<PAGE>
-------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------------------
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter period ended September 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 0-15167
TRANS LEASING INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-2747735
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3000 DUNDEE ROAD, NORTHBROOK, ILLINOIS 60062
(Address of principal executive offices)
Registrant's telephone number, including area code (708) 272-1000
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the Registrant was required to file such
reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes __X__ No____
The number of shares of Common Stock, Par Value $.01 Per Share,
of the Registrant
outstanding as of November 10, 1995 was 4,099,075.
- - - - - - -------------------------------------------------------------------------
Total number of pages: 237
Exhibit index appears on page 16.
<PAGE>
TRANS LEASING INTERNATIONAL, INC.
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Independent Accountants' Review Report 4
Condensed Consolidated Statements of Operations 5
Three-month periods ended
September 30, 1995
and 1994 (unaudited)
Condensed Consolidated Balance Sheets 6
September 30, 1995
(unaudited)
and June 30, 1995
Condensed Consolidated Statements
of Cash Flows 7
Three-month periods ended
September 30, 1995 and 1994
(unaudited)
Notes to Condensed Consolidated
Financial Statements 8
(unaudited)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
-2-
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-3-
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Stockholders and Board of Directors
Trans Leasing International, Inc.
Northbrook, Illinois
We have reviewed the accompanying condensed consolidated balance sheet
of Trans Leasing International, Inc. (the "Company") as of September
30, 1995, and the related condensed consolidated statements of
operations and cash flows for the three-month periods ended September
30, 1995 and 1994. These financial statements are the responsibility
of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to such condensed consolidated financial
statements for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Trans
Leasing International, Inc. as of June 30, 1995, and the related
consolidated statements of operations, stockholders' equity, and cash
flows for the year then ended (not presented herein); and in our
report dated September 1, 1995, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated
balance sheet as of June 30, 1995 is fairly stated, in all material
respects, in relation to the consolidated balance sheet from which it
has been derived.
DELOITTE & TOUCHE LLP
Chicago, Illinois
November 10, 1995
-4-
<PAGE>
<TABLE>
TRANS LEASING INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Three months
ended
September 30,
1995 1994
-------------- --------------
<S> <C> <C>
REVENUES:
Lease income $8,301,000 $7,035,000
Other 283,000 165,000
-------------- --------------
Total Revenues 8,584,000 7,200,000
EXPENSES:
Interest 3,677,000 3,143,000
General and administrative 2,752,000 2,327,000
Provision for uncollectible accounts 1,246,000 1,020,000
-------------- --------------
Total Expenses 7,675,000 6,490,000
-------------- --------------
EARNINGS BEFORE INCOME TAXES 909,000 710,000
INCOME TAXES 348,000 271,000
-------------- --------------
NET EARNINGS $561,000 $439,000
============== ==============
EARNINGS PER COMMON SHARE $0.13 $0.10
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 4,198,400 4,371,900
</TABLE>
See notes to condensed consolidated financial statements.
-5-
<PAGE>
<TABLE>
TRANS LEASING INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
September 30, June 30,
1995 1995
---------------- --------------
ASSETS (UNAUDITED)
<S> <C> <C>
CASH $2,917,000 $3,758,000
RESTRICTED CASH 12,923,000 12,988,000
NET INVESTMENT IN DIRECT FINANCE LEASES:
Future minimum lease payments 229,736,000 219,718,000
Estimated unguaranteed residual value 20,235,000 19,823,000
---------------- --------------
249,971,000 239,541,000
Less: Unearned lease income (41,576,000) (39,965,000)
Allowance for uncollectible accounts (7,232,000) (6,482,000)
---------------- --------------
201,163,000 193,094,000
---------------- --------------
LEASE FINANCING RECEIVABLES, less allowance for
uncollectible accounts of $168,000 and $151,000, respectively 5,164,000 4,977,000
PROPERTY AND EQUIPMENT, net of accumulated
depreciation 6,075,000 5,423,000
INCOME TAXES RECOVERABLE 1,382,000 1,464,000
OTHER ASSETS 4,931,000 4,679,000
---------------- --------------
TOTAL ASSETS $234,555,000 $226,383,000
================ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $8,594,000 $7,067,000
NOTES PAYABLE TO FINANCIAL INSTITUTIONS 56,025,000 49,175,000
LEASE-BACKED OBLIGATIONS 119,291,000 119,788,000
SUBORDINATED OBLIGATIONS 21,840,000 21,840,000
DEFERRED INCOME TAXES 2,843,000 2,843,000
---------------- --------------
TOTAL LIABILITIES 208,593,000 200,713,000
---------------- --------------
COMMITMENTS AND CONTINGENCIES 0 0
STOCKHOLDERS' EQUITY:
Preferred stock, par value $1.00;
authorized 2,500,000 shares; none issued
Common stock, par value $.01; authorized
10,000,000 shares; issued 4,798,500 shares 48,000 48,000
Additional paid-in capital 9,879,000 9,879,000
Retained earnings 17,905,000 17,471,000
Less 631,225 and 586,525 shares respectively, held in treasury,
at cost (1,870,000) (1,728,000)
---------------- --------------
TOTAL STOCKHOLDERS' EQUITY 25,962,000 25,670,000
---------------- --------------
$234,555,000 $226,383,000
================ ==============
</TABLE>
See notes to condensed consolidated financial statements.
