paying the purchase money therefore, deliver in lieu of cash
any Outstanding Notes or claims for interest thereon for credit in
the amount that shall, upon distribution of the net proceeds of
such sale, be payable thereon, and the Notes, in case the amounts
so payable thereon shall be less than the amount due thereon,
shall be returned to the Noteholders after being appropriately
stamped to show such partial payment;
(ii) Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in
any portion of Trust Estate in connection with a sale thereof;
(iii) Indenture Trustee is hereby irrevocably appointed
the agent and attorney-in-fact of Issuer to transfer and convey
its interest in any portion of the Trust Estate in connection with
a sale thereof, and to take all action necessary to effect such
sale; and
(iv) no purchaser or transferee at such a sale shall be
bound to ascertain Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application
of any moneys.
(d) The method, manner, time, place and terms of any sale of all
or any portion of the Trust Estate shall be commercially reasonable.
(e) The provisions of this Section 6.16 shall not be construed to
restrict the ability of Indenture Trustee to exercise any rights and powers
against Issuer or the Trust Estate that are vested in Indenture Trustee by
this Indenture, including, without limitation, the power of Indenture
Trustee to proceed against the collateral subject to the lien of this
Indenture and to institute judicial proceedings for the collection of any
deficiency remaining thereafter.
-34-
<PAGE>
ARTICLE 7.
THE TRUSTEE
SECTION 7.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default known to
Indenture Trustee,
(i) Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against Indenture Trustee; and
(ii) in the absence of bad faith on its part, Indenture
Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to Indenture Trustee and
conforming to the requirements of this Indenture; but in the case
of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to Indenture Trustee,
Indenture Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing to
the actual knowledge of a Responsible Officer of Indenture Trustee,
Indenture Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances
in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve
Indenture Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) this subsection shall not be construed to limit the
effect of subsection (a) of this Section;
(ii) Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it
shall be proved, subject to Section 7.3(f), that Indenture Trustee
was negligent in ascertaining the pertinent facts;
(iii) Indenture Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Noteholders in accordance
with Section 6.12 relating to the
-35-
<PAGE>
time, method, and place of conducting any proceeding for any
remedy available to Indenture Trustee, or exercising any trust or
power conferred upon Indenture Trustee, under this Indenture; and
(iv) no provision of this Indenture shall require
Indenture Trustee to expend or risk its own funds or otherwise
incur any 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 for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to Indenture Trustee shall be subject to the
provisions of this Section.
SECTION 7.2. Notice of Defaults or Events of Default.
----------------------------------------
Within two Business Days after a Responsible Officer obtaining
knowledge of the occurrence of any Default or Event of Default hereunder,
Indenture Trustee shall transmit, by certified mail return receipt
requested, hand delivery or overnight courier, to all Noteholders, as their
names and addresses appear in the Note Register, Servicer, Transferor, and
the Rating Agencies notice of such Default or Event of Default hereunder
known to Indenture Trustee, unless such Default or Event of Default shall
have been cured or waived.
SECTION 7.3. Certain Rights of Indenture Trustee.
------------------------------------
Subject to the provisions of Section 7.1:
(a) Indenture Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
note, debenture, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request or direction of Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request or Issuer Order and any action
of Issuer may be sufficiently evidenced by an Issuer Order;
(c) whenever in the administration of this Indenture Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, Indenture Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
-36-
<PAGE>
(d) Indenture Trustee may consult with counsel as to legal matters
and the written advice of any such counsel selected by Indenture Trustee
with due care shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;
(e) Indenture Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Noteholders pursuant to this Indenture, unless such
Noteholders shall have offered to Indenture Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
note, debenture, other evidence of indebtedness, or other paper or
document, but Indenture Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if Indenture Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of Issuer, personally or by agent or attorney; and
(g) Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and Indenture Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
SECTION 7.4. Not Responsible for Recitals or Issuance of Notes.
--------------------------------------------------
The recitals contained herein and in the Notes, except Indenture
Trustee's certificates of authentication, shall be taken as the statements
of Issuer, and Indenture Trustee assumes no responsibility for their
correctness. Indenture Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Notes. Indenture Trustee shall
not be accountable for the use or application by Issuer of the proceeds of
the Notes.
SECTION 7.5. May Hold Notes.
---------------
Indenture Trustee, in its individual or any other capacity, may
become the owner or pledgee of Notes and may otherwise deal with Issuer
with the same rights it would have if it were not Indenture Trustee.
-37-
<PAGE>
SECTION 7.6. Money Held in Trust.
--------------------
Money and investments held by Indenture Trustee shall be held in
trust in one or more trust accounts hereunder, but need not be segregated
from other funds except to the extent required by law.
SECTION 7.7. [Reserved.]
SECTION 7.8. Corporate Indenture Trustee Required; Eligibility.
--------------------------------------------------
There shall at all times be an Indenture Trustee hereunder which
shall (a) be a corporation organized and doing business under the laws of
the United States of America, any state thereof or the District of
Columbia, authorized under such laws to exercise corporate trust powers;
(b) have a combined capital and surplus of at least $100,000,000; (c) be
subject to supervision or examination by federal or state authority; and
(d) at the time of appointment, shall have long-term debt obligations (or,
if Indenture Trustee does not have outstanding long-term debt obligations
and is a subsidiary of a holding company, which holding company shall have
long-term obligations) having a credit rating of at least "Baa3" from
Moody's and "BBB-" from Fitch IBCA.
If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time Indenture Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
This Indenture shall always have a Indenture Trustee who satisfies
the requirements of Section 310(a)(1) of Trust Indenture Act. Indenture
Trustee is subject to the provisions of Section 310(b) of Trust Indenture
Act regarding disqualification of a trustee upon acquiring any conflicting
interest.
If a default occurs under this Indenture, and Indenture Trustee is
deemed to have a conflicting interest as a result of acting as trustee for
both the Class A Notes and the Class B Notes, a successor Indenture Trustee
shall be appointed for one or both of such Classes, so that there will be
separate Indenture Trustees for the Class A Notes and the Class B Notes. No
such event shall alter the voting rights of the Class A Noteholders or
Class B Noteholders under this Indenture. However, so long as any amounts
remain unpaid with respect to the Class A Notes, only Indenture Trustee for
the Class A Noteholders will have the right to exercise remedies under this
Indenture (but subject to the express provisions of Section 6.2 and to the
right of the Class B Noteholders to receive their share of any proceeds of
enforcement,
-38-
<PAGE>
subject to the subordination of the Class B Notes to the Class A Notes as
described herein). Upon repayment of the Class A Notes in full, all rights
to exercise remedies under the Indenture will transfer to Indenture Trustee
for the Class B Notes.
In the case of the appointment hereunder of a successor Indenture
Trustee with respect to any Class of Notes, the Issuer, retiring Indenture
Trustee and successor Indenture Trustee with respect to such Class of Notes
shall execute and deliver an indenture supplemental hereto wherein each
successor Indenture Trustee shall accept such appointment and which (i)
shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, successor Indenture Trustee all
the rights, powers, trusts and duties of retiring Indenture Trustee with
respect to the Notes of the Class to which the appointment of such
successor Indenture Trustee relates, (ii) if retiring Indenture Trustee is
not retiring with respect to all Classes of Notes, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of retiring Indenture Trustee with
respect to the Notes of each Class as to which retiring Indenture Trustee
is not retiring shall continue to be vested in retiring Indenture Trustee,
and (iii) shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Indenture Trustee, it being understood
that nothing herein or in such supplemental indenture shall constitute such
Indenture Trustees as co-trustees of the same trust and that each such
Indenture Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Indenture Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Indenture Trustee
shall become effective to the extent provided therein.
SECTION 7.9. Resignation and Removal; Appointment of Successor.
--------------------------------------------------
(a) No resignation or removal of Indenture Trustee and no
appointment of a successor Indenture Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor
Indenture Trustee under Section 7.10.
(b) Indenture Trustee may resign at any time by giving written
notice thereof to Issuer and by mailing notice of resignation by
first-class mail, postage prepaid, to Noteholders at their addresses
appearing on the Note Register.
(c) Indenture Trustee may be removed at any time by Act of the
Holders of Notes evidencing not less than a majority of the then
Outstanding Principal Amount of the Notes, delivered to Indenture Trustee
and Issuer.
(d) If Indenture Trustee shall resign, be removed, or become
incapable of acting, or if a vacancy shall occur in the office of Indenture
Trustee for any cause,
-39-
<PAGE>
Issuer, with the consent of the Holders of Notes evidencing at least 662/3%
of the Outstanding Principal Amount of the Notes, by an act of Issuer,
shall promptly appoint a successor Indenture Trustee.
(e) If no successor Indenture Trustee shall have been so appointed
by Issuer or the Noteholders as hereinbefore provided and accepted
appointment in the manner hereinafter provided within 30 days after any
such resignation or removal, existence of incapability, or occurrence of
such vacancy, Indenture Trustee or any Noteholder may petition any court of
competent jurisdiction for the appointment of a successor Indenture
Trustee.
(f) Issuer shall give notice of each resignation and each removal
of Indenture Trustee and each appointment of a successor Indenture Trustee
by mailing written notice of such event by first-class mail, postage
prepaid, to all Noteholders, as their names and addresses appear in the
Note Register and each Rating Agency. Each notice shall include the name of
the successor Indenture Trustee and the address of its Corporate Trust
Office.
(g) Issuer may remove Indenture Trustee if Indenture Trustee fails
to comply with Section 7.8 of this Indenture.
(h) If Indenture Trustee after written request by any Noteholder
who has been a Noteholder for at least six months fails to comply with
Section 310(b) of the Trust Indenture Act, such Noteholder may petition any
court of competent jurisdiction, for the removal of Indenture Trustee and
the appointment of a successor Indenture Trustee.
SECTION 7.10. Acceptance of Appointment by Successor.
---------------------------------------
(a) Every successor Indenture Trustee appointed hereunder shall
execute, acknowledge and deliver to Issuer and to the retiring Indenture
Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Indenture Trustee shall become
effective and such successor Indenture Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Indenture Trustee; but, on request of Issuer or
the successor Indenture Trustee, such retiring Indenture Trustee shall,
upon payment of its charges and expenses, execute and deliver an instrument
transferring to such successor Indenture Trustee all the rights, powers and
trusts of the retiring Indenture Trustee and shall duly assign, transfer
and deliver to such successor Indenture Trustee all property and money held
by such retiring Indenture Trustee hereunder. Upon request of any such
successor Indenture Trustee, Issuer shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor
Indenture Trustee all such rights, powers and trusts.
-40-
<PAGE>
(b) No successor Indenture Trustee shall accept its appointment
unless at the time of such acceptance such successor Indenture Trustee
shall be qualified and eligible under this Article.
SECTION 7.11. Merger, Conversion, Consolidation or Succession to
Business.
---------
Any Person into which Indenture Trustee may be merged or converted
or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which Indenture Trustee shall be a
party, or any Person succeeding to all or substantially all the corporate
trust business of Indenture Trustee, shall be the successor of Indenture
Trustee hereunder, provided such Person shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper
or any further act on the part of any of the parties hereto. In case any
Notes shall have been authenticated, but not delivered, by Indenture
Trustee then in office, any successor by merger, conversion, or
consolidation to such authenticating Indenture Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect
as if such successor Indenture Trustee had itself authenticated such Notes.
Indenture Trustee shall provide prompt written notice to each Rating Agency
of any event referenced in this Section 7.11.
SECTION 7.12. Co-trustees and Separate Indenture Trustees.
--------------------------------------------
(a) At any time or times, if Issuer, Indenture Trustee or any
Noteholder determines that it is necessary for the purpose of meeting the
legal requirements of any jurisdiction in which any of Trust Estate may at
the time be located, Issuer and Indenture Trustee shall have power to
appoint, and, upon the written request of Indenture Trustee or the Holders
of Notes evidencing at least a majority of the then Outstanding Principal
Amount of the Notes, Issuer shall for such purpose join with Indenture
Trustee in the execution, delivery, and performance of all instruments and
agreements necessary or proper to appoint one or more Persons approved by
Indenture Trustee either to act as co-trustee, jointly with Indenture
Trustee, of all or any part of such Trust Estate, or to act as separate
trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such Person or
Persons in the capacity aforesaid, any property, title, right or power
deemed necessary or desirable, subject to the other provisions of this
Section. If Issuer does not join in such appointment within 15 days after
the receipt by it of a request so to do, or in case an Event of Default has
occurred and is continuing, Indenture Trustee, or the Holders of Notes
evidencing a majority of the then Outstanding Principal Amount of the
Notes, alone shall have power to make such appointment.
(b) Should any written instrument from Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to
such
-41-
<PAGE>
co-trustee or separate trustee such property, title, right, or power, any
and all such instruments shall, on request, be executed, acknowledged and
delivered by Issuer.
(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the
following terms:
(i) The Notes shall be authenticated and delivered and
all rights, powers, duties, and obligations hereunder in respect
of the custody of securities, cash and other personal property
held by, or required to be deposited or pledged with, Indenture
Trustee hereunder, shall be exercised, solely by Indenture
Trustee.
(ii) The rights, powers, duties, and obligations hereby
conferred or imposed upon Indenture Trustee in respect of any
property covered by such appointment shall be conferred or imposed
upon and exercised or performed by Indenture Trustee or by
Indenture Trustee and such co-trustee or separate trustee jointly,
as shall be provided in the instrument appointing such co-trustee
or separate trustee, except to the extent that, under any law of
any jurisdiction in which any particular act is to be performed,
Indenture Trustee shall be incompetent or unqualified to perform
such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or
separate trustee.
(iii) Indenture Trustee at any time, by an instrument in
writing executed by it, with the concurrence of Issuer evidenced
by a Trust Order, may accept the resignation of or remove any
co-trustee or separate trustee appointed under this Section, and,
in case an Event of Default has occurred and is continuing,
Indenture Trustee shall have power to accept the resignation of,
or remove, any such co-trustee or separate trustee without the
concurrence of Issuer. Upon the written request of Indenture
Trustee, Issuer shall join with Indenture Trustee in the
execution, delivery and performance of all instruments and
agreements necessary or proper to effectuate such resignation or
removal. A successor to any co-trustee or separate trustee so
resigned or removed may be appointed in the manner provided in
this Section.
(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of Indenture
Trustee or any other such trustee hereunder and Indenture Trustee
shall not be personally liable by reason of any act or omission of
any co-trustee or other such separate trustee hereunder selected
by Indenture Trustee with due care or appointed in accordance with
directions to Indenture Trustee pursuant to Section 6.12.
-42-
<PAGE>
(v) Any Act of Noteholders delivered to Indenture Trustee
shall be deemed to have been delivered to each such co-trustee and
separate trustee.
SECTION 7.13. Acceptance by Indenture Trustee.
--------------------------------
Indenture Trustee hereby acknowledges the conveyance of the
Granted Assets and the receipt of the Leases and the other Granted Assets
granted by Issuer hereunder and declares that Indenture Trustee, through a
custodian, will hold such Leases and other Granted Assets conveyed by
Issuer in trust, for the use and benefit of all Noteholders subject to the
terms and provisions hereof.
SECTION 7.14. Preferential Collection of Claims Against Issuer.
-------------------------------------------------
Indenture Trustee is subject to Trust Indenture Act Section
311(a), excluding any creditor relationship listed in Trust Indenture Act
Section 311(b). A Indenture Trustee who has resigned or been removed shall
be subject to Trust Indenture Act Section 311(a) to the extent indicated
therein.
SECTION 7.15. Reports by Indenture Trustee to Noteholders.
--------------------------------------------
To the extent required by the Trust Indenture Act, within 60 days
after each May 15, following the date of this Indenture, Indenture Trustee
shall mail to Noteholders a brief report dated as of such reporting date
that complies with Trust Indenture Act Section 313(a), if such a report is
required pursuant to Trust Indenture Act Section 313(a), except with
respect to Section 313(a)(6) of the Trust Indenture Act and transactions
described in Section 4.4. Indenture Trustee also shall comply with Trust
Indenture Act Section 313(b). Indenture Trustee shall also transmit by mail
all reports as required by Trust Indenture Act Section 313(c).
A copy of each such report required under Trust Indenture Act
Section 313 shall, at the time of such transmission to Noteholders be filed
with the Commission and with each stock exchange or other market system on
which the Notes are listed. Issuer or any other obligor upon the Notes
shall notify Indenture Trustee if the Notes become listed on any stock
exchange or market trading system.
SECTION 7.16. No Proceedings.
---------------
Indenture Trustee hereby agrees that it will not, with respect to
its fees and expenses, directly or indirectly institute, or cause to be
instituted, against Issuer or Transferor any proceeding of the type
referred to in Section 6.1(e) or (f) so long as there shall not have
elapsed one year plus one day since the latest maturing Notes have been
paid in full in cash.
-43-
<PAGE>
ARTICLE 8.
COVENANTS
SECTION 8.1. Payment of Principal and Interest.
----------------------------------
Issuer will duly and punctually pay the principal of and interest
on the Notes in accordance with the terms of the Notes and this Indenture.
SECTION 8.2. Maintenance of Office or Agency; Chief Executive
Office.
-------
Issuer will maintain at the Corporate Trust Office an
office or agency where Notes may be surrendered for registration of
transfer or exchange and where notices and demands to or upon Issuer in
respect of the Notes and this Indenture may be served. Issuer hereby
appoints Indenture Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
SECTION 8.3. Money for Payments to Noteholders to be Held in
Trust.
-------
(a) 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 3.3(b) or Section 6.6 shall be made on behalf
of Issuer by Indenture Trustee, and no amounts so withdrawn from the
Collection Account for payments of Notes shall be paid over to Issuer under
any circumstances except as provided in this Section 8.3 or in Section
3.3(b) or Section 6.6.
(b) In making payments hereunder, Indenture Trustee will:
(i) allocate all sums received for payment to the
Noteholders on each Payment Date among such Noteholders, first to
the Class A Noteholders on a pro rata basis and then to the Class
B Noteholders on a pro rata basis basis in accordance with the
information known to Indenture Trustee;
(ii) 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; and
(iii) comply with all requirements of the Internal
Revenue Code of 1986, as amended (or any successor statutes), and
all regulations thereunder, with respect to the withholding from
any payments made by it on
-44-
<PAGE>
any Notes of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in
connection therewith.
Whenever Issuer shall have one or more Paying Agents, it will,
prior to each due date of the principal of or interest on any Notes,
deposit with a Paying Agent a sum sufficient to pay the principal or
interest so becoming due, such sum to be held in trust for the benefit of
the Noteholders entitled to such principal or interest, and (unless such
Paying Agent is Indenture Trustee) Issuer will promptly notify Indenture
Trustee of its action or failure so to act.
Issuer will cause each Paying Agent other than Indenture Trustee
to execute and deliver to Indenture Trustee an instrument in which such
Paying Agent shall agree with Indenture Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of or interest on 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
(2) give Indenture Trustee notice of any default by
Issuer (or any other obligor upon the Securities) in the making of
any payment of principal or interest.
(c) Except as required by applicable law, any money held by Indenture
Trustee in trust for the payment of any amount due with respect to any Note
and remaining unclaimed for three years after such amount has become due
and payable to the Noteholder shall be discharged from such trust and,
subject to applicable escheat laws, paid to Issuer upon request; and such
Noteholder shall thereafter, as an unsecured general creditor, look only to
Issuer for payment thereof (but only to the extent of the amounts so paid
to the Trust), and all liability of Indenture Trustee with respect to such
trust money shall thereupon cease.
SECTION 8.4. Corporate Existence; Merger; Consolidation, etc.
------------------------------------------------
(a) Issuer will keep in full effect its existence, rights and
franchises as a trust under the laws of the State of New York, and will
obtain and preserve its qualification to do business as a foreign entity in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of the Indenture, the Notes or any
of the Leases.
(b) Issuer shall not consolidate or merge with or into any other
Person, unless:
-45-
<PAGE>
(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 Indenture Trustee, in form
satisfactory to Indenture Trustee, the due and punctual payment of
the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on
the part of 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) Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to Indenture Trustee) to
the effect that such transaction will not have any material
adverse tax consequence to Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the Lien and
security interest created by this Indenture shall have been taken;
and
(vi) Issuer shall have delivered to Indenture Trustee an
Officers' Certificate and an Opinion of Counsel each stating that
such consolidation or merger and such supplemental indenture
comply with this Article VIII and that all conditions precedent
herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act).
(c) Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person,
unless:
(i) the Person that acquires by conveyance or transfer
the properties and assets of Issuer the conveyance or transfer of
which is hereby restricted shall: (A) be a United States citizen
or a Person organized and existing under the laws of the United
States of America or any State, (B) expressly assumes, by an
indenture supplemental hereto, executed and delivered to Indenture
Trustee, in form satisfactory to Indenture Trustee, the due and
punctual payment of the principal of and interest on all Notes and
the performance or observance of every agreement and covenant of
this Indenture on the part of Issuer to be performed or observed,
all as provided herein, (C) expressly agrees by means of such
supplemental indenture that all right, title and interest so
conveyed or transferred shall be subject and subordinate to the
-46-
<PAGE>
rights of Holders of the Notes, (D) unless otherwise provided in
such supplemental indenture, expressly agrees to indemnify, defend
and hold harmless Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes
and (E) expressly agrees by means of such supplemental indenture
that such Person (or if a group of Persons, then one specified
Person) shall make all filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection
with the Notes;
(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) Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to Indenture Trustee) to
the effect that such transaction will not have any material
adverse tax consequence to Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the Lien and
security interest created by this Indenture shall have been taken;
and
(vi) Issuer shall have delivered to Indenture Trustee an
Officers' Certificate and an Opinion of Counsel each stating that
such conveyance or transfer and such supplemental indenture comply
with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
SECTION 8.5. Protection of Trust Estate; Further Assurances.
-----------------------------------------------
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, and will take such other action as may be necessary or
advisable to:
(i) Grant more effectively all or any portion of Trust
Estate;
(ii) maintain or preserve the Lien of this Indenture or
carry out more effectively the purposes hereof;
(iii) publish notice of, or protect the validity of, any
Grant made or to be made by this Indenture and perfect the
security interest contemplated hereby in favor of Indenture
Trustee in each of the Leases, in the Equipment
-47-
<PAGE>
and all other property included in Trust Estate; provided, that
Issuer shall not be required to file Financing Statements with
respect to the interests in the Equipment in addition to those
contemplated by Section 4.3(d) of the Pooling and Servicing
Agreement;
(iv) enforce or cause Servicer to enforce any of the Leases; or
(v) preserve and defend title to the Leases (including
the right to receive all payments due or to become due
thereunder), the interests in the Equipment, or other property
included in Trust Estate and preserve and defend the rights of
Indenture Trustee and the Noteholders in such Leases (including
the right to receive all payments due or to become due
thereunder), interests in the Equipment and other property against
the claims of all Persons and parties.
Issuer, upon Issuer's failure to do so, hereby designates Indenture Trustee
its agent and attorney-in-fact to execute any Financing Statement or
continuation statement required pursuant to this Section 8.5; provided,
that such designation shall not be deemed to create a duty in Indenture
Trustee to monitor the compliance of Issuer with the foregoing covenants;
and provided, further, that the duty of Indenture Trustee to execute any
instrument required pursuant to this Section 8.5 shall arise only if a
Responsible Officer of Indenture Trustee has actual knowledge of any
failure of Issuer to comply with the provisions of this Section 8.5.
SECTION 8.6. [Reserved].
-----------
SECTION 8.7. Performance of Obligations; Pooling and Servicing
Agreement.
----------
(a) Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Notes and the
Trust Agreement.
(b) Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any Lease or any other instrument included
in Trust Estate, or which would result in the amendment, hypothecation,
subordination, termination, or discharge of, or impair the validity or
effectiveness of, any Lease or such other instrument, except as expressly
provided in this Indenture or the Pooling and Servicing Agreement.
(c) If any Authorized Officer shall have knowledge of the
occurrence of a default under the Pooling and Servicing Agreement, Issuer
shall promptly notify Indenture Trustee and the Noteholders thereof, and
shall specify in such notice the action, if any, Issuers taking in respect
of such default. Except as otherwise
-48-
<PAGE>
provided therein, Issuer may not waive any default under or amend the
Pooling and Servicing Agreement.
SECTION 8.8. Negative Covenants.
-------------------
Issuer will not:
(a) sell, transfer, exchange or otherwise dispose of any portion
of the Trust Estate except as expressly permitted by this Indenture, the
Pooling and Servicing Agreement, and the Trust Agreement;
(b) claim any credit on, or make any deduction from, the principal
of, or interest on, any of the Notes by reason of the payment of any taxes
levied or assessed upon any portion of the Trust Estate;
(c) engage in any business or activity other than in connection
with, or relating to the ownership of, the Leases and the interests in the
Equipment, the issuance of the Notes, and the specific transactions
contemplated hereby;
(d) become liable for, issue, incur, assume, or allow to remain
outstanding any indebtedness, or guaranty any indebtedness of any Person,
other than the Notes, except as contemplated by this Indenture, the
registration statement filed with respect to the Class A Notes and Class B
Notes (and any registration statement for similar securities), and the
Pooling and Servicing Agreement;
(e) seek dissolution or liquidation in whole or in part or
reorganization of its business or affairs;
(f) (i) permit the validity or effectiveness of this Indenture or
any Grant hereby to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations under this
Indenture, except as may be expressly permitted hereby, (ii) permit any
lien, charge, security interest, mortgage or other encumbrance to be
created on or to extend to or otherwise arise upon or burden Trust Estate
or any part thereof or any interest therein or the proceeds thereof other
than the lien of this Indenture, or (iii) subject to Section 3.1(c) of the
Pooling and Servicing Agreement, permit the lien of this Indenture not to
constitute a valid first priority security interest in Trust Estate; or
(g) Issuer shall not make any expenditure (by long-term or
operating lease or otherwise) for capital assets (either realty or
personalty).
-49-
<PAGE>
(h) So long as any Notes are Outstanding, Issuer shall not remove
the Manager without cause unless the Rating Agency Condition shall have
been satisfied in connection with such removal.
(i) Issuer shall not, directly or indirectly: (i) pay any dividend
or make any distribution (by reduction of capital or otherwise), whether in
cash, property, securities or a combination thereof, to Trustee or any
owner of a beneficial interest in Issuer or otherwise with respect to any
ownership or equity interest or security in or of Issuer or to Servicer or
Manager, (ii) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; provided, however,
that Issuer may make, or cause to be made, distributions to Servicer,
Trustee, Noteholders, Certificateholders and Manager as contemplated by,
and to the extent funds are available for such purpose under, the Pooling
and Servicing Agreement. Issuer will not, directly or indirectly, make
payments to or distributions from the Collection Account except in
accordance with this Indenture and the other Basic Documents.
SECTION 8.9. Notice of Events of Default.
----------------------------
Issuer shall give the Indenture Trustee and the Rating Agencies
prompt written notice of each Event of Default hereunder, each default on
the part of Servicer or Transferor of its obligations under the Pooling and
Servicing Agreement and each default on the part of ILC of its obligations
under the Contribution Agreement.
SECTION 8.10. Taxes.
------
Issuer shall pay all taxes when due and payable or levied against
its assets, properties or income, including any property that is part of
Trust Estate.
SECTION 8.11. Indemnification.
----------------
Issuer agrees to indemnify and hold harmless Indenture Trustee and
each Noteholder (each an "Indemnified Party") against any and all
liabilities, losses, damages, penalties, costs and expenses (including
costs of defense and legal fees and expenses) which may be incurred or
suffered by such Indemnified Party without negligence or willful misconduct
on its part as a result of claims, actions, suits or judgments asserted or
imposed against it and arising out of the transactions contemplated hereby
or by the Pooling and Servicing Agreement, including without limitation,
any claims resulting from any use, operation, maintenance, repair, storage
or transportation of any item of Equipment, whether or not in Issuer's
possession or under its control, and any tort claims and any fines or
penalties arising from any violation of the laws or regulations of the
United States or any state or local
-50-
<PAGE>
government or governmental authority; provided that, all amounts payable
pursuant to this Section 8.11 shall be fully subordinated to amounts
payable under the Notes, shall be without recourse to Issuer except to the
extent that all amounts otherwise due and payable under the terms of this
Indenture have been fully paid and shall not, to the extent that such
amounts are unpaid, constitute a claim against Issuer except to the extent
that all amounts otherwise due and payable under the terms of this
Indenture have been fully paid.
SECTION 8.12. Commission Reports; Reports to Indenture Trustee;
Reports to Noteholders.
-----------------------
Issuer shall:
(a) file with Indenture Trustee, within 15 days after Issuer is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports which Issuer may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Exchange Act (or copies of such portions thereof as may be
prescribed by rules and regulations of the Commission); or, if Issuers not
required to file with the Commission information, documents or reports
pursuant to either Section 13 or Section 15(d) of the Exchange Act, then
Issuer will file with Indenture Trustee and with the Commission, in
accordance with rules and regulations prescribed by the Commission, such of
the supplementary and periodic information, documents and reports required
pursuant to Section 13 of the Exchange Act in respect of a security listed
and registered on a national securities exchange as may be prescribed in
such rules and regulations;
(b) file with Indenture Trustee and the Commission, in accordance
with the rules and regulations prescribed by the Commission, such
additional information, documents and reports with respect to compliance by
Issuer with the conditions and covenants provided for in this Indenture as
may be required by such rules and regulations, including, in the case of
annual reports, if required by such rules and regulations, certificates or
opinions of independent public accountants, conforming to the requirements
of Sections 11.3 and 11.4 hereof, as to compliance with conditions or
covenants, compliance with which is subject to verification by accountants;
and
(c) furnish to Indenture Trustee for distribution to the
Noteholders, as the names and addresses of such Noteholders appear in the
Note Register, in the manner and to the extent provided in Section 7.15
hereof, such summaries of any information, documents and reports required
to be filed with Indenture Trustee pursuant to the provisions of
Subsections (a) and (b) of this Section 8.12 as may be required to be
provided to such Noteholders by the rules and regulations of the Commission
under the provisions of the Trust Indenture Act.
-51-
<PAGE>
ARTICLE 9.
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of
Noteholders.
------------
(a) Without the consent of any Noteholders, Issuer, by a Trust
Order, and Indenture Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to
Indenture Trustee, for any of the following purposes:
(i) to add to the covenants of Issuer for the benefit of the
Noteholders, or to surrender any right or power herein conferred upon
the Trust;
(ii) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other
provision herein; or
(iii) to correct or amplify the description of any
property at any time subject to the lien of this Indenture, or to
better assure, convey and confirm unto Indenture Trustee any
property subject or required to be subjected to the lien of this
Indenture;
provided such action pursuant to this Section 9.1(a) shall not adversely
affect the interests of the Noteholders in any respect. Additionally,
Issuer, by Trust Order, and Indenture Trustee, without the consent of any
Noteholders, may execute a Supplemental Indenture to conform the Indenture
to the description thereof and of the Notes and Certificates contained in
the Prospectus.
(b) Indenture Trustee shall promptly deliver to each Noteholder
and each Rating Agency a copy of any supplemental indenture entered into
pursuant to Section 9.1(a).
SECTION 9.2. Supplemental Indentures with Consent of
Noteholders.
------------
(a) With the consent of the Holders of Notes evidencing not less
than 662/3% of the then Outstanding Principal Amount of the Notes and by
Act of said Noteholders delivered to Issuer and Indenture Trustee, Issuer,
by a Trust Order, and Indenture Trustee may 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
-52-
<PAGE>
the Noteholders under this Indenture; provided, that no supplemental
indenture shall, without the consent of the Holder of each Outstanding Note
affected thereby,
(i) change the Stated Maturity of any Note or the
Principal Payments or Interest Payments due or to become due on
any Payment Date with respect to any Note, or change the priority
of payment thereof as set forth herein, or reduce the principal
amount thereof or the Note Interest Rate thereon, or change the
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 any such payment on or after
the Maturity thereof;
(ii) reduce the percentage of the Outstanding Principal
Amount of the Notes the consent of whose Noteholders is required
for any such supplemental indenture, for any waiver of compliance
with provisions of this Indenture or Events of Default and their
consequences, or for any Act of Noteholders;
(iii) modify any of the provisions of this Section or
Section 6.13 except to increase any percentage or fraction set
forth therein or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Note affected thereby;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding"; or
(v) permit the creation of any lien ranking prior to or
on a parity with the lien of this Indenture with respect to any
part of Trust Estate or, except as provided in Sections 4.1 or
4.2, terminate the lien of this Indenture on any property at any
time subject hereto or deprive any Noteholder of the security
afforded by the lien of this Indenture.
(b) Indenture Trustee shall promptly deliver to each Noteholder
and each Rating Agency a copy of any supplemental indenture entered into
pursuant to Section 9.2(a).
SECTION 9.3. Execution of Supplemental Indentures.
-------------------------------------
In executing any supplemental indenture (a) pursuant to Section
9.1 or (b) pursuant to Section 9.2 without the consent of each Holder of
the Notes to the execution of the same, Indenture Trustee shall be entitled
to receive, and (subject to Section 7.1) 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.
Indenture Trustee may, but shall not be obligated to, enter into any
-53-
<PAGE>
supplemental indenture which affects Indenture Trustee's own rights,
duties, projections, or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indentures.
-----------------------------------
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all
purposes, and every Noteholder of Notes theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
SECTION 9.5. Reference in Notes to Supplemental Indentures.
----------------------------------------------
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required
by Indenture Trustee, bear a notation in form approved by Indenture Trustee
as to any matter provided for in such supplemental indenture. If Issuer
shall so determine, new Notes so modified as to conform, in the opinion of
Indenture Trustee and Issuer, to any such supplemental indenture may be
prepared and executed by Issuer and authenticated and delivered by
Indenture Trustee in exchange for Outstanding Notes.
SECTION 9.6. Compliance with Trust Indenture Act.
------------------------------------
Every amendment, supplement or waiver to this Indenture or the
Notes shall comply with the Trust Indenture Act as then in effect.
ARTICLE 10.
SATISFACTION AND DISCHARGE
SECTION 10.1. Satisfaction and Discharge of Indenture.
----------------------------------------
(a) This Indenture shall cease to be of further effect (except as
to any surviving rights of registration of transfer or exchange of Notes
herein expressly provided for), and Indenture Trustee, on demand of and at
the expense of Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(i) 100 days shall have elapsed since either
(A) all Notes theretofore authenticated and
delivered (other than (1) Notes which have been
destroyed, lost or stolen and which have been replaced or
paid as provided in Section 2.4 and (2) Notes for whose
payment money has theretofore been deposited in
-54-
<PAGE>
trust or segregated and held in trust by Issuer and
thereafter repaid to Issuer or discharged from such
trust, as provided in Section 8.3(c)) have been delivered
to Indenture Trustee for cancellation; or
(B) the final installments of principal on all
such Notes not theretofore delivered to Indenture Trustee
for cancellation
(1) have become due and payable, or
(2) will become due and payable at their
Stated Maturity, as applicable, within one year,
and Issuer has irrevocably deposited or caused to be
deposited with Indenture Trustee as trust funds in trust
for the purpose an amount sufficient to pay and discharge
the entire indebtedness on such Notes not theretofore
delivered to Indenture Trustee for cancellation, for
principal and interest to the date of such deposit (in
the case of Notes which have become due and payable) or
to the Stated Maturity thereof;
(ii) Issuer has paid or caused to be paid all other sums
payable hereunder by Issuer for the benefit of the Noteholders;
and
(iii) Issuer has delivered to Indenture Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied
with.
At such time, Indenture Trustee shall deliver to Issuer or, upon Issuer
Order, its assignee, all cash, securities and other property held by it as
part of Trust Estate other than funds deposited with Indenture Trustee
pursuant to Section 10.1(a)(i)(B), for the payment and discharge of the
Notes.
(b) Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of Issuer to Indenture Trustee under Sections
7.7 and 8.11, and, if money shall have been deposited with Indenture
Trustee pursuant to Section 10.1(a)(i)(B), the obligations of Indenture
Trustee under Section 10.2 and Section 8.3(c) shall survive.
(c) Indenture Trustee shall provide prompt written notice to each
Rating Agency of any satisfaction and discharge of this Indenture pursuant
to this Article 10.
-55-
<PAGE>
SECTION 10.2. Application of Trust Money.
Subject to the provisions of Section 8.3(c), all money deposited
with Indenture Trustee pursuant to Sections 10.1 and 8.3 shall be held in
trust and applied by it, in accordance with the provisions of the Notes and
this Indenture, to the payment to the Persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with
Indenture Trustee.
ARTICLE 11.
MISCELLANEOUS
SECTION 11.1. Trust Indenture Act Controls.
-----------------------------
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by operation of Trust Indenture Act Section 318(a),
the duties imposed by Section 318(a) shall control.
SECTION 11.2. Communication by Noteholders with Other
Noteholders.
------------
Noteholders may communicate, pursuant to Trust Indenture Act
Section 312(b), with other Noteholders with respect to their rights under
this Indenture or the Notes. Issuer, Indenture Trustee, the Note Registrar
and all other parties shall have the protection of Trust Indenture Act
Section 312(c).
SECTION 11.3. Officers' Certificate and Opinion of Counsel as to
Conditions Precedent.
- ----------------------
Upon any request or application by Issuer (or any other obligor
upon the Notes) to Indenture Trustee to take any action under this
Indenture, Issuer (or such other Obligor) shall furnish to Indenture
Trustee:
(a) an Officers' Certificate (which shall include the
statements set forth in Section 11.4) stating that, in the opinion
of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and
(b) an Opinion of Counsel (which shall include the
statements set forth in Section 11.4) stating that, in the opinion
of such counsel, all such conditions precedent and covenants have
been complied with.
-56-
<PAGE>
SECTION 11.4. Statements Required in Certificate or Opinion.
----------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he
has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been complied with.
SECTION 11.5. Nonpetition.
------------
Indenture Trustee shall not petition or otherwise invoke the
process of any Governmental Authority for the purpose of commencing or
sustaining a case against Issuer or Transferor under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of
Issuer or Transferor any substantial part of its respective property, or
ordering the winding up or liquidation of the affairs of Issuer or
Transferor.
SECTION 11.6. ERISA Matters. Each Holder and Note Owner, by
acceptance of a Note, or, in the case of a Note Owner, a beneficial
interest in the Note, shall be deemed to represent and warrant that either
(a) it is not acquiring the Note with the plan assets of a plan described
in Section 4975(e)(1) of the Code, or any entity whose underlying assets
include plan assets by reason of a plan's investment in the entity (each, a
"Benefit Plan"); or (b) the acquisition and holding of the Note will not
give rise to a nonexempt prohibited transaction under Section 406(a) of
ERISA or Section 4975 of the Code.
SECTION 11.7. Lessees. Indenture Trustee acknowledges and agrees
that so long no default shall have occurred under any Lease that (a) the
related Lessee shall not be named as a defendant, in any foreclosure or
other proceeding which may be instituted by Indenture Trustee relating to
such Lease or related Equipment and (b) Indenture Trustee shall not
interfere with the right of the related Lessee to have quiet and peaceful
use of the related Equipment during the term of the Lease.
-57-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto
affixed and witnessed, all as of the day and year first above written.
PROVIDENT EQUIPMENT LEASE TRUST
1998-A
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee of the
Provident Equipment Lease Trust 1998-A
By: /s/ Doris J. Krick
-------------------------------------------------
Name: Doris J. Krick
Title: Vice President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Indenture Trustee
By: /s/ Marianna C. Stershic
------------------------------------------------
Name: Marianna C. Stershic
Title: Assistant Vice-President
Indenture
-58-
<PAGE>
EXHIBIT A
{FORM OF CLASS A-1 NOTE}
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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 REQUIRED 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.
PROVIDENT EQUIPMENT LEASE TRUST 1998-A
5.28 % CLASS A-1 LEASE-BACKED NOTE
CUSIP NO. 74386N AA 6
No. R-1 $73,303,000
PROVIDENT EQUIPMENT LEASE TRUST 1998-A (herein called the "Trust",
which term includes any successor Person under the Indenture referred to
herein), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of SEVENTY THREE MILLION THREE
HUNDRED THREE THOUSAND DOLLAR ($73,303,000), payable in monthly
installments beginning on November 25, 1998, in accordance with the
Indenture. Interest will accrue on the unpaid principal hereof from the
date of issuance, at the rate of 5.28% per annum, until the full amount of
principal hereof is otherwise paid or made available for payment and shall
be computed on the basis of a year of 360 days and the actual number of
days in the period since the last Payment Date or with respect to the
November, 1998 Payment Date, since the Issuance Date.
Principal and interest on this Class A-1 Note shall be paid on the
25th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing November 25, 1998, either by check to
the registered address of the Holder of this Class A-1 Note as of the
relevant Record Date or by wire transfer to an account at a bank in the
United States as the Holder shall specify, as provided more fully in the
Indenture; provided, that the final payment of principal and interest in
respect of the Notes shall be payable to the Holder of this Note only upon
presentation and surrender of this Note at the Corporate Trust Office of
Indenture
A-1
<PAGE>
Trustee or at the principal office of any Paying Agent appointed pursuant
to the Indenture.
The Stated Maturity of the Class A-1 Notes is the October, 1999
Payment Date, on which date the Outstanding Principal Amount of the Class
A-1 Notes shall be due and payable.
Unless the certificate of authentication hereon has been executed
by Indenture Trustee referred to on the reverse hereof by manual signature,
this Class A-1 Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
This Class A-1 Note is one of a duly authorized issue of Class A
Notes of Issuer designated as its "5.28% Class A-1 Lease-Backed Notes
(herein called the "Class A-1 Notes") limited in aggregate principal amount
of $73,303,000, issued under the Indenture, dated as of September 1, 1998
(herein called the "Indenture"), between Issuer and Norwest Bank Minnesota,
National Association, as Indenture Trustee (herein called the "Indenture
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, limitations of
rights, duties and immunities thereunder of Issuer, Indenture Trustee and
the Holders and of the terms upon which the Class A-1 Notes are
authenticated and delivered. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings set forth in Appendix
X of the Indenture.
This Class A-1 Note will be secured by the pledge to Indenture
Trustee of the Trust Estate.
If an Event of Default under the Indenture has been declared by
Indenture Trustee, the principal of all the Class A-1 Notes (but not less
than all the Class A-1 Notes) may be declared due and payable in the manner
and with the effect provided in the Indenture. Notice of such declaration
will be given by mail to Holders, as their names and addresses appear in
the Note Register, as provided in the Indenture. Upon payment of such
principal amount together with all accrued interest, the obligations of
Issuer with respect to the payment of principal and interest on this Class
A-1 Note shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of Issuer and the rights of the Holders under the Indenture at
any time by Issuer and Indenture Trustee with the consent of the Holders of
Notes evidencing at least 662/3% in aggregate principal amount of the Class
A Notes and the Issuer's Class B Lease-Backed Notes (the "Class B Notes")
at the time Outstanding. The Indenture also contains provisions permitting
the Holders of specified percentages in aggregate
A-2
<PAGE>
principal amount of the Class A Notes and the Class B Notes at the time
Outstanding, on behalf of all the Holders, to waive compliance by 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 Class A-1 Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Class A-1 Note and of any Class
A-1 Note issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Class A-1 Note or any Class A-1 Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class A-1 Note is registrable in
the Note Register, upon surrender of this Class A-1 Note for registration
of transfer at the office or agency of Indenture Trustee in Minneapolis,
Minnesota, and at any other office or agency maintained by Issuer for that
purpose, duly endorsed by, or accompanied by a written instrument of
transfer in the form satisfactory to the Note Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon
one or more new Class A-1 Notes, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated
transferee or transferees.
Each Holder and Note Owner, by acceptance of a Class A-1 Note, or,
in the case of a Note Owner, a beneficial interest in the Class A-1 Note,
shall be deemed to represent and warrant that either (a) it is not
acquiring the Class A-1 Note with the plan assets of an "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), which is subject to Title I of ERISA, or
a "plan" as defined in Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") (each such entity a "Benefit Plan"); or (b) the
acquisition and holding of the Class A-1 Note will not give rise to a
nonexempt prohibited transaction under Section 406(a) of ERISA or Section
4975 of the Code.
The Class A-1 Notes are issuable only in registered form without
coupons in minimum denominations of $1,000. As provided in the Indenture
and subject to certain limitations therein set forth, Class A-1 Notes are
exchangeable for a like aggregate principal amount of Class A-1 Notes of a
different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange, but Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Issuer, Indenture Trustee and any agent of Issuer or Indenture
Trustee may treat the Person in whose name this Class A-1 Note is
registered as the owner hereof for all purposes, whether or not this Class
A-1 Note may be overdue, and neither
A-3
<PAGE>
Issuer, Indenture Trustee nor any such agent shall be affected by notice to
the contrary.
The Indenture and this Class A-1 Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the
State of New York.
A-4
<PAGE>
IN WITNESS WHEREOF, Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated: September 30, 1998
PROVIDENT EQUIPMENT LEASE TRUST
1998-A
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its individual
capacity, but solely as Trustee of the Provident
Equipment Lease Trust 1998-A
By: _____________________________________
Authorized Officer
Indenture Trustee's Certificate of Authentication
This is one of the Class A-1 Notes referred to in the within
mentioned Indenture.