-6-
<PAGE>
<TABLE>
TRANS LEASING INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three months
ended
September 30,
1995 1994
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $561,000 $439,000
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Leasing costs, primarily provision
for uncollectible accounts and
amortization of initial direct costs 1,788,000 1,529,000
Depreciation and amortization 369,000 132,000
Initial direct costs incurred (576,000) (578,000)
Changes in:
Accounts payable and accrued expenses 1,527,000 634,000
Income taxes recoverable 82,000 222,000
Other assets (271,000) (885,000)
Other 10,000
-------------- --------------
Net cash provided by operating activities 3,480,000 1,503,000
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Principal collections on leases 20,702,000 15,758,000
Equipment purchased for leasing (29,272,000) (25,199,000)
Purchase of lease financing receivables (833,000) (92,000)
Purchase of property and equipment (1,161,000) (490,000)
Disposal of property and equipment 159,000 30,000
-------------- --------------
Net cash used in investing activities (10,405,000) (9,993,000)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of notes payable to financial institutions 25,425,000 19,000,000
Repayment of notes payable to financial institutions (18,575,000) (11,844,000)
Issuance of lease-backed obligations 17,591,000 50,452,000
Repayment of lease-backed obligations (18,088,000) (50,020,000)
Payment of dividends on common stock (127,000)
Purchase of treasury stock (142,000)
-------------- --------------
Net cash provided by financing activities 6,084,000 7,588,000
-------------- --------------
NET DECREASE IN CASH (841,000) (902,000)
CASH, beginning of period 3,758,000 3,297,000
-------------- --------------
CASH, end of period $2,917,000 $2,395,000
============== ==============
</TABLE>
See notes to condensed consolidated financial statements.
-7-
<PAGE>
TRANS LEASING INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - FINANCIAL STATEMENTS:
- - - - - - ------------------------------
The condensed consolidated balance sheet of Trans Leasing
International, Inc. (the "Company") as of September 30, 1995, and the
condensed consolidated statements of operations and cash flows for the
three-month periods ended September 30, 1995 and 1994, have been
prepared by the Company without audit. The condensed consolidated
balance sheet at June 30, 1995, has been taken from the audited
financial statements of that date. In the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position at September 30,
1995, and the results of operations and cash flows for the periods
presented have been made. The results of operations for the period
ended September 30, 1995, are not necessarily indicative of the
operating results for the full year.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted. It is suggested that these
financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's June 30, 1995
annual report to stockholders.
Certain reclassifications have been made to prior years to conform
with the presentation used in fiscal 1996.
NOTE B - ACCOUNTING FOR INTEREST RATE COLLAR AGREEMENT:
- - - - - - -------------------------------------------------------
The Company has an amortizing interest rate collar agreement which
effectively fixes the interest rate on its floating-rate lease-backed
notes issued in October 1992 at 5.75%. The notional amount of the
collar declines over time to match the scheduled amortization of the
related note and, as of September 30, 1995, was $8,496,000.
Interest received from or paid to the counterparty under this
agreement is netted against or added to interest expense on the
Company's statement of operations. There is no market risk associated
with this agreement as it is used to hedge floating-rate debt. The
Company is exposed to potential non-performance by the counterparty to
the interest rate agreement, though the Company does not anticipate
non-performance due to the strong financial position of the
counterparty.
-8-
<PAGE>
NOTE C - SUBSEQUENT EVENTS:
- - - - - - ---------------------------
On October 6, 1995, the Company issued approximately $90 million
6.40% senior notes and approximately $11 million 7.55% subordinated
notes through a newly-formed limited-purpose business trust. The
assets of the trust securing such indebtedness include equipment
leases and the interest in the underlying equipment acquired from TL
Lease Funding Corp. IV (a special-purpose subsidiary of the Company,
"TLFC IV") which in turn acquired such assets from the Company at
various times prior to the issuance of the notes. This securitization
transaction was afforded financing accounting treatment and there will
be no gain or loss impact on consolidated earnings. The Company
continues to service the leases and the trust makes monthly principal
and interest payments to the note holders from lease collections.
Proceeds from the transaction were used to repay borrowings under the
TLFC IV revolving credit facility in the amount of $74 million, to
repay borrowings under the Company's revolving credit agreement in the
amount of approximately $20 million and the remainder for general
corporate purposes. Upon completion of this transaction, the TLFC IV
revolving credit facility was terminated and the Company's revolving
credit agreement was amended to decrease the Company's borrowing
capacity from $30 million to $15 million. As of November 10, 1995,
outstanding loans under the Company's revolving credit agreement were
$9.9 million and unused borrowing capacity was $5.1 million.
On November 9, 1995 the Board of Directors approved the payment of
a quarterly cash dividend in the amount of $.03 per share. The
dividend will be paid on December 8, 1995 to holders of record as of
November 24, 1995.
-9-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
GENERAL
- - - - - - -------
The Company's operations are comprised almost exclusively of
lease financing. The Company realizes net earnings to the extent that
lease income, net of a provision for uncollectible accounts, and
related fees exceed interest expense and general and administrative
expenses. Interest expense is the single largest expense of the
Company and is a function of the amounts borrowed by the Company to
finance its lease portfolio and the interest rates associated with
those borrowings. The difference between the lease income and the
cost of funds to finance the leases is generally referred to as the
"spread" in the portfolio.
Substantially all of the Company's lease receivables are written
at a fixed rate for a fixed term. The Company's borrowings on the
other hand are at both fixed and variable rates of interest. The
Company borrows under a revolving credit facility at a variable
interest rate (see "Liquidity and Capital Resources") and periodically
refinances that debt on a fixed-rate basis through either private
placements of institutional debt, a fixed-rate loan option in the
revolving credit agreement, securitization of lease receivables or the
sale of debt in the public market. To the extent the Company
refinances with fixed-rate debt, the Company locks in the spread in
its portfolio.
The Company has experienced growth in the dollar amount of new
lease receivables added to its portfolio during each of the last five
fiscal years. In analyzing the Company's financial statements, it is
important to understand the impact of lease receivable growth during
an accounting period on lease income and net earnings.
For financial reporting purposes, substantially all of the
Company's leases are classified as direct finance leases and are
accounted for in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 13, "Accounting for Leases." The Company
accounts for its investment in direct finance leases by recording on
the balance sheet the total minimum lease payments receivable plus the
estimated residual value of leased equipment less the unearned lease
income. Unearned lease income represents the excess of the total
minimum lease payments plus the estimated residual value expected to
be realized at the end of the lease term over the cost of the related
equipment. Unearned lease income is recognized as revenue over the
term of the lease by a method which approximates the effective
interest method, i.e., application of a constant periodic rate of
return to the declining net investment in each lease. As a result,
during a period in which the Company realizes growth in new lease
receivables, lease income should also increase, but at a lesser rate.
Initial direct costs incurred in consummating a lease,
principally commissions, are capitalized as part of the net investment
in direct finance leases and amortized over the lease term as a
reduction in the yield. An allowance for uncollectible accounts is
provided over the terms of the underlying leases as the leases are
determined to be uncollectible.
-10-
<PAGE>
RESULTS OF OPERATIONS
- - - - - - ---------------------
Lease income increased $1,266,000 (18.0%) in the first quarter of
fiscal 1996 compared to the first quarter of fiscal 1995 due primarily
to a 16.0% increase in the net investment in direct finance leases
from September 30, 1994 to September 30, 1995. In addition, the
increase in lease income is attributable to an increase in
lease-related fees of $69,000 (10.2%) in the first quarter of fiscal
1996 as compared to the first quarter of fiscal 1995.