ORWEST BANK MINNESOTA, NATIONAL
SSOCIATION, as Indenture Trustee
By: _____________________________________
Authorized Signatory
A-5
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Class A-1 Note, fill in the
form below and have your signature guaranteed:
I or we assign and transfer this Class A-1 Note to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and social security or tax ID number
of assignee)
and irrevocably appoint ____________________, agent to transfer this Class
A-1 Note on the books of Issuer. The agent may substitute another to act
for him.
Dated: __________________ Signed:_______________________________________
----------------------------------------------
(sign exactly as the name appears on the other
side of this Class A-1 Note)
Signature Guarantee_____________________________________________________________
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes
fully negotiable, similar to a check endorsed in blank. Therefore, to
safeguard a signed Class A-1 Note, it is recommended that you fill in the
name of the new owner in the "Assignee" blank. Alternatively, instead of
using this Assignment Form, you may sign a separate "power of attorney"
form and then mail the unsigned Class A-1 Note and the signed "power of
attorney" in separate envelopes. For added protection, use certified or
registered mail for a Class A-1 Note.
A-6
<PAGE>
{FORM OF CLASS A-2 NOTE}
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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 REQUIRED 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.
PROVIDENT EQUIPMENT LEASE TRUST 1998-A
5.78% CLASS A-2 LEASE-BACKED NOTE
CUSIP NO. 74386N AB 4
No. R-1 $19,242,000
PROVIDENT EQUIPMENT LEASE TRUST 1998-A (herein called the
"Issuer", which term includes any successor Person under the Indenture
referred to herein), for value received, hereby promises to pay to Cede &
Co., or registered assigns, the principal sum of NINETEEN MILLION TWO
HUNDRED FORTY TWO THOUSAND DOLLARS ($19,242,000), payable in monthly
installments beginning on November 25, 1998 in accordance with the
Indenture. Interest will accrue on the unpaid principal hereof from the
date of issuance, at the rate of 5.78% per annum, until the full amount of
principal hereof is otherwise paid or made available for payment and shall
be computed on the basis of twelve 30-day months and a year of 360 days.
Principal and interest on this Class A-2 Note shall be paid on the
25th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing November 25, 1998, either by check to
the registered address of the Holder of this Class A-2 Note as of the
relevant Record Date or by wire transfer to an account at a bank in the
United States as the Holder shall specify, as provided more fully in the
Indenture; provided, that the final payment of principal and interest in
respect of the Notes shall be payable to the Holder of this Note only upon
presentation and surrender of this Note at the Corporate Trust Office of
Indenture Trustee or at the principal office of any Paying Agent appointed
pursuant to the Indenture.
A-7
<PAGE>
The Stated Maturity of the Class A-2 Notes is the April, 2006
Payment Date, on which date the Outstanding Principal Amount of the Class
A-2 Notes shall be due and payable.
Unless the certificate of authentication hereon has been executed
by Indenture Trustee referred to on the reverse hereof by manual signature,
this Class A-2 Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
This Class A-2 Note is one of a duly authorized issue of Class A-2
Notes of Issuer designated as its "5.78% Class A-2 Lease-Backed Notes"
(herein called the "Class A-2 Notes") limited in aggregate principal amount
of $19,242,000, issued under the Indenture, dated as of September 1, 1998
(herein called the "Indenture"), between Issuer and Norwest Bank Minnesota,
National Association, as Indenture Trustee (herein called the "Indenture
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, limitations of
rights, duties and immunities thereunder of Issuer, Indenture Trustee and
the Holders and of the terms upon which the Class A-2 Notes are
authenticated and delivered. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings set forth in Appendix
X of the Indenture.
This Class A-2 Note will be secured by the pledge to Indenture
Trustee of the Trust Estate.
If an Event of Default under the Indenture has been declared by
Indenture Trustee, the principal of all the Class A-2 Notes (but not less
than all the Class A-2 Notes) may be declared due and payable in the manner
and with the effect provided in the Indenture. Notice of such declaration
will be given by mail to Holders, as their names and addresses appear in
the Note Register, as provided in the Indenture. Upon payment of such
principal amount together with all accrued interest, the obligations of
Issuer with respect to the payment of principal and interest on this Class
A-2 Note shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of Issuer and the rights of the Holders under the Indenture at
any time by Issuer and Indenture Trustee with the consent of the Holders of
662/3% in aggregate principal amount of the Class A Notes and the Issuer's
Class B Lease-Backed Notes (the "Class B Notes") at the time Outstanding.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Class A Notes and the
Class B Notes at the time Outstanding, on behalf of all the Holders, to
waive compliance by Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by
A-8
<PAGE>
the Holder of this Class A-2 Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Class A-2 Note and of any Class
A-2 Note issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Class A-2 Note or any Class A-2 Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class A-2 Note is registrable in
the Note Register, upon surrender of this Class A-2 Note for registration
of transfer at the office or agency of Indenture Trustee in Minneapolis,
Minnesota, and at any other office or agency maintained by Issuer for that
purpose, duly endorsed by, or accompanied by a written instrument of
transfer in the form satisfactory to the Note Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon
one or more new Class A-2 Notes, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated
transferee or transferees.
Each Holder and Note Owner, by acceptance of a Class A-2 Note, or,
in the case of a Note Owner, a beneficial interest in the Class A-2 Note,
shall be deemed to represent and warrant that either (a) it is not
acquiring the Class A-2 Note with the plan assets of an "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), which is subject to Title I of ERISA, or
a "plan" as defined in Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") (each such entity a "Benefit Plan"); or (b) the
acquisition and holding of the Class A-2 Note will not give rise to a
nonexempt prohibited transaction under Section 406(a) of ERISA or Section
4975 of the Code.
The Class A-2 Notes are issuable only in registered form without
coupons in minimum denominations of $1,000. As provided in the Indenture
and subject to certain limitations therein set forth, Class A-2 Notes are
exchangeable for a like aggregate principal amount of Class A-2 Notes of a
different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange, but Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Issuer, Indenture Trustee and any agent of Issuer or Indenture
Trustee may treat the Person in whose name this Class A-2 Note is
registered as the owner hereof for all purposes, whether or not this Class
A-2 Note may be overdue, and neither Issuer, Indenture Trustee nor any such
agent shall be affected by notice to the contrary.
A-9
<PAGE>
The Indenture and this Class A-2 Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the
State of New York.
A-10
<PAGE>
IN WITNESS WHEREOF, Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated: September 30, 1998
PROVIDENT EQUIPMENT LEASE TRUST
1998-A
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its individual
capacity, but solely as Trustee of the Provident
Equipment Lease Trust 1998-A
By: ______________________________________
Authorized Officer
Indenture Trustee's Certificate of Authentication
This is one of the Class A-2 Notes referred to in the within
mentioned Indenture.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Indenture Trustee
By: ______________________________________
Authorized Signatory
A-11
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Class A-2 Note, fill in the
form below and have your signature guaranteed:
I or we assign and transfer this Class A-2 Note to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and social security or tax ID number
of assignee)
and irrevocably appoint ___________________, agent to transfer this Class
A-2 Note on the books of Issuer. The agent may substitute another to act
for him.
Dated: _____________________ Signed:_______________________
___________________________________________
(sign exactly as the name appears on the
other side of this Class A-2 Note)
Signature Guarantee_____________________________________________________________
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes
fully negotiable, similar to a check endorsed in blank. Therefore, to
safeguard a signed Class A Note, it is recommended that you fill in the
name of the new owner in the "Assignee" blank. Alternatively, instead of
using this Assignment Form, you may sign a separate "power of attorney"
form and then mail the unsigned Class A Note and the signed "power of
attorney" in separate envelopes. For added protection, use certified or
registered mail for a Class A-2 Note.
A-12
<PAGE>
{FORM OF CLASS A-3 NOTE}
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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 REQUIRED 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.
PROVIDENT EQUIPMENT LEASE TRUST 1998-A
5.60 % CLASS A-3 LEASE-BACKED NOTE
CUSIP NO. 74386N AC 2
No. R-1 $90,935,000
PROVIDENT EQUIPMENT LEASE TRUST 1998-A (herein called the
"Issuer", which term includes any successor Person under the Indenture
referred to herein), for value received, hereby promises to pay to Cede &
Co., or registered assigns, the principal sum of NINETY MILLION NINE
HUNDRED THIRTY FIVE THOUSAND DOLLARS ($90,935,000), payable in monthly
installments beginning on November 25, 1998, in accordance with the
Indenture. Interest will accrue on the unpaid principal hereof from the
date of issuance, at the rate of 5.60% per annum, until the full amount of
principal hereof is otherwise paid or made available for payment and shall
be computed on the basis of twelve 30-day months and a year of 360 days.
Principal and interest on this Class A-3 Note shall be paid on the
25th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing November 25, 1998, either by check to
the registered address of the Holder of this Class A-3 Note as of the
relevant Record Date or by wire transfer to an account at a bank in the
United States as the Holder shall specify, as provided more fully in the
Indenture; provided, that the final payment of principal and interest in
respect of the Notes shall be payable to the Holder of this Note only upon
presentation and surrender of this Note at the Corporate Trust Office of
Indenture Trustee or at the principal office of any Paying Agent appointed
pursuant to the Indenture.
A-13
<PAGE>
The Stated Maturity of the Class A-3 Notes is the April, 2006
Payment Date, on which date the Outstanding Principal Amount of the Class
A-3 Notes shall be due and payable.
Unless the certificate of authentication hereon has been executed
by Indenture Trustee referred to on the reverse hereof by manual signature,
this Class A-3 Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
This Class A-3 Note is one of a duly authorized issue of Class A-3
Notes of Issuer designated as its "5.60% Class A-3 Lease-Backed Notes"
(herein called the "Class A-3 Notes") limited in aggregate principal amount
of $90,935,000, issued under the Indenture, dated as of September 1, 1998
(herein called the "Indenture"), between Issuer and Norwest Bank Minnesota,
National Association, as Indenture Trustee (herein called the "Indenture
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, limitations of
rights, duties and immunities thereunder of Issuer, Indenture Trustee and
the Holders and of the terms upon which the Class A-3 Notes are
authenticated and delivered. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings set forth in Appendix
X of the Indenture.
This Class A-3 Note will be secured by the pledge to Indenture
Trustee of the Trust Estate.
If an Event of Default under the Indenture has been declared by
Indenture Trustee, the principal of all the Class A-3 Notes (but not less
than all the Class A-3 Notes) may be declared due and payable in the manner
and with the effect provided in the Indenture. Notice of such declaration
will be given by mail to Holders, as their names and addresses appear in
the Note Register, as provided in the Indenture. Upon payment of such
principal amount together with all accrued interest, the obligations of
Issuer with respect to the payment of principal and interest on this Class
A-3 Note shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of Issuer and the rights of the Holders under the Indenture at
any time by Issuer and Indenture Trustee with the consent of the Holders of
662/3% in aggregate principal amount of the Class A Notes and the Issuer's
Class B Lease-Backed Notes (the "Class B Notes") at the time Outstanding.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Class A Notes and the
Class B Notes at the time Outstanding, on behalf of all the Holders, to
waive compliance by Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by
A-14
<PAGE>
the Holder of this Class A-3 Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Class A-3 Note and of any Class
A-3 Note issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Class A-3 Note or any Class A-3 Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class A-3 Note is registrable in
the Note Register, upon surrender of this Class A-3 Note for registration
of transfer at the office or agency of Indenture Trustee in Minneapolis,
Minnesota, and at any other office or agency maintained by Issuer for that
purpose, duly endorsed by, or accompanied by a written instrument of
transfer in the form satisfactory to the Note Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon
one or more new Class A-3 Notes, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated
transferee or transferees.
Each Holder and Note Owner, by acceptance of a Class A-3 Note, or,
in the case of a Note Owner, a beneficial interest in the Class A-3 Note,
shall be deemed to represent and warrant that either (a) it is not
acquiring the Class A-3 Note with the plan assets of an "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), which is subject to Title I of ERISA, or
a "plan" as defined in Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") (each such entity a "Benefit Plan"); or (b) the
acquisition and holding of the Class A-3 Note will not give rise to a
nonexempt prohibited transaction under Section 406(a) of ERISA or Section
4975 of the Code.
The Class A-3 Notes are issuable only in registered form without
coupons in minimum denominations of $1,000. As provided in the Indenture
and subject to certain limitations therein set forth, Class A-3 Notes are
exchangeable for a like aggregate principal amount of Class A-3 Notes of a
different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange, but Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Issuer, Indenture Trustee and any agent of Issuer or Indenture
Trustee may treat the Person in whose name this Class A-3 Note is
registered as the owner hereof for all purposes, whether or not this Class
A-3 Note may be overdue, and neither Issuer, Indenture Trustee nor any such
agent shall be affected by notice to the contrary.
A-15
<PAGE>
The Indenture and this Class A-3 Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the
State of New York.
A-16
<PAGE>
IN WITNESS WHEREOF, Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated: September 30, 1998
PROVIDENT EQUIPMENT LEASE TRUST
1998-A
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its individual
capacity, but solely as Trustee of the Provident
Equipment Lease Trust 1998-A
By: ______________________________________
Authorized Officer
Indenture Trustee's Certificate of Authentication
This is one of the Class A-3 Notes referred to in the within
mentioned Indenture.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Indenture Trustee
By: ______________________________________
Authorized Signatory
A-17
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Class A-3 Note, fill in the
form below and have your signature guaranteed:
I or we assign and transfer this Class A-3 Note to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and social security or tax ID number
of assignee)
and irrevocably appoint ___________________, agent to transfer this Class
A-3 Note on the books of Issuer. The agent may substitute another to act
for him.
Dated: _____________________ Signed:_______________________
__________________________________________
(sign exactly as the name appears on the
other side of this Class A-3 Note)
Signature Guarantee_____________________________________________________________
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes
fully negotiable, similar to a check endorsed in blank. Therefore, to
safeguard a signed Class A Note, it is recommended that you fill in the
name of the new owner in the "Assignee" blank. Alternatively, instead of
using this Assignment Form, you may sign a separate "power of attorney"
form and then mail the unsigned Class A Note and the signed "power of
attorney" in separate envelopes. For added protection, use certified or
registered mail for a Class A-3 Note
A-18
<PAGE>
{FORM OF CLASS A-4 NOTE}
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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 REQUIRED 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.
PROVIDENT EQUIPMENT LEASE TRUST 1998-A
5.75% CLASS A-4 LEASE-BACKED NOTE
CUSIP NO. 74386N AD 0
No. R-1 $18,576,000
PROVIDENT EQUIPMENT LEASE TRUST 1998-A (herein called the
"Issuer", which term includes any successor Person under the Indenture
referred to herein), for value received, hereby promises to pay to Cede &
Co., or registered assigns, the principal sum of EIGHTEEN MILLION FIVE
HUNDRED SEVENTY SIX THOUSAND DOLLARS ($18,576,000), payable in monthly
installments beginning on November 25, 1998, in accordance with the
Indenture. Interest will accrue on the unpaid principal hereof from the
date of issuance, at the rate of 5.75% per annum, until the full amount of
principal hereof is otherwise paid or made available for payment and shall
be computed on the basis of twelve 30-day months and a year of 360 days.
Principal and interest on this Class A-4 Note shall be paid on the
25th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing November 25, 1998, either by check to
the registered address of the Holder of this Class A-4 Note as of the
relevant Record Date or by wire transfer to an account at a bank in the
United States as the Holder shall specify, as provided more fully in the
Indenture; provided, that the final payment of principal and interest in
respect of the Notes shall be payable to the Holder of this Note only upon
presentation and surrender of this Note at the Corporate Trust Office of
Indenture Trustee or at the principal office of any Paying Agent appointed
pursuant to the Indenture.
A-19
<PAGE>
The Stated Maturity of the Class A-4 Notes is the April, 2006
Payment Date, on which date the Outstanding Principal Amount of the Class
A-4 Notes shall be due and payable.
Unless the certificate of authentication hereon has been executed
by Indenture Trustee referred to on the reverse hereof by manual signature,
this Class A-4 Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
This Class A-4 Note is one of a duly authorized issue of Class A-4
Notes of Issuer designated as its "5.75% Class A-4 Lease-Backed Notes"
(herein called the "Class A-4 Notes") limited in aggregate principal amount
of $18,576,000, issued under the Indenture, dated as of September 1, 1998
(herein called the "Indenture"), between Issuer and Norwest Bank Minnesota,
National Association, as Indenture Trustee (herein called the "Indenture
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, limitations of
rights, duties and immunities thereunder of Issuer, Indenture Trustee and
the Holders and of the terms upon which the Class A-4 Notes are
authenticated and delivered. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings set forth in Appendix
X of the Indenture.
This Class A-4 Note will be secured by the pledge to Indenture
Trustee of the Trust Estate.
If an Event of Default under the Indenture has been declared by
Indenture Trustee, the principal of all the Class A-4 Notes (but not less
than all the Class A-4 Notes) may be declared due and payable in the manner
and with the effect provided in the Indenture. Notice of such declaration
will be given by mail to Holders, as their names and addresses appear in
the Note Register, as provided in the Indenture. Upon payment of such
principal amount together with all accrued interest, the obligations of
Issuer with respect to the payment of principal and interest on this Class
A-4 Note shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of Issuer and the rights of the Holders under the Indenture at
any time by Issuer and Indenture Trustee with the consent of the Holders of
662/3% in aggregate principal amount of the Class A Notes and the Issuer's
Class B Lease-Backed Notes (the "Class B Notes") at the time Outstanding.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Class A Notes and the
Class B Notes at the time Outstanding, on behalf of all the Holders, to
waive compliance by Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by
A-20
<PAGE>
the Holder of this Class A-4 Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Class A-4 Note and of any Class
A-4 Note issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Class A-4 Note or any Class A-4 Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class A-4 Note is registrable in
the Note Register, upon surrender of this Class A-4 Note for registration
of transfer at the office or agency of Indenture Trustee in Minneapolis,
Minnesota, and at any other office or agency maintained by Issuer for that
purpose, duly endorsed by, or accompanied by a written instrument of
transfer in the form satisfactory to the Note Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon
one or more new Class A-4 Notes, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated
transferee or transferees.
Each Holder and Note Owner, by acceptance of a Class A-4 Note, or,
in the case of a Note Owner, a beneficial interest in the Class A-4 Note,
shall be deemed to represent and warrant that either (a) it is not
acquiring the Class A-4 Note with the plan assets of an "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), which is subject to Title I of ERISA, or
a "plan" as defined in Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") (each such entity a "Benefit Plan"); or (b) the
acquisition and holding of the Class A-4 Note will not give rise to a
nonexempt prohibited transaction under Section 406(a) of ERISA or Section
4975 of the Code.
The Class A-4 Notes are issuable only in registered form without
coupons in minimum denominations of $1,000. As provided in the Indenture
and subject to certain limitations therein set forth, Class A-4 Notes are
exchangeable for a like aggregate principal amount of Class A-4 Notes of a
different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange, but Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Issuer, Indenture Trustee and any agent of Issuer or Indenture
Trustee may treat the Person in whose name this Class A-4 Note is
registered as the owner hereof for all purposes, whether or not this Class
A-4 Note may be overdue, and neither Issuer, Indenture Trustee nor any such
agent shall be affected by notice to the contrary.
A-21
<PAGE>
The Indenture and this Class A-4 Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the
State of New York.
A-22
<PAGE>
IN WITNESS WHEREOF, Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated: September 30, 1998
ROVIDENT EQUIPMENT LEASE TRUST
998-A
By: FIRST UNION TRUST COMPANY,
ATIONAL ASSOCIATION, not in its individual
apacity, but solely as Trustee of the Provident
quipment Lease Trust 1998-A
By: ______________________________________
Authorized Officer
Indenture Trustee's Certificate of Authentication
This is one of the Class A-4 Notes referred to in the within
mentioned Indenture.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Indenture Trustee
By: ______________________________________
Authorized Signatory
A-23
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Class A-4 Note, fill in the
form below and have your signature guaranteed:
I or we assign and transfer this Class A-4 Note to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and social security or tax ID number
of assignee)
and irrevocably appoint ___________________, agent to transfer this Class
A-4 Note on the books of Issuer. The agent may substitute another to act
for him.
Dated: _____________________ Signed:______________________
------------------------------------------
(sign exactly as the name appears on the
other side of this Class A-4 Note)
Signature Guarantee_____________________________________________________________
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes
fully negotiable, similar to a check endorsed in blank. Therefore, to
safeguard a signed Class A Note, it is recommended that you fill in the
name of the new owner in the "Assignee" blank. Alternatively, instead of
using this Assignment Form, you may sign a separate "power of attorney"
form and then mail the unsigned Class A Note and the signed "power of
attorney" in separate envelopes. For added protection, use certified or
registered mail for a Class A-4 Note
A-24
<PAGE>
{FORM OF CLASS B NOTE}
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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 REQUIRED 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.
PROVIDENT EQUIPMENT LEASE TRUST 1998-A
6.20% CLASS B LEASE-BACKED NOTE
CUSIP No. 74386N AE 8
No. R-1 $7,687,000
PROVIDENT EQUIPMENT LEASE TRUST 1998-A (herein called the
"Issuer", which term includes any successor Person under the Indenture
referred to herein), for value received, hereby promises to pay to Cede &
Co., or registered assigns, the principal sum of SEVEN MILLION SIX HUNDRED
EIGHTY SEVEN THOUSAND DOLLARS ($7,687,000), payable in monthly installments
beginning on November 25, 1998, in accordance with the Indenture. Interest
will accrue on the unpaid principal hereof from the date of issuance, at
the rate of 6.20% per annum, until the full amount of principal hereof is
otherwise paid or made available for payment and shall be computed on the
basis of twelve 30-day months and a year of 360 days.
Principal and interest on this Class B Note shall be paid on the
25th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing November 25, 1998, either by check to
the registered address of the Holder of this Class B Note as of the
relevant Record Date or by wire transfer to an account at a bank in the
United States as the Holder shall specify, as provided more fully in the
Indenture; provided, that the final payment of principal and interest in
respect of the Class B Notes during the Principal Amortization Period shall
be payable to the Holder of this Class B Note only upon presentation and
surrender of this Class B Note at the Corporate Trust Office of Indenture
Trustee or at the principal office of any Paying Agent appointed pursuant
to the Indenture.
A-25
<PAGE>
The Stated Maturity of the Class B Notes is the April, 2006
Payment Date, on which date the Outstanding Principal Amount of the Class B
Notes shall be due and payable.
Unless the certificate of authentication hereon has been executed
by Indenture Trustee referred to on the reverse hereof by manual signature,
this Class B Note shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.
This Class B Note is one of a duly authorized issue of Class B
Notes of Issuer designated as its "6.20% Class B Lease-Backed Notes"
(herein called the "Class B Notes"), limited in aggregate principal amount
of $7,687,000, issued under the Indenture, dated as of September 1, 1998
(herein called the "Indenture"), between Issuer and Norwest Bank Minnesota,
National Association, as Indenture Trustee (herein called the "Indenture
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, limitations of
rights, duties and immunities thereunder of Issuer, Indenture Trustee and
the Holders and of the terms upon which the Class B Notes are authenticated
and delivered. Unless otherwise defined herein, all capitalized terms used
herein shall have the meanings set forth in Appendix X of the Indenture.
This Class B Note will be secured by the pledge to Indenture
Trustee of the Trust Estate.
If an Event of Default under the Indenture has been declared by
Indenture Trustee, the principal of all the Class B Notes (but not less
than all the Class B Notes) may be declared due and payable in the manner
and with the effect provided in the Indenture. Notice of such declaration
will be given by mail to Holders, as their names and addresses appear in
the Note Register, as provided in the Indenture. Upon payment of such
principal amount together with all accrued interest, the obligations of
Issuer with respect to the payment of principal and interest on this Class
B Note shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of Issuer and the rights of the Holders under the Indenture at
any time by Issuer and Indenture Trustee with the consent of the Holders of
Notes evidencing at least 662/3% in aggregate principal amount of the
Issuer's 662/3% Class A Lease-Backed Notes (the "Class A Notes") and Class
B Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal
amount of the Class A Notes and the Class B Notes at the time Outstanding,
on behalf of all the Holders, to waive compliance by Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture
and their
A-26
<PAGE>
consequences. Any such consent or waiver by the Holder of this Class B Note
shall be conclusive and binding upon such Holder and upon all future
Holders of this Class B Note and of any Class B Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Class B
Note or any Class B Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class B Note is registrable in the
Note Register, upon surrender of this Class B Note for registration of
transfer at the office or agency of Indenture Trustee in Minneapolis,
Minnesota, and at any other office or agency maintained by Issuer for that
purpose, duly endorsed by, or accompanied by a written instrument of
transfer in the form satisfactory to the Note Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon
one or more new Class B Notes, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
Each Holder and Note Owner, by acceptance of a Class B Note, or,
in the case of a Note Owner, a beneficial interest in the Class B Note,
shall be deemed to represent and warrant that either (a) it is not
acquiring the Class B Note with the plan assets of an "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), which is subject to Title I of ERISA, or
a "plan" as defined in Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") (each such entity a "Benefit Plan"); or (b) the
acquisition and holding of the Class B Note will not give rise to a
nonexempt prohibited transaction under Section 406(a) of ERISA or Section
4975 of the Code.
The Class B Notes are issuable only in registered form without
coupons in minimum denominations of $1,000. As provided in the Indenture
and subject to certain limitations therein set forth, Class B Notes are
exchangeable for a like aggregate principal amount of Class B Notes of a
different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange, but Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Issuer, Indenture Trustee and any agent of Issuer or Indenture
Trustee may treat the Person in whose name this Class B Note is registered
as the owner hereof for all purposes, whether or not this Class B Note may
be overdue, and neither Issuer, Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
12312134.1 100298 1317C 98438757
A-27
<PAGE>
The Indenture and this Class B Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the
State of New York.
IN WITNESS WHEREOF, Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated: September 30, 1998
PROVIDENT EQUIPMENT LEASE TRUST
1998-A
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its individual
capacity, but solely as Trustee of the Provident
Equipment Lease Trust 1998-A
By:_______________________________________
Authorized Officer
Indenture Trustee's Certificate of Authentication
This is one of the Class B Notes referred to in the within
mentioned Indenture.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Indenture Trustee
By: _____________________________________
Authorized Signatory
A-28
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Class B Note, fill in the
form below and have your signature guaranteed:
I or we assign and transfer this Class B Note to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and social security or tax ID number
of assignee)
and irrevocably appoint ___________________________, agent to transfer this
Class B Note on the books of Issuer. The agent may substitute another to
act for him.
Dated: _____________________ Signed:______________________
(signed exactly as the name
appears on the other side
of this Class B Note)
Signature Guarantee____________________________________________________________
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes
fully negotiable, similar to a check endorsed in blank. Therefore, to
safeguard a signed Class B Note, it is recommended that you fill in the
name of the new owner in the "Assignee" blank. Alternatively, instead of
using this Assignment Form, you may sign a separate "power of attorney"
form and then mail the unsigned Class B Note and the signed "power of
attorney" in separate envelopes. For added protection, use certified or
registered mail for a Class B Note.
A-29
<PAGE>
APPENDIX X
DEFINITIONS
SECTION 1.1 Defined Terms. The following terms have the meanings
set forth below for all purposes of the Basic Documents, and the
definitions of such terms are applicable to the singular as well as to the
plural forms of such terms and to the masculine as well as to the feminine
and neuter genders of such terms.
"Act" is defined in Section 1.4 of the Indenture.
"Additional Principal" means with respect to each Payment Date, an
amount equal to (a) the difference between (i) the Discounted Present Value
of the Performing Leases as of the Determination Date for the preceding
Payment Date and (ii) the Discounted Present Value of the Performing Leases
as of the related Determination Date, less (b) the Class A Principal
Payment, the Class B Principal Payment and the Certificate Principal
Payment to be paid on such Payment Date.
"Affiliate" means, with respect to any specified Person, any other
Person which directly or indirectly controls, or is controlled by, or is
under common control with, such specified Person. The term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.
"Agreement" means the Indenture, Trust Agreement, Pooling and
Servicing Agreement, or Management Agreement, as applicable, as the same
may be amended and supplemented from time to time.
"Annualized Monthly Default Percentage" means, with respect to any
Due Period, twelve times the percentage equivalent of a fraction (a) the
numerator of which is the Discounted Present Value of all Leases that
became Non-Performing Leases during such Due Period, calculated as of the
related Determination Date, and (b) the denominator of which is the
Discounted Present Value of all Leases, calculated as of the Determination
Date immediately preceding the related Determination Date.
"Authorized Officer" means, with respect to Issuer, any officer of
Trustee who is authorized to act for Trustee in matters relating to the
Trust and, so long as the Management Agreement is in effect, any Vice
President or more senior officer of Manager who is authorized to act for
Manager in matters relating to Issuer and to be acted upon by Manager
pursuant to the Management Agreement and who is
A-30
<PAGE>
identified on the list of Authorized Officers delivered by Manager to
Indenture Trustee on the Closing Date (in each case as such list may be
modified or supplemented from time to time thereafter). With respect to ILC
or Servicer, any officer of ILC or Servicer, as the case may be, who is
authorized to act for Servicer or ILC as the case may be.
"Available Funds" means, with respect to any Payment Date, the
amount on deposit in the Collection Account with respect to the immediately
preceding Due Period received on or prior to the Record Date for such Due
Period, including (a) Lease Payments due during the immediately preceding
Due Period (net of any Third Party Amounts), (b) Residual Realizations up
to the Residual Amount Cap; (c) recoveries from Non-Performing Leases (net
of amounts retained by Servicer in accordance with the Pooling and
Servicing Agreement); (d) proceeds from repurchases by Transferor or
Servicer of Leases to the extent Transferor has not substituted Substitute
Leases for such Leases; (e) proceeds from the investment of funds (other
than Security Deposit Earnings) in the Collection Account, the Residual
Account and the Reserve Account; (f) Casualty Payments; (g) Servicer
Advances; (h) Termination Payments; and (i) funds, if any, on deposit in
the Reserve Account and/or the Residual Account, to the extent provided in
the Pooling and Servicing Agreement.
"Available Funds Shortfall" is defined in Section 6.4(b) of the
Pooling and Servicing Agreement.
"Available Reserve Amount" means the amount on deposit in the Reserve
Account.
"Available Residual Amount" means the excess of (a) the Residual
Amount Cap over (b) the Utilized Residual Amount.
"Basic Documents" means the Contribution Agreement, the Pooling and
Servicing Agreement, the Indenture, the Trust Agreement, the Management
Agreement and the Depository Agreement.
"Benefit Plan" is defined in Section 3.12 of the Trust Agreement.
"Book-Entry Class A-1 Notes" means beneficial interests in the
Class A-1 Notes, the ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 2.5 of the
Indenture.
"Book-Entry Class A-2 Notes" means beneficial interests in the
Class A-2 Notes, the ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 2.5 of the
Indenture.
A-31
<PAGE>
"Book-Entry Class A-3 Notes" means beneficial interests in the
Class A-3 Notes, the ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 2.5 of the
Indenture.
"Book-Entry Class A-4 Notes" means beneficial interests in the
Class A-4 Notes, the ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 2.5 of the
Indenture.
"Book-Entry Class B Notes" means beneficial interests in the Class
B Notes, the ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 2.5 of the Indenture.
"Booked Residual Value" means the estimated residual value of the
Equipment recorded on the books of Transferor.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banking institutions in the cities in which
the Corporate Trust Office of Indenture Trustee or Trustee or the Servicer
are located are authorized or obligated by law or executive order to remain
closed.
"Casualty Payment" means any payment pursuant to a Lease on
account of the loss, theft, condemnation, governmental taking, destruction,
or damage beyond repair of any item of Equipment subject thereto which
results, in accordance with the terms of the Lease, in a reduction in the
number or amount of any future Lease Payments due thereunder or in the
termination of the Lessee's obligation to make future Lease Payments
thereunder.
"Cede & Co." means the initial registered holder of the Class A
Notes and the Class B Notes, acting as nominee of The Depository Trust.
"Certificated Security" has the meaning assigned thereto in
Section 8- 102(a)(4) of Article 8 of the UCC.
"Certificate Balance" means the aggregate principal amount of the
Certificates outstanding at any time.
"Certificate Distribution Account" is defined in Section 5.1 of the
Trust Agreement.
"Certificate Floor" means, with respect to each Payment Date, an
amount equal to the total of (a) 1.50% of the initial Discounted Present
Value of the Leases as of the Cut-Off Date, plus (b) the Cumulative Loss
Amount with respect to such Payment Date, minus (c) the sum of the
Overcollateralization Amount as of such
A-32
<PAGE>
Payment Date plus the amount on deposit in the Reserve Account after giving
effect to withdrawals to be made on such Payment Date.
"Certificate Owner" means each Holder of a Definitive Trust
Certificate.
"Certificate Percentage" means 4.5030%.
"Certificate Principal Payment" means (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 Certificate Balance to the greater of the Certificate Target
Investor Principal Amount and the Certificate Floor.
"Certificate Purchase Agreement" means the Agreement, among
Issuer, ILC, and Lehman Brothers Inc.
"Certificate Rate" means 6.73%.
"Certificate Register" and "Certificate Registrar" means the
register mentioned and the registrar appointed pursuant to Section 3.4 of
the Trust Agreement.
"Certificate Target Investor Principal Amount" means, with respect
to each Payment Date, an amount equal to the product of (a) the Certificate
Percentage and (b) the Discounted Present Value of the Performing Leases as
of the related Determination Date.
"Certificateholder" means a Person in whose name a Trust Certificate is
registered.
"Certificates" means Issuer's 6.73% Lease-Backed Certificates
issued in the original principal amount of $6,589,000.
"Class A Notes" means Issuer's Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes and Class A-4 Notes.
"Class A Percentage" means 87.9918%.
"Class A Principal Payment" means (a) while the Class A-1 Notes
are outstanding, (i) on all Payment Dates prior to the October, 1998
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
difference between (A) the Discounted Present Value of the Performing
Leases as of the Determination Date for the preceding Payment Date and (B)
the Discounted Present Value of the Performing
A-33
<PAGE>
Leases as of the related Determination Date, and (ii) on the October, 1998
Payment Date and thereafter until the Class A-1 Notes have been paid in
full, 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 on 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 Discounted Present Value of the Performing Leases as
of the related Determination Date.
"Class A-1 Note Interest Rate" means the rate at which interest
accrues on the Class A-1 Notes, which rate with respect to each Due Period
shall be at a rate per annum equal to 5.28%.
"Class A-1 Note Owner" means with respect to a Book-Entry Class
A-1 Note, the Person who is the beneficial owner of such Book-Entry Class
A-1 Note, as reflected on the books of the Clearing Agency, or on the books
of a Person maintaining an account with such Clearing Agency (directly or
as an indirect participant, in accordance with the rules of such Clearing
Agency) and with respect to a Definitive Class A-1 Note, a Holder of a
Definitive Class A-1 Note.
"Class A-1 Noteholder" means each Holder of a Class A-1 Note.
"Class A-1 Notes" means Issuer's 5.28% Class A-1 Lease-Backed
Notes issued in the original principal amount of $73,303,000.
"Class A-2 Note Interest Rate" means, the rate at which interest
accrues on the Class A-2 Notes, which rate with respect to each Due Period
shall be at a rate per annum equal to 5.78%.
"Class A-2 Note Owner" means, with respect to a Book-Entry Class
A-2 Note, the Person who is the beneficial owner of such Book-Entry Class
A-2 Note, as reflected on the books of the Clearing Agency, or on the books
of a Person maintaining an account with such Clearing Agency (directly or
as an indirect participant, in accordance with the rules of such Clearing
Agency) and, with respect to a Definitive Class A-2 Note, a Holder of a
Definitive Class A-2 Note.
"Class A-2 Noteholder" means the Holder of a Class A-2 Note.
"Class A-2 Notes" means Issuer's 5.78% Class A-2 Lease-Backed
Notes issued in the original principal amount of $19,242,000.
A-34
<PAGE>
"Class A-3 Note Interest Rate" means, the rate at which interest
accrues on the Class A-3 Notes, which rate with respect to each Due Period
shall be at a rate per annum equal to 5.60%.
"Class A-3 Note Owner" means, with respect to a Book-Entry Class
A-3 Note, the Person who is the beneficial owner of such Book-Entry Class
A-3 Note, as reflected on the books of the Clearing Agency, or on the books
of a Person maintaining an account with such Clearing Agency (directly or
as an indirect participant, in accordance with the rules of such Clearing
Agency) and, with respect to a Definitive Class A-3 Note, a Holder of a
Definitive Class A-3 Note.
"Class A-3 Noteholder" means the Holder of a Class A-3 Note.
"Class A-3 Notes" means Issuer's 5.60% Class A-3 Lease-Backed
Notes issued in the original principal amount of $90,935,000.
"Class A-4 Note Interest Rate" means, the rate at which interest
accrues on the Class A-4 Notes, which rate with respect to each Due Period
shall be at a rate per annum equal to 5.75%.
"Class A-4 Note Owner" means, with respect to a Book-Entry Class
A-4 Note, the Person who is the beneficial owner of such Book-Entry Class
A-4 Note, as reflected on the books of the Clearing Agency, or on the books
of a Person maintaining an account with such Clearing Agency (directly or
as an indirect participant, in accordance with the rules of such Clearing
Agency) and, with respect to a Definitive Class A-4 Note, a Holder of a
Definitive Class A-4 Note.
"Class A-4 Noteholder" means the Holder of a Class A-4 Note.
"Class A-4 Notes" means Issuer's 5.75% Class A-4 Lease-Backed
Notes issued in the original principal amount of $18,576,000.
"Class B Floor" means, with respect to each Payment Date (the
"subject Payment Date"), an amount equal to the total of (a) 2.5% of the
initial Discounted Present Value of the Leases as of the Cut-Off Date, plus
(b) the Cumulative Loss Amount with respect to the subject Payment Date,
minus (c) the sum of the Certificate Balance as of the preceding Payment
Date after giving effect to all payments made on such Payment Date plus the
Overcollateralization Amount as of the subject Payment Date plus the amount
on deposit in the Reserve Account after giving effect to any withdrawals to
be made on the related Payment Date.
"Class B Note Interest Rate" means the rate at which interest
accrues on the Class B Notes, which rate shall be 6.20% per annum.
A-35
<PAGE>
"Class B Note Owner" means with respect to a Book-Entry Class B
Note, the Person who is the beneficial owner of such Book-Entry Class B
Note, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly or as
an indirect participant, in accordance with the rules of such Clearing
Agency) and, with respect to a Definitive Class B Note, a Holder of a Class
B Note.
"Class B Noteholder" means a Holder of a Class B Note.
"Class B Notes" means Issuer's 6.20% Class B Lease-Backed Notes
issued in the original principal amount of $7,687,000.
"Class B Percentage" means 5.2534%.
"Class B Principal Payment" means (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 Target Investor Principal Amount" means with respect to
each Payment Date, an amount equal to the product of (a) the Class B
Percentage and (b) the Discounted Present Value of the Performing Leases as
of the related Determination Date.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means September 30, 1998.
"Code" means the Internal Revenue Code of 1986.
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 6.1(a) of the Pooling and
Servicing Agreement.
"Commission" means the Securities and Exchange Commission.
"Contributed Equipment" are defined in Section 2.3 of the Contribution
Agreement.
A-36
<PAGE>
"Contribution Agreement" means the Contribution Agreement dated as
of September 1, 1998, between Transferor and ILC, as the same may be
amended, supplemented or otherwise modified from time to time.
"Control" means with respect to any Federal Book Entry Security,
Indenture Trustee shall have obtained control if:
(i) Indenture Trustee is a participant in the book
entry system maintained by the Federal Reserve Bank that is acting
as fiscal agent for the issuer of such Federal Book Entry
Security, and such Federal Reserve Bank has indicated by book
entry that such Federal Book Entry Security has been credited to
Indenture Trustee's securities account in such book entry system;
or
(ii) (a) Indenture Trustee (1) is registered on the
records of a Securities Intermediary as the person having a
Securities Entitlement in respect of such Federal Book Entry
Security against such Securities Intermediary; or (2) has obtained
the agreement, in writing, of the Securities Intermediary for such
Securities Entitlement that such Securities Intermediary will
comply with Entitlement Orders of Indenture Trustee without
further consent of any other Person; and (b) the Securities
Intermediary is a participant in the book entry system maintained
by the Federal Reserve Bank that is acting as fiscal agent for the
issuer of such Federal Book Entry Security; and (c) such Federal
Reserve Bank has indicated by book entry that such Federal Book
Entry Security has been credited to the Securities Intermediary's
Securities Account in such book entry system.
"Corporate Trust Office" means, with respect to Indenture Trustee,
the principal corporate trust office of Indenture Trustee located at Sixth
Street and Marquette Avenue, Minneapolis, Minnesota 55479-0070, or at such
other address as Indenture Trustee may designate from time to time by
notice to Noteholders, Issuer and ILC, and with respect to Trustee means,
the principal corporate trust office of Trustee located at One Rodney
Square, 1st Floor, 920 King Street, Wilmington, Delaware 19801, Attention:
Corporate Trust Administration; or at such other address as Trustee may
designate from time to time by notice to the Certificateholders and
Depositor, or the principal corporate trust office of any successor Trustee
(the address of which the successor Trustee will notify the
Certificateholders and Depositor).
"Cumulative Loss Amount" means, with respect to each Payment Date
(the "subject Payment Date"), an amount equal to the excess, if any, of (a)
the difference of (i) the sum of the Outstanding Principal Amount of the
Notes and the Certificate Balance as of the immediately preceding Payment
Date after giving effect to all
A-37
<PAGE>
payments made on such Payment Date, minus (ii) the lesser of (A) the
Discounted Present Value of the Performing Leases as of the Determination
Date relating to the immediately preceding Payment Date minus the
Discounted Present Value of the Performing Leases as of the Determination
Date related to the subject Payment Date and (B) Available Funds for the
subject Payment Date (including any funds withdrawn from the Reserve
Account or the Residual Account as a result of an Available Funds
Shortfall) remaining after the payment of amounts owing to Servicer and in
respect of interest on the Notes and Certificates on the subject Payment
Date over (b) the Discounted Present Value of Performing Leases as of the
Determination Date related to the subject Payment Date.
"Cumulative Net Loss Ratio" means, with respect to any Due Period,
the percentage equivalent of a fraction (a) the numerator of which is the
aggregate of net losses on the Leases from the Cut-Off Date through the
last day of such Due Period and (b) the denominator of which is the
Discounted Present Value of the Leases as of the Cut-Off Date.
"Cut-Off Date" means the close of business on August 31, 1998.
"Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"Definitive Class A-1 Note" means a definitive, fully registered
Class A-1 Note issued pursuant to Section 2.7 of the Indenture.
"Definitive Class A-2 Note" means a definitive, fully registered
Class A-2 Note issued pursuant to Section 2.7 of the Indenture.
"Definitive Class A-3 Note" means a definitive, fully registered
Class A-3 Note issued pursuant to Section 2.7 of the Indenture.
"Definitive Class A-4 Note" means a definitive, fully registered
Class A-4 Note issued pursuant to Section 2.7 of the Indenture.
"Definitive Class B Note" means a definitive, fully registered
Class B Note issued pursuant to Section 2.7 of the Indenture.
"Definitive Trust Certificate" is defined in Section 3.11 of the Trust
Agreement.
"Delinquent Lease" means, as of any Determination Date, any Lease
(other than a Lease which became a Non-Performing Lease prior to such
Determination Date) with respect to which the Servicer has determined the
Lessee is 31 days or more delinquent with respect to any Lease Payments
then due.
A-38
<PAGE>
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to a Certificated Security, transfer
of such Certificated Security to Indenture Trustee or its nominee
or custodian by physical delivery to Indenture Trustee or its
nominee or custodian, endorsed to, or registered in the name of,
Indenture Trustee or its nominee or custodian or endorsed in
blank; and
(b) with respect to any such Trust Account Property
that constitutes an Uncertificated Security (including any
investments in money market mutual funds, but excluding any
Federal Book Entry Security), (A) registration of Indenture
Trustee as the registered owner by the issuer, or (B) satisfaction
of the requirements for obtaining "control" pursuant to Section
8-106(c)(2) of Article 8 of the UCC.
"Depositor" means Transferor in its capacity as Depositor under the
Trust Agreement.
"Depository Agreement" means the letter of representations,
between Issuer, Indenture Trustee and the Depository Trust Company, as
Clearing Agency.
"Determination Date" means with respect to any Payment Date, the
third day immediately preceding such Payment Date, or if such day is not a
Business Day, the first Business Day preceding such day.
"Discount Rate" means, with respect to any Determination Date,
6.54584%, which equals the sum of (a) the weighted-average interest rate of
the Class A Notes (utilizing the Class A-4 Note Interest Rate), Class B
Note Interest Rate and the Certificate Rate on the Closing Date and (b) the
Servicing Fee rate of 0.75% per annum.
"Discounted Present Value of the Leases" means, with respect to
any Lease as of the Cut-Off Date or any date thereafter, an amount equal to
the net present value of all Lease Payments (including Payaheads but
excluding Third Party Amounts and, after the Closing Date, delinquent
amounts) to become due thereunder following the Cut-Off Date or the Due
Period preceding the following Payment Date, as the case may be (determined
by discounting on a monthly basis (assuming a calendar year consisting of
twelve 30-day months), at a rate equal to the Discount Rate, each such
Lease Payment from the Payment Date following such Lease Payment to such
date). In determining the Discounted Present Value of the Leases on any
Determination Date or with respect to a Payment Date, the future remaining
Lease Payments will be calculated after giving effect to any payments
received during the related Due Period to the extent such payments relate
to Lease Payments
A-39
<PAGE>
due and payable by the Lessees with respect to the related Due Period and
any prior Due Period.
"Discounted Present Value of the Performing Leases" means the
Discounted Present Value of the Leases, reduced by the Discounted Present
Value of the Leases that are Non-Performing Leases.
"Due Period" means with respect to any Payment Date and the
Determination Date with respect thereto, the calendar month prior to the
month in which such Payment Date and Determination Date occur; provided,
that the initial Due Period shall be the period from the Closing Date
through the calendar month prior to the month in which such Payment Date
and Determination Date occur.
"Eligible Account" means either (a) a segregated account
maintained with an Eligible Institution or any other segregated account,
the deposit of funds into which has been approved by the Rating Agencies or
(b) a segregated trust account maintained in the corporate trust department
of a depository institution organized under the laws of the United States
of America or any of the states thereof, the District of Columbia, or any
domestic branch of a foreign bank, in any case having corporate trust
powers and acting as trustee for funds deposited in such account, so long
as any of the securities of such depository institution have a credit
rating from each Rating Agency in one of its generic rating categories
which signifies investment grade.
"Eligible Institution" means either (a) the corporate trust
department of the Indenture Trustee or the Trustee, as applicable, or (b) a
depository institution organized under the laws of the United States of
America or any of the states thereof, the District of Columbia, or any
domestic branch of a foreign bank, (i) which has either (A) a long-term
unsecured debt rating or certificate of deposit rating acceptable to the
Rating Agencies or (B) a short-term unsecured debt rating or certificate of
deposit rating acceptable to the Rating Agencies and (ii) whose deposits
are insured by the FDIC.
"Eligible Investments" means any one or more of the following
obligations or securities:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws of
the United States of America or any State (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or
State banking or depository institution authorities; provided, however,
that at the time of the investment or contractual
A-40
<PAGE>
commitment to invest therein, the commercial paper or other short-term
senior unsecured debt obligations (other than such obligations the rating
of which is based on the credit of a Person other than such depository
institution or trust company) thereof shall have a credit rating from each
of the Rating Agencies in the highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the Rating
Agencies in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby
(including funds for which Indenture Trustee, Trustee, Transferor or any of
their respective Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b);
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed as to timely payment by, the
United States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the United
States of America, in either case entered into with a depository
institution or trust company (acting as principal) described in clause (b);
and
(g) any other investment permitted by each of the Rating Agencies
as set forth in writing delivered to the Indenture Trustee; provided, that
investments described in clauses (d) and (g) shall be made only so long as
making such investments will not require the Issuer to register as an
investment company under the Investment Company Act of 1940, as amended.
"Eligible Lease" means a Lease that, on the effective date of the
substitution of such Lease, satisfies the representations and warranties
set forth in Section 3.4 of the Contribution Agreement and the requirements
of Section 4.3 of the Contribution Agreement or Section 5.4 of the Pooling
and Servicing Agreement, as applicable.
"Entitlement Order" has the meaning assigned thereto in Section
8-102(a)(8) of Article 8 of the UCC.
"Equipment" means each item of personal property, together with
any replacement parts, additions, and repairs thereto, any replacements
thereof, and any accessories incorporated therein and/or affixed thereto,
subject to a Lease or, following expiration or termination of the Lease to
which the same was previously
A-41
<PAGE>
subject, remaining subject to the lien of the Indenture in accordance with the
provisions hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Event of Default" is defined in Section 6.1 of the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934.
"Expenses" is defined in Section 8.2 of the Trust Agreement.
"Federal Book Entry Security" means an obligation (i) issued by
the U.S. Treasury, the Federal Home Loan Mortgage Corporation or the
Federal National Mortgage Association, or any other direct obligation of,
or obligation fully guaranteed as to timely payment or principal and
interest by, the United States of America, that is a book-entry security
held through the Federal Reserve System pursuant to Federal book entry
regulations, and (ii) the perfection of a security interest in which is
governed pursuant to federal regulations by Article 8 of the UCC.
"Filing Requirements" means Financing Statements necessary to
perfect the ownership interest of the Transferor and Issuer and the
perfected security interest of Indenture Trustee in the Leases and as of
the Closing Date and as of June 1 and December 1 of every year following
the Closing Date, in Equipment (i) subject to Leases having an original
equipment cost of at least 75% of the aggregate Discounted Present Value of
the Leases and (ii) relating to not less than 75% of the Booked Residual
Value of such Equipment.
"Financing Statement" means a statement filed pursuant to the UCC
which evidences a perfected security or ownership interest in an asset.
"Fitch IBCA" means Fitch IBCA, Inc.
"Governmental Authority" means any court or federal or state
regulatory body, administrative agency or other tribunal or other
governmental instrumentality.
"Grant" means to grant, bargain, convey, assign, transfer,
mortgage, pledge, create and grant a security interest in and right of
set-off against, deposit, set over and confirm. The Grant of the Trust
Estate effected by the Indenture shall include all rights, powers, and
options (but none of the obligations) of Issuer with respect thereto,
including the immediate and continuing right to claim for, collect,
receive, and give receipts for Lease Payments in respect of the Leases 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 judicial proceedings in the name of Issuer or
otherwise, and generally to do and receive
A-42
<PAGE>
anything that Issuer may be entitled to do or receive thereunder or with
respect thereto.
"Granted Assets" means the assets referred to in the Granting Clause
of the Indenture.
"Holder" as used in the Indenture and Pooling and Servicing
Agreement, means each Noteholder and each Certificateholder, and as used in
the Trust Agreement, means a Certificateholder.
"ILC" means Information Leasing Corporation, an Ohio corporation.
"Indemnified Party" with respect to the Indenture and Pooling and
Servicing Agreement is defined in Section 4.3 of the Indenture, with
respect to the Contribution Agreement, is defined in Section 4.1 of the
Contribution Agreement, and with respect to the Trust Agreement is defined
in Section 8.2 of the Trust Agreement.
"Indenture" means the Indenture, dated as of September 1, 1998,
between Issuer and Indenture Trustee, as the same may be amended,
supplemented or otherwise modified from time to time.
"Indenture Trustee" means the Person acting as Indenture Trustee
under the Indenture, its successors in interest and any successor trustee
under the Indenture.
"Independent" means, when used with respect to any specified
Person, that the Person: (a) is in fact independent of the Issuer, any
other obligor upon the Notes, the Transferor and any Affiliate of any of
the foregoing Persons, (b) does not have any direct financial interest or
any material indirect financial interest in the Issuer, any such other
obligor, the Transferor or any Affiliate of any of the foregoing Persons
and (c) is not connected with the Issuer, any such other obligor, the
Transferor or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 11.4
of the Indenture, made by an Independent appraiser or other expert
appointed by an Issuer Order and approved by the Indenture Trustee in the
exercise of reasonable care, and such opinion or certificate shall state
that the signer has read the definition of "Independent" in the Indenture
and that the signer is Independent within the meaning thereof.
"Initial Certificate Balance" means the amount specified as the
Initial Certificate Balance in a letter of instruction from Depositor to
Trustee.
A-43
<PAGE>
"Initial Payment Date" means November 25, 1998.
"Interest Payments" is defined in Section 2.1(c) of the Indenture.
"Issuer" means Provident Equipment Lease Trust 1998-A.
"Issuer Order" or "Issuer Request" means a written order or
request delivered to Indenture Trustee and signed in the name of Issuer by
an Authorized Officer.
"Lease" means, at any time, each separate lease agreement and each
lease schedule or supplement (and each master lease agreement insofar as
the same relates to any such schedule or supplement) described in Schedule
1 of the Contribution Agreement, as the same may be amended or modified
from time to time in accordance with the provisions thereof unless and
until released from the lien of the Indenture.
"Lease Files" is defined in Section 3.2 of the Pooling and Servicing
Agreement.
"Lease Payment" means each periodic installment of rent payable by
a Lessee under a Lease. The following shall not be deemed to be "Lease
Payments": (a) prepayments of rent required pursuant to the terms of a
Lease, at or before the commencement of the Lease; (b) payments (other than
Payaheads) collected on or before the Cut-Off Date, (c) Payaheads, until
such time as such Payaheads are released from the Collection Account in
accordance with Section 6.5 of the Pooling and Servicing Agreement, (d)
Third Party Amounts and (e) any security deposit, unless and until such
security deposit is permitted to be treated as a payment on a Lease in
accordance with the terms of such Lease.
"Lease Repurchase Amount" means at any date with respect to any
Lease, an amount equal to the Discounted Present Value of the Lease as of
the next following Payment Date plus any amounts previously due and unpaid.
"Lessee" means each lessee under a Lease.
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind other than tax liens, mechanics liens, and any
liens that attach to a Lease by operation of law.
"Management Agreement" means the Management Agreement, dated as of
the date hereof, among Manager, Issuer and Indenture Trustee.
A-44
<PAGE>
"Management Fee" means the fee payable to the Manager pursuant to
Section 3 of the Management Agreement.
"Manager" means Information Leasing Corporation, a Delaware
corporation, or any successor Manager under the Management Agreement.
"Maturity" means with respect to any installment of principal of
or interest on any Note, the date on which such installment is due and
payable as therein or herein provided, whether at the Stated Maturity, by
declaration of acceleration, or otherwise.
"Monthly Delinquency Percentage" means, with respect to any Due
Period, the percentage equivalent of a fraction (a) the numerator of which
is the Discounted Present Value of the Leases which are Delinquent Leases
determined as of the related Determination Date and (b) the denominator of
which is the Discounted Present Value of the Performing Leases as of the
related Determination Date.
"Monthly Servicer Realization Percentage" means, with respect to
any Due Period, the percentage equivalent of a fraction (a) the numerator
of which is the aggregate amount of Servicer Residual Realizations
collected during such Due Period and (b) the denominator of which is equal
to the aggregate Servicer Booked Residual Values with respect to the Leases
for which Servicer Residual Realizations have been collected in respect of
such Due Period.
"Moody's" means Moody's Investors Service, Inc.
"Nominal Buy-Out Lease" means each Lease identified on Schedule 1
of the Agreement as having an estimated residual value of $0 or $1 in the
column under the heading "RESIDUAL".
"Non-Performing Lease" means, as of any Determination Date, any
Lease with respect to which at any time following the Cut-Off Date or
related Pooling Date, as the case may be, either (a) a Lease Payment, or
any portion thereof, was determined by Servicer to be more than 90 days
overdue as of the last day of the Due Period with respect to such
Determination Date, unless on or before such Determination Date such Lease
Payment (or portion thereof) has been paid or (b) Servicer has accelerated
the remaining payments or has determined such Lease to be uncollectible in
accordance with Servicer's customary practices prior to the last day of the
Due Period with respect to such Determination Date.
"Non-Performing Lease Payments" means any payment made with
respect to a Non-Performing Lease in an amount equal to all or part of any
specific Lease Payment due with respect to such Non-Performing Lease.
A-45
<PAGE>
"Non-Performing Lease Pay-Through Amount" means with respect to
any Lease with respect to which a Lease Payment is made or due, an amount
equal to the Discounted Present Value of such Lease as of the Payment Date
immediately following the first Determination Date on which such Lease was
a Non-Performing Lease.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 6.1(a) of the Pooling and
Servicing Agreement.
"Note Interest Rate" means the Class A-1 Note Interest Rate, the
Class A-2 Note Interest Rate, the Class A-3 Note Interest Rate, the Class
A-4 Note Interest Rate or the Class B Note Interest Rate, as the case may
be.
"Note Owner" means a Class A-1 Note Owner, Class A-2 Note Owner,
Class A-3 Note Owner, Class A-4 Note Owner or Class B Note Owner, as the
case may be.
"Note Register" is defined in Section 2.3 of the Indenture.
"Noteholder" means at any time, any Holder of a Note.
"Notes" means the Class A Notes and Class B Notes issued pursuant
to the Indenture and all notes issued in exchange therefor pursuant to the
Indenture.
"Officers' Certificate" means (i) with respect to Transferor or
Servicer, a certificate delivered to Trustee and signed by the Chairman,
the President, or a Vice President, and by another Vice President, the
Treasurer, an Assistant Treasurer, the Secretary, or an Assistant Secretary
of Transferor or Servicer, as the case may be, who is not the same person
as the other officer signing such certificate and (ii) a certificate
delivered to Indenture Trustee and signed by the Chairman, the President,
or a Vice President of Manager, and by another Vice President, the
Treasurer, and Assistant Treasurer, the Secretary, or an Assistant
Secretary of Manager who is not the same Person as the other officer
signing such certificate.
"Opinion of Counsel" means a written opinion, which shall be
satisfactory in form and substance to Indenture Trustee, of counsel who
may, except as otherwise expressly provided in this Indenture, be inside or
outside counsel for Issuer or Manager and who shall be satisfactory to
Indenture Trustee.
"Other Lease Payments" means all payments on or in respect of
leases which are not Lease Payments, Casualty Payments, Termination
Payments or Residual Realizations.
A-46
<PAGE>
"Outstanding" means with respect to the Notes, as of any date of
determination, all Notes theretofore authenticated and delivered under this
Indenture except:
(a) Notes theretofore canceled by
Indenture Trustee or delivered to Indenture Trustee for cancellation;
(b) Notes or portions thereof for
whose payment money in the necessary amount has been theretofore
irrevocably deposited with Indenture Trustee in trust for the
holders of such Notes; and
(c) Notes in exchange for or in lieu
of which other Notes have been authenticated and delivered
pursuant to this Indenture unless proof satisfactory to Indenture
Trustee is presented that any such Notes are held by a Person in
whose hands the Note is a valid obligation;
provided, that in determining whether the holders of the requisite
percentage of the Outstanding Principal Amount of the Notes have given any
request, demand, authorization, direction, notice, consent, or waiver
hereunder, Notes owned by Transferor, ILC or any Affiliate of ILC shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, or waiver, only
Notes that a Responsible Officer of Indenture Trustee actually knows to be
so owned shall be so disregarded.
"Outstanding Principal Amount" means the aggregate unpaid
principal amount of the Notes at any time.
"Overcollateralization Amount" means, with respect to each Payment
Date, an amount equal to (a) the Discounted Present Value of the Performing
Leases as of the related Determination Date minus (b) the Outstanding
Principal Amount of the Notes and the Certificate Balance (after giving
effect to payments of principal (other than Additional Principal) on such
Payment Date); provided, that such amount will never be less than zero.
"Payaheads" means Lease Payments received prior to their
respective Due Periods that do not constitute full prepayments or partial
prepayments in accordance with Servicer's customary practices.
"Paying Agent" means each agent of Issuer appointed for the
purpose of making payments on the Notes or Certificates, as applicable,
including
A-47
<PAGE>
"Payment Date" means the 25th day of each month, or if such day is
not a Business Day, the next succeeding Business Day, commencing on the
Initial Payment Date, and ending on the latest Stated Maturity.
"Pension Plan" is defined in Section 3.13 of the Contribution
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof.
"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement dated as of September 1, 1998, among Issuer, Transferor and
Servicer, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the provisions hereof and thereof.
"Predecessor Lease" for purposes of the Pooling and Servicing
Agreement, is defined in Section 5.4(a) of the Pooling and Servicing
Agreement, and for purposes of the Contribution Agreement, is defined in
Section 4.3(a) of the Contribution Agreement.
"Predecessor Notes" 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 2.4 of the Indenture in
lieu of a lost, destroyed or stolen Note (or a mutilated Note surrendered
to Indenture Trustee) shall be deemed to evidence the same debt as the
lost, destroyed or stolen Note (or a mutilated Note surrendered to
Indenture Trustee).
"Prime Rate" means the prime lending rate of the Person that is
the Indenture Trustee at the time of the calculation of such rate.
"Principal Payments" is defined in Section 2.1(b) of the Indenture.
"Private Placement Memorandum" means the final Private Placement
Memorandum used in connection with the private offering of the
Certificates.
"Prohibited Transaction" means any transaction described in
Section 406 of ERISA which is not exempt by reason of Section 408 of ERISA
or the transitional rules set forth in Section 414(c) of ERISA and any
transaction described in Section
A-48
<PAGE>
4975(c) of the Code which is not exempt by reason of Section 4975(c)(2) or
Section 4975(d) of the Code, or the transitional rules of Section 2003(c)
of ERISA.
"Prospectus" means the form of final prospectus to be used in
connection with the public offering of the Notes as filed with the
Securities and Exchange Commission pursuant to Rule 424(b).
"Rating Agency" means each of Moody's and Fitch IBCA.
"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 Transferor that such
action will not result in a reduction or withdrawal of the then current
rating of any Class of the Notes.
"Record Date" means with respect to any Payment Date, the close of
business on the last day of the calendar month immediately preceding such
Payment Date.
"Registration Statement" means the registration statement (File No.
333-58909) filed with the Securities and Exchange Commission for the
registration of the Notes.
"Related Person" means any Person (whether or not incorporated)
which is under common control with Transferor within the meaning of Section
414(c) of the Internal Revenue Code of 1986, as amended, or of Section
4001(b) of ERISA.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, a withdrawal from a Pension
Plan described in Section 4063 of ERISA, or a cessation of operations
described in Section 4062(e) of ERISA.
"Required Deposit Date" means, as to any funds or item required to
be deposited into the Collection Account, the date falling two Business
Days after Servicer's receipt of such funds or item, provided that at any
time when (a) ILC is Servicer, (b) there exists no Servicer Event of
Default and (c) any other condition to making deposits less frequently than
daily as may be specified by the Rating Agencies is satisfied, the Business
Day preceding the applicable Payment Date shall be the "Required Deposit
Date."
"Required Payment" is defined in Section 6.4(b) of the Pooling and
Servicing Agreement.
A-49
<PAGE>
"Required Reserve Amount" means the lesser of (a) 1.0% of the
Discounted Present Value of the Leases as of the Cut-Off Date and (b) the
Outstanding Principal Amount of the Notes and the Certificate Balance.
"Reserve Account" means the account or accounts by that name
established and maintained by Indenture Trustee pursuant to Section 6.1(a)
of the Pooling and Servicing Agreement.
"Residual Account" means the account or accounts by that name
established and maintained by Indenture Trustee pursuant to Section 6.1(a)
of the Pooling and Servicing Agreement.
"Residual Amount Cap" means an amount equal to $10,981,342.04
which equals 5.0% of the Discounted Present Value of the Leases as of the
Cut-Off Date.
"Residual Event" means the occurrence of one or more of the
following: (a) ILC is no longer the Servicer, (b) with respect to the
December, 1998 Due Period and each Due Period thereafter, the Three-Month
Servicer Realization Percentage calculated on any Determination Date is
less than 100%, (c) with respect to the December, 1998 Due Period and each
Due Period thereafter, the Three-Month Delinquency Percentage is greater
than 8.0% (d) with respect to the December, 1998 Due Period and each Due
Period thereafter, the Three-Month Default Percentage is greater than 2.0%
or (e) the Cumulative Net Loss Ratio is greater than (i) 2.0%, for any Due
Period occurring on or before the August, 1999 Due Period, (ii) 3.0%, for
any Due Period occurring after the August, 1999 Due Period and on or before
the August, 2000 Due Period and (iii) 4.0%, for any Due Period occurring
after the August, 2000 Due Period; provided, that (i) the Residual Event
referred to in clause (b) may be cured if the Three-Month Servicer
Realization Percentage is greater than or equal to 100% for three
consecutive Due Periods thereafter, (ii) the Residual Event referred to in
clause (c) may be cured if the Three-Month Delinquency Percentage for any
Due Period thereafter is less than or equal to 7.0%, (iii) the Residual
Event referred to in clause (d) may be cured if the Three-Month Default
Percentage for any Due Period thereafter is less than or equal to 2.0% and
(iv) the Residual Event referred to in clause (e) may be cured if the
Cumulative Net Loss Ratio for any Due Period thereafter is less than or
equal to the ratio specified in clause (e) for such Due Period.
"Residual Realizations" means the net cash flows realized by and
allocable to ILC from the sale (including pursuant to a Lessee's purchase
option) or reletting of any Equipment following the scheduled termination
of the related Lease. Amounts received in respect of Non-Performing Leases
shall only be included as Residual Realizations to the extent such amounts
exceed the related Non-Performing Lease Pay-Through Amount.
A-50
<PAGE>
"Responsible Officer" means with respect to Indenture Trustee or
Trustee, any person regularly engaged in the administration or supervision
of corporate trust accounts (including, in the case of either of the
original Indenture Trustee or original Trustee hereunder, any officer in
its Corporate Trust Office) and also, with respect to a particular
corporate trust matter, any other officer of such entity to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Secretary of State" means the Secretary of State of the State of
Delaware.
"Securities Account" has the meaning assigned thereto in Section
8-501(a) of Article 8 of the UCC.
"Securities Act" the Securities Act of 1933.
"Securities Entitlement" has the meaning assigned thereto in
Section 8- 102(a)(17) of Article 8 of the UCC.
"Securities Intermediary" is defined in Section 8-102(a)(14) of
Article 8 of the UCC.
"Security Deposit Earnings" are defined in Section 6.1(b) of the
Pooling and Servicing Agreement.
"Seller Assets" are defined in Section 2.1 of the Contribution
Agreement.
"Servicer" means ILC and any successor Servicer appointed pursuant
to the terms of the Pooling and Servicing Agreement and, to the extent that
it at any time is performing the functions of Servicer, Indenture Trustee.
"Servicer Advance" means a payment by Servicer pursuant to Section
5.1 of the Pooling and Servicing Agreement.
"Servicer Booked Residual Value" means the estimated residual
value of the Equipment recorded on the books of ILC.
"Servicer Event of Default" is defined in Section 9.1 of the Pooling
and Servicing Agreement.
"Servicer Order" means a written order or request delivered to
Indenture Trustee and signed in the name of Servicer by an Authorized
Officer.
A-51
<PAGE>
"Servicer Residual Realizations" means the aggregate cash flows
realized by ILC from the sale (including pursuant to a Lessee's purchase
option) or lease of any Equipment or extension of the related Lease
following the termination of such Lease.
"Servicer's Certificate" means an Officers' Certificate of
Servicer delivered pursuant to Section 4.8 of the Pooling and Servicing
Agreement, substantially in the form of Exhibit C to the Pooling and
Servicing Agreement.
"Servicing Fee" means the fee payable to Servicer for services
rendered during the respective Due Period, determined pursuant to Section
4.6 of the Pooling and Servicing Agreement.
"Servicing Report" is defined in Section 4.8(b) of the Pooling and
Servicing Agreement.
"Servicing Standard" is defined in Section 4.1 of the Pooling and
Servicing Agreement.
"Stated Maturity" means the date on which the entire remaining
unpaid Outstanding Principal Amount of each class of Notes is due and
payable, which date is the October, 1999 Payment Date with respect to the
Class A-1 Notes and the April, 2006 Payment Date for the Class A-2 Notes,
Class A-3 Notes, Class A-4 Notes, Class B Notes and the Certificates.
"Substitute Lease" for purposes of the Pooling and Servicing
Agreement, is defined in Section 5.4(a) of the Pooling and Servicing
Agreement, and for purposes of the Contribution Agreement, is defined in
Section 4.3(a) of the Contribution Agreement.
"Supplemental Servicing Fee" is defined in Section 4.6(d) of the
Pooling and Servicing Agreement.
"Termination Payment" means a payment payable by a Lessee under a
Lease upon the early termination, in full or in part, of such Lease (but
not on account of a Casualty) which may be agreed upon by Servicer, acting
in the name of Issuer, and the Lessee in accordance with the provisions of
Section 4.5 of the Pooling and Servicing Agreement.
"Third Party Amounts" means supplemental or additional Payments
required by the terms of a Lease with respect to taxes, insurance,
maintenance, or other specific charges, including charges included in an
invoice but payable to vendors.
"Three-Month Default Percentage" means, with respect to any Due Period,
the percentage equivalent of a fraction, (a) the numerator of which is the sum
of the
A-52
<PAGE>
Annualized Monthly Default Percentage for such Due Period and the two
immediately preceding Due Periods and (b) the denominator of which is
three.
"Three-Month Delinquency Percentage" means, with respect to any
Due Period, the percentage equivalent of a fraction, (a) the numerator of
which is the sum of the Monthly Delinquency Percentage for such Due Period
and the two immediately preceding Due Periods and (b) the denominator of
which is three.
"Three-Month Servicer Realization Percentage" means, with respect
to any Due Period, the percentage equivalent of a fraction, (a) the
numerator of which is the sum of the Monthly Servicer Realization
Percentage for such Due Period and the two immediately preceding Due
Periods and (b) the denominator of which is three.
"Transaction Payment Amount" means for each Required Deposit Date,
the amount of all Lease Payments, Non-Performing Lease Payments, Casualty
Payments, Termination Payments and other payments on or in respect of a
Lease received by Servicer excluding Payaheads and deposited in the
Collection Account pursuant to Section 6.2(c) of the Pooling and Servicing
Agreement and reported by Servicer for such Required Deposit Date in
accordance with Section 4.8 of the Pooling and Servicing Agreement.
"Transfer Date" means the Business Day immediately preceding any
Payment Date.
"Transfer Taxes" are defined in Section 3.20 of the Contribution
Agreement.
"Transferor" means Provident Lease Receivables Corporation, a
Delaware corporation, and its successors in interest to the extent
permitted hereunder.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" means the trust established by the Trust Agreement.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the
form of deposit accounts, Physical Property, book-entry securities,
uncertificated securities or otherwise), and all proceeds of the foregoing.
"Trust Accounts" is defined in Section 6.1(b) of the Pooling and
Servicing Agreement.
A-53
<PAGE>
"Trust Agreement" means the Trust Agreement dated as of the date
hereof, between Transferor and Trustee, as the same may be amended and
supplemented from time to time.
"Trust Certificate" means a certificate evidencing the beneficial
interest of a Certificateholder in Trust, substantially in the form
attached as Exhibit A to the Trust Agreement.
"Trustee" means the Person acting as Trustee under the Trust
Agreement, its successors in interest and any successor trustee under the
Trust Agreement.
"Trust Estate" means all money, instruments and other property
subject to or intended to be subject to the lien of the Indenture including
all proceeds thereof.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
effect on the date on which the Indenture is qualified under Trust
Indenture Act, except as provided in Section 9.6 of the Indenture.
"Trust Officer" means, in the case of Indenture Trustee, any
officer within the Corporate Trust Office of Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer of Indenture Trustee customarily performing
functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject and, with respect to Trustee, any
officer in the Corporate Trust Administration Department of Trustee with
direct responsibility for the administration of the Trust Agreement and the
Basic Documents on behalf of Trustee.
"Uncertificated Security" has the meaning assigned thereto in
Section 8- 102(a)(18) of Article 8 of the UCC.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code as in effect in the relevant jurisdiction, as amended from
time to time.
"Underwriting Agreement" means the Underwriting Agreement, among
Transferor, ILC and Lehman Brothers Inc.
"Utilized Residual Amount" means on any day of determination, the
sum of (a) the total Residual Realizations applied to make payments of
amounts owing Servicer, Noteholders and Certificateholders (including any
such amounts withdrawn from the Reserve Account and the Residual Account,
but not including any amounts paid to Issuer under Section 6.3 of the
Pooling and Servicing Agreement the amount
A-54
<PAGE>
on deposit in the Reserve Account and the Residual Account on such date
allocable to Residual Realizations.
"Warranty Lease" means a Lease subject to repurchase by ILC as a
result of a breach of a representation or warranty in accordance with the
provisions of Section 5.2 of the Pooling and Servicing Agreement.
SECTION 1.2 Other Interpretive Provisions. All terms defined in
this Appendix X shall have the defined meanings when used in any Basic
Document or any certificate or other document delivered pursuant to any
Basic Document unless otherwise defined therein. For purposes of the Basic
Documents, and all certificates and other documents delivered in connection
with the Basic Documents, unless the context otherwise requires: (a)
accounting terms not otherwise defined in any Basic Document, and
accounting terms partly defined in any Basic Document to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles; (b) terms defined in Article 9 of the UCC
as in effect in the State of New York and not otherwise defined in the
Basic Documents are used in the Basic Documents as defined in that Article;
(c) any reference to each Rating Agency shall only apply to any specific
rating agency if such rating agency is then rating any outstanding Notes
and/or Certificates, as applicable; (d) references to any amount as on
deposit or outstanding on any particular date means such amount at the
close of business on such day; (e) the words "hereof," "herein" and
"hereunder" and words of similar import refer to this in any Basic Document
(or any certificate or other document in which they are used) as a whole
and not to any particular provision of such Basic Document (or such
certificate or document); (f) references in any Basic Document to any
Section, Schedule or Exhibit are references to Sections, Schedules and
Exhibits in such Basic Document (or the certificate or other document in
which the reference is made), and references to any paragraph, subsection,
clause or other subdivision within any Section or definition refer to such
paragraph, subsection, clause or other subdivision of such Section or
definition; (g) the term "including" means "including without limitation";
(h) references to any law or regulation refer to that law or regulation as
amended from time to time and include any successor law or regulation; and
(i) references to any Person include that Person's successors and assigns.
A-55
EXHIBIT 10.1
===============================================================================
PROVIDENT EQUIPMENT LEASE TRUST 1998-A
TRUST AGREEMENT
between
PROVIDENT LEASE RECEIVABLES CORPORATION
and
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
as Trustee
Dated as of September 1, 1998
===============================================================================
Table of Contents
Page
ARTICLE I
Definitions
SECTION 1.1. Capitalized Terms..............................................
SECTION 1.2. Other Definitional Provisions..................................
ARTICLE II
Organization
SECTION 2.1. Name...........................................................1
SECTION 2.2. Office.........................................................1
SECTION 2.3. Purposes and Powers............................................1
SECTION 2.4. Appointment of Trustee.........................................2
SECTION 2.5. Initial Capital Contribution of Trust Estate...................2
SECTION 2.6. Declaration of Trust...........................................2
SECTION 2.7. Liability of the Certificateholders............................3
SECTION 2.8. Title to Trust Property........................................3
SECTION 2.9. Situs of Trust.................................................3
SECTION 2.10. Representations and Warranties of Depositor...................3
SECTION 2.11. Federal Income Tax Allocations................................4
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.1. Initial Ownership..............................................5
SECTION 3.2. The Trust Certificates.........................................5
SECTION 3.3. Authentication of Trust Certificates...........................5
SECTION 3.4. Registration of Transfer and Exchange of Trust Certificates....6
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Trust Certificates........6
SECTION 3.6. Persons Deemed Certificateholders..............................7
SECTION 3.7. Access to List of Certificateholders' Names and Addresses......7
SECTION 3.8. Maintenance of Office or Agency................................8
SECTION 3.9. Appointment of Paying Agent....................................8
SECTION 3.10. [Reserved].....................................................8
SECTION 3.11. Definitive Certificates.......................................8
<PAGE>
Page
ARTICLE IV
Actions by Trustee
SECTION 4.1. Prior Notice to Certificateholders with Respect to
Certain Matters.....................................10
SECTION 4.2. Action by the Certificateholders with Respect to
Certain Matters.....................................11
SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy........11
SECTION 4.4. Restrictions on Certificateholders' Power......................11
SECTION 4.5. Majority Control...............................................11
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.1. Establishment of Trust Account.................................12
SECTION 5.2. Applications of Trust Funds....................................12
SECTION 5.3. Method of Payment..............................................13
SECTION 5.4. No Segregation of Moneys; No Interest..........................13
SECTION 5.5. Accounting and Reports to the Noteholders, Certificateholder
the Internal Revenue Service and Others.............13
SECTION 5.6. Signature on Returns; Tax Matters Partner......................14
ARTICLE VI
Authority and Duties of Trustee
SECTION 6.1. General Authority..............................................14
SECTION 6.2. General Duties.................................................15
SECTION 6.3. Action upon Instruction........................................15
SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions........................................16
SECTION 6.5. No Action Except Under Specified Documents
or Instructions.....................................16
SECTION 6.6. Restrictions...................................................16
ARTICLE VII
Concerning Trustee
SECTION 7.1. Acceptance of Trusts and Duties................................17
SECTION 7.2. Furnishing of Documents........................................18
SECTION 7.3. Representations and Warranties.................................18
SECTION 7.4. Reliance; Advice of Counsel....................................19
SECTION 7.5. Not Acting in Individual Capacity..............................19
ii
<PAGE>
Page
SECTION 7.6. Trustee Not Liable for Trust Certificates or The Trust Estate..19
SECTION 7.7. Trustee May Not Own Notes......................................20
ARTICLE VIII
Compensation of Trustee
SECTION 8.1. Trustee's Fees and Expenses................................... 20
SECTION 8.2. Indemnification................................................20
SECTION 8.3. Payments to Trustee............................................21
ARTICLE IX
Termination of Trust Agreement
SECTION 9.1. Termination of Trust Agreement.................................21
ARTICLE X
Successor Trustees and Additional Trustees
SECTION 10.1. Eligibility Requirements for Trustee..........................22
SECTION 10.2. Resignation or Removal of Trustee.............................23
SECTION 10.3. Successor Trustee.............................................23
SECTION 10.4. Merger or Consolidation of Trustee............................24
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.................24
ARTICLE XI
Miscellaneous
SECTION 11.1. Supplements and Amendments....................................26
SECTION 11.2. No Legal Title to Trust Estate in Certificateholders..........27
SECTION 11.3. Limitations on Rights of Others...............................27
SECTION 11.4. Notices.......................................................27
SECTION 11.5. Severability..................................................28
SECTION 11.6. Separate Counterparts.........................................28
SECTION 11.7. Successors and Assigns........................................28
SECTION 11.8. Covenants of Depositor........................................28
SECTION 11.9. No Petition...................................................29
SECTION 11.10. No Recourse..................................................29
SECTION 11.11. Headings.....................................................29
SECTION 11.12. Governing Law................................................29
SECTION 11.13. Manager......................................................29
iii
<PAGE>
EXHIBITS
EXHIBIT A Form of Trust Certificate
iv
<PAGE>
TRUST AGREEMENT dated as of September 1, 1998, between PROVIDENT
LEASE RECEIVABLES CORPORATION, a Delaware corporation, as Depositor, and
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, a national banking
association, as Trustee.
ARTICLE I
Definitions
SECTION 1.1. Capitalized Terms. For all purposes of this Agreement
capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to such terms in Appendix X to the Indenture dated the
date hereof, between Provident Equipment Lease Trust 1998-A and the
Indenture Trustee.
SECTION 1.2. Other Definitional Provisions. The other interpretive
provisions specified in Appendix X to the Indenture shall apply to this
Agreement.
ARTICLE II
Organization
SECTION 2.1. Name. The Trust created hereby shall be known as
"Provident Equipment Lease Trust 1998-A", in which name Trustee may conduct
the business of Trust, make and execute contracts and other instruments on
behalf of Trust and sue and be sued.
SECTION 2.2. Office. The office of Trust shall be in care of Trustee at
the Corporate Trust Office or at such other address as Trustee may designate by
written notice to the Certificateholders and Depositor.
SECTION 2.3. Purposes and Powers. The purpose of Trust is, and Trust
shall have the power and authority to, engage in the following activities:
(a) to issue the Notes pursuant to the Indenture and the
Trust Certificates pursuant to this Agreement and to sell the
Notes and the Trust Certificates in one or more transactions;
(b) with the proceeds of the sale of the Notes and the
Trust Certificates, to acquire the Trust Estate pursuant to the
Pooling and Servicing Agreement;
1
<PAGE>
(c) to assign, grant, transfer, pledge, mortgage and
convey the Trust Estate pursuant to the Indenture and to hold,
manage and distribute to the Certificateholders pursuant to the
Pooling and Servicing Agreement any portion of the Trust Estate
released from the Lien of, and remitted to Trust pursuant to, the
Indenture;
(d) to enter into and perform its obligations under the
Basic Documents to which it is to be a party;
(e) to engage in those activities, including entering
into agreements, that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected
therewith; and
(f) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection
with conservation of the Trust Estate and the making of
distributions to the Certificateholders and the Noteholders.
Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by this Agreement or the
Basic Documents.
SECTION 2.4. Appointment of Trustee. Depositor hereby appoints
Trustee as trustee of Trust effective as of the date hereof, to have all
the rights, powers and duties set forth herein.
SECTION 2.5. Initial Capital Contribution of Trust Estate.
Depositor hereby sells, assigns, transfers, conveys and sets over to
Trustee, as of the date hereof, the sum of $1.00. Trustee hereby
acknowledges receipt in trust from Depositor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Trust Estate and
shall be deposited in the Certificate Distribution Account. Depositor shall
pay organizational expenses of Trust as they may arise or shall, upon the
request of Trustee, promptly reimburse Trustee for any such expenses paid
by Trustee. Depositor may also take steps necessary, including the
execution and filing of any necessary filings, to ensure that Trust is in
compliance with any applicable state securities law.
SECTION 2.6. Declaration of Trust. Trustee hereby declares that it
will hold the Trust Estate in trust upon and subject to the conditions set
forth herein for the use and benefit of the Certificateholders, subject to
the obligations of Trust under the Basic Documents. It is the intention of
the parties hereto that, solely for income and franchise tax purposes, the
Trust shall be disregarded as a separate entity and that the Trust
Certificates and the Notes shall be treated as debt. If the Trust
Certificates are not respected as debt by the appropriate tax authorities,
however, then they shall be treated as partnership interests in Trust which
would be treated as
2
<PAGE>
a partnership, with the assets of the partnership being the Trust Estate
and other assets held by Trust, the partners of the partnership being the
Certificateholders, and the Notes being debt of the partnership. The
parties agree that, unless otherwise required by appropriate tax
authorities, Trustee, on behalf of the Trust, will take all appropriate
actions for income and franchise tax purposes, consistent with the Trust
being treated as a disregarded entity. Effective as of the date hereof,
Trustee shall have all rights, powers and duties set forth herein with
respect to accomplishing the purposes of Trust.
SECTION 2.7. Liability of the Certificateholders. No
Certificateholder shall have any personal liability for any liability or
obligation of Trust.
SECTION 2.8. Title to Trust Property. Legal title to all the Trust
Estate shall be vested at all times in Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part
of the Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in Trustee, a co-trustee and/or a
separate trustee, as the case may be.
SECTION 2.9. Situs of Trust. Trust will be located and
administered in the State of Delaware. All bank accounts maintained by
Trustee on behalf of Trust shall be located in the State of Delaware or the
State of New York. Trust shall not have any employees; provided that
nothing herein shall restrict or prohibit Trustee from having employees
within or without the State of Delaware. Payments will be received by Trust
only in Delaware or New York, and payments will be made by Trust only from
Delaware or New York.
SECTION 2.10. Representations and Warranties of Depositor. Depositor
hereby represents and warrants to Trustee that:
(a) Depositor is duly organized and validly existing as a
corporation in good standing under the laws of the State of
Delaware, with power and authority to own its properties and to
conduct its business as such properties are currently owned and
such business is presently conducted.
(b) Depositor is duly qualified to do business as a
foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which
the ownership or lease of property or the conduct of its business
shall require such qualifications, licenses and approvals.
(c) Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms; Depositor has
full power and authority to transfer and assign the property to be
transferred and assigned to and deposited with Trust and Depositor
shall have duly authorized such transfer and assignment and
deposit to Trust by all necessary corporate action; and
3
<PAGE>
the execution, delivery and performance of this Agreement have
been duly authorized by Depositor by all necessary corporate
action.
(d) The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of
time) a default under, the certificate of incorporation or by-laws
of Depositor, or any indenture, agreement or other instrument to
which Depositor is a party or by which it is bound; or result in
the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); or
violate any law or, to the best of Depositor's knowledge, any
order, rule or regulation applicable to Depositor of any court or
of any Federal or State regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over
Depositor or its properties.
SECTION 2.11. Federal Income Tax Allocations. If the Trust
Certificates are treated as partnership interests rather than as debt, then
the following provisions shall apply. Interest payments on the Certificates
at the Certificate Rate (including interest on amounts previously due on
the Certificates but not yet distributed) shall be treated as "guaranteed
payments" under Section 707(c) of the Code. Net income of Trust for any
month as determined for Federal income tax purposes (and each item of
income, gain, loss and deduction entering into the computation thereof)
shall be allocated:
(a) among the Certificateholders as of the close of
business on the last day of such month, in proportion to their
ownership of principal amount of Trust Certificates on such date,
an amount of net income up to the sum of: (i) the portion of the
market discount on the Trust Estate accrued during such month that
is allocable to the excess, if any, of the initial Certificate
Balance over their initial aggregate issue price, and (ii) any
other amounts of income payable to the Certificateholders for such
month; and such sum of amounts specified in clauses (i) and (ii)
of this sentence shall be reduced by any amortization by Trust of
premium on the Trust Estate that corresponds to any excess of the
issue price of Certificates over their principal amount; and
(b) to Depositor any remaining net income.
If the net income of Trust for any month is insufficient for the
allocations described in clause (a), subsequent net income shall first be
allocated to make up such shortfall before being allocated as provided in
the preceding sentence. Net losses of Trust, if any, for any month as
determined for Federal income tax purposes (and each item of income, gain,
loss and deduction entering into the computation thereof) shall be
4
<PAGE>
allocated to Depositor to the extent Depositor (or such holders) are
reasonably expected to bear the economic burden of such net losses, and any
remaining net losses shall be allocated among the remaining
Certificateholders as of the close of business on the last day of such
month in proportion to their ownership of principal amount of Trust
Certificates on such day. Depositor is authorized to modify the allocations
in this paragraph if necessary or appropriate, in its sole discretion, for
the allocations to fairly reflect the economic income, gain or loss to
Depositor or to the Certificateholders, or as otherwise required by the
Code.
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.1. Initial Ownership. Upon the formation of Trust by the
contribution by Depositor pursuant to Section 2.5, and until the issuance
of the Trust Certificates, Depositor shall be the sole beneficiary of
Trust.
SECTION 3.2. The Trust Certificates. The Trust Certificates shall
be issued in denominations of $1,000,000 or in integral multiples of $1,000
in excess thereof; provided that one Trust Certificate may be issued in a
denomination below $1,000,000 as to include any residual amount. The Trust
Certificates shall be executed on behalf of Trust by manual or facsimile
signature of an authorized officer of Trustee. Trust Certificates bearing
the manual or facsimile signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf
of Trust, shall be, when authenticated pursuant to Section 3.3, validly
issued and entitled to the benefits of this Agreement, notwithstanding that
such individuals or any of them shall have ceased to be so authorized prior
to the authentication and delivery of such Trust Certificates or did not
hold such offices at the date of authentication and delivery of such Trust
Certificates.
SECTION 3.3. Authentication of Trust Certificates. Concurrently
with the transfer of the Trust Estate to Trust pursuant to the Pooling and
Servicing Agreement, Trustee shall cause the Trust Certificates in an
aggregate principal amount equal to the Initial Certificate Balance to be
executed on behalf of Trust, authenticated and delivered to or upon the
written order of Depositor, signed by its chairman of the board, its
president or any vice president, without further corporate action by
Depositor, in authorized denominations. No Trust Certificate shall entitle
its Holder to any benefit under this Agreement, or shall be valid for any
purpose, unless there shall appear on such Trust Certificate a certificate
of authentication substantially in the form set forth in Exhibit A,
executed by Trustee or Indenture Trustee, as Trustee's authenticating
agent, by the manual signature of one of its authorized signatories; such
certificate of authentication shall constitute conclusive
5
<PAGE>
evidence, and the only evidence, that such Trust Certificate shall have
been duly authenticated and delivered hereunder. All Trust Certificates
shall be dated the date of their authentication. No further Trust
Certificates shall be issued except pursuant to Section 3.4, 3.5, 3.10 or
3.13 hereunder.
SECTION 3.4. Registration of Transfer and Exchange of Trust
Certificates. Trustee shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 3.8, a register (the "Certificate
Register") in which, subject to such reasonable regulations as it may
prescribe, Issuer shall provide for the registration of Trust Certificates
and of transfers and exchanges of Trust Certificates. Paying Agent shall be
the "Certificate Registrar" for the purpose of registering Trust
Certificates and the transfers of Trust Certificates as herein provided.
Upon any resignation of any Certificate Registrar, Depositor shall promptly
appoint a successor or, if it elects not to make such an appointment,
assume the duties of the Certificate Registrar.
Upon surrender for registration of transfer of any Trust
Certificate at the office or agency maintained pursuant to Section 3.8, if
the requirements of Section 8-401(l) of the UCC are met, Trustee shall
execute, authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Trust Certificates in authorized
denominations of a like aggregate principal amount.
At the option of a Holder, Trust Certificates may be exchanged for
other Trust Certificates of authorized denominations, of a like aggregate
principal amount, upon surrender of the Trust Certificates to be exchanged
at the office or agency maintained pursuant to Section 3.8. Whenever any
Trust Certificates are so surrendered for exchange, if the requirements of
Section 8-401(l) of the UCC are met, Trustee shall execute, authenticate
and deliver the Trust Certificates that the Certificateholder making the
exchange is entitled to receive.