The growth in the Company's lease portfolio is the result of an
increase in the dollar amount of leases originated. The Company
believes that the dollar amount of leases originated has increased
primarily as a result of its increased marketing and selling
activities, greater name recognition of LeaseCard in the marketplace,
the introduction of new products by equipment manufacturers and
reductions in lease rates which have enabled the Company to attract
additional new business. Lease-related fees, primarily delinquency
charges and lease continuance fees, have increased as a result of the
growth in the size of the Company's lease portfolio.
Interest expense increased $534,000 (17.0%) in the first quarter
of fiscal 1996 compared to the first quarter of fiscal 1995. This
increase resulted from an increase in the amounts borrowed to finance
the growth in the lease portfolio. Interest expense as a percent of
lease income decreased to 44.3% in the first quarter of fiscal 1996
from 44.7% in the first quarter of fiscal 1995. Interest expense is
reported net of the impact of interest rate swaps used to fix the rate
on floating rate financings, the effect of which was to decrease
interest expense by $23,000 for the first quarter in fiscal 1996 and
increase interest expense $85,000 for the first quarter in fiscal
1995.
General and administrative expense increased $425,000 (18.3%) in
the first quarter of fiscal 1996 compared to the first quarter of
fiscal 1995 primarily due to an increase in employees to accommodate
the Company's continued growth. General and administrative expense as
a percent of lease income remained relatively constant at 33.2% in the
first quarter of fiscal 1996 compared to 33.1% in the first quarter of
fiscal 1995.
The provision for uncollectible accounts increased $226,000
(22.1%) in the first quarter of fiscal 1996 compared to the first
quarter of fiscal 1995. The increase over this period resulted
primarily from the increase in the size of the Company's lease
portfolio. The provision for uncollectible accounts as a percent of
lease income was 15.0% in the first quarter of fiscal 1996 and 14.5%
in the first quarter of fiscal 1995.
Earnings before income taxes increased 28.0% to $909,000 compared
with $710,000 for the like quarter of the prior year. Net earnings
for the first quarter of fiscal 1996 increased by 27.8% to $561,000,
or $.13 per share, compared with $439,000, or $.10 per share, for the
like quarter of the prior year. The increases in both earnings before
income taxes and net earnings for the first quarter of fiscal 1996 are
primarily due to the increase in lease income and the decrease in
interest expense as a percent of lease income, as discussed above.
-11-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- - - - - - -------------------------------
The Company has principally financed its operations, including
the growth of its lease portfolio, through borrowings under its
revolving credit agreement, issuance of debt and lease-backed
obligations in both the institutional private placement and public
markets, principal collections on leases and cash provided from
operations.
Net cash used in investing activities, which was $10.4 million in
the first quarter of fiscal 1996 and $10.0 million in the first
quarter of fiscal 1995, generally represents the excess of equipment
purchased for leasing over principal collections on leases. Net cash
provided by financing activities (the excess of borrowings under the
revolving credit agreement and issuances of debt and lease-backed
obligations over repayments of these debt instruments) was $6.1
million in the first quarter of fiscal 1996 and $7.6 million in the
first quarter of fiscal 1995. The remaining funds used in investing
activities were provided by operating cash flows and cash on hand at
the beginning of the period. As of September 30, 1995, the Company
had outstanding commitments to purchase equipment, which it intended
to lease, with an aggregate purchase price of $6.8 million.
The Company borrows under its revolving credit agreement from
time to time to fund its operations. As the Company has approached
full utilization under this agreement, it has sold long-term debt and
lease-backed obligations in both the institutional private placement
and public markets and used the proceeds to reduce its revolving
credit borrowings. These long-term debt and lease-backed obligations
are issued either with fixed interest rates or with floating interest
rates combined with interest rate swaps to lock in a fixed rate. The
Company intends to continue to issue long-term debt and lease-backed
obligations in both the institutional private placement and public
markets to reduce its exposure to floating rates associated with
revolving credit borrowings.
On October 6, 1995, the Company issued approximately $90 million
6.40% senior notes and approximately $11 million 7.55% subordinated
notes through a newly-formed limited-purpose business trust. The
assets of the trust securing such indebtedness include equipment
leases and the interest in the underlying equipment acquired from TL
Lease Funding Corp. IV (a special-purpose subsidiary of the Company,
"TLFC IV"), which in turn acquired such assets from the Company at
various times prior to the issuance of the notes. This securitization
transaction was afforded financing accounting treatment and there will
be no gain or loss impact on consolidated earnings. The Company
continues to service the leases and the trust makes monthly principal
and interest payments to the note holders from lease collections.