All Trust Certificates issued upon any registration of transfer or
exchange of Trust Certificates shall be entitled to the same benefits under
this Agreement as the Trust Certificates surrendered upon such registration
of transfer or exchange.
Every Trust Certificate 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 Trustee and the
Certificate Registrar duly executed by, Holder thereof or his attorney duly
authorized in writing. Each Trust Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by
Trustee in accordance with its customary practice.
No service charge shall be made to a Certificateholder for any
registration of transfer or exchange of Trust Certificates, but Trustee or
the Certificate Registrar may require payment of a sum sufficient to cover
any tax or other governmental
6
<PAGE>
charge that may be imposed in connection with any registration of transfer
or exchange of Trust Certificates.
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Trust
Certificates. If: (a) any mutilated Trust Certificate shall be surrendered
to the Certificate Registrar, or if the Certificate Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Certificate (provided, that Trustee shall not be required to verify the
evidence provided to it), and (b) there shall be delivered to the
Certificate Registrar and Trustee such security or indemnity as may be
required by them to hold each of them harmless, then, in the absence of
notice that such Trust Certificate shall have been acquired by a "protected
purchaser" as defined in 8- 303(a) of the UCC, and provided that the
requirements of Section 8-405 of the UCC are met, Trustee on behalf of
Trust shall execute, authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Trust Certificate, a
replacement Trust Certificate of like tenor and denomination.
In connection with the issuance of any replacement Trust
Certificate under this Section, Trustee and the Certificate Registrar may
require the payment by the Certificateholder of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith.
Any replacement Trust Certificate issued pursuant to this Section
in replacement of any mutilated, destroyed, lost or stolen Trust
Certificate shall constitute conclusive evidence of ownership in Trust, as
if originally issued, whether or not the mutilated, lost, stolen or
destroyed Trust Certificate shall be found at any time, and shall be
entitled to all the benefits of this Agreement.
SECTION 3.6. Persons Deemed Certificateholders. Prior to due
presentation of a Trust Certificate for registration of transfer of any
Trust Certificate, Trustee or the Certificate Registrar may treat the
Person in whose name any Trust Certificate shall be registered in the
Certificate Register (as of the day of determination) as the owner of such
Trust Certificate for the purpose of receiving distributions pursuant to
Section 5.2 and for all other purposes whatsoever, and neither Trustee nor
the Certificate Registrar shall be bound by any notice to the contrary.
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses. Trustee shall furnish or cause to be furnished to Servicer and
Depositor, within 15 days after receipt by an Authorized Officer of Trustee
of a request therefor from Servicer or Depositor in writing, a list, in
such form as Servicer or Depositor may reasonably require, of the names and
addresses of the Certificateholders as of the most recent Record Date. If
two or more Certificateholders or one or more Holder(s) of Trust
Certificates evidencing not less than 25% of the Certificate Balance apply
in writing to Trustee, and such application states that the applicants
desire to communicate with other Certificateholders with respect to their
rights under this
7
<PAGE>
Agreement or under the Trust Certificates and such application shall be
accompanied by a copy of the communication that such applicants propose to
transmit, then Trustee shall, within five Business Days after the receipt
of such application by one of its Authorized Officers, afford such
applicants access during normal business hours to the current list of the
Certificateholders. Each Holder, by receiving and holding a Trust
Certificate, shall be deemed to have agreed not to hold any of Depositor,
the Certificate Registrar or Trustee accountable by reason of the
disclosure of its name and address, regardless of the source from which
such information was derived.
SECTION 3.8. Maintenance of Office or Agency. Trustee shall
maintain in the City of New York, an office or offices or agency or
agencies where Trust Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon Trustee in
respect of the Trust Certificates and the Basic Documents may be served.
Trustee shall give prompt written notice to Depositor and to the
Certificateholders of any change in the location of the Certificate
Register or any such office or agency.
SECTION 3.9. Appointment of Paying Agent. Paying Agent shall make
distributions to the Certificateholders from the Certificate Distribution
Account pursuant to Section 5.2 and shall report the amounts of such
distributions to Trustee. Any Paying Agent shall have the revocable power
to withdraw funds from the Certificate Distribution Account for the purpose
of making the distributions referred to above. Trustee may revoke such
power and remove Paying Agent if Trustee determines in its sole discretion
that Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect. Paying Agent shall initially be Norwest
Bank Minnesota, National Association, and any co-paying agent chosen by and
acceptable to Trustee. Paying Agent shall be permitted to resign as Paying
Agent upon 30 days' written notice to Trustee. In the event that Trustee
shall not be Paying Agent, Trustee shall appoint a successor to act as
Paying Agent (which shall be a bank or trust company). Trustee shall cause
such successor Paying Agent or any additional Paying Agent appointed by
Trustee to execute and deliver to Trustee an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with Trustee
that as Paying Agent, such successor Paying Agent or additional Paying
Agent will hold all sums, if any, held by it for payment to the
Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders.
Paying Agent shall return all unclaimed funds to Trustee and upon removal
of a Paying Agent such Paying Agent shall also return all funds in its
possession to Trustee. The provisions of Sections 7.1, 7.3, 7.4 and 8.1
shall apply to Trustee also in its role as Paying Agent, for so long as
Trustee shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
8
<PAGE>
SECTION 3.10. [Reserved].
SECTION 3.11. Definitive Certificates. The Trust Certificates,
upon original issuance, will be issued in the form of definitive, fully
registered Trust Certificates (the "Definitive Trust Certificates").
SECTION 3.12. Transfer Restrictions. (a) Each Certificateholder,
by acceptance of a Trust Certificate, shall be deemed to represent and
warrant that either (a) it is not (i) an employee benefit plan (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") that is subject to the provisions of Title I of ERISA,
(ii) a plan (as described in Section 4975(e)(1) of the Code or (iii) an
entity whose underlying assets include "plan assets" by reason of a plan's
investment in the entity (including an insurance company general account
that is treated as including "plan assets") or (b) such person is an
insurance company using the assets of its general account to purchase the
Trust Certificate if the portion of the assets so used to purchase the
Trust Certificate that constitutes the assets of "benefit plan investors"
as defined in 29 C.F.R. ss. 2510.3- 101(f)(2) is less than 25% of the total
of such assets so used, and the purchase and holding of the Trust
Certificates meets all the requirements of and is eligible for exemptive
relieve under Prohibited Transaction Exemption 95-60; provided that, with
the consent of Transferor, Trust Certificates may be sold to purchasers
that do not satisfy either clause (a) or clause (b) if such purchaser makes
such additional representations as may be requested by Transferor in order
for the Transferor to reasonably determine that, after giving effect to
such sale, the assets of Trust will not be treated as plan assets of any
Benefit Plan."
(b) No sale, transfer, assignment or other conveyance of a Trust
Certificate or any interest therein shall be made if Servicer shall have
advised Trustee, Certificate Registrar and the transferring
Certificateholder (and, in the case of a pledge as to which the pledgor has
given notice to Servicer, the pledgee) as provided below that, in its
reasonable judgment, (A) at the time of such transfer (or purported
transfer) any interest in Trust (or economic interest therein, other than
indebtedness issued by Trust) is traded on an established securities market
or (B) after such transfer (or purported transfer) (I) Trust would have
more than 90 Certificateholders or (II) any interest in Trust was issued in
a transaction (or transactions) that was required to be registered under
the Securities Act (or, in the case of an offering and sale of interests in
Trust exempt from registration under the Securities Act by reason of
Regulation S, the offering and sale would have been required to be
registered under the Securities Act if the interests had been offered and
sold within the United States). For purposes of clause (A) of the preceding
sentence, an established securities market is (w) a national securities
exchange that is either registered under Section 6 of the Exchange Act or
exempt from registration because of the limited volume of transactions, (x)
a foreign securities exchange that, under
9
<PAGE>
the law of the jurisdiction where it is organized, satisfies regulatory
requirements that are analogous to the regulatory requirements of the
Exchange Act, (y) a regional or local exchange, or (z) an interdealer
quotation system that regularly disseminates firm buy or sell quotations by
identified brokers or dealers by electronic means or otherwise. None of
Servicer, Depositor, Trustee or Certificate Registrar (or any Affiliate
thereof) shall take any action which could result in any interest in the
Trust (or economic interest therein) being traded on an established
securities market within the meaning of the preceding sentence. For
purposes of determining whether the Trust will have more than 90
Certificateholders, each Person owning an interest in a partnership
(including any entity treated as a partnership for federal income tax
purposes), a grantor trust or an S corporation (each such entity, a
"flow-through entity") that owns, directly or through other flow-through
entities, an interest in the Trust shall be treated as a Certificateholder
unless Servicer reasonably determines that less than substantially all of
the value of such Person's interest in the flow-through entity is
attributable to the flow-through entity's interest (direct or indirect) in
the Trust, or unless Servicer determines in its sole discretion that it is
not a principal purpose of the use of the tiered arrangement to permit the
90- Certificateholder limitation to be avoided.
(c) No sale, transfer, assignment or other conveyance of a Trust
Certificate or any interest therein shall be made to any Person unless such
Person is a "United States Person" as defined in Section 7701(a)(30) of the
Code.
(d) No sale, transfer, assignment or other conveyance of a Trust
Certificate or any interest therein shall be made to any Person unless (A)
such Person is a Qualified Institutional Buyer (a "QIB") that purchases (1)
for its own account or (2) for the account of a QIB, and is, in either
case, aware that such sale, transfer, assignment or other conveyance is
being made as reliance on Rule 144A under the Securities Act or (B) such
sale, transfer, assignment or other conveyance is made in reliance upon any
other exemption from the Securities Act if the transferor provides an
opinion of counsel to Provident Lease Receivables Corporation and the
Trustee to the effect that the proposed transfer is exempt from the
registration requirements of the Securities Act and the securities or blue
sky laws of any applicable state.
ARTICLE IV
Actions by Trustee
SECTION 4.1. Prior Notice to Certificateholders with Respect to
Certain Matters. With respect to the following matters, Trustee shall not
take action unless, at least 30 days before the taking of such action,
Trustee shall have notified the Certificateholders in writing of the
proposed action and the Certificateholders shall not have notified Trustee
in writing prior to the 30th day after such notice is given
10
<PAGE>
that such Certificateholders have withheld consent or shall not have
provided alternative direction:
(a) the initiation of any claim or lawsuit by Trust
(except claims or lawsuits brought in connection with the
collection of the Trust Estate) and the compromise of any action,
claim or lawsuit brought by or against Trust (except with respect
to the aforementioned claims or lawsuits for collection of the
Trust Estate);
(b) [reserved];
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is
required;
(d) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is
not required and such amendment materially adversely affects the
interest of the Certificateholders;
(e) the amendment, change or modification of the
Management Agreement, except to cure any ambiguity or to amend or
supplement any provision in a manner, or add any provision, that
would not materially adversely affect the interests of the
Certificateholders; or
(f) the appointment pursuant to the Indenture of a
successor Note Registrar, Paying Agent or Indenture Trustee, or
pursuant to this Agreement of a successor Certificate Registrar,
or the consent to the assignment by the Note Registrar, Paying
Agent or Indenture Trustee or Certificate Registrar of its
obligations under the Indenture or this Agreement, as applicable.
SECTION 4.2. Action by the Certificateholders with Respect to
Certain Matters. Trustee shall not have the power, except upon the
direction of the Certificateholders, to: (a) remove Manager under the
Management Agreement, (b) appoint a successor Manager, (c) remove Servicer
under the Pooling and Servicing Agreement or (d) except as expressly
provided in the Basic Documents, sell the Trust Estate after the
termination of the Indenture. Trustee shall take the actions referred to in
the preceding sentence only upon written instructions signed by the
Certificateholders.
SECTION 4.3. Action by Certificateholders with Respect to
Bankruptcy. Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to Trust without the unanimous prior
approval of all Certificateholders and the delivery to Trustee by each such
Certificateholder of a certificate certifying that such Certificateholder
reasonably believes that Trust is insolvent.
11
<PAGE>
SECTION 4.4. Restrictions on Certificateholders' Power. The
Certificateholders shall not direct Trustee to take or refrain from taking
any action if such action or inaction would be contrary to any obligation
of Trust or Trustee under this Agreement or any of the Basic Documents or
would be contrary to Section 2.3, nor shall Trustee be obligated to follow
any such direction, if given.
SECTION 4.5. Majority Control. Except as expressly provided
herein, any action that may be taken by the Certificateholders under this
Agreement may be taken by Holders of Trust Certificates evidencing not less
than a majority of the Certificate Balance. Except as expressly provided
herein, any written notice of the Certificateholders delivered pursuant to
this Agreement shall be effective if signed by Holders of Trust
Certificates evidencing not less than a majority of the Certificate Balance
at the time of the delivery of such notice.
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.1. Establishment of Trust Account. Trustee, for the
benefit of the Certificateholders, shall establish and maintain in the name
of Trust an Eligible Deposit Account (the "Certificate Distribution
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders.
Trust shall possess all right, title and interest in all funds on
deposit from time to time in the Certificate Distribution Account and in
all proceeds thereof. Except as otherwise expressly provided herein, the
Certificate Distribution Account shall be under the sole dominion and
control of Trustee for the benefit of the Certificateholders. If, at any
time, the Certificate Distribution Account ceases to be an Eligible
Account, Trustee (or Depositor on behalf of Trustee, if the Certificate
Distribution Account is not then held by Trustee or an affiliate thereof)
shall, within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which the Rating Agency Condition shall be satisfied),
establish a new Certificate Distribution Account as an Eligible Account and
shall transfer any cash and/or any investments to such new Certificate
Distribution Account.
SECTION 5.2. Applications of Trust Funds. (a) On each Payment
Date, Trustee will distribute to Certificateholders, on a pro rata basis,
amounts deposited in the Certificate Distribution Account pursuant to
Sections 6.3(b) and 6.3(c) of the Pooling and Servicing Agreement.
12
<PAGE>
(b) On each Payment Date, Trustee shall send to each
Certificateholder the statement provided to Trustee by Servicer pursuant to
Section 4.8 of the Pooling and Servicing Agreement.
(c) In the event that any withholding tax is imposed on Trust's
payment (or allocations of income) to a Certificateholder, such tax shall
reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section. Trustee is hereby authorized and directed to
retain from amounts otherwise distributable to the Certificateholders
sufficient funds for the payment of any tax that is legally owed by Trust
(but such authorization shall not prevent Trustee from contesting any such
tax in appropriate proceedings, and withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings). The amount of
any withholding tax imposed with respect to a Certificateholder shall be
treated as cash distributed to such Certificateholder at the time it is
withheld by Trust. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a
non-U.S. Certificateholder), Trustee may, in its sole discretion, withhold
such amounts in accordance with this paragraph (c). In the event that a
Certificateholder wishes to apply for a refund of any such withholding tax,
Trustee shall reasonably cooperate with such Certificateholder in making
such claim so long as such Certificateholder agrees to reimburse Trustee
for any out-of-pocket expenses incurred.
SECTION 5.3. Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Payment Date
shall be made to each Certificateholder of record on the preceding Record
Date either by wire transfer, in immediately available funds, to the
account of such Holder at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided to the
Certificate Registrar appropriate written instructions at least five
Business Days prior to such Payment Date and such Holder's Trust
Certificates aggregate not less than $1,000,000, or, if not, by check
mailed to such Certificateholder at the address of such Holder appearing in
the Certificate Register.
SECTION 5.4. No Segregation of Moneys; No Interest. Subject to
Sections 5.1 and 5.2, moneys received by Trustee hereunder need not be
segregated in any manner except to the extent required by law or the
Pooling and Servicing Agreement and may be deposited under such general
conditions as may be prescribed by law, and Trustee shall not be liable for
any interest thereon.
SECTION 5.5. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. If the Trust
Certificates are treated as partnership interests rather than as debt, the
following provisions shall apply. Trustee shall: (a) maintain (or cause to
be maintained) the books of Trust on a calendar year basis on the accrual
method of accounting, (b) deliver to each Certificateholder, as may be
required by the Code and applicable Treasury
13
<PAGE>
Regulations, such information as may be required (including Schedule K-1)
to enable each Certificateholder to prepare its Federal, state and local
income tax returns, (c) file such tax returns relating to Trust (including
a partnership information return on Internal Revenue Service Form 1065 or
its successor), and make such elections as may from time to time be
required or appropriate under any applicable state or Federal statute or
rule or regulation thereunder so as to maintain Trust's characterization as
a partnership for Federal income tax purposes, (d) cause such tax returns
to be signed in the manner required by law and (e) collect or cause to be
collected any withholding tax as described in and in accordance with
Section 5.2(c) with respect to income or distributions to
Certificateholders. Trustee shall elect under Section 1278 of the Code to
include in income currently any market discount that accrues with respect
to the Trust Estate and shall elect under Section 171 of the Code to
amortize any bond premium with respect to the Trust Estate. Trustee shall
not make the election provided under Section 754 of the Code.
SECTION 5.6. Signature on Returns; Tax Matters Partner. (a)
Trustee shall sign on behalf of Trust the tax returns of Trust, unless
applicable law requires a Certificateholder to sign such documents, in
which case such documents shall be signed by Depositor.
(b) Depositor shall be designated the "tax matters partner" of
Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable Treasury
Regulations.
ARTICLE VI
Authority and Duties of Trustee
SECTION 6.1. General Authority. Trustee is authorized and directed
to execute and deliver the Basic Documents to which Trust is to be a party
and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which Trust is to be a party, in
each case in such form as Depositor shall approve as evidenced conclusively
by Trustee's execution thereof, and, on behalf of Trust, to direct
Indenture Trustee to authenticate and deliver Notes in the aggregate
principal amount specified in a letter of instruction from Depositor to
Trustee. In addition to the foregoing, Trustee is authorized, but shall not
be obligated, to take all actions required of Trust pursuant to the Basic
Documents. Trustee is further authorized from time to time to take such
action as Manager recommends with respect to the Basic Documents.
14
<PAGE>
SECTION 6.2. General Duties. It shall be the duty of Trustee to
discharge (or cause to be discharged) all of its responsibilities pursuant
to this Agreement and the Basic Documents to which Trust is a party and to
administer Trust in the interest of the Certificateholders, subject to the
Basic Documents and in accordance with this Agreement. Notwithstanding the
foregoing, Trustee shall be deemed to have discharged its duties and
responsibilities hereunder and under the Basic Documents to the extent
Manager has agreed in the Management Agreement to perform any act or to
discharge any duty of Trustee hereunder or under any Basic Document, and
Trustee shall not be held liable for the default or failure of Manager to
carry out its obligations under the Management Agreement.
SECTION 6.3. Action upon Instruction. (a) Subject to Article IV
and in accordance with the Basic Documents, the Certificateholders may by
written instruction direct Trustee in the management of Trust. Such
direction may be exercised at any time by written instruction of the
Certificateholders pursuant to Article IV.
(b) Trustee shall not be required to take any action hereunder or
under any Basic Document if Trustee shall have reasonably determined, or
shall have been advised by counsel, that such action is likely to result in
liability on the part of Trustee or is contrary to the terms hereof or of
any Basic Document or is otherwise contrary to law.
(c) Whenever Trustee is unable to decide between alternative
courses of action permitted or required by this Agreement or any Basic
Document, Trustee shall promptly give notice (in such form as shall be
appropriate under the circumstances) to the Certificateholders requesting
instruction as to the course of action to be adopted, and to the extent
Trustee acts in good faith in accordance with any written instruction of
the Certificateholders received, Trustee shall not be liable on account of
such action to any Person. If Trustee shall not have received appropriate
instruction within 10 days of such notice (or within such shorter period of
time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or
refrain from taking such action, not inconsistent with this Agreement or
the Basic Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such
action or inaction.
(d) In the event that Trustee is unsure as to the application of
any provision of this Agreement or any Basic Document or any such provision
is ambiguous as to its application, or is, or appears to be, in conflict
with any other applicable provision, or in the event that this Agreement
permits any determination by Trustee or is silent or is incomplete as to
the course of action that Trustee is required to take with respect to a
particular set of facts, Trustee may give notice (in such form as shall be
appropriate under the circumstances) to the Certificateholders requesting
instruction
15
<PAGE>
and, to the extent that Trustee acts or refrains from acting in good faith
in accordance with any such instruction received, Trustee shall not be
liable, on account of such action or inaction, to any Person. If Trustee
shall not have received appropriate instruction within 10 days of such
notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it
may, but shall be under no duty to, take or refrain from taking such
action, not inconsistent with this Agreement or the Basic Documents, as it
shall deem to be in the best interests of the Certificateholders, and shall
have no liability to any Person for such action or inaction.
SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions. Trustee shall not have any duty or obligation to manage, make
any payment with respect to, register, record, sell, dispose of or
otherwise deal with the Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated
hereby to which Trustee is a party, except as expressly provided by this
Agreement or in any document or written instruction received by Trustee
pursuant to Section 6.3; and no implied duties or obligations shall be read
into this Agreement or any Basic Document against Trustee. Trustee shall
have no responsibility for filing any financing or continuation statement
in any public office at any time or to otherwise perfect or maintain the
perfection of any security interest or Lien granted to it hereunder or to
prepare or file any Securities and Exchange Commission filing for Trust or
to record this Agreement or any Basic Document. Trustee nevertheless agrees
that it will, at its own cost and expense, promptly take all action as may
be necessary to discharge any Liens on any part of the Trust Estate that
result from actions by, or claims against, Trustee that are not related to
the ownership or the administration of the Trust Estate.
SECTION 6.5. No Action Except Under Specified Documents or
Instructions. Trustee shall not manage, control, use, sell, dispose of or
otherwise deal with any part of the Trust Estate except: (i) in accordance
with the powers granted to and the authority conferred upon Trustee
pursuant to this Agreement, (ii) in accordance with the Basic Documents or
(iii) in accordance with any document or instruction delivered to Trustee
pursuant to Section 6.3.
SECTION 6.6. Restrictions. Trustee shall not take any action: (a)
that is inconsistent with the purposes of Trust set forth in Section 2.3 or
(b) that, to the actual knowledge of Trustee, would result in Trust's
becoming taxable as a corporation for Federal income tax purposes. The
Certificateholders shall not direct Trustee to take action that would
violate this Section.
16
<PAGE>
ARTICLE VII
Concerning Trustee
SECTION 7.1. Acceptance of Trusts and Duties. Trustee accepts the
trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Agreement. Trustee
also agrees to disburse all moneys actually received by it constituting
part of the Trust Estate upon the terms of the Basic Documents and this
Agreement. Trustee shall not be answerable or accountable hereunder or
under any Basic Document under any circumstances, except: (i) for its own
willful misconduct, bad faith or gross negligence (or ordinary negligence
in the handling of funds) or (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 7.3 expressly made by
Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) Trustee shall not be liable for any error of judgment
made in good faith by a responsible officer of Trustee unless it
is proved than Trustee was grossly negligent in ascertaining the
pertinent facts;
(b) Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the
instructions of Manager, Servicer or any Certificateholder;
(c) no provision of this Agreement or any Basic Document
shall require Trustee to expend or risk funds or otherwise incur
any financial liability in the performance of any of its rights or
powers hereunder or under any Basic Document, if Trustee shall
have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not
reasonably assured or provided to it;
(d) under no circumstances shall Trustee be liable for
indebtedness evidenced by or arising under any of the Basic
Documents, including the principal of and interest on the Notes;
(e) Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due
execution hereof by Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Trust
Estate or for or in respect of the validity or sufficiency of the
Basic Documents, other than the certificate of authentication on
the Trust Certificates, and Trustee shall in no event assume or
incur any liability, duty or obligation to any Noteholder or to
any Certificateholder, other than is expressly provided for herein
and in the Basic Documents;
17
<PAGE>
(f) Trustee shall not be liable for the default or
misconduct of Manager, Transferor, Indenture Trustee or Servicer
under any of the Basic Documents or otherwise and Trustee shall
have no obligation or liability to perform the obligations of
Trust under this Agreement or the Basic Documents that are
required to be performed by Manager under the Management
Agreement, Indenture Trustee under the Indenture or Servicer under
the Pooling and Servicing Agreement; and
(g) Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement
or otherwise or in relation to this Agreement or any Basic
Document, at the request, order or direction of any of the
Certificateholders unless such Certificateholders have offered to
Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities that may be incurred by Trustee
therein or thereby. The right of Trustee to perform any
discretionary act enumerated in this Agreement or in any Basic
Document shall not be construed as a duty, and Trustee shall not
be answerable for other than its negligence or willful misconduct
in the performance of any such act.
SECTION 7.2. Furnishing of Documents. Trustee shall furnish to the
Certificateholders promptly upon receipt of a written request therefor, and
at the expense of the Certificateholders, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and
any other instruments furnished to Trustee under the Basic Documents.
SECTION 7.3. Representations and Warranties. Trustee hereby represents
and warrants to Depositor, for the benefit of the Certificateholders, that:
(a) it is a national banking association duly formed and
validly existing under the laws of the United States of America,
with the requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement.
(b) it has taken all corporate action necessary to
authorize the execution and delivery by it of this Agreement, and
this Agreement will be executed and delivered by one of its
officers who is duly authorized to execute and deliver this
Agreement on its behalf.
(c) the consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of
time) a default under, the articles of incorporation or by-laws of
Trustee, or any indenture, agreement or other instrument to
18
<PAGE>
which Trustee is a party or by which it is bound; or violate any
Federal or Delaware law governing the banking or trust powers of
Trustee; or, to the best of Trustee's knowledge, violate any
order, rule or regulation applicable to Trustee of any court or of
any Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over
Trustee or its properties.
SECTION 7.4. Reliance; Advice of Counsel. (a) Trustee shall incur
no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or
other document or paper believed by it to be genuine and believed by it to
be signed by the proper party or parties. Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of
any party as conclusive evidence that such resolution has been duly adopted
by such body and that the same is in full force and effect. As to any fact
or matter the method of the determination of which is not specifically
prescribed herein, Trustee may for all purposes hereof rely on a
certificate, signed by the president, any vice president, the treasurer or
other authorized officers of the relevant party as to such fact or matter,
and such certificate shall constitute full protection to Trustee for any
action taken or omitted to be taken by it in good faith in reliance
thereon.
(b) In the exercise or administration of the trusts hereunder and
in the performance of its duties and obligations under this Agreement or
the Basic Documents, Trustee: (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and Trustee
shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by Trustee
with reasonable care, and (ii) may consult with counsel, accountants and
other skilled Persons to be selected with reasonable care and employed by
it. Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any
such counsel, accountants or other such Persons and which opinion or advice
states that such action is not contrary to this Agreement or any Basic
Document.
SECTION 7.5. Not Acting in Individual Capacity. Except as provided
in this Article VII, in accepting the trusts hereby created First Union
Trust Company, National Association, acts solely as Trustee hereunder and
not in its individual capacity and all Persons having any claim against
Trustee by reason of the transactions contemplated by this Agreement or any
Basic Document shall look only to the Trust Estate for payment or
satisfaction thereof.
SECTION 7.6. Trustee Not Liable for Trust Certificates or The
Trust Estate. The recitals contained herein and in the Certificates (other
than the signature and counter-signature of Trustee on the Trust
Certificates) shall be taken as the statements of Depositor, and Trustee
assumes no responsibility for the correctness
19
<PAGE>
thereof. Trustee makes no representations as to the validity or sufficiency
of this Agreement, of any Basic Document or of the Trust Certificates
(other than the signature and countersignature, if any, of Trustee on the
Trust Certificates) or the Notes, or of any of the Trust Estate or related
documents. Trustee shall at no time have any responsibility or liability
for or with respect to the legality, validity and enforceability of any of
the Trust Estate, or the perfection and priority of any security interest
created by any of the Trust Estate in any of the Equipment or the
maintenance of any such perfection and priority, or for or with respect to
the sufficiency of the Trust Estate or its ability to generate the payments
to be distributed to the Certificateholders under this Agreement or the
Noteholders under the Indenture, including: (a) the existence, condition
and ownership of any Equipment, (b) the existence and enforceability of any
insurance thereon, (c) the existence and contents of any Lease on any
computer or other record thereof, (d) the validity of the assignment of any
of the Trust Estate to Trust or of any intervening assignment, (e) the
completeness of any Lease, (f) the performance or enforcement of any Lease,
and (g) the compliance by Depositor or Servicer with any warranty or
representation made under any Basic Document or in any related document or
the accuracy of any such warranty or representation or any action of
Manager, Indenture Trustee or Servicer or any subservicer taken in the name
of Trustee.
SECTION 7.7. Trustee May Not Own Notes. Trustee shall not, in its
individual capacity, but may in a fiduciary capacity, become the owner of
Notes or otherwise extend credit to Issuer. Trustee may otherwise deal with
Depositor, Manager, Indenture Trustee and Servicer with the same rights as
it would have if it were not Trustee.
ARTICLE VIII
Compensation of Trustee
SECTION 8.1. Trustee's Fees and Expenses. Trustee shall receive as
compensation for its services hereunder such fees as have been separately
agreed upon before the date hereof between Depositor and Trustee, and
Trustee shall be entitled to be reimbursed by Depositor for its other
reasonable expenses hereunder, including the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and
counsel as Trustee may employ in connection with the exercise and
performance of its rights and its duties hereunder.
SECTION 8.2. Indemnification. Depositor shall be liable as primary
obligor for, and shall indemnify Trustee (whether individually or as
Trustee) and its successors, assigns, agents and servants (collectively,
the "Indemnified Parties") from and against any and all liabilities,
obligations, losses, damages, taxes, claims, actions and suits, and any and
all reasonable costs, expenses and disbursements
20
<PAGE>
(including reasonable legal fees and expenses) of any kind and nature
whatsoever (collectively, "Expenses"), which may at any time be imposed on,
incurred by or asserted against Trustee or any Indemnified Party in any way
relating to or arising out of this Agreement, the Basic Documents, the
Trust Estate, the administration of the Trust Estate or the action or
inaction of Trustee hereunder, except only that Depositor shall not be
liable for or required to indemnify an Indemnified Party from and against
Expenses arising or resulting from: (a) its own willful misconduct or
negligence or (b) with respect to Trustee, the inaccuracy of any
representation or warranty contained in Section 7.3 expressly made by
Trustee. The indemnities contained in this Section shall survive the
resignation or termination of Trustee or the termination of this Agreement.
In any event of any claim, action or proceeding for which indemnity will be
sought pursuant to this Section, Trustee's choice of legal counsel shall be
subject to the approval of Depositor, which approval shall not be
unreasonably withheld.
SECTION 8.3. Payments to Trustee. Any amounts paid to Trustee
pursuant to this Article VIII shall be deemed not to be a part of the Trust
Estate immediately after such payment. Trustee shall also be entitled to
interest on all advances at a rate equal to: (a) the rate publicly
announced by Trustee, as its prime rate from time to time, plus (b) 3.5%.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.1. Termination of Trust Agreement. (a) This Agreement
(other than Article VIII) and Trust shall terminate and be of no further
force or effect upon the final distribution by Trustee of all moneys or
other property or proceeds of the Trust Estate in accordance with the
Indenture, the Pooling and Servicing Agreement and Article V. The
bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder, shall not: (x) operate to terminate this Agreement or
Trust, (y) entitle such Certificateholder's legal representatives or heirs
to claim an accounting or to take any action or proceeding in any court for
a partition or winding up of all or any part of Trust or Trust Estate or
(z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Except as provided in Section 9.1(a), neither Depositor nor
any Certificateholder shall be entitled to revoke or terminate Trust.
(c) Notice of any termination of Trust, specifying the Payment
Date upon which the Certificateholders shall surrender their Trust
Certificates to Paying Agent for payment of the final distribution and
cancellation, shall be given promptly by Trustee by letter to the
Certificateholders mailed within five Business Days of receipt of notice of
such termination from Servicer given pursuant to the Indenture stating:
21
<PAGE>
(i) the Payment Date upon which final payment of the Trust Certificates
shall be made upon presentation and surrender of the Trust Certificates at
the office of Paying Agent therein designated, (ii) the amount of any such
final payment and (iii) that the Record Date otherwise applicable to such
Payment Date is not applicable, payments being made only upon presentation
and surrender of the Trust Certificates at the office of Paying Agent
therein specified. Trustee shall give such notice to the Certificate
Registrar (if other than Trustee) and Paying Agent at the time such notice
is given to Certificateholders. Upon presentation and surrender of the
Trust Certificates, Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Payment Date pursuant to
Section 5.2.
In the event that not all of Certificateholders shall surrender
their Trust Certificates for cancellation within six months after the date
specified in the above mentioned written notice, Trustee shall give a
second written notice to the remaining Certificateholders to surrender
their Trust Certificates for cancellation and to receive the final
distribution with respect thereto. If within one year after the second
notice not all the Trust Certificates shall have been surrendered for
cancellation, Trustee may take appropriate steps, or may appoint an agent
to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Trust Certificates, and the cost thereof
shall be paid out of the funds and other assets that shall remain subject
to this Agreement. Any funds remaining in Trust after exhaustion of such
remedies shall be distributed by Trustee to Depositor.
ARTICLE X
Successor Trustees and Additional Trustees
SECTION 10.1. Eligibility Requirements for Trustee. Trustee shall
at all times: (a) be a corporation satisfying the provisions of Section
26(a)(1) of the Investment Company Act of 1940, as amended, (b) be
authorized to exercise corporate trust powers, (c) have a combined capital
and surplus of at least $50,000,000 and be subject to supervision or
examination by Federal or state authorities, and (d) have a rating of at
least "Baa3" by Moody's. Trustee shall not, in its individual capacity, but
may in a fiduciary capacity, purchase any of the Notes or otherwise extend
credit to Trust. If such corporation shall publish reports of condition at
least annually, pursuant to law or the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section,
the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time Trustee shall cease to be
eligible in accordance with this Section, Trustee shall resign immediately
in the manner and with the effect specified in Section 10.2.
22
<PAGE>
SECTION 10.2. Resignation or Removal of Trustee. Trustee may at
any time resign and be discharged from the trusts hereby created by giving
written notice thereof to Manager. Upon receiving such notice of
resignation, Manager shall promptly appoint a successor Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered
to the resigning Trustee and one copy to the successor Trustee. If no
successor Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If at any time Trustee shall cease to be eligible in accordance
with Section 10.1 and shall fail to resign after written request therefor
by Manager, or if at any time Trustee shall be legally unable to act, or
shall be adjudged bankrupt or insolvent, or a receiver of Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then Manager may remove
Trustee. If Manager shall remove Trustee under the authority of the
preceding sentence, Manager shall promptly appoint a successor Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Trustee so removed and one copy to the successor
Trustee and payment of all fees owed to the outgoing Trustee.
Any resignation or removal of Trustee and appointment of a
successor Trustee pursuant to this Section shall not become effective until
acceptance of appointment by the successor Trustee pursuant to Section
10.3. Notwithstanding the appointment of any successor trustee, the
outgoing Trustee shall nevertheless be entitled to payment of all fees and
expenses owed to such outgoing Trustee. Manager shall provide notice of
such resignation or removal of Trustee to each of the Rating Agencies.
SECTION 10.3. Successor Trustee. Any successor Trustee appointed
pursuant to Section 10.2 shall execute, acknowledge and deliver to Manager
and to its predecessor Trustee an instrument accepting such appointment
under this Agreement, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties, and obligations of its predecessor under
this Agreement, with like effect as if originally named as Trustee. The
predecessor Trustee shall upon payment of its fees, expenses and any other
amounts owing to it hereunder or under any other Basic Document deliver to
the successor Trustee all documents and statements and monies held by it
under this Agreement; and Manager and the predecessor Trustee shall execute
and deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor
Trustee all such rights, powers, duties and obligations.
23
<PAGE>
No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Trustee shall
be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Trustee pursuant to
this Section, Manager shall mail notice of such appointment to all
Certificateholders, Indenture Trustee, the Noteholders and the Rating
Agencies. If Manager shall fail to mail such notice within 10 days after
acceptance of appointment by the successor Trustee, the successor Trustee
shall cause such notice to be mailed at the expense of Manager.
SECTION 10.4. Merger or Consolidation of Trustee. Any corporation
or other entity into which Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of Trustee, shall be the successor of Trustee hereunder; provided,
such corporation shall be eligible pursuant to Section 10.1, without the
execution or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding; and
provided that Trustee shall mail notice of such merger or consolidation to
the Rating Agencies.
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which
any part of Trust or any Equipment may at the time be located, Manager and
Trustee acting jointly shall have the power and may execute and deliver all
instruments to appoint one or more Person(s) approved by Trustee to act as
co-trustee(s), jointly with Trustee, or separate trustee(s), of all or any
part of the Trust Estate, and to vest in such Person(s), in such capacity
and for the benefit of the Certificateholders, such title to the Trust
Estate, or any part thereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as Manager and
Trustee may consider necessary or desirable. If Manager shall not have
joined in such appointment within 15 days after the receipt by it of a
request so to do, Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee under this Agreement shall
be required to meet the terms of eligibility as a successor trustee
pursuant to Section 10.1 and no notice of the appointment of any co-trustee
or separate trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon Trustee shall be conferred or imposed upon and
exercised or performed
24
<PAGE>
by 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 Trustee joining in such act),
except to the extent that under any law of any jurisdiction in
which any particular act(s) are to be performed, Trustee shall be
incompetent or unqualified to perform such act(s), in which event
such rights, powers, duties and obligations (including the holding
of title to the Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of
Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) Manager and Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the
estates or property specified in its instrument of appointment, either
jointly with Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the
liability of, or affording protection to, Trustee. Each such instrument
shall be filed with Trustee and a copy thereof given to Manager.
25
<PAGE>
Any separate trustee or co-trustee may at any time appoint Trustee
as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any 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 Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Trustee shall have no obligation to determine whether a co-trustee
or separate trustee is legally required in any jurisdiction in which any
part of the Trust Estate may be located.
ARTICLE XI
Miscellaneous
SECTION 11.1. Supplements and Amendments. This Agreement may be
amended from time to time by a written amendment duly executed and
delivered by Depositor and Trustee, with prior written notice to the Rating
Agencies, without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this
Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the
interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by Depositor
and Trustee, with prior written notice to the Rating Agencies, with the
written consent of Holders of Notes evidencing not less than 662/3% of the
Outstanding Principal Amount of the Notes and the written consent of
Holders of Certificates evidencing not less than 662/3% of the Certificate
Balance, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, 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 the Trust Estate or distributions that shall be
required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the
Outstanding Principal Amount and the Certificate Balance required to
consent to any such amendment, without the consent of the holders of all
the outstanding Notes and Certificates.
26
<PAGE>
Promptly after the execution of any such amendment or consent (or,
in the case of the Rating Agencies, 10 days prior thereto), Trustee shall
furnish written notification of the substance of such amendment or consent
to each Certificateholder, Indenture Trustee and each of the Rating
Agencies.
It shall not be necessary for the consent of Certificateholders,
Noteholders or Indenture Trustee 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 Certificateholders
provided for in this Agreement or in any other Basic Document) and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable requirements as Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement and that all conditions precedent to the execution and delivery
of such amendment have been satisfied. Trustee may, but shall not be
obligated to, enter into any such amendment that affects Trustee's own
rights, duties or immunities under this Agreement or otherwise.
SECTION 11.2. No Legal Title to Trust Estate in
Certificateholders. The Certificateholders shall not have legal title to
any part of the Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided ownership interest
therein only in accordance with Articles V and IX. No transfer, by
operation of law or otherwise, of any right, title or interest of
Certificateholders in, to and under their ownership interest in the Trust
Estate shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal
title to any part of the Trust Estate.
SECTION 11.3. Limitations on Rights of Others. Except for Section
2.7, the provisions of this Agreement are solely for the benefit of
Trustee, Depositor, the Certificateholders, Manager and, to the extent
expressly provided herein, Indenture Trustee and the Noteholders, and
nothing in this Agreement (other than Section 2.7), whether express or
implied, shall be construed to give to any other Person any legal or
equitable right, remedy or claim in the Trust Estate or under or in respect
of this Agreement or any covenants, conditions or provisions contained
herein.
SECTION 11.4. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing, personally
delivered or mailed by certified mail, postage prepaid and return receipt
requested, and shall be deemed to have been duly given upon receipt: (i) if
to Trustee, addressed to the Corporate Trust Office; (ii) if to Depositor,
addressed to Provident Lease Receivables Corporation, c/o The Provident
Bank, One East Fourth Street,
27
<PAGE>
Cincinnati, Ohio 45202, Attention: Treasury Services Department; or, as to
each party, at such other address as shall be designated by such party in a
written notice to the other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. Any notice
so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.5. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 11.6. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.7. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of,
Depositor and its successors, Trustee and its successors and each
Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other
instrument or action by an Certificateholder shall bind the successors and
assigns of such Certificateholder.
SECTION 11.8. Covenants of Depositor. If: (a) the Certificate
Balance shall be reduced by the Cumulative Loss Amount and (b) any
litigation with claims in excess of $1,000,000 to which Depositor is a
party that shall be reasonably likely to result in a material judgment
against Depositor that Depositor will not be able to satisfy shall be
commenced by a Certificateholder during the period beginning nine months
following the commencement of such litigation and continuing until such
litigation is dismissed or otherwise terminated (and, if such litigation
has resulted in a final judgment against Depositor, such judgment has been
satisfied), Depositor shall not pay any dividend to ILC, or make any
distribution on or in respect of its capital stock to ILC, or repay the
principal amount of any indebtedness of Depositor held by ILC, unless: (i)
after giving effect to such payment, distribution or repayment, Depositor's
liquid assets shall not be less than the amount of actual damages claimed
in such litigation or (ii) the Rating Agency Condition shall have been
satisfied with respect to any such payment, distribution or repayment.
Depositor will not at any time institute against Trust any bankruptcy
proceedings under any
28
<PAGE>
United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Trust Certificates, the Notes, the Trust
Agreement or any of the Basic Documents.
SECTION 11.9. No Petition. Trustee, on behalf of Trust, by
entering into this Agreement, each Certificateholder, by accepting a Trust
Certificate, and Indenture Trustee and each Noteholder, by accepting the
benefits of this Agreement, hereby covenant and agree that they will not at
any time institute against Depositor or Trust, or join in any institution
against Depositor or Trust of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any
Federal or state bankruptcy or similar law in connection with any
obligations relating to the Trust Certificates, the Notes, this Agreement
or any of the Basic Documents.
SECTION 11.10. No Recourse. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust
Certificates represent beneficial interests in Trust only and do not
represent interests in or obligations of Transferor, Servicer, Manager,
Trustee, Indenture Trustee or any Affiliate thereof and no recourse may be
had against such parties or their assets, except as may be expressly set
forth or contemplated in this Agreement, the Trust Certificates or the
Basic Documents.
SECTION 11.11. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 11.12. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 11.13. Manager. Manager is authorized to execute on behalf
of Trust all such documents, reports, filings, instruments, certificates
and opinions as it shall be the duty of Trust to prepare, file or deliver
pursuant to this Agreement and the Basic Documents. Upon written request,
Trustee shall execute and deliver to Manager a power of attorney appointing
Manager its agent and attorney-in-fact to execute all such documents,
reports, filings, instruments, certificates and opinions.
29
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in
its individual capacity, but
solely as Trustee of The
Provident Equipment Lease Trust
1998-A
By: /s/ Doris J. Krick
--------------------------------
Name: Doris J. Krick
Title: Vice President
PROVIDENT LEASE RECEIVABLES
CORPORATION
as Depositor
By: /s/ John R. Farrenkopf
-------------------------------
Name: John R. Farrenkopf
Title: Treasurer
30
<PAGE>
EXHIBIT A
to Trust Agreement
FORM OF TRUST CERTIFICATES
--------------------------
REGISTERED $___________1
NUMBER R-___ CUSIP NO. 74386NAF5
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OF AMERICA. THE
CERTIFICATEHOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS
CERTIFICATE (OR ANY INTEREST HEREIN) MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE TRUST AGREEMENT AND
APPLICABLE LAWS AND IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE STATE SECURITIES LAWS AND ONLY (A) TO AN ENTITY WHICH SUCH
PURCHASER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED
UNDER RULE 144A OF THE SECURITIES ACT ("RULE 144A") THAT PURCHASES (1) FOR
ITS OWN ACCOUNT OR (2) FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER,
THAT IS, IN EITHER CASE, AWARE THAT THE RESALE, PLEDGE OR TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, OR (B) IN RELIANCE UPON ANY OTHER EXEMPTION
FROM THE SECURITIES ACT IF THE TRANSFEROR PROVIDES AN OPINION OF COUNSEL TO
PROVIDENT LEASE RECEIVABLES CORPORATION AND THE TRUSTEE TO THE EFFECT THAT
THE PROPOSED TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND THE SECURITIES OR BLUE SKY LAWS OF ANY APPLICABLE STATE.
THE PURCHASER OF THIS CERTIFICATE AGREES THAT IT WILL, AND EACH SUBSEQUENT
TRANSFEREE IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS CERTIFICATE OF THE
RESALE RESTRICTIONS REFERRED TO ABOVE.
THE CERTIFICATEHOLDER HEREOF, BY ACCEPTING AND HOLDING THIS CERTIFICATE IS
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (A) IT IS NOT (I)
AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME
-------- 1Denominations of $1,000,000 and integral multiples of $1,000 in
excess thereof.