Proceeds from the transaction were used to repay borrowings under the
TLFC IV revolving credit facility in the amount of $74 million, to
repay borrowings under the Company's revolving credit agreement in the
amount of approximately $20 million and the remainder for general
corporate purposes. Upon completion of this transaction, the TLFC IV
revolving credit facility was terminated and the Company's revolving
credit agreement was amended to decrease the Company's borrowing
capacity from $30 million to $15 million. As of November 10, 1995,
outstanding loans under the Company's revolving credit agreement were
$9.9 million and unused borrowing capacity was $5.1 million.
-12-
<PAGE>
The Company believes that the unused portions of the credit
facilities, increasing principal payments on leases and continued
placement of debt and lease-backed obligations in the public and/or
private markets will provide adequate capital resources and liquidity
for the Company to fund its operations and debt maturities. The
Company was in compliance with all of the provisions of its loan
agreements and its revolving credit facilities at September 30, 1995.
On November 16, 1994, the Board of Directors authorized the
repurchase by the Company of up to 1,000,000 shares of its common
stock. The Board determined that this stock repurchase program is in
the best interests of the Company and its shareholders given the
significant discount to book value at which the Company's common stock
is currently trading. As of September 30, 1995, 204,625 shares have
been repurchased at a total cost of $692,000 under this program.
On November 9, 1995 the Board of Directors approved the third
consecutive payment of a quarterly cash dividend in the amount of $.03
per share. The dividend will be paid on December 8, 1995 to holders
of record as of November 24, 1995.
-13-
<PAGE>
PART II. OTHER INFORMATION.
ITEM 6. Exhibits and Reports on Form 8-K.
(a) List of Exhibits Filed with Form 10-Q:
10.33 Amended and Restated Contribution and Sale Agreement,
dated as of October 6, 1995, between Registrant and TL
Lease Funding Corp. IV.
10.34 Pooling and Servicing Agreement, dated as of October
6, 1995, among Registrant, TL Lease Funding Corp. IV
and TLFC IV Equipment Lease Trust 1995-1.
10.35 Indenture, dated as of October 6, 1995, between TLFC
IV Equipment Lease Trust 1995-1 and Manufacturers and
Traders Trust Company.
10.36 Trust Agreement, dated as of October 6, 1995, between
TL Lease Funding Corp. IV and Bankers Trust
(Delaware).
10.37 Administration Agreement, dated as of October 6,
1995, between Registrant and TLFC IV Equipment Lease
Trust 1995-1.
27 Financial Data Schedule
(b) Reports on Form 8-K
During the first quarter of fiscal 1996, the Company filed
a Current Report on Form 8-K, dated July 28, 1995,
containing no financial statements but describing, under
Item 5, certain loss and delinquency information with
respect to the Company for fiscal 1995.
-14-
<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 thereunto duly authorized.
TRANS LEASING INTERNATIONAL, INC.
(Registrant)
DATE: November 14, 1995 RICHARD GROSSMAN
--------------------- -----------------------------------
Richard Grossman
President, Chief Executive Officer,
Chairman of the Board of Directors
DATE: November 14, 1995 NORMAN SMAGLEY
--------------------- -----------------------------------
Norman Smagley
Vice President, Finance, and
Chief Financial Officer
-15-
<PAGE>
Exhibit Index
Exhibit No. Description of Exhibit Page No
- - - - - - ----------- -------------------------------------------------------- --------
10.33 Amended and Restated Contribution and Sale 17
Agreement, dated as of October 6, 1995, between
Registrant and TL Lease Funding Corp. IV.
10.34 Pooling and Servicing Agreement, dated as of 45
October 6, 1995, among Registrant, TL Lease Funding
Corp. IV and TLFC IV Equipment Lease Trust 1995-1.
10.35 Indenture, dated as of October 6, 1995, between TLFC IV 105
Equipment Lease Trust 1995-1 and Manufacturers and
Traders Trust Company.
10.36 Trust Agreement, dated as of October 6, 1995, between 189
TL Lease Funding Corp. IV and Bankers Trust (Delaware).
10.37 Administration Agreement, dated as of October 6, 1995, 224
between Registrant and TLFC IV Equipment Lease Trust
1995-1.
27 Financial Data Schedule 237
-16-
<PAGE>
_________________________________________________________________
AMENDED AND RESTATED CONTRIBUTION AND SALE AGREEMENT
______________________
between
TRANS LEASING INTERNATIONAL, INC.
and
TL LEASE FUNDING CORP. IV
_______________________
Dated as of
October 6, 1995
_________________________________________________________________
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . .2
1.01 Definitions . . . . . . . . . . . . . . . . . . . . .2
1.02 Other Definitional Provisions . . . . . . . . . . . .7
ARTICLE II
ISSUANCE OF STOCK BY TLFC; CONTRIBUTION OF CONTRIBUTED ASSETS; SALE
OF PURCHASED ASSETS8
2.01 Issuance of Common Stock by TLFC. . . . . . . . . . .8
2.02 Contributions and Sales . . . . . . . . . . . . . . .8
2.03 Contribution and Sale of Additional Assets. . . . . 10
2.04 Custody of Lease Files. . . . . . . . . . . . . . . 11
ARTICLE IIIREPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 12
3.01 Representations and Warranties of Trans Leasing . . 12
3.02 Representations and Warranties of TLFC. . . . . . . 17
3.03 Purchase of Leases and Equipment by Trans Leasing . 19
3.04 Indemnification . . . . . . . . . . . . . . . . . . 20
ARTICLE IVCOVENANTS OF TRANS LEASING AND TLFC. . . . . . . . . 20
4.01 Trans Leasing Covenants . . . . . . . . . . . . . . 20
4.02 TLFC Covenants. . . . . . . . . . . . . . . . . . . 23
4.03 Assignment; Grant of Security Interest. . . . . . . 23
ARTICLE VTERMINATION . . . . . . . . . . . . . . . . . . . . . 23
5.01 Termination . . . . . . . . . . . . . . . . . . . . 23
5.02 Effect of Termination . . . . . . . . . . . . . . . 23
ARTICLE VIMISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . 24
6.01 Amendment . . . . . . . . . . . . . . . . . . . . . 24
6.02 Governing Law . . . . . . . . . . . . . . . . . . . 24
6.03 Notice. . . . . . . . . . . . . . . . . . . . . . . 24
6.04 Severability of Provisions. . . . . . . . . . . . . 25
6.05 Assignment. . . . . . . . . . . . . . . . . . . . . 25
6.06 No Waiver; Cumulative Remedies. . . . . . . . . . . 25
6.07 Counterparts. . . . . . . . . . . . . . . . . . . . 26
6.08 Binding Effect; Third-Party Beneficiaries . . . . . 26
6.09 Merger and Integration. . . . . . . . . . . . . . . 26
6.10 Headings. . . . . . . . . . . . . . . . . . . . . . 26
6.11 Schedules and Exhibits. . . . . . . . . . . . . . . 26
6.12 No Petition Covenants . . . . . . . . . . . . . . . 26
6.13 Confidential Information. . . . . . . . . . . . . . 26
LIST OF EXHIBITS
Exhibit A Form of Assignment for the Closing Date Assets
Exhibit B Form of Assignment for the Additional Assets
Exhibit C Forms of Lease
LIST OF SCHEDULES
Lease Schedule
Excluded Lease Schedule
Lease Criteria Schedule
Specified Portfolio Characteristics Schedule
<PAGE>
AMENDED AND RESTATED CONTRIBUTION AND SALE AGREEMENT
THIS AMENDED AND RESTATED CONTRIBUTION AND SALE AGREE-
MENT, dated as of October 6, 1995 (this "Agreement"), is entered
into between Trans Leasing International, Inc. ("Trans Leasing"),
a Delaware corporation, and TL Lease Funding Corp. IV ("TLFC"), a
Delaware corporation. Capitalized terms used and not otherwise
defined herein have the respective meanings set forth in Article
I below.
Trans Leasing in the ordinary course of its business
originates equipment and other leases in the United States.
Trans Leasing and TLFC entered into a Contribution and
Sale Agreement dated as of April 18, 1995 (the "Original Agree-
ment"), pursuant to which, among other things, Trans Leasing
transferred the Purchased Leases, the Contributed Leases, its
interests in the related Equipment and other assets to TLFC upon
the terms and conditions set forth in the Original Agreement.
Trans Leasing and TLFC desire to amend and restate in
its entirety the Original Agreement.