1
<PAGE>
SECURITY ACT OF 1974, AS AMENDED ("ERISA") THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN (AS DESCRIBED IN SECTION
4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"))
OR (III) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF A PLAN'S INVESTMENT IN THE ENTITY (INCLUDING AN INSURANCE COMPANY
GENERAL ACCOUNT THAT IS TREATED AS INCLUDING "PLAN ASSETS") OR (B) SUCH
PERSON IS AN INSURANCE COMPANY USING THE ASSETS OF ITS GENERAL ACCOUNT TO
PURCHASE THE CERTIFICATES, THE PORTION OF THE ASSETS SO USED TO PURCHASE
THE CERTIFICATES THAT CONSTITUTES THE ASSETS OF "BENEFIT PLAN INVESTORS" AS
DEFINED IN 29 C.F.R. ss. 2510.3-101(F)(2) IS LESS THAN 25% OF THE TOTAL OF
SUCH ASSETS SO USED, AND THE PURCHASE AND HOLDING OF THE CERTIFICATES MEETS
ALL THE REQUIREMENTS OF AND IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
PROHIBITED TRANSACTION EXEMPTION 95-60, PROVIDED THAT, WITH THE CONSENT OF
THE TRANSFEROR, CERTIFICATES MAY BE SOLD TO PURCHASERS THAT DO NOT SATISFY
EITHER CLAUSE (A) OR CLAUSE (B) IF EACH SUCH PURCHASER MAKES SUCH
ADDITIONAL REPRESENTATIONS AS MAY BE REQUESTED BY PROVIDENT LEASE
RECEIVABLES CORPORATION (THE "TRANSFEROR") IN ORDER FOR THE TRANSFEROR TO
REASONABLY DETERMINE THAT, AFTER GIVING EFFECT TO SUCH SALE, THE ASSETS OF
THE TRUST WILL NOT BE TREATED AS PLAN ASSETS OF ANY BENEFIT PLAN.
PROVIDENT EQUIPMENT LEASE TRUST 1998-A
6.73% LEASE-BACKED CERTIFICATE
evidencing a fractional undivided interest in Trust, as defined below, the
property of which includes a pool of leases and leased equipment
transferred to Trust by Provident Lease Receivables Corporation.
(This Trust Certificate does not represent an interest in or obligation of
Provident Lease Receivables Corporation, Information Leasing Corporation,
or any of their respective affiliates, except to the extent described
below.)
THIS CERTIFIES THAT [Name of Holder] is the registered owner of a
_____________ DOLLAR ($___________) nonassessable, fully-paid, fractional
undivided interest in the Provident Equipment Lease Trust 1998-A ("Trust")
formed by Provident Lease Receivables Corporation, a Delaware corporation
("Transferor").
Trust was created pursuant to a Trust Agreement dated as of September 1,
1998 (the "Trust Agreement"), between Transferor and First Union Trust
Company, National Association, as trustee ("Trustee"). To the extent not
otherwise defined herein, the
2
<PAGE>
capitalized terms used herein have the meanings assigned to them in the
Indenture dated as of September 1, 1998, among Trust and Norwest Bank
Minnesota, National Association, as Indenture Trustee. This Certificate is
one of the duly authorized Certificates designated as "6.75% Lease-Backed
Certificates" (herein called the "Trust Certificates"). Issued under the
Indenture are Notes designated as "5.28% Class A-1 Lease-Backed Notes",
"5.78% Class A-2 Lease-Backed Notes", 5.60% Class A-3 Lease-Backed Notes",
"5.75% Class A-4 Lease-Backed Notes" and "6.20% Class B Lease-Backed Notes"
(collectively, the "Notes"). This Trust Certificate is issued under and is
subject to the terms, provisions and conditions of the Trust Agreement, to
which Trust Agreement the holder of this Trust Certificate by virtue of the
acceptance hereof assents and by which holder is bound.
Each holder of this Trust Certificate acknowledges and agrees that
its rights to receive distributions in respect of this Trust Certificate
are subordinated to the rights of the Noteholders as described in the
Pooling and Servicing Agreement and the Indenture.
It is the intent of Transferor, Servicer, Certificateholders and
the Certificate Owners that, for purposes of Federal income, state and
local income and franchise and any other income taxes measured in whole or
in part by income, Trust will be treated as a partnership, the assets of
which are the assets held by Trust, and the Certificateholders will be
treated as partners in that partnership. Depositor and the other
Certificateholders by acceptance of a Trust Certificate (and the
Certificate Owners by acceptance of a beneficial interest in a Trust
Certificate), agree to treat, and to take no action inconsistent with the
treatment of, the Trust Certificates for such tax purposes as partnership
interests in Trust.
Each Certificateholder or Certificate Owner, by its acceptance of
a Trust Certificate or a beneficial interest in a Trust Certificate,
acknowledges and agrees that, for income and franchise tax purposes, the
Trust will be disregarded as an entity separate from its owner(s), and that
the Trust Certificates shall be treated as debt. In the event that the
Trust Certificates are not respected as debt by the appropriate tax
authorities, the Certificateholders agree that the Trust Certificates shall
be treated as partnership interests in the Trust.
Each Certificateholder or Certificate Owner, by its acceptance of
a Trust Certificate or, in the case of a Certificate Owner, a beneficial
interest in a Trust Certificate, covenants and agrees that such
Certificateholder or Certificate Owner, as the case may be, will not at any
time institute against Transferor or Trust, or join in any institution
against Transferor or Trust of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings
under any United States Federal or state bankruptcy or similar law in
connection with any obligations relating to the Trust Certificates, the
Notes, the Trust Agreement or any of the Basic Documents.
3
<PAGE>
The Trust Certificates do not represent an obligation of, or an
interest in, Transferor, Servicer, Information Leasing Corporation, Trustee
or any affiliates of any of them and no recourse may be had against such
parties or their assets, except as may be expressly set forth or
contemplated herein or in the Trust Agreement or the Basic Documents.
No sale, transfer, assignment or other conveyance of this Trust
Certificate or any interest therein shall be made to any Person unless (x)
such Person is a "United States Person" as defined in Section 7701(a)(30)
of the Code and (y) the Services has determined that, after giving effect
to such sale, transfer, assignment or other conveyance, .there would be no
more that 90 Certificateholders or such transfer is otherwise permitted
pursuant to Section 3.12(b) of the Trust Agreement.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of Trustee, by manual signature, this
Trust Certificate shall not entitle the holder hereof to any benefit under
the Trust Agreement or the Pooling and Servicing Agreement or be valid for
any purpose.
This Trust Certificate shall be construed in accordance
with the laws of the State of Delaware, without reference to its conflict
of law provisions, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
4
<PAGE>
IN WITNESS WHEREOF, Trustee on behalf of Trust and not in
its individual capacity has caused this Trust Certificate to be duly
executed.
PROVIDENT EQUIPMENT LEASE
TRUST 1998-A
By: FIRST UNION TRUST
COMPANY, NATIONAL
ASSOCIATION
not in its individual
capacity, but
solely as Trustee
By:_______________________
Name:__________________
Title:_________________
5
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned
Trust Agreement.
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as Trustee
By:_________________________________
Authorized Officer
OR
By: NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
as Authenticating Agent
By:_________________________________
Authorized Officer
Date: September 30, 1998
6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE
_______________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
_______________________________________________________________________________
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
___________________________________________________________________ Attorney to
transfer said Trust Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
----------------------*
Dated: Signature Guaranteed:
______________________*
*NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Trust Certificate in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by a member firm of the New York Stock
Exchange or a commercial bank or trust company.
1
<PAGE>
EXHIBIT 10.2
==============================================================================
PROVIDENT EQUIPMENT LEASE TRUST 1998-A
POOLING AND SERVICING AGREEMENT
among
PROVIDENT EQUIPMENT LEASE TRUST 1998-A,
as Issuer,
and
PROVIDENT LEASE RECEIVABLES CORPORATION,
as Transferor,
and
INFORMATION LEASING CORPORATION,
as Servicer
Dated as of September 1, 1998
==============================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.1. Definitions....................................................1
SECTION 1.2. Other Definitional Provisions..................................1
ARTICLE II
Conveyance of Leases
SECTION 2.1. Conveyance of Leases...........................................2
ARTICLE III
The Leases
SECTION 3.1. Representations and Warranties of Transferor...................3
SECTION 3.2. Custody of Lease Files.........................................3
SECTION 3.3. Duties of Servicer as Custodian................................4
SECTION 3.4. Instructions; Authority To Act.................................4
SECTION 3.5. Custodian's Indemnification....................................5
SECTION 3.6. Effective Period and Termination...............................5
ARTICLE IV
Administration and Servicing of Leases
SECTION 4.1. Duties of Servicer.............................................5
SECTION 4.2. Collection and Allocation of Lease Payments.................. .6
SECTION 4.3. Administration of Leases.................................... ..6
SECTION 4.4. Lease Amendments and Modifications.............................8
SECTION 4.5. Non-Performing Leases........................................ .8
SECTION 4.6. Costs of Servicing; Servicing Fee; Administrative Expenses.. ..9
SECTION 4.7. Other Transactions......................................... ..10
SECTION 4.8. Monthly Status Reports; Servicing Reports.................... 10
SECTION 4.9. Annual Independent Public Accountant's Report............... .12
SECTION 4.10. Access to Certain Documentation and Information
Regarding Leases............................................ 12
SECTION 4.11. Appointment of Subservicer...................................13
ARTICLE V
Servicer Advances and Transferor's Obligations
SECTION 5.1. Servicer Advances.............................................13
<PAGE>
Page
SECTION 5.2. Transferor Repurchases; Other Payments........................13
SECTION 5.3. Payment Advices...............................................15
SECTION 5.4. Substitution..................................................15
SECTION 5.5. Procedure for Substitution....................................16
SECTION 5.6. Objection and Repurchase......................................17
SECTION 5.7. Transferor's and Servicer's Subsequent Obligations............17
ARTICLE VI
Distributions: Trust Accounts;
Statements to Certificateholders and Noteholders
SECTION 6.1. Establishment of Trust Accounts...............................18
SECTION 6.2. Collections...................................................20
SECTION 6.3. Distributions.................................................21
SECTION 6.4. The Reserve Account and the Residual Account..................24
SECTION 6.5. Payaheads
SECTION 6.6. Net Deposits..................................................26
ARTICLE VII
Transferor
SECTION 7.1. Representations of Transferor.................................26
SECTION 7.2. Corporate Existence...........................................27
SECTION 7.3. Liability of Transferor; Indemnities..........................28
SECTION 7.4. Merger or Consolidation of, or Assumption of the Obligations
of, Transferor...........................................29
SECTION 7.5. Limitation on Liability of Transferor and Others..............30
SECTION 7.6. Transferor May Own Certificates or Notes......................30
SECTION 7.7. Lessees......................................................30
ARTICLE VIII
Servicer
SECTION 8.1. Representations of Servicer...................................30
SECTION 8.2. Indemnities of Servicer.......................................32
SECTION 8.3. Merger or Consolidation of, or Assumption of the Obligations
of, Servicer.................................................34
SECTION 8.4. Limitation on Liability of Servicer and Others................34
SECTION 8.5. ILC Not to Resign as Servicer.................................35
SECTION 8.6. Servicer to Act as Manager....................................35
12312136.1 100298 1316C 98438757
ii
<PAGE>
Page
ARTICLE IX
Default
SECTION 9.1. Servicer Events of Default....................................35
SECTION 9.2. Termination...................................................37
SECTION 9.3. Trustee to Act; Appointment of Successor......................38
SECTION 9.4. Servicer to Cooperate.........................................39
SECTION 9.5. Notification to Noteholders and Certificateholders............39
SECTION 9.6. Waiver of Past Defaults.......................................39
ARTICLE X
Termination
SECTION 10.1. Optional Purchase of All Leases..............................40
ARTICLE XI
Miscellaneous Provisions
SECTION 11.1. Amendment....................................................40
SECTION 11.2. Security for Obligations.....................................41
SECTION 11.3. Further Assurances; Financing Statements.....................42
SECTION 11.5. Notices......................................................42
SECTION 11.6. Assignment...................................................42
SECTION 11.7. Limitations on Rights of Others..............................43
SECTION 11.8. Severability.................................................43
SECTION 11.9. Separate Counterparts........................................43
SECTION 11.10. Headings....................................................43
SECTION 11.11. Governing Law...............................................43
SECTION 11.12. Assignment to Indenture Trustee.............................43
SECTION 11.13. Nonpetition Covenants.......................................43
SECTION 11.14. Limitation of Liability of Trustee and Indenture Trustee....44
||
iii
<PAGE>
SCHEDULES AND EXHIBITS
SCHEDULE 1 Leases
EXHIBIT A Form of Servicer's Certificate
iv
<PAGE>
POOLING AND SERVICING AGREEMENT dated as of September 1, 1998
among PROVIDENT EQUIPMENT LEASE TRUST 1998-A (the "Issuer"), PROVIDENT
LEASE RECEIVABLES CORPORATION, a Delaware corporation (the "Transferor"),
and INFORMATION LEASING CORPORATION, an Ohio corporation (the "Servicer").
RECITALS
WHEREAS, Transferor desires to transfer all right, title and
interest of Transferor in, to and under the Leases purchased by Transferor
pursuant to the Contribution Agreement, dated as of the date hereof,
between Information Leasing Corporation ("ILC") and Transferor.
WHEREAS, Issuer is willing to accept the transfer of such Leases from
Transferor; and
WHEREAS, ILC is willing to service such Leases.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Definitions. Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to such terms in Appendix X
to the Indenture, dated as of the date hereof, between Provident Equipment
Lease Trust 1998-A and Norwest Bank Minnesota, National Association, as
amended, supplemented or otherwise modified from time to time (the
"Indenture").
SECTION 1.2. Other Definitional Provisions. The other interpretive
provisions specified in Appendix X to the Indenture shall apply to this
Agreement.
1
<PAGE>
ARTICLE II
Conveyance of Leases
SECTION 2.1. Conveyance of Leases. In consideration of Issuer's
delivery to or upon the order of Transferor on the Closing Date of the
Notes and the Certificates and the other amounts to be distributed from
time to time to Transferor in accordance with this Agreement, Transferor
does hereby transfer, assign, set over and otherwise convey to Issuer,
without recourse (subject to the obligations herein), all of its right,
title and interest in, to and under the following (collectively, the
"Transferred Assets"):
(a) the Leases listed in Schedule 1, as such Schedule 1
is amended or supplemented from time to time, including all
instruments, documents, books and other records relating thereto,
(b) all Lease Payments, Casualty Payments, Termination
Payments and other amounts not collected with respect thereto on
or prior to the Cut-Off Date (other than any prepayments of rent
required pursuant to the terms of any Lease at or before the
commencement of the Lease) and all Payaheads relating to payments
on the Leases due or becoming due after the Cut-Off Date, and all
Substitute Leases and all Lease Payments, Casualty Payments,
Termination Payments and other amounts not collected prior to the
effective date of their respective substitution (other than any
prepayments of rent required by the terms of any Substitute Lease
at or before the commencement of the Substitute Lease) and all
Payaheads relating to payments on the Substitute Leases due or
becoming due after the effective date of their respective
substitution,
(c) all rights of Transferor to or under any guarantees
of or collateral (including all rights of Transferor in any
security deposits) for the Lessee's obligations under any Lease
and all UCC financing statements relating to such collateral,
(d) all interests of Transferor in the Equipment at any
time subject to any Lease, including any security interest of
Transferor in the Equipment,
(e) any proceeds with respect to the Leases from claims
on insurance policies covering the Equipment or Lessees,
(f) all moneys from time to time on deposit in any of the
Trust Accounts, including all investments and income from the
investment of such moneys,
2
<PAGE>
(g) all rights of Transferor under the Contribution
Agreement, including the right of Transferor to cause ILC to
repurchase Leases from Transferor under the circumstances
described therein, and
(h) all proceeds of the foregoing, whether by voluntary
or involuntary conversion thereof.
ARTICLE III
The Leases
SECTION 3.1. Representations and Warranties of Transferor.
Transferor makes the following representations and warranties as to the
Leases on which Issuer is deemed to have relied in acquiring the Leases.
Such representations and warranties speak as of the execution and delivery
of this Agreement and as of the Closing Date, in the case of the Initial
Leases, and as of the applicable effective date of any substitution, in the
case of the Substitute Leases, but shall survive the transfer and
assignment of the Leases to Issuer and the pledge thereof to Indenture
Trustee pursuant to the Indenture.
(a) Title. No Lease has been transferred, assigned or pledged by
Transferor to any Person other than Issuer. Immediately prior to the
transfer and assignment herein contemplated, Transferor had good title to
each Lease, free and clear of all Liens and, immediately upon the transfer
thereof, Issuer shall have good title to each Lease, free and clear of all
Liens; and the transfer and assignment of the Leases to Issuer has been
perfected under the UCC.
(b) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give Issuer a first priority perfected
ownership interest in the Leases, and to give Indenture Trustee a first
priority perfected security interest therein, have been made.
SECTION 3.2. Custody of Lease Files. To assure uniform quality in
servicing the Leases and to reduce administrative costs, Issuer hereby
revocably appoints Servicer, and Servicer hereby accepts such appointment,
to act for the benefit of Issuer and Indenture Trustee as custodian of the
following documents or instruments (collectively, the "Lease Files"), which
are hereby constructively delivered to Indenture Trustee, as pledgee of
Issuer (or, in the case of the Substitute Leases, will as of the applicable
effective date of any substitution be constructively delivered to Indenture
Trustee, as pledgee of Issuer) with respect to each Lease:
(a) the original fully executed copy of the Lease;
3
<PAGE>
(b) a record or facsimile of the original credit
application fully executed by the Lessee;
(c) the original certificate of title or file stamped
copy of the UCC financing statement or such other documents that
Servicer shall keep on file, in accordance with its customary
procedures, evidencing the security interest of ILC in the
Equipment; and
(d) any and all other documents that Servicer or
Transferor shall keep on file, in accordance with its customary
procedures, relating to a Lease, a Lessee or any of the Equipment.
SECTION 3.3. Duties of Servicer as Custodian.
(a) Safekeeping. Servicer shall hold the Lease Files for the
benefit of Issuer and Indenture Trustee and maintain such accurate and
complete accounts, records and computer systems pertaining to each Lease
File as shall enable Issuer to comply with this Agreement. In performing
its duties as custodian, Servicer shall act in accordance with the
Servicing Standard set forth in Section 4.1. Servicer shall conduct, or
cause to be conducted, periodic audits of the Lease Files and the related
accounts, records and computer systems, in such a manner as shall enable
Issuer or Indenture Trustee to verify the accuracy of Servicer's record
keeping. Servicer shall promptly report to Issuer and Indenture Trustee any
failure on its part to hold the Lease Files and maintain its accounts,
records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be
deemed to require an initial review or any periodic review by Issuer,
Trustee or Indenture Trustee of the Lease Files.
(b) Maintenance of and Access to Records. Servicer shall maintain
each Lease File at its office in Cincinnati, Ohio, or at such other office
as shall be specified to Issuer and Indenture Trustee by written notice not
later than 60 days after any change in location. Servicer shall make
available for inspection by Transferor, Issuer and Indenture Trustee or
their respective duly authorized representatives, attorneys or auditors a
list of locations of the Lease Files and the related accounts, records and
computer systems maintained by Servicer at such times during normal
business hours as Transferor, Issuer or Indenture Trustee shall instruct.
Servicer on behalf of Noteholders shall mark conspicuously its master data
processing records evidencing each Lease with a legend, acceptable to
Indenture Trustee, evidencing that all right, title and interest in the
Leases has been granted to Indenture Trustee as provided in the Indenture.
SECTION 3.4. Instructions; Authority To Act. Servicer shall be
deemed to have received proper instructions with respect to the Lease Files
upon its receipt of written instructions signed by a Trust Officer of
Indenture Trustee.
4
<PAGE>
SECTION 3.5. Custodian's Indemnification. Servicer as custodian
shall indemnify the Trust, Trustee and Indenture Trustee (and each of their
officers, directors, employees and agents) for any and all liabilities,
obligations, losses, compensatory damages, payments, costs or expenses of
any kind whatsoever that may be imposed on, incurred by or asserted against
the Trust, Trustee or Indenture Trustee (or any of their officers,
directors and agents) as the result of any improper act or omission in any
way relating to the maintenance and custody by Servicer as custodian of the
Lease Files; provided, that Servicer shall not be liable: (a) to Trustee
for any portion of any such amount resulting from the willful misfeasance,
bad faith or gross negligence of Trustee and (b) to Indenture Trustee for
any portion of any such amount resulting from the willful misfeasance, bad
faith or negligence of Indenture Trustee.
SECTION 3.6. Effective Period and Termination. Servicer's
appointment as custodian shall become effective as of the Cut-Off Date and
shall continue in full force and effect until terminated pursuant to this
Section. If any Servicer shall resign as Servicer in accordance with this
Agreement or if all of the rights and obligations of any Servicer shall
have been terminated under Section 9.1, the appointment of such Servicer as
custodian may be terminated by (a) Indenture Trustee, (b) Noteholders of
Notes evidencing not less than 25% of the Outstanding Principal Amount of
the Notes, (d) Trustee or (e) Certificateholders evidencing not less than
25% of the Certificate Balance, in the same manner as Indenture Trustee or
such Holders may terminate the rights and obligations of Servicer under
Section 9.1. As soon as practicable after any termination of such
appointment, Servicer shall deliver the Lease Files to Indenture Trustee or
Indenture Trustee's agent at such place(s) as Indenture Trustee may
reasonably designate.
ARTICLE IV
Administration and Servicing of Leases
SECTION 4.1. Duties of Servicer. Servicer, for the benefit of
Issuer, and (to the extent provided herein and in the Indenture) Indenture
Trustee, shall manage, service, administer and make collections on the
Leases from time to time, all in accordance with (i) customary and prudent
servicing procedures for leases of a similar type, (ii) all applicable
laws, rules and regulations, and (iii) without limitation as to its
obligations under the preceding clauses (i) and (ii), no less a standard of
care than that which it applies to leases and equipment of a similar type
it services for its own account (collectively, the "Servicing Standard").
Servicer's duties shall include collection and posting of all payments,
responding to inquiries of Lessees on such Leases, investigating
delinquencies, sending invoices to Lessees, reporting tax information to
Lessees, accounting for collections and furnishing monthly and annual
statements to Trustee and Indenture Trustee with respect to distributions.
Subject to
5
<PAGE>
any contrary terms of this Agreement, Servicer shall follow its customary
standards, policies and procedures in performing its duties as Servicer.
Without limiting the generality of the foregoing, Servicer is authorized
and empowered to execute and deliver, on behalf of itself, Issuer, Trustee,
Indenture Trustee, Certificateholders, Noteholders or any of them, any and
all instruments of satisfaction or cancellation, or partial or full release
or discharge, and all other comparable instruments, with respect to such
Lease or the Equipment securing such Lease. If Servicer shall commence a
legal proceeding to enforce a Lease, Issuer shall thereupon be deemed to
have automatically assigned, solely for the purpose of collection, such
Lease to Servicer. If in any enforcement suit or legal proceeding it shall
be held that Servicer may not enforce a Lease on the ground that it shall
not be a real party in interest or a holder entitled to enforce such Lease,
Trustee shall, at Servicer's expense and direction, take steps to enforce
such Lease, including bringing suit in its name or the name of Issuer,
Indenture Trustee, Certificateholders or Noteholders. Trustee or Indenture
Trustee shall, upon the written request of Servicer, furnish Servicer with
any powers of attorney and other documents reasonably necessary or
appropriate to enable Servicer to carry out its servicing and
administrative duties hereunder.
SECTION 4.2. Collection and Allocation of Lease Payments. Servicer
shall provide the Lessees with appropriate invoices and such other notices
as may be required to ensure that all Lease Payments, Casualty Payments and
Termination Payments on or in respect of each Lease are remitted by the
Lessees to the address specified by Servicer. Servicer shall deposit such
payments to the Collection Account on the Required Deposit Date. Any other
amount received by Servicer from time to time from Transferor, any Lessee
or any other Person which is or is intended to be subject to the Lien of
the Indenture shall be held in trust by Servicer, as agent for Indenture
Trustee and promptly turned over to Indenture Trustee or deposited into the
Collection Account for application in accordance with the provisions of
this Agreement.
SECTION 4.3. Administration of Leases. (a) Servicer shall do, and
shall have full power and authority to do, subject only to the specific
requirements and prohibitions of this Agreement, any and all things in
connection with the servicing and administration of the Leases and the
interests in the Equipment which are consistent with the Servicing
Standard, but in performing its duties hereunder, Servicer will act on
behalf and for the benefit of Issuer (and to the extent provided herein)
Indenture Trustee, subject at all times to the provisions of the Indenture,
without regard to any relationship which Servicer or any Affiliate of
Servicer may otherwise have with a Lessee. Servicer shall at all times act
in accordance with the provisions of each Lease, and shall observe and
comply with all requirements of law applicable to it. Except as permitted
by the terms of any Lease following a default thereunder, Servicer shall
not take any action which would result in the interference with Lessee's
right to quiet enjoyment of the Equipment subject to the Lease during the
term thereof. Servicer shall exercise with respect to each item of
Equipment all
6
<PAGE>
rights and remedies it, Issuer or Indenture Trustee shall have against any
vendor of the Equipment, subject to the provisions of any Lease, and shall
deposit all amounts realized from such actions into the Collection Account.
(b) Without limiting the generality of the foregoing, Servicer
agrees to, in accordance with the Servicing Standard, (i) invoice each
Lessee monthly (except quarterly, semi-annually or annually in the case of
Leases which provide for quarterly, semi-annual or annual Lease Payments,
respectively) for all Lease Payments required to be paid by such Lessee,
(ii) maintain with respect to each Lease and each item of Equipment, and
with respect to each payment by each Lessee and compliance by each Lessee
with the provisions of each Lease, complete and accurate records in the
form and to the extent as required by the Servicing Standard (which records
shall be at least as complete and accurate as those maintained by Servicer
as of the date of this Agreement), and (iii) from time to time execute,
deliver and file (or cause the same to be done), and Servicer is hereby
authorized and empowered to execute, deliver, and file on behalf of Issuer
and Indenture Trustee, any and all tax returns with respect to sales, use,
personal property and other taxes (other than corporate income tax returns)
and any and all reports or licensing applications required to be filed in
any jurisdiction with respect to any Lease or any item of Equipment and any
and all required Financing Statements and assignments of Financing
Statements and such additional Financing Statements and continuation
statements with respect thereto as may from time to time be necessary
because of Lease substitutions, equipment replacements in accordance with
the provisions of any Lease or otherwise so that the ownership interest of
Issuer granted hereunder and the security interest contemplated by the
Indenture in favor of Indenture Trustee in each of the Leases, at all times
will be perfected by such filings with the appropriate UCC filing offices.
Transferor and Servicer agree to file Financing Statements on Form UCC-1
(or any similar form) to perfect the ownership interest of Issuer granted
hereunder and the security interest of Indenture Trustee in the Leases and
the Lease Payments, and to the extent provided herein, the Equipment.
(c) Servicer will maintain, or cause to be maintained, with
respect to the Leases and the Equipment liability insurance in amounts at
least as great as those described in Section 3.4(f) of the Contribution
Agreement. Each such casualty and liability policy (i) if maintained by
Servicer, shall name Issuer and Indenture Trustee as loss payees or
additional insureds and (ii) if maintained by Lessee, shall name Servicer
or Indenture Trustee as loss payee and additional insured; provided that
Servicer shall cause all such policies to name Indenture Trustee and Issuer
as loss payees and additional insureds if (A) ILC is no longer Servicer,
(B) an Event of Default shall have occurred and be continuing or (C) a
Servicer Event of Default shall have occurred and be continuing.
(d) On or prior to the Closing Date, Servicer will file the
Financing Statements and assignments of Financing Statements in accordance
with the Filing
7
<PAGE>
Requirements and thereafter will file such additional Financing Statements
and continuation statements and assignments with respect to the Leases as
may be necessary because of equipment replacements in accordance with the
provisions of any Lease, because of Lease substitutions pursuant to Section
5.4, or otherwise so that (i) the ownership interest contemplated by this
Agreement in favor of Issuer and the security interest contemplated by the
Indenture in favor of Indenture Trustee in each of the Leases will be
perfected by such filings with the appropriate UCC filing offices and (ii)
the security interest contemplated by the Indenture in favor of Indenture
Trustee in Equipment subject to Leases having an original cost of Equipment
of at least 75% of the original cost of Equipment of the Leases as of June
1 and December 1 of each year following the Closing Date and Equipment
relating to not less than 75% of the Booked Residual Value of such
Equipment as of June 1 and December 1 of each year following the Closing
Date will be perfected by such filings with the appropriate UCC filing
offices.
(e) Servicer shall pay the Third Party Amounts, if any, owing to
any Person in a timely fashion.
SECTION 4.4. Lease Amendments and Modifications. In performing its
obligations hereunder, Servicer may, acting in the name of Issuer and
without the necessity of obtaining the prior consent of Issuer, Indenture
Trustee, Trustee or any Noteholder or Certificateholder, enter into and
grant modifications, waivers and amendments to the terms of any Lease
except for modifications, waivers or amendments that (a) are inconsistent
with the Servicing Standard, (b) would reduce the amount or extend the time
for payment of any Lease Payment, Casualty Payment or Termination Payment
to be made under a Lease (other than to permit termination of a Lease which
does not otherwise provide for termination by requiring the payment, in
lieu of all future Lease Payments with respect to the Lease or Equipment
subject thereto, an amount which equals or exceeds the Lease Repurchase
Amount for such Lease as of such date) or Lessee's absolute and
unconditional obligation to make payment of the same, (c) would reduce or
adversely affect Lessee's obligation to maintain, service, insure and care
for the Equipment or would permit the alteration of any item of Equipment
in any way which could adversely affect its present or future value or (d)
otherwise, individually or in connection with all other adjustments and
modifications made pursuant to this sentence, could adversely affect the
interests of any of Issuer, Seller, Indenture Trustee, Trustee, Noteholders
or Certificateholders. Notwithstanding the foregoing, Servicer may, without
obtaining the prior written consent of Issuer, Indenture Trustee, Trustee
or any Noteholder or Certificateholder, enter into and grant modifications,
waivers or amendments in addition to those referred to in the preceding
sentence if such Lease is repurchased in accordance with Section 5.2.
SECTION 4.5. Non-Performing Leases. (a) Upon receipt of notice from
Issuer, Indenture Trustee or Trustee or any other Person, or if Servicer
otherwise
8
<PAGE>
determines that any Lease is a Non-Performing Lease, Servicer will take
such action as is appropriate and as is consistent with the Servicing
Standard, including such action as may be necessary to cause, or attempt to
cause, Lessee thereunder to cure such non-performance (if the same may be
cured) or to terminate or attempt to terminate such Lease and to recover,
or attempt to recover, all damages resulting from such default.
(b) Servicer will use its best efforts to sell or lease any
Equipment upon the expiration or early termination of a Lease or that is
subject to a Non-Performing Lease in a timely manner and upon the most
favorable terms and conditions available at the time.
(c) If Servicer is required to sell or lease any item of Equipment
pursuant to the provisions of this Section 4.5 at a time when Servicer has
other similar items of equipment available to it, Servicer will not favor
any such other item in its remarketing efforts.
(d) All amounts realized by Servicer in the performance of its
duties hereunder with respect to any Lease or Equipment remaining subject
to the Lien of the Indenture (net of Servicer's actual out-of-pocket
expenses reasonably incurred in such realization) shall be held in trust by
Servicer, for the benefit of Issuer and Indenture Trustee and deposited
into the Collection Account for application in accordance with the
provisions of the Indenture; provided that, if (i) Servicer has made any
Servicer Advances pursuant to Section 5.1 with respect to any Lease which
thereafter became a Non-Performing Lease, and (ii) Servicer has not
otherwise been fully reimbursed for such Servicer Advances, Servicer shall
reimburse itself for such Servicer Advances from any amounts recovered with
respect to such Non-Performing Lease before depositing any such amounts
into the Collection Account.
SECTION 4.6. Costs of Servicing; Servicing Fee; Administrative
Expenses. (a) All costs of servicing each Lease in the manner required by
this Article IV shall be borne by Servicer, but Servicer shall be entitled
to retain, out of any amounts actually recovered by Servicer in the
performance of its obligations under Section 4.5 with respect to any Lease
or the interests in the Equipment subject thereto, Servicer's actual
out-of-pocket expenses reasonably incurred in the course of such
performance with respect to such Lease or the interests in the Equipment.
(For all purposes of this Article IV Servicer's "out-of-pocket expenses"
means only those expenses incurred to third parties (e.g., reasonable fees
of outside counsel in a collection suit) and not salaries, operating costs,
overtime wages and other such "overhead" costs or expenses of Servicer.) In
addition, Servicer shall be entitled to receive from Issuer on each Payment
Date following the Closing Date a servicing fee (the "Servicing Fee") in
the amount described in paragraph (b) and the Supplemental Servicing Fee
described in paragraph (d).
9
<PAGE>
(b) The amount of the Servicing Fee which Servicer shall be
entitled to receive on each Payment Date following the Closing Date shall
accrue from Payment Date to Payment Date (or, in the case of the initial
Payment Date, from the Closing Date to the initial Payment Date) at the
rate of 0.75% per annum (calculated on the basis of a year of 360 days
comprised of twelve 30-day months) on a balance equal to the lesser of (i)
the sum of the aggregate Outstanding Principal Amount of the Notes and the
Certificate Balance, each calculated as of the preceding Payment Date,
after giving effect to all payments made on such Payment Date, and (ii) the
Discounted Present Value of the Performing Leases calculated as of the
related Determination Date.
(c) Servicer agrees to pay, out of the Servicing Fee, the
Management Fee, all Indenture Trustee's and Trustee's fees and expenses in
connection with the Notes and the Certificates (including the expenses
relating to the preparation and delivery of reports to Noteholders and
Certificateholders), all fees of accountants in connection with the Notes
and the Certificates and all documented expenses and allocated cost of
personnel reasonably incurred by Indenture Trustee in connection with a
transfer of servicing from Servicer to Indenture Trustee, as successor
Servicer.
(d) Servicer shall be permitted to collect and retain any late
fees, extension fees, prepayment charges and certain non-sufficient funds
charges and other administrative fees or similar charges (the "Supplemental
Servicing Fee") allowed by applicable law with respect to the Leases.
SECTION 4.7. Other Transactions. Nothing in this Agreement shall
preclude Transferor or Servicer from entering into other leases or other
financial transactions with any Lessee or selling or discounting any such
lease with any Person.
SECTION 4.8. Monthly Status Reports; Servicing Reports. (a) Within
five Business Days following each Payment Date, Servicer will send to
Indenture Trustee (copies of which Indenture Trustee shall send to each
Rating Agency and to each Noteholder and Certificateholder as provided in
Section 3.4 of the Indenture a written report, signed by one of Servicer's
financial officers, (i) identifying each Lease with respect to which any
Lease Payment was determined to be 30 or more days overdue as of the end of
the immediately preceding Due Period, the Discounted Present Value of such
Lease as of such Payment Date, the amount advanced by Servicer with respect
to such Lease pursuant to Section 4.1 since Servicer's previous monthly
report (or, in the case of the first such report, since the Cut-Off Date),
(ii) identifying each Lease with respect to which any Lease Payment was
determined to be 60 or more days overdue as of the end of the immediately
preceding Due Period, the Discounted Present Value of such Lease as of such
Payment Date, the amount advanced by Servicer with respect to such Lease
pursuant to Section 4.1 since Servicer's previous monthly report (or, in
the case of the first such report, since the
10
<PAGE>
Cut-Off Date), (iii) identifying each Lease with respect to which any Lease
Payment was determined to be 90 or more days overdue as of the end of the
immediately preceding Due Period, the Discounted Present Value of such
Lease as of such Payment Date, the amount advanced by Servicer with respect
to such Lease pursuant to Section 4.1 since Servicer's previous monthly
report (or, in the case of the first such report, since the Cut-Off Date),
(iv) identifying each Lease which became a Non-Performing Lease as of the
preceding Determination Date and specifying the Discounted Present Value of
such Lease as of such Determination Date (or, in the case of the first such
report, subsequent to the Cut-Off Date) and the aggregate Discounted
Present Value of all such Non-Performing Leases, (v) indicating the
aggregate amount recovered by Servicer subsequent to the preceding Payment
Date (or, in the case of the first Payment Date, subsequent to the Cut-Off
Date) and on or prior to such Payment Date with respect to Lease Payments
made on Leases referred to in clauses (i) and (ii) and Non-Performing Lease
Payments previously made by Transferor and Servicer (and the specific
amounts (net of expenses) so recovered with respect to any Non-Performing
Lease) and (vi) indicating the Residual Realizations, the Available
Residual Amount and the Utilized Residual Amount as of the related
Determination Date.
(b) On the Business Day following the Determination Date, Servicer
shall deliver to Indenture Trustee a certificate signed by an officer of
Servicer (a "Servicing Report") stating the date and in the form of Exhibit
A.
(c) The Servicing Report shall include, among other items, the
total amount of all Lease Payments, Casualty Payments, Termination
Payments, Non-Performing Lease Payments and Other Lease Payments received
by Servicer and deposited in the Collection Account prior to such
Determination Date and on or subsequent to the Determination Date preceding
such Determination Date (or, in the case of the first Determination Date,
on or subsequent to the Cut-Off Date). Such report shall indicate the
amount of all Lease Payments received by Servicer and deposited in the
Collection Account which are for any Due Period other than the Due Period
for such Determination Date. Such report shall also indicate (i) the
aggregate amount paid by Servicer on or subsequent to the most recent
Determination Date with respect to Non-Performing Leases pursuant to
Section 4.1, and (ii) the aggregate amount reimbursed to Servicer prior to
the most recent Determination Date and on or subsequent to the
Determination Date preceding such Determination Date (or, in the case of
the first Determination Date, on or subsequent to the Cut-Off Date) for
actual cash payments made by Servicer with respect to Non-Performing Leases
pursuant to Section 4.1. Such report shall also include a calculation of
each of the Three- Month Servicer Realization Percentage, the Three-Month
Delinquency Percentage, the Three-Month Default Percentage and the
Cumulative Net Loss Ratio, in each case, for the related Due Period, and,
if a Residual Event is then in effect, the amount to be deposited into the
Residual Account. Servicer hereby represents and warrants that such
calculations will be correct and accurate, and Servicer shall be fully
11
<PAGE>
responsible for, and shall reimburse and indemnify each Indemnified Party
for, any loss resulting from such Indemnified Party's reliance on any such
calculations which are not correct.
(d) If Servicer intends to withdraw any funds from the Collection
Account in accordance with Section 6.2(b) of this Agreement after the
Payment Date relating to the Determination Date for which a Servicing
Report is submitted, Servicer shall submit with such report a certificate
(i) setting forth the amounts to be withdrawn (on an item-by-item basis),
(ii) stating that none of such amounts are all or part of any Lease
Payment, Non-Performing Lease Payment, Casualty Payment or Termination
Payment, and (iii) identifying the lease or leases to which such amounts
relate.
(e) On or prior to June 30, 1999, Servicer shall certify in
writing to Indenture Trustee that computer and other systems used in
servicing the Leases have been or will be modified to operate in a manner
such that on and after January 1, 2000, (i) the Servicer can service the
Leases in accordance with the terms of this Agreement and (ii) Servicer can
operate its business in a comparable manner as it is operating on the date
hereof.
SECTION 4.9. Annual Independent Public Accountant's Report. The
Servicer shall cause Ernst & Young or another firm of nationally recognized
independent certified public accountants, who may also render other
services to the Servicer, to deliver to Indenture Trustee, Trustee and each
Rating Agency on or before April 30 of each year concerning the 12-month
period ended December 31 of the preceding year (or such other first period
since the date of this Agreement, beginning April 30, 1999, a report to the
effect that such firm has examined the assertion of Servicer's management
as to its compliance with the servicing requirements set forth in this
Agreement with respect to such 12-month (or other) period and that (1) such
examination was made in accordance with standards established by the
American Institute of Certified Public Accountants, and (2) except as
described in the report, management's assertion is fairly stated in all
material respects. The report will also indicate that the firm is
independent of the Servicer within the meaning of the Code of Professional
Ethics of the American Institute of Certified Public Accountants.
SECTION 4.10. Access to Certain Documentation and Information
Regarding Leases. Servicer shall provide to Trustee and Indenture Trustee
access to the Lease Files in such cases where Trustee or Indenture Trustee
shall be required by applicable statutes or regulations to review such
documentation. Access shall be afforded without charge, but only upon
reasonable request and during the normal business hours at the respective
offices of Servicer. Nothing in this Section shall affect the obligation of
Servicer to observe any applicable law prohibiting disclosure of
information regarding the Lessees, and the failure of Servicer to provide
access
12
<PAGE>
to information as a result of such obligation shall not constitute a breach
of this Section.
SECTION 4.11. Appointment of Subservicer. Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided, that the Rating Agency Condition shall have
been satisfied in connection therewith; and provided further, that Servicer
shall remain obligated and be liable to Issuer, Trustee, Indenture Trustee
Certificateholders and Noteholders for the servicing and administering of
the Leases in accordance with the provisions hereof without diminution of
such obligation and liability by virtue of the appointment of such
subservicer and to the same extent and under the same terms and conditions
as if Servicer alone were servicing and administering the Leases. The fees
and expenses of the subservicer shall be as agreed between Servicer and its
subservicer from time to time and none of Issuer, Trustee, Indenture
Trustee, Certificateholders or Noteholders shall have any responsibility
therefor.
ARTICLE V
Servicer Advances and Transferor's Obligations
SECTION 5.1. Servicer Advances. On each Determination Date,
Servicer (x) if ILC or one of its Affiliates, shall be required, and (y) if
any other Person, shall have the option, to advance and remit to Indenture
Trustee, in such manner as will ensure that Indenture Trustee will have
immediately available funds on account thereof by 11:00 a.m. New York City
time on the second Business Day prior to the next succeeding Payment Date,
an amount (a "Servicer Advance") equal to any Lease Payment due during the
prior Due Period but unpaid on or prior to the Record Date for such Due
Period with respect to any Lease; provided that Servicer shall not be
required to make any Servicer Advance if it determines that such Servicer
Advance may not be recoverable by it from recoveries on the applicable
Leases. In consideration of each Servicer Advance, Servicer will be
entitled to retain any late payment fees and proceeds from the sale or
lease of the Equipment recovered from Lessee with respect to any Lease
Payment covered by a Servicer Advance. In addition, Servicer will be
reimbursed for Servicer Advances from funds in the Collection Account in
accordance with Section 6.3 on the second Payment Date following the
Determination Date on which Servicer made such Servicer Advance.
SECTION 5.2. Transferor Repurchases; Other Payments. (a) If (i)
any of the representations or warranties made by Transferor in Section 3.1
or 7.1 of this Agreement or ILC's representations and warranties made
pursuant to Section 3.4 of the Contribution Agreement with respect to any
of the Leases or the Equipment subject thereto proves at any time to have
been inaccurate in any material respect as of the Closing Date or related
transfer date, as the case may be, (ii) any adjustment
13
<PAGE>
or modification is made to any Lease pursuant to the second sentence of
Section 4.4 or (iii) any Lease shall be terminated in whole or in part by a
Lessee, or any amounts due with respect to any Lease shall be reduced or
impaired, as a result of any action or inaction by Transferor or any claim
by any Lessee against Transferor and, in the case of clauses (i) and (iii),
the event or condition causing such inaccuracy, termination, reduction,
impairment or claim shall not have been cured or corrected within 30 days
after the earlier of the date on which Transferor is given notice thereof
by Issuer or Indenture Trustee or the date on which Transferor otherwise
first has notice thereof, then Transferor will repurchase such Lease and
the Equipment subject thereto by paying to Indenture Trustee, not later
than the third Business Day after the Determination Date (A) next following
the expiration of such 30-day period with respect to the events referenced
in clause (i) or (iii), and (B) next following the date of such event with
respect to events referenced in clause (ii), an amount equal to the Lease
Repurchase Amount, and simultaneously with such repurchase, Transferor
shall reimburse Servicer for all Servicer Advances made by Servicer
pursuant to Section 5.1 with respect to such Lease; provided, that the
obligation of Transferor to repurchase any Lease solely as a result of a
breach of ILC's representations and warranties pursuant to Section 3.4 of
the Contribution Agreement is subject to the receipt by Transferor of the
Lease Repurchase Amount from ILC; provided further, that if Transferor is
required to repurchase any Lease under clause (i) or (ii), Transferor may
instead substitute a Substitute Lease if such substitution is permitted
under Section 5.4. Without limiting the generality of the foregoing, it is
agreed and understood that for purposes of this Section 5.2, any inaccuracy
in any representation or warranty with respect to (i) the priority of the
Lien of the Indenture with respect to any Lease or (ii) the amount (if less
than represented) of the Lease Payments, Casualty Payments or Termination
Payment under any Lease shall be deemed to be material.
(b) By the Closing Date, Transferor agrees to obtain and provide
to Indenture Trustee UCC searches against it and ILC from the central and
county filing offices in Ohio confirming the absence of any UCC filings
against either Transferor or ILC with respect to the Leases (including the
right to receive all payments due or to become due thereunder) and the
Equipment, other than those naming Transferor as the purchaser of the
Leases or Indenture Trustee as secured party. If any searches delivered
pursuant to this Section 5.2(b) disclose UCC filings (which are not in the
process of being released pursuant to releases delivered on the Closing
Date) against ILC or Transferor with respect to Leases of Equipment the
original cost of which (i) is greater than 2% but less than 5% of the
original cost of Equipment under all the Leases, then Transferor shall
cause searches to be made in additional states within 30 days following
such disclosure so that the original cost of Equipment under Leases in
states where searches have been performed exceeds 75% of the aggregate
original cost of Equipment under all Leases and 75% of the Booked Residual
Value of Equipment or (ii) is equal to or greater than 5% of the original
cost of Equipment under all the Leases then Transferor shall cause searches
to be made in additional
14
<PAGE>
states within 30 days following such disclosure so that the original cost
of Equipment under Leases in states where such searches have been performed
equals 100% of the aggregate original cost of Equipment under all Leases.
Without limiting the provisions of Section 5.2(a) or this Section 5.2(b),
if Transferor fails to provide any such searches required by the preceding
sentences of this Section 5.2(b) within the required time period or any
search reveals the existence of any conflicting Liens (which are not
removed within 30 days of receipt of such search), Transferor shall be
required to repurchase not later than the third Business Day after the
Determination Date following the expiration of the time period during which
such search was to be obtained or such Lien released, as the case may be,
any Lease or Equipment in any such state for which such searches are not
provided or with respect to which conflicting Liens are found to exist at
the Lease Repurchase Amount for such Lease.
(c) Transferor's obligations under this Section 5.2 are the full
recourse obligations of Transferor and shall in no way be limited or
discharged by the application of any funds constituting part of the Trust
Estate.
(d) With respect to all Leases repurchased by Transferor pursuant
to this Agreement, Issuer shall transfer, assign, set over and otherwise
convey to Transferor, without recourse, representation or warranty, all of
Issuer's right, title and interest in, to and under such Leases, and all
security and documents relating thereto.
SECTION 5.3. Payment Advices. Each payment by Transferor or
Servicer to Indenture Trustee pursuant to any of the provisions of this
Agreement shall be accompanied by written advice containing sufficient
information to identify the Section of this Agreement pursuant to which
such payment is made, and the proper application pursuant to the provisions
of the Indenture of the amounts being paid.
SECTION 5.4. Substitution. (a) Subject to the satisfaction of the
requirements set forth in paragraph (b) and in lieu of repurchasing any
Lease if required pursuant to clause (i) or (ii) of Section 5.2, Transferor
will have the right (but not the obligation) at any time to substitute one
or more Eligible Leases and the Equipment subject thereto (each, a
"Substitute Lease") for such Lease (for purposes of this Section 5.4, a
"Predecessor Lease") and the Equipment subject thereto if:
(i) such Predecessor Lease became a Warranty Lease or was
adjusted pursuant to the second sentence of Section 4.4 during the
immediately preceding Due Period; and
(ii) the aggregate Discounted Present Value of the
Predecessor Leases shall not exceed 10% of the Discounted Present
Value of the Leases on the Cut-off Date.
15
<PAGE>
(b) Each transfer of Substitute Leases will be subject to the
satisfaction of the following conditions precedent:
(i) after giving effect to such substitutions, the
aggregate Booked Residual Value of such Leases must be not less
than 90% of the Booked Residual Value of the Leases substituted
since the Closing Date;
(ii) either the final payment on such Substitute Lease
must be on or prior to April, 2005 Payment Date or, if the final
payment on such Lease is due subsequent to April, 2005 Payment
Date, only scheduled payments due on or prior to such date may be
included in the Discounted Present Value of such Lease for the
purpose of making any calculation under this Agreement and the
other Basic Documents;
(iii) after giving effect to such substitutions, the
aggregate amount of Lease Payments through the term of the Leases
(including the Substitute Leases) will not be more than 5% less
than the aggregate scheduled Lease Payments of the Leases prior to
such substitution; and
(iv) after giving effect to such substitutions, the
Discounted Present Value of the Performing Leases must not be less
than the Discounted Present Value of the Performing Leases prior
to such substitution.
(c) Each substitution pursuant to this Section 5.4 shall include
the right to receive all amounts not collected under each Substitute Lease
prior to being substituted and any security deposits paid by the related
Lessee to Transferor in connection therewith (other than any prepayments of
rent required pursuant to the terms thereof at or before the commencement
of such Lease), all Payaheads relating to payments on such Substitute
Leases due or becoming due after the effective date of such substitution
and all other related assets referred to in Section 2.1.
SECTION 5.5. Procedure for Substitution. (a) By 11:00 a.m. on the
third Business Day following each Determination Date, Transferor shall give
written notice to Servicer of any substitution of Substitute Leases for
Predecessor Leases. By 11:00 a.m. on the fourth Business Day following each
Payment Date, Transferor shall deliver to Servicer and Indenture Trustee
and, to the extent not included in the Monthly Servicer Report, Indenture
Trustee shall promptly deliver to each Rating Agency (i) a supplement to
Schedule 1 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 amount of each
periodic Lease Payment and the Booked Residual Value under each such
Predecessor Lease and the amount of each periodic Lease Payment and the
Booked Residual Value under each Substitute Lease being transferred thereby
and (C) that all conditions precedent to
16
<PAGE>
such substitution have been satisfied and (iii) such additional information
concerning such Substitute Leases or Predecessor Leases as may be needed
for Servicer to prepare its monthly reports pursuant to Section 4.8 and to
otherwise carry out its duties as Servicer hereunder.
(b) Subject to the provisions of Section 5.6, the delivery of any
Officer's Certificate and supplement to Schedule 1 pursuant to Section
5.4(a) shall be conclusive evidence, without further act or deed, that
during the immediately preceding Due Period (i) Transferor assigned to
Issuer pursuant to Section 2.1 all of Transferor's right title and interest
in and to the Substitute Leases identified in such supplement and the
related rights described in Section 2.1, (ii) Transferor transferred to
Issuer, all of Transferor's right, title and interest in and to the
Equipment subject to such Substitute Leases (to the extent of Transferor's
interest in such Equipment, including Transferor's security interest in any
Equipment which is not owned by Transferor), and (iii) Issuer assigned and
transferred to Transferor, without representation or warranty, all of
Issuer's right, title and interest in and to the Predecessor Leases
identified in such Officer's Certificate and the Equipment subject thereto
(to the extent of Issuer's interest in such Equipment, including Issuer's
security interest in any Equipment which is not owned by Issuer).
Transferor shall promptly deliver to Indenture Trustee (or a custodian on
its behalf) the original executed counterpart of each Substitute Lease
assigned to Issuer in accordance with Section 5.4 and Issuer shall promptly
request Indenture Trustee to deliver to Transferor the original executed
counterpart of each Predecessor Lease for which substitution has been made
pursuant to Section 5.4.
SECTION 5.6. Objection and Repurchase. If any holder of the Notes
or the Certificates objects to any substitution of Leases within ten days
of receipt of Servicer's monthly report providing notice thereof pursuant
to Section 4.8, on the grounds either that any Substitute Lease is not an
Eligible Lease within the meaning of the definition thereof or that such
substitution is otherwise not permitted under the provisions of Section
5.4, Transferor 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 5.4. 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 Transferor shall be
required to repurchase such Lease in accordance with the provisions of
Section 5.2.
SECTION 5.7. Transferor's and Servicer's Subsequent Obligations.
Upon any substitution of Leases in accordance with the provisions of this
Article V, Transferor's and Servicer's obligations hereunder with respect
to the related Predecessor Lease shall cease, but Transferor and Servicer
shall each thereafter have
17
<PAGE>
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 VI
Distributions: Trust Accounts;
Statements to Certificateholders and Noteholders
SECTION 6.1. Establishment of Trust Accounts. (a)(i) Servicer, for
the benefit of Noteholders and Certificateholders, shall establish
and maintain in the name of Indenture Trustee an Eligible Account
(the "Collection Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the
benefit of Noteholders and Certificateholders.
(ii) Servicer, for the benefit of Noteholders, shall
establish and maintain in the name of Indenture Trustee an
Eligible Account (the "Note Distribution Account"), bearing a
designation clearly indicating that the funds deposited therein
are held for the benefit of Noteholders.
(iii) Servicer, for the benefit of Noteholders and
Certificateholders, shall establish and maintain in the name of
Indenture Trustee an Eligible Account (the "Reserve Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of Noteholders.
(iv) Servicer, for the benefit of Noteholders and
Certificateholders, shall establish and maintain in the name of
Indenture Trustee an Eligible Account (the "Residual Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of Noteholders and
Certificateholders.
(b) Funds on deposit in the Collection Account, the Note Distribution
Account, the Reserve Account and the Residual Account (collectively, the
"Trust Accounts") shall be invested or reinvested by Indenture Trustee in
Eligible Investments selected by and as directed in writing by Servicer
(which written direction may be in the form of standing instructions);
provided, if no written direction is received by Indenture Trustee, such
funds shall be invested in the investment described in clause (d) of the
definition of Eligible Investments; provided further, it is understood and
agreed that Indenture Trustee shall not be liable for the selection of, or
any loss arising from such investment in, Eligible Investments. All such
Eligible Investments (other than Investment Earnings attributable each day
to amounts on deposit in the Collection Account representing security
deposits of Lessees on deposit in the Collection Account ("Security Deposit
Earnings")) shall be held by Indenture Trustee for the benefit of
Noteholders and Certificateholders;
18
<PAGE>
provided, that on each Transfer Date, all Investment Earnings (other than
Security Deposit Earnings) on funds on deposit therein shall be deposited
into the Collection Account and shall be deemed to constitute a portion of
the Available Funds for the related Due Period and all Security Deposit
Earnings shall be paid to ILC. Funds on deposit in the Trust Accounts shall
be invested in Eligible Investments that will mature so that such funds
will be available at the close of business on the Transfer Date preceding
the following Payment Date. Funds deposited in a Trust Account on the
Transfer Date that precedes a Payment Date upon the maturity of any
Eligible Investments are not required to be invested overnight.
No investment of any amount held in any Trust Account shall mature
later than the Business Day immediately preceding the Payment Date which is
scheduled to occur immediately following the date of investment. All income
or other gains (net of losses) from the investment of moneys deposited in
the Trust Accounts shall be deposited by Indenture Trustee in such account
immediately upon receipt.
(c)(i) Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Trust
Accounts and in all proceeds thereof (including all income
thereon) and all such funds, investments, proceeds and income
shall be part of the Trust Estate. The Trust Accounts shall be
under the sole dominion and control of Indenture Trustee for the
benefit of Noteholders and Certificateholders. If, at any time,
any of the Trust Accounts ceases to be an Eligible Account,
Indenture Trustee (or Servicer on its behalf) shall within 10
Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency may consent) establish a new
Trust Account as an Eligible Account and shall transfer any cash
and/or any investments held in the no-longer Eligible Account to
such new Trust Account.
(ii) With respect to the Trust Account Property,
Indenture Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in
deposit accounts shall be held solely in Eligible
Accounts, subject to the last sentence of Section
6.1(c)(i); and each such Eligible Account shall be
subject to the exclusive custody and control of Indenture
Trustee, and Indenture Trustee shall have sole signature
authority with respect thereto;
(B) any Trust Account Property that constitutes
a Certificated Security shall be delivered to Indenture
Trustee in accordance with paragraph (a) of the
definition of "Delivery" and shall be held, pending
maturity or disposition, solely by Indenture Trustee;
19
<PAGE>
(C) any such Trust Account Property that
constitutes an Uncertificated Security (including any
investments in money market mutual funds, but excluding
any Federal Book Entry Security) shall be delivered to
Indenture Trustee in accordance with paragraph (a) of the
definition of "Delivery" and shall be maintained, pending
maturity or disposition, through continued registration
of Indenture Trustee's (or its nominee's) ownership of
such security; and
(D) with respect to any Trust Account Property
that constitutes a Federal Book Entry Security, Indenture
Trustee shall maintain and obtain Control over such
property.
(iii) Servicer shall have the power, revocable by
Indenture Trustee or by Trustee, with the consent of Indenture
Trustee, to instruct Indenture Trustee to make withdrawals and
payments from the Trust Accounts for the purpose of permitting
Servicer or Trustee to carry out its respective duties hereunder
or permitting Indenture Trustee to carry out its duties under the
Indenture.
(d) All Trust Accounts will initially be established at Indenture
Trustee.
SECTION 6.2. Collections. (a) On or before the Closing Date,
Servicer shall designate an address for the receipt directly from Lessees
of all Lease Payments, Casualty Payments and Termination Payments on or in
respect of each Lease. Servicer shall, on each Required Deposit Date,
deposit any payment in the Collection Account. All Lease Payments, Casualty
Payments, Termination Payments and other payments relating to a Lease
received at such designated address and so deposited in the Collection
Account shall constitute part of the Trust Estate. Any Other Lease Payments
from time to time received at such designated address or otherwise received
by Servicer or deposited in the Collection Account shall not constitute
part of Trust Estate.
(b) Indenture Trustee shall from time to time, in accordance with
instructions of Servicer withdraw from the Collection Account and pay as
instructed by Servicer any amounts in the Collection Account which Servicer
advises Indenture Trustee are Other Lease Payments or otherwise not part of
the Trust Estate. Prior to such payment, Indenture Trustee shall have
rights to and an interest in such amounts to the extent (but only to the
extent) it is determined that such amounts actually constitute Transaction
Payment Amounts.
(c) Not later than the Required Deposit Date, Servicer shall
deposit the following funds, as received, into the Collection Account:
(i) Lease Payments (net of any Third Party Amounts);
20
<PAGE>
(ii) Residual Realizations up to the Residual Amount Cap;
(iii) recoveries from Non-Performing Leases (net of
amounts retained by Servicer in accordance with the Pooling and
Servicing Agreement);
(iv) proceeds from repurchases by Transferor or Servicer
of Leases if Transferor has not substituted Substitute Leases for
such Leases;
(v) proceeds from investment of funds in the Trust
Accounts (other than Security Deposit Earnings);
(vi) Casualty Payments;
(vii) Servicer Advances;
(viii) Termination Payments; and
(ix) payments from Servicer to effect a redemption
pursuant to Section 2.1(b) of the Indenture.
SECTION 6.3. Distributions. (a) On each Determination Date, Servicer
shall calculate all amounts required to determine the amounts to be deposited
in the Note Distribution Account, the Certificate Distribution Account, the
Reserve Account and the Residual Account.
(b) On each Payment Date other than a Payment Date referred to in
paragraph (c), Servicer shall instruct Indenture Trustee (based on the
information contained in the Servicer's Report related to such Payment Date
delivered pursuant to Section 4.8(b)) to make the following deposits and
distributions for receipt by Servicer or deposit into the applicable Trust
Account or Certificate Distribution Account, as applicable, by 10:00 a.m.
(New York time), to the extent of the Available Funds on deposit in the
Collection Account, in the following order of priority:
(i) to Servicer, the Servicing Fee and all unpaid
Servicing Fees owed to such Servicer from prior Due Periods;
(ii) to Servicer, to reimburse unreimbursed Servicer
Advances in respect of a prior Payment Date;
(iii) to the Note Distribution Account, concurrently: (A)
to make Interest Payments on the Class A-1 Notes; (B) to make
Interest Payments on the Class A-2 Notes; (C) to make Interest
Payments on the Class A-3 Notes; and (D) to make Interest Payments
on the Class A-4 Notes;
21
<PAGE>
(iv) to the Note Distribution Account, to make Interest
Payments on the Class B Notes;
(v) to the Certificate Distribution Account, to make
Interest Payments on the Certificates;
(vi) to the Note Distribution Account, to make the Class
A Principal Payment (i) to the Class A-1 Noteholders only, until
the Outstanding Principal Amount of the Class A-1 Notes is reduced
to zero, then (ii) to the Class A-2 Noteholders only, until the
Outstanding Principal Amount of the Class A-2 Notes is reduced to
zero, then (iii) to the Class A-3 Noteholders only, until the
Outstanding Principal Amount of the Class A-3 Notes is reduced to
zero; then (iv) to the Class A-4 Noteholders only, until the
Outstanding Principal Amount of the Class A-4 Notes is reduced to
zero;
(vii) to the Note Distribution Account, to pay the Class
B Principal Payment to the Class B Noteholders;
(viii) to the Certificate Distribution Account, to pay
the Certificate Principal Payment to Certificateholders;
(ix) to the Note Distribution Account, to pay the
Additional Principal, if any, as an additional reduction of
principal, first to the Class A Noteholders receiving the Class A
Principal Payment as provided in clause (vi) until the Outstanding
Principal Amount of the Class A Notes has been reduced to zero,
second to the Class B Noteholders as an additional reduction of
principal until the Outstanding Principal Amount of the Class B
Notes has been reduced to zero and, thereafter to the Certificate
Distribution Account, until the Certificate Balance been reduced
to zero;
(x) to make a deposit into the Reserve Account in an
amount equal to the excess of the Required Reserve Amount over the
Available Reserve Amount;
(xi) during such time as a Residual Event has occurred
and is continuing, to make a deposit into the Residual Account in
an amount equal to the balance of the remaining Residual
Realizations on deposit in the Collection Account and included in
Available Funds up to the Residual Amount Cap after giving effect
to the allocations in clauses (i) through (x) above on such
Payment Date; and
(xii) to Transferor, the balance, if any.
22
<PAGE>
Notwithstanding the foregoing, Indenture Trustee shall retain in
the Collection Account an amount equal to all Payaheads (except as
contemplated by Section 6.6), and all Casualty Payments and Termination
Payments received by Indenture Trustee after the Record Date for such
Payment Date and shall not distribute any such amounts on such Payment
Date. Additionally, Indenture Trustee shall, prior to remitting amounts to
Servicer pursuant to clause (b)(i) or (c)(ii) or (v), pay over to itself
(from amounts allocated pursuant to such clauses, as applicable) all
Indenture Trustee fees and expenses then due and owing to Indenture Trustee
pursuant to the Basic Documents. If at any time any amount or portion
thereof previously distributed pursuant to this Section 5.5(a) shall have
been recovered, or shall be subject to recovery, in any proceeding with
respect to Issuer or otherwise, then for purposes of determining future
distributions pursuant to this Section 5.5(a) such amount or portion
thereof shall be deemed to have not been previously so distributed.
(c) On any Payment Date on and after the occurrence and
continuation of an Event of Default and acceleration of the Notes, Servicer
shall instruct Indenture Trustee (based on the information contained in the
Servicer's Report related to such Payment Date delivered pursuant to
Section 4.8) to make the following deposits and distributions for receipt
by Servicer or other applicable Persons or deposit into the Trust Accounts
or Certificate Distribution Account, as applicable, by 10:00 a.m. (New York
time), to the extent of the Available Funds on deposit in the Collection
Account, in the following order of priority:
(i) to the appropriate Person, for the payment of all
costs and expenses of collection incurred by Indenture Trustee and
the Noteholders (including the reasonable fees and expenses of any
counsel to Indenture Trustee and the Noteholders);
(ii) to Servicer, if the person then acting as Servicer
under the Pooling and Servicing Agreement is not ILC or an
Affiliate of ILC, for the payment of all Servicer's Fees then due
to such person;
(iii) to the Note Distribution Account or Certificate
Distribution Account, as applicable; first, pro-rata to the
payment of all accrued and unpaid interest on the Outstanding
Class A-1 Principal Amount, Outstanding Class A-2 Principal
Amount, Outstanding Class A-3 Principal Amount and Outstanding
Class A-4 Principal Amount, respectively, to the date of payment
thereof, including (to the extent permitted by applicable law)
interest on any overdue installment of interest and principal from
the maturity of such installment to the date of payment thereof at
the rate per annum equal to the Class A-1 Note Interest Rate,
Class A-2 Note Interest Rate, Class A-3 Note Interest Rate and
Class A-4 Note Interest Rate, respectively, second, to the payment
of all accrued and unpaid interest on the Outstanding Class B
23
<PAGE>
Principal Amount to the date of payment thereof, including (to the
extent permitted by applicable law) interest on any overdue
installment of interest and principal from the maturity of such
installment to the date of payment thereof at the rate per annum
equal to the Class B Note Interest Rate, third, to the payment of
all accrued and unpaid interest on the Certificate Balance to the
date of payment thereof, including (to the extent permitted by
applicable law) interest on any overdue installment of interest
and principal from the maturity of such installment to the date of
payment thereof at the rate per annum equal to the Certificate
Rate, fourth, to the payment of the Outstanding Class A-1
Principal Amount, fifth, pro rata to the payment of the
Outstanding Class A-2 Principal Amount, Outstanding Class A-3
Principal Amount and Outstanding Class A-4 Principal Amount sixth,
to the payment of the Outstanding Class B Principal Amount and
seventh, to the payment of the Certificate Balance; provided, that
the Noteholders may allocate such payments for interest, principal
and premium at their own discretion, except that no such
allocation shall affect the allocation of such amounts or future
payments received by any other Noteholder;
(iv) to Indenture Trustee, for the payment of amounts
then due Indenture Trustee hereunder and the Trustee under the
Trust Agreement;
(v) to Servicer, if the person then acting as Servicer is
ILC or an Affiliate of ILC, to the payment of all Servicer's Fees
then due to such Person; and
(vi) to the payment of the remainder, if any, to
Transferor or any other Person legally entitled thereto.
(d) The total amount of Residual Realizations which are required
to be deposited into the Collection Account on any day, is an amount up to
the Available Residual Amount on such date.
SECTION 6.4. The Reserve Account and the Residual Account. (a) On
each Payment Date, Servicer shall instruct Indenture Trustee to transfer
(i) to the Reserve Account from the Collection Account such amounts as
shall be required by Section 6.3(b)(x) and (ii) to the Residual Account
from the Collection Account such amounts as shall be required by Section
6.3(b)(xi).
(b) If by 12:00 noon, New York City time, on the third Business
Day preceding any Payment Date, the amount of collected funds on deposit in
the Collection Account available for distribution under Section 6.3 is
insufficient to permit on such Payment Date all distributions required by
Sections 6.3(b)(i) through 6.3(b)(ix) or Section 6.3(c)(iii) (such
payments, the "Required Payments" and such shortfall, an "Available Funds
Shortfall"), then, to the extent of the Available
24
<PAGE>
Reserve Amount on deposit in the Reserve Account, Servicer shall instruct
Indenture Trustee to transfer, not later than the end of such Business Day,
from the Reserve Account to the Collection Account such amount as shall be
necessary to make on such Payment Date all Required Payments. In addition,
in the event that the Available Funds Shortfall is greater than the
Available Reserve Amount, then, Indenture Trustee shall transfer, not later
than the end of such Business Day, from the Residual Account to the
Collection Account, an amount equal to the lesser of (i) the remaining
Available Funds Shortfall and (ii) the amount, if any, on deposit in the
Residual Account and available therefore.
(c) If after giving effect to all the disbursements required to be
made on any Payment Date, the Available Reserve Amount exceeds the Required
Reserve Amount, Servicer shall instruct Indenture Trustee to transfer, not
later than the end of business on such Payment Date, an amount equal to
such excess to Transferor.
(d) If there are funds on deposit in the Residual Account,
Servicer shall instruct Indenture Trustee to transfer, not later than the
close of Business on such Payment Date after making required withdrawals,
if any, on such Payment Date pursuant to Section 6.3(b) or (c), an amount
equal to the amount on deposit in the Residual Account to the Reserve
Account to the extent that the amount on deposit in the Reserve Account is
less than the Required Reserve Amount and thereafter, to Transferor. Funds
on deposit in the Residual Account shall only be available for allocation
pursuant to Section 6.3(b) or (c) during such time as a Residual Event has
occurred and is continuing.
(e) Upon termination of this Indenture, any balance remaining in
the Reserve Account and the Residual Account, after all obligations to
Noteholders and Certificateholders have been fully satisfied, shall be paid
to reimburse Indenture Trustee for any amounts owing to it arising from the
performance of its obligations under the Indenture and, then, to
Transferor.
SECTION 6.5. Payaheads. Payaheads received with respect to any
Lease shall be retained in the Collection Account until: (i) with respect
to each Lease for which the payments made by or on behalf of the Lessee for
the related Due Period are less than the scheduled payment for the related
Due Period, the amount of prior Payaheads, if any, made with respect to
such Lease which, when added to the amount of such payments, is equal to
the amount of such scheduled payment, shall be treated as a part of such
scheduled payment; and (ii) with respect to each Lease for which
prepayments insufficient to prepay the Lease in full have been made by or
on behalf of the Lessee for the related Due Period, the amount of prior
Payaheads, if any, made with respect to such Lease which, when added to the
amount of such prepayments, is equal to an amount sufficient to prepay such
Lease in full, shall be treated as part of the Termination Payment for such
Lease; and (iii) the amount of all Payaheads,
25
<PAGE>
if any, made with respect to any Lease repurchased by Transferor shall be
returned to Transferor after such repurchase.
SECTION 6.6. Net Deposits. As an administrative convenience,
unless Servicer is required to remit collections daily, Servicer will be
permitted to make the deposit of collections net of distributions, if any,
to be made to Servicer with respect to any Due Period. Servicer, however,
will account to Trustee, Indenture Trustee, Noteholders and
Certificateholders as if all deposits, distributions and transfers were
made individually.
ARTICLE VII
Transferor
SECTION 7.1. Representations of Transferor. Transferor makes the
following representations on which Issuer is deemed to have relied in
acquiring the Leases. The representations speak as of the execution and
delivery of this Agreement and shall survive the transfer of the Leases to
Issuer and the pledge thereof to Indenture Trustee pursuant to the
Indenture.
(a) Organization and Good Standing. Transferor is duly
organized and validly existing as a corporation in good standing
under the laws of the State of Delaware, with the corporate power
and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently
conducted (except where the failure to have such licenses and
permits would not have a material adverse effect on the Trust
Estate or the business or condition (financial or otherwise) of
Transferor or impair the enforceability of any Lease), and had at
all relevant times, and has, the corporate power, authority and
legal right to acquire, own and transfer the Leases.
(b) Due Qualification. Transferor is duly qualified to do
business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the
conduct of its business shall require such qualifications (except
where the failure to have such licenses and permits would not have
a material adverse effect on the Trust Estate or the business or
condition (financial or otherwise) of Transferor or impair the
enforceability of any Lease).
(c) Power and Authority. Transferor has the power and
authority to execute and deliver this Agreement and to carry out
its terms; Transferor has full power and authority to transfer and
assign the property to be transferred
26
<PAGE>
and assigned to and deposited with Issuer and has duly authorized
such transfer and assignment to Issuer by all necessary corporate
action; and the execution, delivery and performance of this
Agreement have been duly authorized by Transferor by all necessary
corporate action.
(d) Binding Obligation. This Agreement and each other
Basic Document to which Transferor is a party constitute a legal,
valid and binding obligation of Transferor enforceable in
accordance with their terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents to
which Transferor is a party and the fulfillment of the terms
hereof and thereof do not conflict with, result in any breach of
any of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, the certificate of
incorporation or by-laws of Transferor, or any indenture,
agreement or other instrument to which Transferor is a party or by
which it shall be bound; or result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of
any such indenture, agreement or other instrument (other than the
Liens contemplated by Basic Documents); or violate any law or any
order, rule or regulation applicable to Transferor of any court or
of any Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over
Transferor or its properties.
(f) No Proceedings. There are no proceedings or
investigations pending or, to Transferor's best knowledge (after
due inquiry), threatened, before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over Transferor or its properties: (i) asserting the
invalidity of this Agreement, the Indenture or any of the other
Basic Documents, the Notes or the Certificates, (ii) seeking to
prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this
Agreement, the Indenture or any of the other Basic Documents,
(iii) seeking any determination or ruling that involve the
possibility of materially and adversely affecting the performance
by Transferor of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other
Basic Documents, the Notes or the Certificates or (iv) that might
adversely affect the Federal or state income tax attributes of the
Notes or the Certificates.
SECTION 7.2. Corporate Existence. (a) During the term of this
Agreement, Transferor will keep in full force and effect 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 in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this
27
<PAGE>
Agreement, the Basic Documents and each other instrument or agreement
necessary or appropriate to the proper administration of this Agreement and
the transactions contemplated hereby.
(b) During the term of this Agreement, Transferor shall observe
the applicable legal requirements for the recognition of Transferor as a
legal entity separate and apart from ILC and its other Affiliates,
including as follows:
(i) Transferor shall maintain corporate records and books
of account separate from those of its Affiliates;
(ii) except as otherwise provided in this Agreement and
similar arrangements relating to other securitizations, Transferor
shall not commingle its assets and funds with those of its
Affiliates;
(iii) Transferor shall hold such appropriate meetings or
obtain such appropriate consents of its Board of Directors as are
necessary to authorize all Transferor's corporate actions required
by law to be authorized by the Board of Directors, shall keep
minutes of such meetings and of meetings of its stockholder(s) and
observe all other customary corporate formalities (and any
successor Transferor not a corporation shall observe similar
procedures in accordance with its governing documents and
applicable law);
(iv) Transferor shall at all times hold itself out to the
public under Transferor's own name as a legal entity separate and
distinct from its Affiliates; and
(v) all transactions and dealings between Transferor and
its Affiliates will be conducted on an arm's-length basis.
SECTION 7.3. Liability of Transferor; Indemnities. (a) Transferor
shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by Transferor under this Agreement.
(b) Transferor shall indemnify, defend and hold harmless Issuer,
Trustee and Indenture Trustee (and their officers, directors, employees and
agents) from and against any taxes that may at any time be asserted against
any of them with respect to the transfer of the Leases to Issuer or the
issuance and original sale of the Certificates and the Notes, including any
sales, gross receipts, general corporation, tangible personal property,
privilege or license taxes (but, in the case of Issuer, not including any
taxes asserted with respect to ownership of the Leases or Federal or other
income taxes arising out of the transactions contemplated by this
Agreement) and costs and expenses in defending against the same.
28
<PAGE>
(c) Transferor shall indemnify, defend and hold harmless Issuer,
Trustee and Indenture Trustee (and their officers, directors, employees and
agents) from and against any loss, liability or expense (including costs of
defense and legal fees and expenses) incurred or suffered by reason of: (i)
Transferor's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement and (ii)
Transferor's or Issuer's violation of Federal or State securities laws in
connection with the offering and sale of the Notes and the Certificates.
Indemnification under this Section shall survive the resignation
or removal of Trustee or Indenture Trustee or the termination of this
Agreement and the Indenture and shall include reasonable fees and expenses
of counsel and expenses of litigation. If Transferor shall have made any
indemnity payments pursuant to this Section and the Person to or on behalf
of whom such payments are made thereafter shall collect any of such amounts
from others, such Person shall promptly repay such amounts to Transferor,
without interest.
SECTION 7.4. Merger or Consolidation of, or Assumption of the
Obligations of, Transferor. Any Person: (a) into which Transferor may be
merged or consolidated, (b) that may result from any merger or
consolidation to which Transferor shall be a party or (c) that may succeed
to the properties and assets of Transferor substantially as a whole, which
Person (in any of the foregoing cases) executes an agreement of assumption
to perform every obligation of Transferor under this Agreement (or is
deemed by law to have assumed such obligations), shall be the successor to
Transferor hereunder without the execution or filing of any document or any
further act by any of the parties to this Agreement; provided, that: (i)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 7.1 shall have been breached and no
Servicer Event of Default, and no event that, after notice or lapse of
time, or both, would become a Servicer Event of Default shall have occurred
and be continuing, (ii) Transferor shall have delivered to Trustee and
Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if
any, provided for in this Agreement relating to such transaction have been
complied with, (iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction and (iv) Transferor shall have delivered
to Trustee and Indenture Trustee an Opinion of Counsel either: (A) stating
that, in the opinion of such counsel, all financing statements,
continuation statements and amendments thereto have been executed and filed
that are necessary fully to preserve and protect the interest of Trustee
and Indenture Trustee, respectively, in the Leases and reciting the details
of such filings, or (B) stating that, in the opinion of such counsel, no
such action shall be necessary to preserve and protect such interests.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of
29
<PAGE>
assumption and compliance with clauses (i), (ii), (iii) and (iv) shall be
conditions to the consummation of the transactions referred to in clauses
(a), (b) or (c).
SECTION 7.5. Limitation on Liability of Transferor and Others.
Transferor and any director, officer, employee or agent of Transferor may
rely in good faith on the advice of counsel or on any document of any kind
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. Transferor shall not be under any obligation to
appear in, prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion
may involve it in any expense or liability.
SECTION 7.6. Transferor May Own Certificates or Notes. Transferor
and any Affiliate thereof may in its individual or any other capacity
become the owner or pledgee of the Notes with the same rights as it would
have if it were not Transferor or an Affiliate thereof, except as expressly
provided herein or in any other Basic Document.
SECTION 7.7. Lessees. Issuer acknowledges and agrees that so long
as no default shall have occurred under any Lease that (a) the related
Lessee shall not be named as a defendant, in any foreclosure or other
proceeding which may be instituted by Issuer relating to such Lease or
related Equipment and (b) Issuer shall not interfere with the right of the
related Lessee to have quiet and peaceful use of the related Equipment
during the term of the Lease.
ARTICLE VIII
Servicer
SECTION 8.1. Representations of Servicer. Servicer makes the
following representations on which Issuer is deemed to have relied in
acquiring the Leases. The representations speak as of the execution and
delivery of the Agreement and as of the Closing Date, in the case of the
Leases, and as of the applicable effective date of any substitution, in the
case of the Substitute Leases, and shall survive the transfer of the Leases
to Issuer and the pledge thereof to Indenture Trustee pursuant to the
Indenture.
(a) Organization and Good Standing. Servicer is duly
organized and validly existing as a corporation in good standing
under the laws of the state of its incorporation, with the
corporate power and authority to own its properties and to conduct
its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times,
and has, the power, authority and legal right to acquire, own,
sell and service the Leases and to hold the Lease Files as
custodian.
30
<PAGE>
(b) Due Qualification. 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 in which the ownership or lease of property or the
conduct of its business (including the servicing of the Leases as
required by this Agreement) shall require such qualifications.
(c) Power and Authority. Servicer has the corporate power
and authority to execute and deliver this Agreement and to carry
out its terms; and the execution, delivery and performance of this
Agreement have been duly authorized by Servicer by all necessary
corporate action.
(d) Binding Obligation. This Agreement constitutes a
legal, valid and binding obligation of Servicer enforceable
against Servicer in accordance with its terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms
hereof shall not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or
lapse of time) a default under, the articles of incorporation or
by-laws of Servicer, or any indenture, agreement or other
instrument to which Servicer is a party or by which it shall be
bound; or result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than this Agreement); or
violate any law or, to the best of Servicer's knowledge, any
order, rule or regulation applicable to Servicer of any court or
of any Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over
Servicer or its properties.
(f) No Proceedings. There are no proceedings or
investigations pending, or, to Servicer's best knowledge,
threatened, before any court, regulatory body, administrative
agency or other governmental instrumentality having jurisdiction
over Servicer or its properties: (i) asserting the invalidity of
this Agreement, the Indenture, any of the other Basic Documents,
the Notes or the Certificates, (ii) seeking to prevent the
issuance of the Notes or the Certificates or the consummation of
any of the transactions contemplated by this Agreement, the
Indenture or any of the other Basic Documents, (iii) seeking any
determination or ruling that could reasonably be expected to
materially and adversely affect the performance by Servicer of its
obligations under, or the validity or enforceability of, this
Agreement, the Indenture, any of the other Basic Documents, the
Notes or the Certificates or (iv) relating to Servicer and that
might adversely affect the Federal or state income tax attributes
of the Notes or the Certificates.
31
<PAGE>
(g) No Insolvent Lessees. As of the Cut-Off Date, no
Lessee is shown on the Lease Files as the subject of a bankruptcy
proceeding and, as of the effective date of any substitution of a
Substitute Lease, the related Lessee is not the subject of a
bankruptcy proceeding.
SECTION 8.2. Indemnities of Servicer. Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by Servicer under this Agreement.
(a) Servicer shall defend, indemnify and hold harmless
Issuer, Trustee, Indenture Trustee, Noteholders,
Certificateholders and Transferor (and any of their officers,
directors, employees and agents) from and against any and all
costs, expenses, losses, damages, claims and liabilities, arising
out of or resulting from:
(i) the use, ownership or operation by Servicer
or any Affiliate thereof of any of the Equipment;
(ii) any taxes that may at any time be asserted
against any such Person with respect to the transactions
contemplated herein, including any sales, gross receipts,
general corporation, tangible personal property,
privilege or license taxes (but, in the case of Issuer,
not including any taxes (other than any Ohio taxes on
pass-through entities or on investors in such pass
through entities) asserted with respect to, and as of the
date of, the transfer of the Leases to Issuer or the
issuance and original sale of the Certificates, the
Notes, or asserted with respect to ownership of the
Leases, or Federal or other income taxes arising out of
distributions on the Certificates or the Notes) and costs
and expenses in defending against the same; and
(iii) the negligence, willful misfeasance or bad
faith of Servicer in the performance of its duties under
this Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement.
(b) Servicer shall indemnify, defend and hold harmless
Trustee and Indenture Trustee (and their respective officers,
directors, employees and agents) from and against all costs,
expenses, losses, claims, damages and liabilities arising out of
or incurred in connection with the acceptance or performance of
the trusts and duties herein and, in the case of Trustee, in the
Trust Agreement contained, and, in the case of Indenture Trustee,
in the Indenture contained, except to the extent that such cost,
expense, loss, claim, damage or liability:
32
<PAGE>
(i) shall be due to the willful misfeasance, bad
faith or negligence (except for errors in judgment) of
Trustee or Indenture Trustee as applicable; or
(ii) shall arise from the breach by Trustee of
any of its representations or warranties set forth in
Section 7.3 of the Trust Agreement.
(c) Servicer shall pay any and all taxes levied or
assessed upon all or any part of the Trust Estate.
(d) Servicer shall pay Indenture Trustee and Trustee from
time to time reasonable compensation for all services rendered by
Indenture Trustee under the Indenture or by Trustee under the
Trust Agreement (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust).
(e) Servicer shall, except as otherwise expressly
provided in the Indenture or the Trust Agreement, reimburse either
Indenture Trustee or Trustee, respectively, upon its request for
all reasonable expenses, disbursements and advances incurred or
made in accordance with the Indenture or the Trust Agreement,
respectively, (including the reasonable compensation, expenses and
disbursements of its agents and either in-house counsel or outside
counsel, but not both), except any such expense, disbursement or
advance as may be attributable to Indenture Trustee's or
Trustee's, respectively negligence, bad faith or willful
misfeasance.
(f) The successor Servicer, if Norwest Bank Minnesota,
National Association, its successors or assigns, shall have (i) no
liability with respect to any obligation which was required to be
performed by the terminated Servicer prior to the date that the
successor Servicer becomes the Servicer or any claim of a third
party based on any alleged action or inaction of the terminated
Servicer, (ii) no obligation to pay any taxes required to be paid
by the Servicer, (iii) no obligation to pay any of the fees and
expenses of any other party involved in this transaction other
than out of the Servicing Fee paid to it in its capacity as
successor Servicer and (iv) no liability or obligation with
respect to any Servicer indemnification obligations of the
Servicer other than those set forth in subsection (a)(iii).
For purposes of this Section, in the event of the termination of
the rights and obligations of Servicer pursuant to Section 9.1, or a
resignation by Servicer pursuant to this Agreement, Servicer shall be
deemed to be Servicer pending appointment of a successor Servicer pursuant
to Section 9.2.
33
<PAGE>
Indemnification under this Section shall survive the resignation
or removal of Trustee or Indenture Trustee or the termination of this
Agreement, the Trust Agreement and the Indenture and shall include
reasonable fees and expenses of counsel and expenses of litigation. If
Servicer shall have made any indemnity payments pursuant to this Section
and the Person to or on behalf of whom such payments are made thereafter
collects any of such amounts from others, such Person shall promptly repay
such amounts to Servicer, without interest.
SECTION 8.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person: (a) into which Servicer may be merged
or consolidated, (b) that may result from any merger or consolidation to
which Servicer shall be a party, or (c) that may succeed to the properties
and assets of Servicer substantially as a whole, which Person (in any of
the foregoing circumstances) executes an agreement of assumption to perform
every obligation of Servicer hereunder (or is deemed by law to have assumed
such obligations), shall be the successor to Servicer under this Agreement
without further act on the part of any of the parties to this Agreement;
provided, that: (i) immediately after giving effect to such transaction, no
Servicer Event of Default, and no event that, after notice or lapse of
time, or both, would become a Servicer Event of Default shall have occurred
and be continuing, (ii) Servicer shall have delivered to Trustee and
Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if
any, provided for in this Agreement relating to such transaction have been
complied with, (iii) the Rating Agencies shall have received at least ten
days' prior written notice of such transaction and (iv) Servicer shall have
delivered to Trustee and Indenture Trustee an Opinion of Counsel either:
(A) stating that, in the opinion of such counsel, all financing statements,
continuation statements and amendments thereto have been executed and filed
that are necessary fully to preserve and protect the interest of Trustee
and Indenture Trustee, respectively, in the Leases and reciting the details
of such filings, or (B) stating that, in the opinion of such counsel, no
such action shall be necessary to preserve and protect such interests.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii),
(iii) and (iv) shall be conditions to the consummation of the transactions
referred to in clauses (a), (b) or (c).
SECTION 8.4. Limitation on Liability of Servicer and Others.
Neither Servicer nor any of the directors, officers, employees or agents of
Servicer shall be under any liability to Issuer, Noteholders or
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action in good faith
pursuant to this Agreement with respect to any Lease (including any
Non-Performing Lease) or the Equipment subject thereto; provided, that this
provision shall not protect Servicer or any such Person against any breach
of warranties, representations or covenants made by Servicer herein or in
any certificate
34
<PAGE>
delivered in conjunction with the sale of the Notes or for any liability
that would otherwise be imposed by reason of willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement.
Servicer and any director, officer, employee or agent of 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 hereunder.
SECTION 8.5. ILC Not to Resign as Servicer. Subject to Section
8.3, ILC shall not resign from the obligations and duties imposed on it as
Servicer under this Agreement except upon determination that the
performance of its duties under this Agreement shall no longer be
permissible under applicable law. Notice of any such determination shall be
communicated to Trustee and Indenture Trustee at the earliest practicable
time (and, if such communication is not in writing, shall be confirmed in
writing at the earliest practicable time) and any such determination shall
be evidenced by an Opinion of Counsel to such effect delivered to Trustee
and Indenture Trustee concurrently with or promptly after such notice. No
such resignation shall become effective until Indenture Trustee or a
successor Servicer shall have assumed the responsibilities and obligations
of ILC in accordance with Section 9.2.
SECTION 8.6. Servicer to Act as Manager. In the event of the
resignation or removal of Manager and the failure of a successor Manager to
have been appointed and to have accepted such appointment as successor
Manager, Servicer shall become the successor Manager and shall be bound by
the terms of the Management Agreement.
ARTICLE IX
Default
SECTION 9.1. Servicer Events of Default. The following events and
conditions shall constitute a "Servicer Event of Default" hereunder:
(a) failure on the part of Servicer to deposit into the
Collection Account or other applicable account within three
Business Days following the receipt thereof any monies received by
Servicer (including any Lease Payments and any Non-Performing
Lease Payments) and required to be deposited hereunder;
(b) so long as ILC is Servicer hereunder, failure on the
part of ILC to pay to Indenture Trustee on the date when due in
accordance with the terms hereof, any payment required to be made
by Transferor pursuant to Section 5.1.
35
<PAGE>
(c) failure on the part of either Servicer or (so long as
ILC is Servicer) ILC to observe or perform in any material respect
any other of their respective covenants or agreements in this
Agreement which failure continues unremedied for a period of 30
days after the earlier of (A) the date it first becomes known to
any officer of Transferor or Servicer, as the case may be, and (B)
the date on which written notice thereof requiring the same to be
remedied shall have been given to Transferor or Servicer, as the
case may be, by Indenture Trustee or Trustee, or to Transferor or
Servicer, as the case may be, and Indenture Trustee by any Holder
of the Notes or the Certificates;
(i) if any representation or warranty made by
Transferor in this Agreement or in any certificate or
other writing delivered pursuant hereto or made by any
successor Servicer in connection with such successor
Servicer's assumption of the duties of Servicer shall
prove to be incorrect in any material respect as of the
time when the same shall have been made; provided, that
the breach of any representation or warranty made by
Transferor or Servicer in this Agreement will be deemed
to be "material" only if it affects Noteholders or the
Certificateholders, the enforceability of the Indenture
or of the Notes or the enforceability of the Trust
Agreement or the Certificates; and provided, further,
that a material breach of any representation or warranty
made by Transferor in this Agreement with respect to any
of the Leases or the Equipment subject thereto will not
constitute a Servicer Event of Default if Transferor
repurchases such Lease and Equipment in accordance with
this Agreement.