On the date hereof, Trans Leasing desires to sell and
contribute to TLFC additional Leases, its interests in the
related Equipment and other assets and it is contemplated that,
from time to time after the date hereof, Trans Leasing and TLFC
may agree that Trans Leasing will transfer additional Leases, its
interests in the related Equipment and other assets to TLFC, in
each case, upon the terms and conditions set forth in this
Agreement.
It is contemplated that, TLFC will transfer the Leases,
its interests in the related Equipment and other assets to the
Trust, which in turn will pledge such Leases, interests in the
related Equipment and other assets to the Indenture Trustee, and
that, following such transfers and pledge, Trans Leasing, in its
capacity as Servicer pursuant to the Pooling and Servicing
Agreement, will administer and service such Leases and the
related Equipment.
In connection with the transactions contemplated
hereby, and as contemplated by the Original Agreement, Trans
Leasing is willing to restate certain representations,
warranties, covenants and agreements made under the Original
Agreement and make additional representations and warranties,
covenants and agreements.
In consideration of the mutual covenants set forth in
this Agreement, and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, Trans
Leasing and TLFC agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. Whenever used in this
Agreement, the following words and phrases will have the
following meanings:
"Addition Cut-Off Date" means, with respect to an
Additional Lease, the close of business on the last day of the
month preceding the related Addition Date.
"Addition Date" has the meaning set forth in Section
2.03(a).
"Additional Assets" means all right, title and interest
of Trans Leasing in, to, and under (i) the Additional Leases
(including Trans Leasing's obligations under the Additional
Leases) and all monies due or to become due thereunder after the
related Addition Cut-Off Date, (ii) the related Equipment (other
than any licensed products that may accompany any of such
Equipment), (iii) the Lease Files for the Additional Leases, (iv)
any Insurance Policies and the related Insurance Proceeds with
respect to the Additional Leases and (v) all income and proceeds
relating to the foregoing.
"Additional Leases" means the Leases listed on any
Additional Lease Schedule delivered by Trans Leasing to TLFC
pursuant to Section 2.03(a).
"Assets" means the Purchased Assets, the Contributed
Assets, the Closing Date Assets and any Additional Assets, but
does not include any Excluded Assets.
"Business Day" means any day which is not a Saturday,
Sunday or a legal holiday under the laws of the State of Illinois
and is not a day on which banking institutions located in the
State of Illinois are authorized or permitted by law or other
governmental action to close.
"Closing Date" means October 6, 1995.
"Closing Date Assets" means all right, title and
interest of Trans Leasing in, to and under (i) the Closing Date
Leases (including Trans Leasing's obligations under the Closing
Date Leases) and all monies due or to become due thereunder after
the Cut-Off Date, (ii) the related Equipment (other than any
licensed products that may accompany any of such Equipment),
(iii) the Lease Files for the Closing Date Leases, (iv) any
Insurance Policies and the related Insurance Proceeds with
respect to the Closing Date Leases and (v) all income and
proceeds relating to the foregoing.
"Closing Date Leases" means the Leases listed on the
Closing Date Lease Schedule attached to the assignment executed
and delivered by Trans Leasing to TLFC as described in Section
2.02(c).
"Common Stock" means 1,000 shares of the common stock
of TLFC, par value $0.01 per share, constituting all of its
authorized capital stock.
"Contributed Assets" means all right, title and
interest of Trans Leasing in, to and under (i) the Contributed
Leases (including Trans Leasing's obligations under the
Contributed Leases) and all monies due or to become due
thereunder after the date set forth in the related assignments
with respect thereto, (ii) the related Equipment (other than any
licensed products that may accompany any of such Equipment),
(iii) the Lease Files for the Contributed Leases, (iv) any
Insurance Policies and the related Insurance Proceeds with
respect to the Contributed Leases and (v) all income and proceeds
relating to the foregoing.
"Contributed Leases" means the Leases listed on the
Contributed Lease Schedule, as amended to reflect the
contribution by Trans Leasing to TLFC of certain additional
Leases on the Subsequent Closing Dates, attached to the Original
Agreement.
"Credit Agreement" means the Revolving Credit and Term
Loan and Security Agreement between TLFC and the Lender, dated as
of April 18, 1995, as amended, together with all amendments,
restatements, supplements and modifications thereof or thereto.
"Cut-Off Date" means August 31, 1995.
"Discounted Lease Balance" has the meaning ascribed to
such term in the Pooling and Servicing Agreement.