(ii) the entry by a court having jurisdiction in
the premises of (A) a decree or order for relief in
respect of Servicer in an involuntary case or proceeding
under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or (B) a
decree or order adjudging Servicer bankrupt or insolvent,
or approving as properly filed a petition seeking
reorganization, arrangement, adjustment, or composition
of or in respect of Servicer under any applicable federal
or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator, or other
similar official of Servicer or of any substantial part
of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any
such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 60
consecutive days;
36
<PAGE>
(iii) the commencement by Servicer of a
voluntary case or proceeding under any applicable federal
or state bankruptcy, insolvency, reorganization, or other
similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it
to the entry of a decree or order for relief in respect
of Servicer in an involuntary case or proceeding under
any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or to the
commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition
or answer or consent seeking reorganization or relief
under any applicable federal or state law, or the consent
by it to the filing of such petition or to the
appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator, or
similar official of Servicer or of any substantial part
of its property, or the making by it of an assignment for
the benefit of creditors, or the failure by Servicer to
pay its debts generally as they become due, or the taking
of corporate action by Servicer in furtherance of any
such action;
(iv) the failure of Servicer to make one or more
payments due with respect to aggregate recourse debt or
other obligations exceeding $1,000,000, or the occurrence
of any event or the existence of any condition, the
effect of which event or condition is to cause (or permit
one or more persons to cause) more than $1,000,000 of
aggregate recourse debt or other obligations of Servicer
to become due before its (or their) stated maturity or
before its (or their) regularly scheduled dates of
payment so long as such failure, event or condition shall
be continuing and shall not have been waived by the
Person or Persons entitled to performance; or
(v) a final judgment or judgments (or decrees or
orders) for the payment of money aggregating in excess of
$1,000,000 and any one of such judgments (or decrees or
orders) has remained unsatisfied and in effect for any
period of 60 consecutive days without a stay of
execution.
SECTION 9.2. Termination. So long as a Servicer Event of Default
shall be continuing, Indenture Trustee shall, upon the instructions of the
Holders of Notes representing at least 662/3% of the Outstanding Principal
Amount of the Notes (or, if no Notes are Outstanding, Holders of
Certificates representing at least 662/3% of the Certificate Balance), by
notice in writing to Servicer terminate all of the rights and obligations
of Servicer under this Agreement. On the receipt by Servicer of such
written notice, all authority and power of Servicer under this Agreement to
take any action with respect to any Lease or Equipment shall cease and the
same shall pass to and be vested in Indenture Trustee pursuant to and under
this Section and the
37
<PAGE>
Indenture; and, Indenture Trustee is hereby authorized and empowered to
execute and deliver, on behalf of Servicer, as attorney-in-fact or
otherwise, any and all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and assignment of any Lease and the related Equipment, or
otherwise.
SECTION 9.3. Trustee to Act; Appointment of Successor. On and
after the time Servicer receives a notice of termination pursuant to
Section 9.2, Indenture Trustee, subject to the terms of Section 5.2 of the
Indenture, shall be the successor in all respects to Servicer in its
capacity as servicer of the Leases under this Agreement and, to such
extent, shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on Servicer by the terms and provisions
hereof and shall be entitled to receive the Servicing Fee and other amounts
payable pursuant to Section 4.6; provided that Indenture Trustee shall in
no way be responsible or liable for any action or actions of Servicer
before the time Servicer receives such a notice of termination.
(a) Notwithstanding the above, Indenture Trustee may, if
it shall be unwilling to so act, or shall, if it is unable to so
act, give notice of such fact to each Holder of the Notes and (i)
appoint an established institution satisfactory to the Holders of
Notes evidencing at least 662/3% of the Outstanding Principal
Amount of the Notes (or, if no Notes are Outstanding, Holders of
Certificates representing at least 662/3% of the Certificate
Balance) as the successor to Servicer hereunder to assume all of
the rights and obligations of Servicer hereunder, including
Servicer's right hereunder to receive the Servicing Fee and
Supplemental Servicing Fee or (ii) if no such institution
satisfactory to the Holders of Notes evidencing at least 662/3% of
the Outstanding Principal Amount of the Notes (or, if no Notes are
Outstanding, Holders of Certificates representing at least 662/3%
of the Certificate Balance) is so appointed within 60 days
following the giving of such notice, appoint a bank or other
established institution, which has experience in servicing lease
contracts and equipment similar to the Leases and Equipment and as
to which the Rating Agency Condition has been satisfied with
respect to the appointment of such Person as the successor to
Servicer, or (iii) if no such institution is so appointed,
petition a court of competent jurisdiction to appoint an
institution meeting such criteria as Servicer hereunder. Pending
appointment of a successor to Servicer hereunder, Indenture
Trustee shall act in such capacity as provided in this Agreement.
In connection with such appointment and assumption, Indenture
Trustee shall cause such successor to Servicer to enter into a
servicing agreement substantially in the form of this Agreement
except that such agreement shall not include any of Transferor's
representations, warranties or obligations and Indenture Trustee
may make arrangements for the compensation of such successor out
of payments on Leases as it and such
38
<PAGE>
successor shall agree; provided, that no such compensation shall
be in excess of that provided for a successor to Servicer in
Section 4.6.
SECTION 9.4. Servicer to Cooperate. Servicer hereby agrees to
cooperate with Indenture Trustee or any successor to Servicer appointed in
accordance with Section 9.3, as applicable, in effecting the termination
and transfer of the responsibilities and rights of Servicer hereunder to
Indenture Trustee or any successor to Servicer, including the execution and
delivery of assignments of Financing Statements, and the transfer to
Indenture Trustee or the successor to Servicer for administration by it of
all cash amounts which shall at the time be held by Servicer or thereafter
received with respect to the Leases. Servicer hereby agrees to transfer to
any successor to Servicer its electronic records and all other records,
correspondence and documents relating to the Leases and Equipment in the
manner and at such times as the successor to Servicer shall reasonably
request. Servicer hereby designates Indenture Trustee and any successor to
Servicer its agent and attorney-in-fact to execute transfers of Financing
Statements (including any and all Financing Statements naming an individual
Lessee as debtor and Servicer as secured party) and any other filings or
instruments which may be necessary or advisable to effect such transfer of
Servicer's responsibilities and rights hereunder.
SECTION 9.5. Notification to Noteholders and Certificateholders.
Upon any termination of, or appointment of a successor to, Servicer
pursuant to this Article IX, Trustee shall give prompt written notice
thereof to Certificateholders and Indenture Trustee shall give prompt
written notice thereof to Noteholders and the Rating Agencies.
SECTION 9.6. Waiver of Past Defaults. Holders of Notes evidencing
at least 662/3% of the Outstanding Principal Amount of the Notes (or the
Holders of Certificates evidencing not less than a majority of the
Certificate Balance, in the case of any default that does not adversely
affect Indenture Trustee or Noteholders) may, on behalf of all Noteholders
and Certificateholders, waive in writing any default by Servicer in the
performance of its obligations hereunder and its consequences, except a
default in making any required deposits to or payments from any of the
Trust Accounts in accordance with this Agreement. Upon any such waiver of a
past default, such default shall cease to exist, and any Servicer Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereto.
39
<PAGE>
ARTICLE X
Termination
SECTION 10.1. Optional Purchase of All Leases. (a) As of any
Payment Date as of which the Discounted Present Value of the Performing
Leases (after giving effect to all Principal Payments on such Payment Date)
is less than or equal to 5% of the Discounted Present Value of Performing
Leases as of the Cut-Off Date, Servicer shall have the option to purchase
all of the Trust Estate, other than the Trust Accounts, if after giving
effect to all payments required to be made on such Payment Date, the Notes
and Certificates shall have been paid in full. To exercise such option,
Servicer shall deposit, pursuant to Section 6.2, into the Collection
Account an amount equal to the aggregate Lease Repurchase Amount for the
Leases, and shall succeed to all interests in, to and under the Trust
Estate, other than the Trust Accounts.
(b) Following the satisfaction and discharge of the Indenture and
the payment in full of the principal of and interest on the Notes,
Certificateholders will succeed to the rights of Noteholders hereunder and
Trustee will succeed to the rights of, and assume the obligations of,
Indenture Trustee pursuant to this Agreement.
ARTICLE XI
Miscellaneous Provisions
SECTION 11.1. Amendment. The Agreement may be amended from time to
time by a written amendment duly executed and delivered by Transferor,
Servicer and Issuer, with the written consent of Indenture Trustee, but
without the consent of any of Noteholders or Certificateholders, to cure
any ambiguity, to correct or supplement any provisions in this Agreement or
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of Noteholders or Certificateholders; provided, that such
action shall not, as evidenced by an Opinion of Counsel delivered to
Trustee and Indenture Trustee, adversely affect in any material respect the
interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by
Transferor, Servicer and Issuer, with the written consent of Indenture
Trustee and Trustee, but without the consent of any of Noteholders or
Certificateholders, to: (x) replace the Reserve Account with another form
of credit enhancement as long as such substitution will not result in a
reduction or withdrawal of the rating of any Class of the Notes or the
Certificates or (y) add credit enhancement for the benefit of any Class of
the Notes or the Certificates.
40
<PAGE>
This Agreement may also be amended from time to time by
Transferor, Servicer and Issuer, with the written consent of (a) Indenture
Trustee, (b) Holders of Notes evidencing not less than 662/3% of the
Outstanding Principal Amount of the Notes, and (c) the Holders of
Certificates evidencing not less than 662/3% of the Certificate Balance,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of Noteholders or Certificateholders; provided, 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 that shall be required to be made for the benefit of
Noteholders or Certificateholders or (b) reduce the aforesaid percentage of
the Notes and the Certificates that are required to consent to any such
amendment, without the consent of the holders of all the outstanding Notes
and Certificates.
Promptly after the execution of any such amendment or consent (or,
in the case of the Rating Agencies, 10 days prior thereto), Trustee shall
furnish written notification of the substance of such amendment or consent
to each Certificateholder, Indenture Trustee and each of the Rating
Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, Trustee
and Indenture Trustee shall be entitled to receive and rely upon an Opinion
of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and that all conditions precedent to such
execution and delivery by Trustee and Indenture Trustee have been
satisfied. Trustee and Indenture Trustee may, but shall not be obligated
to, enter into any such amendment that affects Trustee's or Indenture
Trustee's, as applicable, own rights, duties or immunities under this
Agreement or otherwise.
SECTION 11.2. Security for Obligations. As security for the full
and timely performance by Transferor of each of its obligations hereunder,
Transferor hereby pledges and grants to Issuer (as a precaution in the
event that, contrary to the intent of the parties to the transactions
contemplated hereby, it is contended that Transferor has any continuing
interest in any Lease or item of Equipment) a first priority Lien on and
security interest in all right, title and interest of Transferor now or
hereafter acquired in and to each Lease (including the right to receive all
payments due or to become due thereunder), each item of Equipment and each
other Transferred Asset at any time subject to this Agreement. The
foregoing security interest is granted upon and is subject to the same
terms and provisions as are set forth in the Indenture and shall continue
in full force and effect until the same is discharged in accordance with
41
<PAGE>
the terms therein, notwithstanding any waiver or modification of any of the
terms hereof or thereof or of any of the Notes, whether with or without the
consent of Transferor.
SECTION 11.3. Further Assurances; Financing Statements. Transferor
agrees that at any time and from time to time, at its expense, it shall
promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or desirable or that Issuer
or Indenture Trustee may request to perfect and protect the assignments and
ownership and security interests granted or purported to be granted herein
or therein with respect to the Leases and other Transferred Assets or to
enable Issuer or Indenture Trustee to exercise and enforce its rights and
remedies under this Agreement and the Indenture with respect to any Leases
and other Transferred Assets. Without limiting the generality of the
foregoing, Transferor shall execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices as
may be necessary or desirable or that Issuer or Indenture Trustee may
request to protect and preserve the assignments and ownership and security
interests granted by this Agreement with respect to the Leases.
SECTION 11.4. Registration. Transferor shall, to the extent
required by applicable law, cause the Certificates and the Notes to be
registered with the Commission pursuant to Section 12(b) or Section 12(g)
of the Exchange Act within the time periods specified in such sections.
SECTION 11.5. Notices. All demands, notices, directions,
instructions and communications upon or to Transferor, Servicer, Issuer,
Trustee, Indenture Trustee or the Rating Agencies under this Agreement
shall be in writing, personally delivered or mailed by certified mail,
return receipt requested, and shall be deemed to have been duly given upon
receipt: (a) in the case of Transferor, to Provident Lease Receivables
Corporation, c/o The Provident Bank, One East Fourth Street, Cincinnati,
Ohio 45202, Attention of: Treasury Services Department, (facsimile (513)
579-2233), (b) in the case of Servicer, to Information Leasing Corporation,
c/o The Provident Bank, One East Fourth Street, Cincinnati, Ohio 45202,
Attention: Treasury Services Department, (facsimile (513) 579-2233), (c) in
the case of Issuer or Trustee, at its Corporate Trust Office, (d) in the
case of Indenture Trustee, at its Corporate Trust Office, (e) in the case
of each of the Rating Agencies: to Fitch IBCA, Inc., 1 State Street Plaza,
New York, New York 10004 Attn: Surveillance (Number for telecopy: (212)
514-9879) and to Moody's Investors Service, Inc., 99 Church Street, New
York, New York 10007, Attention: ABS Monitoring Department (facsimile:
(212) 553-4948); or, as to each of the foregoing, at such other address as
shall be designated by written notice to the other parties.
SECTION 11.6. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 7.8 and 8.3 and as
provided in the
42
<PAGE>
provisions of this Agreement concerning the resignation of Servicer, this
Agreement may not be assigned by Transferor or Servicer, without the prior
written consent of Issuer and Indenture Trustee (acting upon the
instructions of Holders of at least 662/3% of the Outstanding Principal
Amount of the Notes.
SECTION 11.7. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of Transferor, Servicer, Issuer,
Trustee, Certificateholders, Indenture Trustee and Noteholders, and nothing
in this Agreement, whether express or implied, shall be construed to give
to any other Person any legal or equitable right, remedy or claim in the
Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
SECTION 11.8. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 11.9. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.10. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.11. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 11.12. Assignment to Indenture Trustee. Transferor hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of
a security interest by Issuer to Indenture Trustee pursuant to the
Indenture for the benefit of Noteholders of all right, title and interest
of Issuer in, to and under the Leases and/or the assignment of any or all
of Issuer's rights and obligations hereunder to Indenture Trustee.
SECTION 11.13. Nonpetition Covenants. (a) Notwithstanding any prior
termination of this Agreement, Servicer and Transferor shall not, prior to
the date that is one year and one day after the termination of this
Agreement, with respect to
43
<PAGE>
Issuer, acquiesce, petition or otherwise invoke or cause Issuer to invoke
the process of any court or governmental authority for the purpose of
commencing or sustaining a case against Issuer under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of
Issuer or any substantial part of its property, or ordering the winding up
or liquidation of the affairs of Issuer. The foregoing shall not limit the
right of Servicer and Transferor to file any claim in or otherwise take any
action with respect to any such insolvency proceeding that was instituted
against Issuer by any Person other than Servicer or Transferor.
(b) Notwithstanding any prior termination of this Agreement,
Servicer shall not, prior to the date that is one year and one day after
the termination of this Agreement, with respect to Transferor, acquiesce,
petition or otherwise invoke or cause Transferor to invoke the process of
any court or governmental authority for the purpose of commencing or
sustaining a case against Transferor under any Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of Transferor or
any substantial part of its property, or ordering the winding up or
liquidation of the affairs of Transferor. The foregoing shall not limit the
right of Servicer to file any claim in or otherwise take any action with
respect to any such insolvency proceeding that was instituted against
Transferor by any Person other than Servicer.
SECTION 11.14. Limitation of Liability of Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by First Union Trust Company,
National Association, not in its individual capacity but solely in its
capacity as Trustee of Issuer, and in no event shall First Union Trust
Company, National Association, in its individual capacity or, except as
expressly provided in the Trust Agreement, any beneficial owner of Issuer
have any liability for the representations, warranties, covenants,
agreements or other obligations of Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of Issuer.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by Norwest Bank Minnesota, National
Association, not in its individual capacity but solely as Indenture
Trustee, and in no event shall Norwest Bank Minnesota, National Association
have any liability for the representations, warranties, covenants,
agreements or other obligations of Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of Issuer.
44
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers as of the day and year
first above written.
PROVIDENT EQUIPMENT LEASE TRUST 1998-A
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Trustee of the
Provident Equipment Lease
Trust 1998-A
By: /s/ Doris J. Krick
----------------------------------------
Name: Doris J. Krick
Title: Vice President
PROVIDENT LEASE RECEIVABLES
CORPORATION,
as Transferor
By: /s/ John R. Farrenkopf
------------------------------------------
Name: John R. Farrenkopf
Title: Treasurer
INFORMATION LEASING CORPORATION,
as Servicer
By: /s/ Vincent D. Rinaldi
------------------------------------------
Name: Vincent D. Rinaldi
Title: President
Acknowledged and Accepted:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ Marianna C. Stershic
-------------------------------------
Name: Marianna C. Stershic
Title: Assistant Vice-President
45
<PAGE>
EXHIBIT 10.3
==============================================================================
INFORMATION LEASING CORPORATION,
Seller,
and
PROVIDENT LEASE RECEIVABLES CORPORATION,
as Purchaser
---------------------------
CONTRIBUTION AGREEMENT
Dated as of September 1, 1998
---------------------------
==============================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.1 Definitions; Interpretive Provisions.............................1
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase of Leases..........................................2
Section 2.2 [Reserved]..................................................3
Section 2.3 Capital Contribution........................................3
Section 2.4 Transfer of Leases; Grant of Security Interest..............3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.1 Corporate Organization and Authority........................3
Section 3.2 Business and Property.......................................4
Section 3.3 Financial Statements........................................4
Section 3.4 Equipment and Leases........................................4
Section 3.5 Payments....................................................8
Section 3.6 Full Disclosure.............................................8
Section 3.7 Pending Litigation..........................................8
Section 3.8 Title to Properties.........................................9
Section 3.9 Transactions Legal and Authorized...........................9
Section 3.10 Governmental Consent........................................9
Section 3.11 Taxes.......................................................9
Section 3.12 Compliance with Law........................................10
Section 3.13 ERISA......................................................10
Section 3.14 Ability to Perform.........................................10
Section 3.15 Ordinary Course; No Insolvency.............................10
Section 3.16 Assets and Liabilities.....................................11
Section 3.17 Fair Consideration.........................................11
Section 3.18 Ability to Pay Debts.......................................11
Section 3.19 Bulk Transfer Provisions...................................11
Section 3.20 Transfer Taxes.............................................11
Section 3.21 Principal Executive Office.................................12
Section 3.22 Nonconsolidation...........................................12
Section 3.23 Sale Treatment.............................................12
Section 3.24 Leases are Chattel Paper...................................12
12312137.1 100298 1318C 98438757
-i-
<PAGE>
ARTICLE IV
SELLER'S OBLIGATIONS
Section 4.1 Indemnification............................................12
Section 4.2 Repurchases; Other Payments................................13
Section 4.3 Substitution...............................................14
Section 4.4 Procedure for Substitution.................................15
Section 4.5 Objection and Repurchase...................................16
Section 4.6 Seller's Subsequent Obligations............................16
Section 5.1 Merger or Consolidation of Seller..........................17
Section 5.2 Inspection.................................................17
Section 5.3 Books and Records..........................................17
Section 5.4 Communications.............................................18
ARTICLE VI
ASSIGNMENT
Section 6.1 Assignment to Indenture Trustee............................18
Section 6.2 Assignment by Seller.......................................18
ARTICLE VII
NATURE OF SELLER'S OBLIGATIONS AND SECURITY THEREFOR
Section 7.1 Seller's Obligations Absolute..............................18
Section 7.2 Security for Obligations...................................19
Section 7.3 Further Assurances; Financing Statements...................19
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Continuing Obligations.....................................20
Section 8.2 GOVERNING LAW..............................................20
Section 8.3 Successors and Assigns.....................................20
Section 8.4 Modification...............................................20
Section 8.5 Notices....................................................21
Section 8.6 Counterparts...............................................21
Section 8.7 Nonpetition Covenant.......................................21
Section 8.8 Lessees....................................................21
Schedule 1 - Schedule of Leases and Equipment
-ii-
<PAGE>
CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT is made and dated as of September 1,
1998, between PROVIDENT LEASE RECEIVABLES CORPORATION, a Delaware
corporation ("Purchaser"), and INFORMATION LEASING CORPORATION ("ILC"), an
Ohio corporation ("Seller").
R E C I T A L S
A. Seller wishes to sell and assign to Purchaser, and Purchaser
wishes to purchase from Seller, all right, title and interest of Seller in,
to and under the Leases originated by Seller from time to time.
B. Seller and Purchaser wish to set forth certain representations,
warranties, covenants and indemnities of Seller with respect to the Leases
for the benefit of Purchaser, Issuer, the Noteholders and the
Certificateholders.
Now, therefore, in consideration of the foregoing, other good and
valuable consideration and the mutual terms and covenants contained herein,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions; Interpretive Provisions. (a) Capitalized
terms used and not otherwise defined herein shall have the meanings
ascribed to such terms in Appendix X to the Indenture, dated as of the date
hereof, between Provident Equipment Lease Trust 1998-A and Norwest Bank
Minnesota, National Association, as amended, supplemented or otherwise
modified from time to time (the "Indenture").
(b) The other interpretive provisions specified in Appendix X to
the Indenture shall apply to this Agreement.
(c) It is understood and agreed that all transfers of Leases made
pursuant to this Agreement shall be made as contributions by ILC to the
capital of Transferor. Each reference herein to any "purchase" of leases by
Transferor from ILC, or "sale" of leases by ILC to Transferor or similar
terms shall be deemed to refer to such capital contributions. Each
reference to Leases "sold" by ILC or "purchased" by Transferor shall be
deemed to refer to Leases that are contributed by ILC to the capital of
Transferor. All other terms of this Agreement shall be construed in a
manner consistent with the foregoing.
1
<PAGE>
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase of Leases. By their execution and delivery of
this Agreement, Seller hereby contributes and transfers to Purchaser
without recourse (except to the extent of Seller's repurchase obligations
as set forth herein), all of Seller's right, title and interest in, to and
under the following (collectively, with the Contributed Equipment, the
"Seller Assets"):
(a) the Leases listed in Schedule 1, as such Schedule 1
is amended or supplemented from time to time, including all
instruments, documents, books and other records relating thereto,
(b) all Lease Payments, Casualty Payments, Termination
Payments and other amounts not collected with respect thereto on
or prior to the Cut-Off Date (other than any prepayments of rent
required pursuant to the terms of any Lease at or before the
commencement of the Lease), all Payaheads relating to payments on
Leases due or becoming due after the Cut-Off Date and all
Substitute Leases and all Lease Payments, Casualty Payments,
Termination Payments and other amounts not collected prior to the
effective date of their respective substitution (other than any
prepayments of rent required by the terms of any Substitute Lease
at or before the commencement of the Substitute Lease) and all
Payaheads relating to payments on the Substitute Leases due or
becoming due after the effective date of their respective
substitution,
(c) all rights of Seller to or under any guarantees of or
collateral (including all rights of Seller in any security
deposits) for the Lessee's obligations under any Lease and all UCC
financing statements relating to such collateral, all rights of
Seller to or under any guarantees of or collateral (including all
rights of Seller in any security deposits) for the Lessee's
obligations under any Lease and all UCC financing statements
relating to such collateral,
(d) any proceeds with respect to the Leases from claims
on insurance policies covering the Equipment or Lessees,
(e) all moneys from time to time on deposit in any of the
Trust Accounts, including all investments and income from the
investment of such moneys,
(f) all proceeds of the foregoing, whether by voluntary
or involuntary conversion thereof.
2
<PAGE>
Section 2.2 [Reserved].
Section 2.3 Capital Contribution. Seller and Purchaser each
acknowledge and confirm that contemporaneously with the contribution and
transfer of Seller Assets referred to in Section 2.1, Seller, as the sole
stockholder of Purchaser, is contributing and transferring to Purchaser,
and in connection with each contribution and transfer of Substitute Leases,
Seller will contribute and transfer to Purchaser, without recourse, all
right, title and interest of Seller in and to each item of Equipment
subject to each Lease and Substitute Lease (collectively, the "Contributed
Equipment"). After such contribution and transfer by Seller to Purchaser,
all right, title and interest of Seller in and to each item of Equipment
subject to each Lease shall be vested in Purchaser.
Section 2.4 Transfer of Leases; Grant of Security Interest. It is
the intention of the parties hereto that the transfer of the Seller Assets
being made hereunder shall constitute a contribution and not a loan. Seller
shall take no action inconsistent with Purchaser's ownership of the Seller
Assets, Seller shall indicate in its records that ownership of each of the
Lease is held by Purchaser, and Seller shall respond to any inquiries from
third parties by indicating that its ownership in the Leases, Substitute
Leases, and all other Seller Assets is held by Purchaser and pledged to
Indenture Trustee. If a court of competent jurisdiction were to hold that
any transaction evidenced hereby constitutes a loan and not a contribution,
it is the intention of the parties hereto that this Agreement shall
constitute a security agreement under applicable law and that Seller shall
be deemed to have granted to Purchaser a first priority security interest
in the Seller Assets.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants as follows:
Section 3.1 Corporate Organization and Authority. Seller:
(a) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation,
(b) has all requisite power and authority and all
necessary licenses and permits to own and operate its properties
and to carry on its business as now conducted (except where the
failure to have such licenses and permits would not have a
material adverse effect on the Trust Estate or the business or
condition (financial or otherwise) of Seller or impair the
enforceability of any Lease) and to enter into and perform its
obligations under this Agreement, and the transactions
contemplated hereby, including performance of Seller's support
obligations hereunder, and
3
<PAGE>
(c) has duly qualified and is authorized to do business
and is in good standing as a foreign corporation in each
jurisdiction where the character of its properties or the nature
of its activities makes such qualification necessary (except where
the failure to be so qualified or in good standing would not have
a material adverse effect on the Trust Estate or the business or
condition (financial or otherwise) of Seller or impair the
enforceability of any Lease).
Section 3.2 Business and Property. The Prospectus and the Private
Placement Memorandum accurately describe in all material respects the
general nature of the business of Seller.
Section 3.3 Financial Statements. (a) The consolidated balance
sheet of Provident Financial Group, Inc. and its consolidated subsidiaries,
including ILC and PLRC, for the fiscal periods ended December 31, 1997 and
December 31, 1996 and the related consolidated statements of income,
retained earnings and cash flow for the respective period and fiscal years
ended on such dates, all accompanied by reports thereon containing opinions
without qualification, except as therein noted, by Ernst & Young,
independent certified public accountants, and the unaudited interim
consolidated balance sheet of Provident Financial Group, Inc. and its
consolidated subsidiaries as of June 30, 1998 and the related consolidated
statements of income, retained earnings and cash flow for the three months
ended on such date have been prepared in accordance with generally accepted
accounting principles consistently applied, and present fairly the
financial position of Provident Financial Group, Inc. and its subsidiaries
as of such dates and the results of their operations for such periods.
(b) Except as disclosed in the Prospectus, the Private Placement
Memorandum and the financial statements referred to in paragraph (a), since
December 31, 1997, there has been no change in the business, condition or
prospects (financial or otherwise) of Seller except changes in the ordinary
course of business, none of which individually or in the aggregate has been
materially adverse. Neither Seller nor any of its subsidiaries has any
material liabilities or obligations not incurred in the ordinary course of
business other than those disclosed in the financial statements referred to
in paragraph (a) or for which adequate reserves are reflected in such
financial statements.
Section 3.4 Equipment and Leases. (a) Prior to the date of each
transfer of any Leases and other Seller Assets in accordance with Section
2.1 and the contribution of the Contributed Equipment pursuant to Section
2.3, Seller purchased each item of Equipment from either (i) the
manufacturer or other supplier following receipt of an invoice from such
manufacturer or supplier or (ii) a Lessee following confirmation that such
item of equipment was on such Lessee's premises. Seller has paid in full,
to the manufacturer, supplier or Lessee, as
4
<PAGE>
applicable, the purchase price and any related charges in connection with
the acquisition of the Equipment. The sale and contribution to Purchaser of
the Seller Assets, including all of Seller's right, title and interest in
each item of Equipment does not violate the terms or provisions of any
Lease or any other agreement to which Seller is a party or by which it is
bound.
(b) Upon payment of the consideration described in Section 2.2 and
concurrent contribution described in Section 2.3, Purchaser will (i) be the
legal owner of the Leases, (ii) have good title to each item of the
Equipment (other than computer software) subject to any Lease other than a
Nominal Buy-Out Lease, and (iii) have a perfected security interest in each
item of Equipment with a purchase price in excess of $10,000 to a Nominal
Buy-Out Lease. At such time, the Leases and Seller's interest in the
Equipment will be free and clear of all Liens (x) other than the rights of
each Lessee under the Lease to which such Lessee is a party, (y) the Liens
contemplated by this Agreement and the other Basic Documents and (z) as to
Equipment that constitutes a fixture, Liens in favor of Persons with
recorded ownership or mortgage interests in the real estate to which such
Equipment is attached, if ILC has not obtained waivers from such Persons;
and there will be no delinquent taxes or other outstanding charges
affecting the Equipment which are or may be Liens prior to, or equal or
coordinate with, the Lien of Purchaser hereunder or Indenture Trustee under
the Indenture.
(c) At the time of each transfer of a Lease hereunder, each such
Lease (i) is or will be a triple-net lease and (ii) is or will be a legal,
valid and binding full recourse obligation of the Lessee thereunder,
enforceable by Purchaser (and by Indenture Trustee as assignee of
Purchaser) against such Lessee in accordance with the terms thereof, except
as such enforcement may be limited by bankruptcy, insolvency,
reorganization or other similar laws relating to or affecting the
enforcement of creditors' rights and by general equity principles, is
noncancellable by the Lessee and is in full force and effect, and any and
all requirements of any federal, state or local law, including usury,
truth-in-lending and equal credit opportunity laws applicable to each Lease
have been complied with; and Seller has no knowledge (after due inquiry) of
any challenge, dispute or claim by or against the Lessee under or affecting
any Lease or of the bankruptcy or insolvency of any such Lessee. As of the
initial Determination Date, or the effective date of the transfer of any
Substitute Lease, each Lessee has paid at least one installment of rent
under its respective Lease.
(d) At the time that any item of Equipment (including Seller's
security interest in any item not owned by it) is transferred hereunder,
Seller will have no knowledge that any item of the Equipment has suffered
any loss or damage which has not been repaired.
5
<PAGE>
(e) Each Lease requires the Lessee thereunder to maintain
insurance on the Equipment subject thereto in an amount at least equal to
the fair market value thereof.
(f) In addition to the insurance maintained by the Lessees with
respect to the Equipment, Seller (or an Affiliate of Seller) maintains (i)
a general liability insurance policy in the aggregate amount of $1,000,000
and (ii) an excess liability insurance policy in umbrella form in the
aggregate amount of $10,000,000. Each of such policies is in full force and
effect and covers all equipment owned by Seller and transferred to
Purchaser. All premiums in respect of such policies have been paid. Each of
Purchaser and Indenture Trustee are named as loss payees and additional
insureds, as their interests may appear, on such casualty and liability
policies maintained by Seller.
(g) At the time of each transfer of a Lease hereunder, no Lease
had outstanding rent which was 63 or more days past due as of the Cut-Off
Date.
(h) Each Lease was originated by Seller in accordance with
Seller's regular credit approval process described in the Prospectus, and
no selection procedures adverse to the credit quality of the Leases were
employed in selecting the Leases for sale under this Agreement.
(i) The obligation of each Lessee to pay rent under each of the
Leases throughout the term thereof is and will be unconditional, without
any right of setoff by such Lessee and without regard to any event
affecting the Equipment, the obsolescence of any Equipment, any claim of
such Lessee against Issuer, Purchaser, Seller or Servicer or any change in
circumstance of such Lessee or any other circumstance whatsoever except to
the extent that in the event of a casualty of any item of Equipment, the
Lessee is obligated to pay, in lieu of the future Lease Payments with
respect to such item, an amount which equals or exceeds the Discounted
Present Value of the Lease as of the Payment Date next succeeding the
making of such payment.
(j) In the case of each Lease which consists of a master lease and
one or more exhibits or schedules thereto, Seller has neither assigned such
master lease in its entirety, nor delivered physical possession of such
master lease, to any Person other than Purchaser or Indenture Trustee.
(k) As of the time of each transfer of Leases and Equipment
hereunder, there are no facts or circumstances which give rise, or would
give rise at any time in the future, to any right of rescission, setoff,
counterclaim or defense, including the defense of usury, to obligations of
any Lessee, including the obligation of such Lessee to pay all amounts due
with respect to any Lease to which such Lessee is a party, and neither the
operation of any of the terms of any Lease or the exercise
6
<PAGE>
of any right thereunder will render such Lease unenforceable in whole or in
part or subject to any right of rescission, setoff, counterclaim or
defense, including the defense of usury, and no such right of rescission,
setoff, counterclaim or defense has been asserted with respect thereto.
(l) As of the time of each transfer of Leases and Equipment
hereunder, no Lease has been amended, altered or modified in any respect,
except in writing and copies of all such writings are attached to the Lease
delivered to Indenture Trustee.
(m) As of the time of each transfer of Leases and Equipment
hereunder, no Lessee will have been released, in whole or in part, from any
of its obligations in respect of any Lease; no Lease will have been
satisfied, cancelled or subordinated, in whole, or in part, or rescinded,
and no Equipment covered by any Lease will have been released from such
Lease, in whole or in part, nor has any instrument been executed that would
effect any such satisfaction, release, cancellation, subordination or
rescission.
(n) As of the time of each transfer of Leases and Equipment
hereunder, each Lease was purchased or originated by Seller for value and
taken into possession prior to the Cut-Off Date or, in the case of
Substitute Leases, the related date of transfer in the ordinary course of
its business.
(o) No Lease was originated in or is subject to the laws of any
jurisdiction whose laws would make the transfer and sale thereof under this
Agreement unlawful.
(p) All parties to each Lease had authority and capacity to
execute such Lease.
(q) None of the Leases is a consumer lease and each Lessee has
accepted the Equipment leased to it.
(r) The Booked Residual Value of the Equipment as of the Cut-Off
Date equaled $21,453,071.94.
(s) All parties to each Lease had all requisite authority and
capacity to execute such Lease.
(t) As of the Cut-Off Date, the Final Lease Payment on each Lease
was due and payable on or prior to the April, 2005 Payment Date.
7
<PAGE>
(u) There is only one original of each Lease for purposes of the
UCC as in effect in Ohio and in New York and such counterpart will be
delivered to Indenture Trustee (or a custodian on its behalf) on or before
the Closing Date.
Section 3.5 Payments. (a) The aggregate amount of Lease Payments
payable by the Lessees under the Leases during each Due Period, including
amounts on deposit in the Reserve Account, is sufficient to cover the
Servicing Fee and pay the principal and interest on the Notes, as such
payments become due and payable.
(b) The portfolio detail delivered or to be delivered to Indenture
Trustee on or prior to the Closing Date: (i) accurately sets forth, as of
the Cut-Off Date, the amount of each Lease Payment due under each of the
Leases and the month in which such Lease Payment is to be paid in
accordance with the terms of the Lease under which the same is to be paid,
(ii) accurately sets forth, as of the Cut-Off Date, the information with
respect to certain other characteristics of the Leases and the Equipment
described in such portfolio detail and (iii) is otherwise true and correct
in all respects.
Section 3.6 Full Disclosure. The Prospectus and the Private
Placement Memorandum (including the statistical and descriptive information
with respect to the initial Leases, Lessees and Equipment), as of their
respective dates, do not contain any untrue statement of a material fact or
omit a material fact necessary to make the statements contained therein, in
light of the circumstances under which they were made, not misleading.
There is no fact peculiar to Seller or any Affiliate of Seller or, to the
knowledge of Seller, any Lease, Lessee or item of Equipment, which Seller
has not disclosed in the Prospectus or the Private Placement Memorandum
which materially affects adversely nor, so far as Seller can now reasonably
foresee, will materially affect adversely the ability of Seller to perform
the transactions contemplated by this Agreement and the other Basic
Documents.
Section 3.7 Pending Litigation. There are no proceedings or
investigations pending, or to the knowledge (after due inquiry) of Seller
threatened, against or affecting Seller or any subsidiary in or before any
court, governmental authority or agency or arbitration board or tribunal,
including any such proceeding or investigation with respect to any
environmental or other liability resulting from the ownership or use of any
of the Equipment, which, individually or in the aggregate, involve the
possibility of materially and adversely affecting the properties, business,
prospects, profits or condition (financial or otherwise) of Seller, or the
ability of Seller to perform its obligations under this Agreement or any
other Basic Document to which Seller is a party. Seller is not in default
with respect to any order of any court, governmental authority or agency or
arbitration board or tribunal.
8
<PAGE>
Section 3.8 Title to Properties. Immediately following the
transfer by Seller to Purchaser of the Leases and Seller's interest in the
Equipment, the Leases and the interest in the Equipment will be free and
clear of all Liens, except the Liens contemplated by this Agreement and the
other Basic Documents.
Section 3.9 Transactions Legal and Authorized. The transfer by
Seller of all of its right, title and interest in and to the Seller Assets
and compliance by Seller with all of the provisions of this Agreement and
the other Basic Documents to which Seller is a party:
(a) have been duly authorized by all necessary corporate action on
the part of Seller, and do not require any stockholder approval, or
approval or consent of any trustee or holders of any indebtedness or
obligations of Seller except such as have been duly obtained;
(b) are within the corporate powers of Seller; and
(c) are legal and will not conflict with, result in any breach in
any of the provisions of, constitute a default under, or result in the
creation of any Lien upon any property of Seller under the provisions of,
any agreement, charter instrument, by-law or other instrument to which
Seller is a party or by which it or its property may be bound or result in
the violation of any law, regulation, rule, order or judgment applicable to
Seller or its properties, or any order to which Seller or its properties is
subject, of or by any government or governmental agency or authority.
Section 3.10 Governmental Consent. No consent, approval or
authorization of, or filing, registration or qualification with, any
governmental authority is necessary or required on the part of Seller in
connection with the execution and delivery of this Agreement and the other
Basic Documents or the transfer of the Leases and other Seller Assets.
Section 3.11 Taxes. (a) All tax returns required to be filed by
Seller in any jurisdiction have in fact been filed, and all taxes,
assessments, fees and other governmental charges upon Seller, or upon any
of its properties, income or franchises, shown to be due and payable on
such returns have been paid. To the best of Seller's knowledge all such tax
returns were true and correct and Seller knows of no proposed additional
tax assessment against it in any material amount nor of any basis therefor.
(b) The provisions for taxes on the books of Seller are in
accordance with generally accepted accounting principles.
9
<PAGE>
Section 3.12 Compliance with Law.
Seller:
(a) is not in violation of any laws, ordinances, governmental rules
or regulations to which it is subject;
(b) has not failed to obtain any licenses, permits, franchises or
other governmental authorizations necessary to the ownership of its
property or to the conduct of its business; and
(c) is not in violation in any material respect of any term of any
agreement, charter instrument, by-law or other instrument to which it is a
party or by which it may be bound,
which violation or failure to obtain would have a material adverse affect
on the Trust Estate or the business or condition (financial or otherwise)
of Seller or impair the enforceability of any Lease.
Section 3.13 ERISA. (a) The present value of all benefits vested
under all "employee pension benefit plans," as such term is defined in
Section 3 of ERISA, maintained by or contributed to by Seller and its
Related Persons (other than multi-employer plans as such term is defined in
Section 3 of ERISA), as from time to time in effect (herein called the
"Pension Plans"), does not exceed the value of the assets of the Pension
Plans allocable to such vested benefits;
(b) No Prohibited Transactions, Accumulated Funding Deficiencies,
Withdrawals or Reportable Events have occurred with respect to any Pension
Plans that, in the aggregate, could subject Seller to any material tax,
penalty or other liability; and
(c) No notice of intent to terminate a Pension Plan under a
distress termination has been filed, nor has the PBGC instituted
proceedings to terminate, or appoint a trustee to administer, a Pension
Plan and no event has occurred or condition exists which might constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan.
Section 3.14 Ability to Perform. At the date hereof, Seller does
not believe, nor does it have any reasonable cause to believe, that it
cannot perform each and every covenant contained in this Agreement and the
other Basic Documents to which Seller is a party.
Section 3.15 Ordinary Course; No Insolvency. The transactions
contemplated by this Agreement and the other Basic Documents are being
10
<PAGE>
consummated by Seller in furtherance of Seller's ordinary business purposes
and constitute a practical and reasonable course of action by Seller
designed to improve the financial position of Seller, with no contemplation
of insolvency and with no intent to hinder, delay or defraud any of its
present or future creditors. Seller will not, either as a result of the
transactions contemplated by this Agreement, or immediately before or after
such transactions, be insolvent or have an unreasonably small capital for
the conduct of its business and the payment of anticipated obligations.
Section 3.16 Assets and Liabilities. (a) Both immediately before
and after any transfer of Leases and the interests in the Equipment
contemplated by this Agreement, the present fair salable value of Seller's
assets was or will be in excess of the amount that will be required to pay
Seller's probable liabilities as they then exist and as they become
absolute and matured; and
(b) Both immediately before and after any transfer of Leases, the
transfer of the interests in the Equipment contemplated by this Agreement,
the sum of Seller's assets was or will be greater than the sum of Seller's
debts, valuing Seller's assets at a fair salable value.
Section 3.17 Fair Consideration. The consideration received by
Seller, in exchange for the Seller Assets, is fair consideration having
value equivalent to or in excess of the value of the assets being
transferred by Seller.
Section 3.18 Ability to Pay Debts. Neither as a result of the
transaction contemplated by this Agreement nor otherwise does Seller
believe that it will incur debts beyond its ability to pay or which would
be prohibited by its charter documents or by-laws. Seller's assets and cash
flow enable it to meet its present obligations in the ordinary course of
business as they become due.
Section 3.19 Bulk Transfer Provisions. The sale, transfer,
assignment and conveyance of the Seller Assets by Seller pursuant to this
Agreement is not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
Section 3.20 Transfer Taxes. The sale, transfer, assignment and
conveyance of the Seller Assets by Seller pursuant to this Agreement is not
subject to and will not result in any tax, fee or governmental charge
payable by Seller to any federal, state or local government ("Transfer
Taxes"). If Purchaser receives actual notice of any Transfer Taxes arising
out of the transfer, assignment and conveyance of the Seller Assets, on
written demand by Purchaser, or upon Seller otherwise being given notice
thereof, Seller shall pay, and otherwise indemnify and hold Purchaser,
Indenture Trustee, Owner Trustee, Noteholders and Certificateholders and
the holders of the Notes harmless, on an after-tax basis,
11
<PAGE>
from and against any and all such Transfer Taxes (it being understood that
Indenture Trustee, Owner Trustee, Noteholders and Certificateholders shall
have
no obligation to pay such Transfer Taxes).
Section 3.21 Principal Executive Office. The principal executive
office of Seller is located at 1023 West Eighth Street, Cincinnati, Ohio
45203.
Section 3.22 Nonconsolidation. Seller shall not take any action which
would cause Purchaser to breach Section 7.2(b) of the Pooling and Servicing
Agreement.
Section 3.23 Sale Treatment. Seller will treat the transfer to
Purchaser of the Seller Assets (other than the Contributed Equipment) as a
sale for reporting and accounting purposes and will treat the transfer of
the Contributed Equipment as a contribution for reporting and accounting
purposes.
Section 3.24 Leases are Chattel Paper. Each Lease agreement (other
than Lease agreements covering only software) is "chattel paper" within the
meaning of the Uniform Commercial Code in the states of New York and Ohio.
ARTICLE IV
SELLER'S OBLIGATIONS
Section 4.1 Indemnification. Seller agrees to indemnify and hold
harmless Purchaser, Servicer, Indenture Trustee, Owner Trustee, each of
their respective officers, directors, employees and agents, and the
Noteholders and the Certificateholders (each an "Indemnified Party")
against any and all liabilities, losses, damages, penalties, costs and
expenses (including costs of defense and legal fees and expenses) which may
be incurred or suffered by such Indemnified Party (except to the extent
arising out of the gross negligence or willful misconduct on the part of
such Indemnified Party) as a result of claims, actions, suits or judgments
asserted or imposed against it and arising out of the transactions
contemplated hereby or by the Indenture, including any claims resulting
from any use, operation, maintenance, repair, storage or transportation of
any item of Equipment, whether or not in Seller's possession or under its
control pursuant to this Agreement, and any tort claims and any fines or
penalties arising from any violation of the laws or regulations of the
United States or any state or local government or governmental authority;
provided that the foregoing indemnity shall in no way be deemed to impose
on Seller any obligation, other than to the extent specifically set forth
in this Article IV, to make any payment with respect to principal or
interest on the Notes or Certificates or to reimburse Purchaser for any
payments on account of the Notes or Certificates.
12
<PAGE>
Section 4.2 Repurchases; Other Payments. (a) If (i) any of the
representations or warranties made by Seller in Sections 3.4 and 3.5 with
respect to any of the Leases or the Equipment subject thereto proves at any
time to have been inaccurate in any material respect as of the Closing Date
or related transfer date in the case of Substitute Leases, as the case may
be, (ii) any adjustment or modification is made to any Lease pursuant to
the second sentence of Section 4.4 of the Pooling and Servicing Agreement
or (iii) any Lease shall be terminated in whole or in part by a Lessee, or
any amounts due with respect to any Lease shall be reduced or impaired, as
a result of any action or inaction by Seller (other than any such action or
inaction of Seller, when acting as Servicer, in connection with the
enforcement of any Lease in a manner consistent with the provisions of the
Pooling and Servicing Agreement) or any claim by any Lessee against Seller
and, in the case of clauses (i) and (iii), the event or condition causing
such inaccuracy, termination, reduction, impairment or claim shall not have
been cured or corrected within 30 days after the earlier of the date on
which Seller is given notice thereof by Purchaser or Indenture Trustee or
the date on which Seller otherwise first has notice thereof, Seller will
repurchase such Lease and the Equipment subject thereto by paying to
Purchaser, not later than the third Business Day after the Determination
Date (A) next following the expiration of such 30-day period with respect
to any such event referred to in clauses (i) and (iii), and (B) next
following the date of such event with respect to any such event referred to
in clause (ii), an amount equal to the Lease Repurchase Amount, and
simultaneously with such repurchase, Seller shall reimburse Servicer for
all amounts, if any, theretofore advanced by Servicer pursuant to the
Pooling and Servicing Agreement with respect to such Lease; provided, that
if Seller is required to repurchase any Lease under clause (i) or (ii),
Seller may instead substitute a Substitute Lease if such substitution is
permitted under Section 4.3. Without limiting the generality of the
foregoing, it is agreed and understood that for purposes of this Section
4.2, any inaccuracy in any representation or warranty with respect to (i)
the priority of the Lien of the Indenture with respect to any Lease or (ii)
the amount (if less than represented) of the Lease Payments, Casualty
Payments or Termination Payment under any Lease shall be deemed to be
material.
(b) By the Closing Date, Seller agrees to obtain and provide to
Indenture Trustee UCC searches against it and Purchaser from the central
and county filing offices in Ohio confirming the absence of any UCC filings
against either Seller or Purchaser with respect to the Leases (including
the right to receive all payments due or to become due thereunder) and the
Equipment, other than those naming Purchaser as Purchaser of the Leases or
Indenture Trustee as secured party. If any searches delivered pursuant to
this Section 4.1(b) disclose UCC filings (which are not in the process of
being released pursuant to releases delivered on the Closing Date) against
Purchaser or Seller with respect to Leases of Equipment the original cost
of which (i) is greater than 2% but less than 5% of the original cost of
Equipment under all the Leases, then Seller shall cause
13
<PAGE>
searches to be made in additional states within 30 days following such
disclosure so that the original cost of Equipment under Leases in states
where searches have been performed exceeds 75% of the aggregate original
cost of Equipment under all Leases and 75% of the Booked Residual Value of
Equipment or (ii) is equal to or greater than 5% of the original cost of
Equipment under all the Leases then Seller shall cause searches to be made
in additional states within 30 days following such disclosure so that the
original cost of Equipment under Leases in states where such searches have
been performed equals 100% of the aggregate original cost of Equipment
under all Leases. Without limiting the provisions of Section 4.2(a) or this
Section 4.2(b), if Seller fails to provide any such searches required by
the preceding sentences of this Section 4.2(b) within the required time
period or any search reveals the existence of any conflicting Liens (which
are not removed within 30 days of receipt of such search), Seller shall be
required to repurchase not later than the third Business Day after the
Determination Date following the expiration of the time period during which
such search was to be obtained or such Lien released, as the case may be,
any Lease of Equipment in any such state for which such searches are not
provided or with respect to which conflicting Liens are found to exist at
the Lease Repurchase Amount for such Lease.
(c) Seller's obligations under this Section 4.2 are the full
recourse obligations of Seller and shall in no way be limited or discharged
by the application of any funds constituting part of the Trust Estate.
Section 4.3 Substitution.
(a) Subject to the satisfaction of the requirements set forth in
paragraph (b), and in lieu of repurchasing any Lease if required pursuant
to clause (i) or (ii) of Section 4.2, Seller will have the right (but not
the obligation) at any time to substitute one or more Eligible Leases and
the Equipment subject thereto (each, a "Substitute Lease") for such Lease
(for purposes of this Section 4.3, a "Predecessor Lease") and the Equipment
subject thereto if:
(i) such Predecessor Lease became a Warranty Lease or was
adjusted pursuant to the second sentence of Section 4.4 of the
Pooling and Servicing Agreement during the immediately preceding
Due Period; and
(ii) the aggregate Discounted Present Value of the
Predecessor Leases shall not exceed 10% of the Discounted Present
Value of the Leases on the Cut-off Date.
(b) Each transfer of Substitute Leases will be subject to the
satisfaction of the following conditions precedent:
14
<PAGE>
(i) after giving effect to such substitutions, the
aggregate Booked Residual Value of such Leases must be not less
than 90% of the Booked Residual Value of the Leases substituted
since the Closing Date;
(ii) either the final payment on such Substitute Lease
must be on or prior to the April, 2005 Payment Date or, to the
extent the final payment on such Lease is due subsequent to the
April, 2005 Payment Date, only scheduled payments due on or prior
to such date may be included in the Discounted Present Value of
such Lease for the purpose of making any calculation under the
Basic Documents;
(iii) after giving effect to such substitutions, the
aggregate amount of Lease Payments through the term of the Leases
(including the Substitute Leases) will not be materially less than
the aggregate scheduled Lease Payments of the Leases prior to such
substitution; and
(iv) after giving effect to such substitutions, the
Discounted Present Value of the Performing Leases must not be less
than the Discounted Present Value of the Performing Leases prior
to such substitution.
(c) Each substitution pursuant to this Section 4.3 shall include
the right to receive all amounts not collected under each Substitute Lease
prior to being substituted and any security deposits paid by the related
Lessee to Seller in connection therewith (other than any prepayments of
rent required pursuant to the terms thereof at or before the commencement
of such Lease), all Payaheads relating to payments on such Substitute
Leases due or becoming due after the effective date of such substitution
and all other related assets referred to in Section 2.1.
Section 4.4 Procedure for Substitution. (a) By 11:00 a.m. on the
third Business Day following each Determination Date, Seller shall give
written notice to Purchaser and Servicer of any substitution of Substitute
Leases for Predecessor Leases. By 11:00 a.m. on the fourth Business Day
following each Payment Date, Seller shall deliver to Purchaser, Servicer
and Indenture Trustee and, to the extent not included in the Monthly
Servicer Report, Indenture Trustee shall promptly deliver to each Rating
Agency (i) a supplement to Schedule 1 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 amount of each periodic Lease Payment and the Booked Residual Value
under each such Predecessor Lease and the amount of each periodic Lease
Payment and the Booked Residual Value under each Substitute Lease being
transferred thereby and (C) that all conditions precedent to such
substitution have been satisfied and
15
<PAGE>
(iii) such additional information concerning such Substitute Leases or
Predecessor Leases as may be needed for Servicer to prepare its monthly
reports pursuant to Section 4.8 of the Pooling and Servicing Agreement and
to otherwise carry out its duties as servicer thereunder.
(b) Subject to the provisions of Section 4.5, the delivery of any
Officer's Certificate and supplement to Schedule 1 pursuant to Section
4.3(a) shall be conclusive evidence, without further act or deed, that
during the immediately preceding Due Period (i) Seller assigned to
Purchaser pursuant to Section 2.1 all of Seller's right, title and interest
in and to the Substitute Leases identified in such supplement and the
related rights described in Section 2.1, (ii) Seller transferred to
Purchaser, as a contribution to capital, all of Seller's right, title and
interest in and to the Equipment subject to such Substitute Leases (to the
extent of Seller's interest in such Equipment, including Seller's security
interest in any Equipment which is not owned by Seller), and (iii)
Purchaser assigned and transferred to Seller, without representation or
warranty, all of Purchaser's right, title and interest in and to the
Predecessor Leases identified in such Officer's Certificate and the
Equipment subject thereto (to the extent of Purchaser's interest in such
Equipment, including Purchaser's security interest in any Equipment which
is not owned by Purchaser). Seller shall promptly deliver to Indenture
Trustee (or a custodian on its behalf) on behalf of Purchaser the original
executed counterpart of each Substitute Lease assigned to Purchaser in
accordance with Section 4.3 and Purchaser shall promptly request Indenture
Trustee to deliver to Seller the original executed counterpart of each
Predecessor Lease for which substitution has been made pursuant to Section
4.3.
Section 4.5 Objection and Repurchase. If any Noteholder or
Certificateholder objects to any substitution of Leases within ten days of
receipt of Servicer's monthly report providing notice thereof pursuant to
Section 4.8 of the Pooling and Servicing Agreement, on the grounds either
that any Substitute Lease is not an Eligible Lease within the meaning of
the definition thereof or that such substitution or addition is otherwise
not permitted under the provisions of Section 4.3 Seller 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 4.3. 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 Seller shall be required to
repurchase such Lease in accordance with the provisions of Section 4.2.
Section 4.6 Seller's Subsequent Obligations. Upon any substitution of
Leases in accordance with the provisions of this Article IV, Seller's
16
<PAGE>
obligations hereunder with respect to the related Predecessor Lease shall
cease but Seller 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.
ARTICLE V
SELLER
Section 5.1 Merger or Consolidation of Seller. (a) Seller will
keep in full force and effect its existence, rights and franchise as a
corporation under the laws of its jurisdiction of incorporation and will
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is necessary to protect the
validity and enforceability of any of the Leases or to permit performance
of Seller's duties under this Agreement and the other Basic Documents to
which Seller is a party.
(b) Seller shall not merge or consolidate with any other Person
unless (i) the entity surviving such merger or consolidation is a
corporation organized under the laws of the United States or any
jurisdiction thereof and (ii) the surviving entity, if not Seller, shall
execute and deliver to Purchaser, Servicer and Indenture Trustee, in form
and substance satisfactory to each of them, (a) an instrument expressly
assuming all of the obligations of Seller hereunder and (b) an Opinion of
Counsel to the effect that such Person is a corporation of the type
described in the preceding clause (i) and has effectively assumed the
obligations of Seller hereunder.
Section 5.2 Inspection. Seller will permit, on reasonable prior
notice, the representatives of Purchaser, Servicer, Indenture Trustee,
Owner Trustee or any Noteholder or Certificateholder evidencing not less
than 25% of the Outstanding Principal Amount of any class of Notes or the
Certificate Balance, as applicable, to examine all of the books of account,
records, reports and other papers of Seller, to make copies and extracts
therefrom, and to discuss Seller's affairs, finances and accounts with its
officers, employees and independent public accountants (and by this
provision Seller authorizes said accountants to discuss the finances and
affairs of Seller) all at such reasonable times and as often as may be
reasonably requested for the purpose of reviewing or evaluating the
financial condition or affairs of Seller or Seller's performance of its
duties and obligations hereunder. Any expense incident to the exercise by
Purchaser, Indenture Trustee, Owner Trustee or any Noteholder or
Certificateholder during the continuance of any default by Seller in any of
its obligations hereunder of any right under this Section 7.05 shall be
borne by Seller.
Section 5.3 Books and Records. Seller will clearly mark its books
and records to reflect each sale of a Lease and contribution of the
Equipment subject thereto to Purchaser.
17
<PAGE>
Section 5.4 Communications. Seller will reply to all inquiries by
third parties with respect to the transactions contemplated by this
Agreement by indicating that it has sold to Purchaser the Leases and
contributed to Purchaser its right, title and interest in the related
Equipment.
ARTICLE VI
ASSIGNMENT
Section 6.1 Assignment to Indenture Trustee. It is understood that
this Agreement and all rights of Purchaser hereunder will be assigned by
Purchaser to Indenture Trustee pursuant to the Indenture, for the benefit
of Indenture Trustee and the Noteholders as provided in the Indenture, and
may be subsequently assigned by Indenture Trustee to any successor
Indenture Trustee or as otherwise provided in the Indenture. Seller hereby
expressly agrees to each such assignment and agrees that all of its duties,
obligations, representations and warranties hereunder shall be for the
benefit of, and may be enforced by, Indenture Trustee, the Noteholders, and
any successor to or assignee of any thereof.
Section 6.2 Assignment by Seller. None of the respective rights or
obligations of Seller hereunder may be assigned without the prior written
consent of Purchaser, Indenture Trustee (acting upon the instructions of
the Holders of Notes representing 662/3% of the then aggregate unpaid
Outstanding Principal Amount of the Notes) and the Holders of Certificates
representing 662/3% of the Certificate Balance.
ARTICLE VII
NATURE OF SELLER'S OBLIGATIONS AND SECURITY THEREFOR
Section 7.1 Seller's Obligations Absolute. The obligations of
Seller hereunder, and the rights of Indenture Trustee, as assignee of
Purchaser, in and to all amounts payable by Seller hereunder, shall be
absolute and unconditional and shall not be subject to any abatement,
reduction, setoff, defense, counterclaim or recoupment whatsoever,
including abatements, reductions, setoffs, defenses, counterclaims or
recoupments due or alleged to be due to, or by reason of, any past, present
or future claims which Seller may have against Servicer, Purchaser,
Indenture Trustee, Owner Trustee and any Noteholder or Certificateholder or
any other Person for any reason whatsoever; nor, except as otherwise
expressly provided herein, shall this Agreement terminate, or the
obligations of Seller be otherwise affected, by reason of any defect in any
Lease or in any unit of Equipment or in the respective rights and interests
of Purchaser, Seller and Indenture Trustee therein, or by reason of any
Liens, encumbrances, security interests or rights of others with respect to
any Lease or any unit of Equipment, or any failure by Purchaser to perform
any of its obligations herein contained, or by reason of any other
indebtedness or liability, howsoever and whenever arising,
18
<PAGE>
of Purchaser, Servicer, Indenture Trustee, or any Noteholder or
Certificateholder to Seller or any other Person or by reason of any
insolvency, bankruptcy, or similar proceedings by or against Seller,
Servicer, Purchaser, Indenture Trustee or any other Person or for any other
cause whether similar or dissimilar to the foregoing, any present or future
law to the contrary notwithstanding, it being the intention of the parties
hereto that all obligations of Seller hereunder and all amounts payable by
Seller hereunder shall continue to be due and payable in all events and in
the manner and at the times herein provided unless and until the obligation
to perform or pay the same shall be terminated or limited pursuant to the
express provisions of this Agreement.
Section 7.2 Security for Obligations. As security for the full and
timely performance by Seller of each of its obligations hereunder, Seller
hereby pledges and grants to Purchaser (as a precaution in the event that,
contrary to the intent of the parties to the transactions contemplated
hereby, it is contended that Seller has any continuing interest in any
Lease or item of Equipment subject to the Indenture) a first priority Lien
on and security interest in all right, title and interest of Seller now or
hereafter acquired in and to each Lease (including the right to receive all
payments due or to become due thereunder) and each item of Equipment at any
time subject to this Agreement. The foregoing security interest is granted
upon and is subject to the same terms and provisions as are set forth in
the Indenture and shall continue in full force and effect until the same is
discharged in accordance with the terms therein, notwithstanding any waiver
or modification of any of the terms hereof or thereof or of any of the
Notes or the Certificates, whether with or without the consent of Seller.
Section 7.3 Further Assurances; Financing Statements. Seller
agrees that at any time and from time to time, at its expense, it shall
promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or desirable or that
Purchaser or Indenture Trustee may request to perfect and protect the
assignments and security interests granted or purported to be granted
herein with respect to the Leases, the Lease Payments and Equipment or to
enable Purchaser or Indenture Trustee to exercise and enforce its rights
and remedies under this Agreement and the other Basic Documents with
respect to any Leases, the Lease Payments and Equipment. Without limiting
the generality of the foregoing, Seller shall execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices as may be necessary or desirable or that Purchaser
or Indenture Trustee may request to protect and preserve the assignments
and security interests granted by this Agreement and the other Basic
Documents with respect to the Leases, the Lease Payments and the Equipment.
ARTICLE VIII
MISCELLANEOUS
19
<PAGE>
Section 8.1 Continuing Obligations. This Agreement shall continue
in full force and effect until each of the Notes and any other amounts due
to any holder of the Notes have been paid in full and all other
obligations, if any, secured by the Lien of the Indenture have been fully
satisfied.
Section 8.2 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE
GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK. IF ANY PROVISION OF THIS
AGREEMENT IS DEEMED INVALID, IT SHALL NOT AFFECT THE BALANCE OF THIS
AGREEMENT.
Section 8.3 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the successors and assigns of
Purchaser, Seller, Servicer and Indenture Trustee and shall inure to the
benefit of the successors and assigns of the holders, from time to time, of
the Notes.
Section 8.4 Modification. The Agreement may be amended from time
to time by a written amendment duly executed and delivered by Seller and
Purchaser, with the written consent of Indenture Trustee, but without the
consent of any of Noteholders or Certificateholders, to cure any ambiguity,
to correct or supplement any provisions in this Agreement or for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of Noteholders or Certificateholders; provided, that such
action shall not, as evidenced by an Opinion of Counsel delivered to
Trustee and Indenture Trustee, adversely affect in any material respect the
interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by Seller and
Purchaser, with the written consent of (a) Indenture Trustee, (b)
Noteholders holding Notes evidencing not less than 662/3% of the
Outstanding Principal Amount of the Notes, and (c) the Holders of
Certificates evidencing not less than 662/3% of the Certificate Balance,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of Noteholders or Certificateholders; provided, 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 that shall be required to be made for the benefit of
Noteholders or Certificateholders or (b) reduce the aforesaid percentage of
the Notes and the Certificates that are required to consent to any such
amendment, without the consent of the holders of all the outstanding Notes
and Certificates.
Promptly after the execution of any such amendment or consent (or,
in the case of the Rating Agencies, 10 days prior thereto), Seller and
Purchaser shall
20
<PAGE>
furnish written notification of the substance of such amendment or consent
to each Certificateholder, Indenture Trustee and each of the Rating
Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, Trustee
and Indenture Trustee shall be entitled to receive and rely upon an Opinion
of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and that all conditions precedent to such
execution and delivery by Trustee and Indenture Trustee have been
satisfied. Trustee and Indenture Trustee may, but shall not be obligated
to, enter into any such amendment that affects Trustee's or Indenture
Trustee's, as applicable, own rights, duties or immunities under this
Agreement or otherwise.
Section 8.5 Notices. All notices and other communications given in
connection with this Agreement shall be sufficient for every Person
hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid or certified mail return receipt
requested, or sent by private courier or confirmed telecopy, in case of
Seller, to Information Leasing Corporation, c/o The Provident Bank, One
East Fourth Street, Cincinnati, Ohio 45202, Attention: Treasury Services
Department (telecopy: 513/579-2233), and in the case of Purchaser, to
Provident Lease Receivables Corporation, c/o The Provident Bank, One East
Fourth Street, Cincinnati, Ohio 45202, Attention: Treasury Services
Department (telecopy: 513/579-2233), or to such other address as either
party may specify to the other from time to time in accordance with this
Section 8.5.
Section 8.6 Counterparts. This Agreement may be executed in any number
of counterparts, each counterpart constituting an original, but all together
constituting only one Agreement.
Section 8.7 Nonpetition Covenant. Seller shall not petition or
otherwise invoke the process of any Governmental Authority for the purpose
of commencing or sustaining a case against Purchaser under any federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of Purchaser or any substantial part of its respective property,
or ordering the winding up or liquidation of the affairs of Purchaser so
long as there shall not have elapsed one year plus one day since the latest
maturing Notes have been paid in full in cash.
Section 8.8 Lessees. Purchaser acknowledges and agrees that so long as
no default shall have occurred under any Lease that (a) the related Lessee
shall not be
21
<PAGE>
named as a defendant, in any foreclosure or other proceeding which may be
instituted by Purchaser relating to such Lease or related Equipment and (b)
Purchaser shall not interfere with the right of the related Lessee to have
quiet and peaceful use of the related Equipment during the term of the
Lease.
22
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Contribution Agreement as of the date and year first written above.
PROVIDENT LEASE RECEIVABLES
CORPORATION
By: /s/ John R. Farrenkopf
--------------------------------
Name: John R. Farrenkopf
Title: Treasurer
INFORMATION LEASING
CORPORATION
By: /s/ Vincent D. Rinaldi
--------------------------------
Name: Vincent D. Rinaldi
Title: President
23
<PAGE>
SCHEDULE 1
SCHEDULE OF LEASES AND EQUIPMENT
ON FILE AT INDENTURE TRUSTEE
A-1
EXHIBIT 10.4
================================================================================
PROVIDENT EQUIPMENT LEASE TRUST 1998-A
MANAGEMENT AGREEMENT
among
PROVIDENT EQUIPMENT LEASE TRUST 1998-A,
as Issuer,
and
INFORMATION LEASING CORPORATION,
as Manager,
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
as Indenture Trustee.
Dated as of September 1, 1998
================================================================================
<PAGE>
TABLE OF CONTENTS
Section Page
- -------- ----
1. Duties of Manager....................................................2
(a) Duties with Respect to the Indenture and the
Depository Agreement..................................2
(b) Duties with Respect to Trust...........................4
(c) Non-Ministerial Matters................................6
2. Records..............................................................6
Compensation.........................................................6
4. Additional Information To Be Furnished to Issuer.....................7
5. Independence of Manager..............................................7
6. No Joint Venture.....................................................7
7. Other Activities of Manager..........................................7
8. Term of Agreement; Resignation and Removal of Manager................7
9. Action upon Termination, Resignation or Removal......................9
10. Notices..............................................................9
11. Amendments..........................................................10
12. Successors and Assigns..............................................11
13. Governing Law.......................................................12
14. Headings............................................................12
15. Counterparts........................................................12
16. Severability........................................................12
17. Not Applicable to Information Leasing Corporation in Other
Capacities.........................................................12
18. Limitation of Liability of Trustee and Indenture Trustee............12
19. Third-Party Beneficiary.............................................13
i
<PAGE>
TABLE OF CONTENTS
(continued)
Section Page
20. Indemnification.....................................................13
ii
<PAGE>
MANAGEMENT AGREEMENT dated as of September 1, 1998, among
PROVIDENT EQUIPMENT LEASE TRUST 1998-A ("Issuer"), INFORMATION LEASING
CORPORATION, an Ohio corporation, as Manager ("Manager"), and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity but solely as Indenture Trustee ("Indenture Trustee").
RECITALS
WHEREAS Issuer is issuing 5.28% Class A-1 Lease-Backed Notes,
5.78% Class A-2 Lease-Backed Notes, 5.60% Class A-3 Lease-Backed Notes,
5.75% Class A-4 Lease-Backed Notes and 6.20% Class B Lease-Backed Notes
(collectively, the "Notes") pursuant to the Indenture, dated as of
September 1, 1998 (as amended and supplemented from time to time in
accordance with the provisions thereof, "Indenture"), between Issuer and
Indenture Trustee (capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned such terms in Appendix X to the
Indenture);
WHEREAS Issuer has entered into certain agreements in connection
with the issuance of the Notes and of certain beneficial ownership
interests of the Issuer, including: (i) the Pooling and Servicing
Agreement, (ii) a Depository Agreement, dated September 25, 1998 (the
"Depository Agreement"), among Issuer, Indenture Trustee, Manager and The
Depository Trust Company, (iii) the Indenture, and (iv) the Trust Agreement
(the Pooling and Servicing Agreement, the Depository Agreement, the
Indenture and the Trust Agreement being hereinafter referred to
collectively as the "Related Agreements");
WHEREAS pursuant to the Related Agreements, Issuer and Trustee are
required to perform certain duties in connection with: (a) the Notes and
the collateral therefor pledged pursuant to the Indenture (the
"Collateral") and (b) the beneficial ownership interests in Issuer (the
registered Holders of such interests being referred to herein as the
"Owners");
WHEREAS Issuer and Trustee desire to have Manager perform certain
of the duties of Issuer and Trustee referred to in the preceding clause,
and to provide such additional services consistent with this Agreement and
the Related Agreements as Issuer and Trustee may from time to time request;
WHEREAS Manager has the capacity to provide the services required
hereby and is willing to perform such services for Issuer and Trustee on
the terms set forth herein;
1
<PAGE>
NOW, THEREFORE, in consideration of the mutual terms and covenants
contained herein, and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties agree as
follows:
1. Duties of Manager.
(a) Duties with Respect to the Indenture and the Depository
Agreement. Manager shall perform all of its duties as Manager and the
duties of Issuer and Trustee under the Depository Agreement. In addition,
Manager shall consult with Trustee regarding the duties of Issuer and
Trustee under the Indenture and the Depository Agreement. Manager shall
monitor the performance of Issuer and shall advise Trustee when action is
necessary to comply with Issuer's or Trustee's duties under the Indenture
and the Depository Agreement. Manager shall prepare for execution by Issuer
or shall cause the preparation by other appropriate persons of all such
documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of Issuer or Trustee to prepare, file or deliver pursuant
to the Indenture or the Depository Agreement. In furtherance of the
foregoing, Manager shall take all appropriate action that is the duty of
Issuer or Trustee to take pursuant to the Indenture or the Depository
Agreement, including, without limitation, such of the foregoing as are
required with respect to the following matters (references in this Section
are to sections of the Indenture):
(i) the preparation of all Officer's Certificates and
Opinions of Counsel with respect to any requests by Issuer to
Indenture Trustee to take any action under the Indenture (Section
1.2);
(ii) the preparation of or obtaining of the documents and
instruments required for authentication of the Notes and delivery
of the same to Indenture Trustee (Section 2.2);
(iii) the duty to cause the Note Register to be kept and
to give Indenture Trustee notice of any appointment of a new Note
Registrar and the location, or change in location, of the Note
Register (Section 2.3);
(iv) the review of evidence of the destruction, loss or
theft of any Notes and the preparation or obtaining of documents
or instruments required for the authentication of replacement
Notes and the delivery of same to Indenture Trustee (Section 2.4);
(v) the furnishing to Indenture Trustee with the names
and addresses of Noteholders during any period when Indenture
Trustee is not the Note Registrar (Section 2.11);
2
<PAGE>
(vi) the preparation of Issuer Orders and all other
actions necessary with respect to investment and reinvestment of
funds in the Trust Accounts (Section 3.1(c));
(vii) the preparation and delivery of Issuer Requests for
the release of Leases and interests in the related Equipment from
the lien of the Indenture (Section 4.3);
(viii) the compliance with any written directive of
Indenture Trustee with respect to the sale of the Trust Estate in
a commercially reasonable manner if an Event of Default shall have
occurred and be continuing (Sections 6.3 and 6.16);
(ix) the delivery of any Noteholder waiver of an Event of
Default to Indenture Trustee (Section 6.13);
(x) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures and the mailing to Noteholders of notices with respect
to such supplemental indentures (Sections 7.8, 7.9, 7.10, 9.1, 9.2
and 9.3);
(xi) the determination of the need to appoint a
co-trustee or separate trustee, the selection of such trustee, the
preparation of all instruments and agreements necessary or proper
for the appointment of such trustee and the preparation of all
instruments and agreements necessary to accept the resignation or
removal such trustee (Section 7.12);
(xii) the notification of Indenture Trustee if the Notes
become listed on any exchange (Section 7.15);
(xiii) the maintenance of an office for registration of
transfer or exchange of Notes (Section 8.2);
(xiv) the duty to cause newly appointed Paying Agents, if
any, to deliver to Indenture Trustee the instrument specified in
the Indenture regarding funds held in trust (Section 8.3);
(xv) the direction to the Paying Agents to deposit moneys
with Indenture Trustee (Section 8.3);
(xvi) the obtaining and preservation of 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
3
<PAGE>
Notes, the Collateral and each other instrument and
agreement included in the Trust Estate (Section 8.4);
(xvii) the preparation and delivery of all documents,
agreements, approvals, notices, Officer's Certificates, and
Opinions of Counsel necessary for any merger or consolidation of
Issuer (Section 8.4);
(xviii) the preparation of all supplements, amendments,
financing statements, continuation statements, instruments of
further assurance and other instruments, in accordance with
Section 8.5 of the Indenture, necessary to protect the Trust
Estate (Section 8.5);
(xix) the notification of Indenture Trustee and the
Noteholders of a Servicer Default pursuant to the Pooling and
Servicing Agreement (Section 8.7(d));
(xx) the delivery of notice to Indenture Trustee and the
Rating Agencies of each Event of Default under the Indenture and
each default by Servicer or Transferor under the Pooling and
Servicing Agreement and each default by ILC under the Contribution
Agreement (Section 8.9);
(xxi) the preparation, execution and filing with the
Commission and Indenture Trustee of documents required to be filed
on a periodic basis with, and summaries thereof as may be required
by rules and regulations prescribed by, the Commission and the
transmission of such summaries, as necessary, to the Noteholders
(Section 8.12);
(xxii) the execution and delivery of new Notes conforming
to any supplemental indenture (Section 9.5);
(xxiii) the monitoring of 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 relating thereto (Section 10.1);
(b) Duties with Respect to Trust. (i) In addition to the duties of
Manager set forth above, Manager shall perform such calculations, and shall
prepare for execution by Issuer or Trustee or shall cause the preparation
by other appropriate persons of all such documents, reports, filings,
instruments, certificates and opinions, as it shall be the duty of Issuer
or Trustee to perform, prepare, file or deliver pursuant to the Related
Agreements, and at the request of Trustee shall take all appropriate action
that it is the duty of Issuer or Trustee to take pursuant to the Related
Agreements. Subject to Section 5 of this Agreement, and in accordance with
the directions of Trustee, Manager shall administer, perform or supervise
the performance of such other activities in connection with the Collateral
(including the Related Agreements)
4
<PAGE>
as are not covered by any of the foregoing and as are expressly requested by
Trustee and are reasonably within the capability of Manager.
(ii) Notwithstanding anything in this Agreement or the
Related Agreements to the contrary, Manager shall be responsible
for promptly notifying Trustee in the event that any withholding
tax is imposed on Trust's payments (or allocations of income) to
an Owner as contemplated in Section 5.2(c) of the Trust Agreement.
Any such notice shall specify the amount of any withholding tax
required to be withheld by Trustee pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the
Related Agreements to the contrary, Manager shall be responsible
for performance of the duties of Trustee set forth in Sections
5.5(a), (b), (c) and (d), the penultimate sentence of Section 5.5,
and 5.6(a) of the Trust Agreement with respect to, among other
things, accounting and reports to Owners; provided, however, that
Trustee shall retain responsibility for the distribution of the
Schedule K-1s necessary to enable each Owner to prepare its
Federal and state income tax returns.
(iv) Manager shall satisfy its obligations with respect
to clauses (ii) and (iii) by retaining, at the expense of the
Trust payable by Servicer, a firm of independent certified public
accountants (the "Accountants") acceptable to Trustee, which
Accountants shall perform the obligations of Manager thereunder.
In connection with clause (ii), Accountants will provide prior to
November 25, 1998, a letter in form and substance satisfactory to
Trustee as to whether any tax withholding is then required and, if
required, the procedures to be followed with respect thereto to
comply with the requirements of the Code. Accountants shall be
required to update the letter in each instance that any additional
tax withholding is subsequently required or any previously
required tax withholding shall no longer be required.
(v) Manager shall perform the duties of Manager specified
in Section 10.2 of the Trust Agreement required to be performed in
connection with the resignation or removal of Trustee, and any
other duties expressly required to be performed by Manager under
the Trust Agreement.
(vi) In carrying out the foregoing duties or any of its
other obligations under this Agreement, Manager may enter into
transactions with or otherwise deal with any of its affiliates;
provided, however, that the terms of any such transactions or
dealings shall be in accordance with any directions received from
Issuer and shall be, in Manager's opinion, no less favorable to
Issuer than would be available from unaffiliated parties.
5
<PAGE>
(vii) Manager hereby agrees to execute on behalf of
Issuer all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of Issuer to
prepare, file or deliver pursuant to the Basic Documents or
otherwise by law.
(c) Non-Ministerial Matters. (i) With respect to matters that in
the reasonable judgment of Manager are non-ministerial, Manager shall not
take any action unless within a reasonable time before the taking of such
action Manager shall have notified Trustee of the proposed action and
Trustee shall not have withheld consent or provided an alternative
direction. For the purpose of the preceding sentence, "non-ministerial
matters" shall include, without limitation:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by Issuer and
the compromise of any action, claim or lawsuit brought by or
against Issuer (other than in connection with the collection of
the Trust Estate);
(C) the amendment, change or modification of the Related
Agreements;
(D) the appointment of successor Note Registrars,
successor Paying Agents and successor Trustees pursuant to the
Indenture or the appointment of successor Managers or successor
Servicers, or the consent to the assignment by the Note Registrar,
Paying Agent or Indenture Trustee of its obligations under the
Indenture; and
(E) the removal of Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this
Agreement, Manager shall not be obligated to, and shall not, (x)
make any payments to the Noteholders under the Related Agreements,
(y) sell the Trust Estate pursuant to Section 6.3 of the Indenture
or (z) take any other action that Issuer directs Manager not to
take on its behalf.
2. Records. Manager shall maintain appropriate books of account
and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by Issuer, Indenture
Trustee and Depositor at any time during normal business hours.
3. Compensation. As compensation for the performance of Manager's
obligations under this Agreement and as reimbursement for its expenses
related thereto, Manager shall be entitled to $500 per quarter payable in
arrears on each Payment Date, which payment shall be solely an obligation
of Servicer.
6
<PAGE>
4. Additional Information To Be Furnished to Issuer. Manager shall
furnish to Issuer from time to time such additional information regarding
the Collateral as Issuer shall reasonably request.
5. Independence of Manager. For all purposes of this Agreement,
Manager shall be an independent contractor and shall not be subject to the
supervision of Issuer or Trustee with respect to the manner in which it
accomplishes the performance of its obligations hereunder. Unless expressly
authorized by Issuer, Manager shall have no authority to act for or
represent Issuer or Trustee in any way (other than as permitted hereunder)
and shall not otherwise be deemed an agent of Issuer or Trustee.
6. No Joint Venture. Nothing contained in this Agreement: (i)
shall constitute Manager and either of Issuer or Trustee as members of any
partnership, joint venture, association, syndicate, unincorporated business
or other separate entity, (ii) shall be construed to impose any liability
as such on any of them or (iii) shall be deemed to confer on any of them
any express, implied or apparent authority to incur any obligation or
liability on behalf of the others.
7. Other Activities of Manager. Nothing herein shall prevent
Manager or its Affiliates from engaging in other businesses or, in its sole
discretion, from acting in a similar capacity as an Manager for any other
Person even though such Person may engage in business activities similar to
those of Issuer, Trustee or Indenture Trustee.
8. Term of Agreement; Resignation and Removal of Manager.
(a) This Agreement shall continue in force until the dissolution
of Issuer, upon which event this Agreement shall automatically terminate.
(b) Subject to Section 8(e), Manager may resign its duties
hereunder by providing Issuer, Indenture Trustee and Servicer with at least
60 days' prior written notice.
(c) Subject to Section 8(e), Issuer may remove Manager without
cause by providing Manager, Indenture Trustee and Servicer with at least 60
days' prior written notice.
(d) Subject to Section 8(e), at the sole option of Issuer, Manager
may be removed immediately upon written notice of termination from Issuer
to Manager, Indenture Trustee and Servicer if any of the following events
shall occur:
(i) Manager shall default in the performance of any of
its duties under this Agreement and, after notice of such default,
shall not cure such
7
<PAGE>
default within ten days (or, if such default cannot be cured in
such time, shall not give within ten days such assurance of cure
as shall be reasonably satisfactory to Issuer);
(ii) a court having jurisdiction in the premises shall
enter a decree or order for relief, and such decree or order shall
not have been vacated within 60 days, in respect of Manager in any
involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect or appoint a
receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official for Manager or any substantial part of its
property or order the winding-up or liquidation of its affairs; or
(iii) Manager shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, shall consent to the entry of an order for
relief in an involuntary case under any such law, or shall consent
to the appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator or similar official for Manager or any
substantial part of its property, shall consent to the taking of
possession by any such official of any substantial part of its
property, shall make any general assignment for the benefit of
creditors or shall fail generally to pay its debts as they become
due.
Manager agrees that if any of the events specified in clauses (ii)
or (iii) of this Section shall occur, it shall give written notice thereof
to Issuer, Servicer and Indenture Trustee within seven days after the
happening of such event.
(e) Upon Manager's receipt of notice of termination, pursuant to
Sections 8(c) or (d), or Manager's resignation in accordance with this
Agreement, the predecessor Manager shall continue to perform its functions
as Manager under this Agreement, in the case of termination, only until the
date specified in such termination notice or, if no such date is specified
in a notice of termination, until receipt of such notice and, in the case
of resignation, until the later of: (x) the date 45 days from the delivery
to Issuer, Indenture Trustee and Servicer of written notice of such
resignation (or written confirmation of such notice) in accordance with
this Agreement and (y) the date upon which the predecessor Manager shall
become unable to act as Manager, as specified in the notice of resignation
and accompanying Opinion of Counsel. In the event of Manager's termination
hereunder, Issuer shall appoint a successor Manager acceptable to Indenture
Trustee, and the successor Manager shall accept its appointment by a
written assumption in form acceptable to Indenture Trustee. In the event
that a successor Manager has not been appointed at the time when the
predecessor Manager has ceased to act as Manager in accordance with this
Section, Indenture Trustee without further action shall automatically be
appointed the successor Manager and Indenture Trustee shall be entitled to
the compensation specified in Section 3. Notwithstanding the above,
Indenture Trustee
8
<PAGE>
shall, if it shall be unable so to act, appoint or petition a court of
competent jurisdiction to appoint any established institution having a net
worth of not less than $50,000,000 and whose regular business shall include
the performance of functions similar to those of Manager, as the successor
to Manager under this Agreement.
(f) Upon appointment, the successor Manager (including Indenture
Trustee acting as successor Manager) shall be the successor in all respects
to the predecessor Manager and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating
thereto placed on the predecessor Manager and shall be entitled to the
compensation specified in Section 3 and all the rights granted to the
predecessor Manager by the terms and provisions of this Agreement.
(g) Except when and if Indenture Trustee is appointed successor
Manager, Manager may not resign unless it is prohibited from serving as
such by law as evidenced by an Opinion of Counsel to such effect delivered
to Indenture Trustee. No resignation or removal of Manager pursuant to this
Section shall be effective until: (i) a successor Manager shall have been
appointed by Issuer and (ii) such successor Manager shall have agreed in
writing to be bound by the terms of this Agreement in the same manner as
Manager is bound hereunder.
(h) The appointment of any successor Manager shall be effective
only after satisfaction of the Rating Agency Condition with respect to the
proposed appointment.
9. Action upon Termination, Resignation or Removal. Promptly upon
the effective date of termination of this Agreement pursuant to Section
8(a), or the resignation or removal of Manager pursuant to Section 8(b) or
(c), respectively, Manager shall be entitled to be paid all fees and
reimbursable expenses accruing to it to the date of such termination,
resignation or removal. Manager shall forthwith upon such termination
pursuant to Section 8(a) deliver to Issuer all property and documents of or
relating to the Collateral then in the custody of Manager. In the event of
the resignation or removal of Manager pursuant to Section 8(b) or (c),
respectively, Manager shall cooperate with Issuer and Indenture Trustee and
take all reasonable steps requested to assist Issuer and Indenture Trustee
in making an orderly transfer of the duties of Manager.
10. Notices. Any notice, report or other communication given
hereunder shall be in writing and addressed as follows:
9
<PAGE>
(a) if to Issuer or Trustee , to
Provident Equipment Lease Trust 1998-A
c/o First Union Trust Company, National
Association
One Rodney Square, 1st Floor
920 King Street
Wilmington, Delaware 19801
Attn: Corporate Trust Administration
with a copy to:
Information Leasing Corporation
c/o The Provident Bank
One East Fourth Street
Cincinnati, Ohio 45202
Attn: Treasury Management Services
(b) if to Manager, to
Information Leasing Corporation
c/o The Provident Bank
One East Fourth Street
Cincinnati, Ohio 45202
Attn: Treasury Management Services
(c) if to Indenture Trustee, to
Norwest Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust Services/Asset-Backed
Administration
or to such other address as any party shall have provided to the other
parties in writing. Any notice required to be in writing hereunder shall be
deemed given if such notice is mailed by certified mail, postage prepaid,
or hand-delivered to the address of such party as provided above.
11. Amendments. This Agreement may be amended from time to time by
a written amendment duly executed and delivered by Issuer, Manager and
Indenture Trustee, with the written consent of Trustee, but without the
consent of any of the Noteholders or the Certificateholders, to cure any
ambiguity, to correct or supplement provisions of this Agreement or for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement
10
<PAGE>
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such amendment shall not, as
evidenced by an Opinion of Counsel satisfactory to Indenture Trustee,
adversely affect in any material respect the interests of any Noteholder or
Certificateholder.
This Agreement may also be amended from time to time by Issuer,
Manager and Indenture Trustee with the written consent of Trustee,
Noteholders holding Notes evidencing not less than 662/3% of the
Outstanding Principal Amount of the Notes and the Holders of Certificates
evidencing not less than 662/3% of the Certificate Balance, for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the provisions of this Agreement or of modifying in any manner the rights
of the Noteholders or the Certificateholders; 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 the Trust
Estate or distributions that are required to be made for the benefit of the
Noteholders or the Certificateholders or (ii) reduce the aforesaid
percentage of the holders of Notes and Certificates that are required to
consent to any such amendment, without the consent of the holders of all
the outstanding Notes and Certificates. Notwithstanding the foregoing,
Manager may not amend this Agreement without the permission of the
Depositor, which permission shall not be unreasonably withheld.
Promptly after the execution of any such amendment or consent (or,
in the case of the Rating Agencies, 10 days prior thereto), Manager shall
furnish written notification of the substance of such amendment or consent
to each Certificateholder, Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of the
Certificateholders or the 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.
12. Successors and Assigns. This Agreement may not be assigned by
Manager unless such assignment is previously consented to in writing by
Issuer and Trustee and subject to the satisfaction of the Rating Agency
Condition in respect thereof. An assignment with such consent and
satisfaction, if accepted by the assignee, shall bind the assignee
hereunder in the same manner as Manager is bound hereunder. Notwithstanding
the foregoing, this Agreement may be assigned by Manager without the
consent of Issuer or Trustee to a corporation or other organization that is
a successor (by merger, consolidation or purchase of assets) to Manager,
provided that such successor organization executes and delivers to Issuer,
Trustee and Indenture Trustee an agreement in which such corporation or
other organization agrees to be bound hereunder by the terms of said
assignment in the
11
<PAGE>
same manner as Manager is bound hereunder. Subject to the foregoing, this
Agreement shall bind any successors or assigns of the parties hereto.
13. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of New York, without reference to its conflict
of law provisions, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
14. Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
15. Counterparts. This Agreement may be executed in counterparts,
all of which when so executed shall together constitute but one and the
same agreement.
16. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
17. Not Applicable to Information Leasing Corporation in Other
Capacities. Nothing in this Agreement shall affect any obligation
Information Leasing Corporation may have in any other capacity.
18. Limitation of Liability of Trustee and Indenture Trustee. (a)
Notwithstanding anything contained herein to the contrary, this instrument
has been countersigned by First Union Trust Company, National Association,
not in its individual capacity but solely in its capacity as Trustee of
Issuer, and in no event shall First Union Trust Company, National
Association, in its individual capacity, or any beneficial owner of Issuer
have any liability for the representations, warranties, covenants,
agreements or other obligations of Issuer hereunder, as to all of which
recourse shall be had solely to the assets of Issuer. For all purposes of
this Agreement, in the performance of any duties or obligations of Issuer
thereunder, Trustee shall be subject to, and entitled to the benefits of,
the terms and provisions of Articles VI, VII and VIII of the Trust
Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by Norwest Bank Minnesota, National
Association, not in its individual capacity but solely as Indenture
Trustee, and in no event shall Norwest Bank Minnesota, National Association
have any liability for the representations, warranties, covenants,
agreements or other obligations of Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of Issuer.
12
<PAGE>
19. Third-Party Beneficiary. Trustee is a third-party beneficiary to
this Agreement and is entitled to the rights and benefits hereunder and may
enforce the provisions hereof as if it were a party hereto.
20. Indemnification. Manager shall indemnify Trustee and Indenture
Trustee (and their officers, directors, employees and agents) for, and hold
them harmless against, any losses, liability or expense, including
attorneys' fees reasonably incurred by them, incurred without negligence or
bad faith on their part, arising out of or in connection with (i) actions
taken by either of them pursuant to instructions given by Manager pursuant
to this Agreement or (ii) the failure of Manager to perform its obligations
hereunder. The indemnities contained in this Section shall survive the
termination of this Agreement and the resignation or removal of Manager,
Trustee or Indenture Trustee.
13
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
PROVIDENT EQUIPMENT LEASE TRUST
1998-A
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Trustee on behalf of Issuer and on its
own behalf as Trustee under the
Trust Agreement,
By: /s/ Doris J. Krick
-----------------------------------------
Name: Doris J. Krick
Title: Vice President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual capacity
but solely as Indenture Trustee,
By: /s/ Marianna C. Stershic
------------------------------------------
Name: Marianna C. Stershic
Title: Assistant Vice-President
14
<PAGE>
INFORMATION LEASING CORPORATION,
as Manager,
By: /s/ Vincent D. Rinaldi
---------------------------------
Name: Vincent D. Rinaldi
Title: President
15
<PAGE>