"Discounted Lease and Residual Balance" has the meaning
ascribed to such term in the Pooling and Servicing Agreement.
"Equipment" means the assets leased to a Lessee
pursuant to any Lease and/or, unless the context otherwise
requires, a security interest therein.
"Excluded Assets" means all right, title and interest
of Trans Leasing in, to and under (i) the Excluded Leases
(including Trans Leasing's obligations under the Excluded Leases)
and all monies due or to become due thereunder, (ii) the
Equipment related to the Excluded Lease (other than any licensed
products that may accompany any of such Equipment), (iii) the
Lease Files for the Excluded Leases, (iv) any Insurance Policies
and the related Insurance Proceeds with respect to the Excluded
Leases and (v) all income and proceeds relating to the foregoing.
"Excluded Leases" means Contributed Leases and
Purchased Leases listed in the Excluded Leases Schedule attached
hereto.
"Filing Locations" means the states of Alabama,
Arizona, California, Delaware, Florida, Georgia, Illinois,
Indiana, Maryland, New Jersey, New York, North Carolina, Ohio,
Pennsylvania, Texas and Virginia.
"Governmental Authority" means (a) any federal, state,
county, municipal or foreign government, or political subdivision
thereof, (b) any governmental or quasi-governmental agency,
authority, board, bureau, commission, department, instrumentality
or public body, (c) any court or administrative tribunal or (d)
with respect to any Person, any arbitration tribunal or other
non-governmental authority to the jurisdiction of which such
Person has consented.
"Holders" has the meaning set forth in the Pooling and
Servicing Agreement.
"Indenture" means the Indenture of even date herewith
between the Trust and the Indenture Trustee, as such agreement
may be amended, modified or supplemented from time to time.
"Indenture Trustee" means Manufacturers and Traders
Trust Company, as Indenture Trustee under the Indenture, or any
successor thereto.
"Initial Closing Date" means April 18, 1995.
"Insurance Policy" means with respect to any Lease, an
insurance policy covering physical damage to or loss of the
related Equipment.
"Insurance Proceeds" means, depending on the context,
any amounts payable or any payments made, to the Servicer under
an Insurance Policy.
"Interested Parties" means the Trust, the Holders and
the Indenture Trustee, in each case to the extent of their
respective interests in the Assets.
"Lease" means each agreement, including, as applicable,
schedules, subschedules, summary schedules, supplements and
amendments to a master lease, pursuant to which Trans Leasing, as
lessor, leases specified assets to a Lessee at a specified
monthly or quarterly rental, and which is identified in the Lease
Schedule, including all Contributed Leases, Purchased Leases,
Closing Date Leases and Additional Leases but not including any
Excluded Leases; provided, that, from and after the date on which
a Lease is purchased by Trans Leasing pursuant to Section 3.03 or
a Lease is otherwise transferred to Trans Leasing, such Lease
shall no longer be a Lease for purposes of this Agreement.
"Lease File" means, with respect to any Lease, the
Lease and all other documents relating to such Lease in the
possession of Trans Leasing or held by the Servicer under the
Pooling and Servicing Agreement, as the context requires.
"Lease Management System" means the computerized
electronic lease management system maintained by Trans Leasing
for all Leases and other agreements similar to the Leases.
"Lease Schedule" means a list of all Leases included in
the Assets, as amended to show the deletion of Leases purchased
by Trans Leasing pursuant to Section 3.03 or otherwise
transferred by TLFC to Trans Leasing.
"Lender" means First Union National Bank of North
Carolina.
"Lessee" means with respect to any Lease, the Person or
Persons obligated to make payments with respect to such Lease,
including any guarantor thereof.
"Lien" means any mortgage, pledge, hypothecation,
assignment for security, security interest, encumbrance, levy,
lien or charge of any kind, whether voluntarily incurred or
arising by operation of law or otherwise, affecting any Property,
including any agreement to grant any of the foregoing, any
conditional sale or other title retention agreement, any lease in
the nature of a security interest, and the filing of or agreement
to file or deliver any financing statement (other than a
precautionary financing statement with respect to a lease that is
not in the nature of a security interest and until 5 Business
Days after the Closing Date, financing statements filed in
connection with the Credit Agreement, other than those filed in
Delaware, Illinois and New York) under the UCC or comparable law
of any jurisdiction.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel to Trans Leasing or other counsel,
acceptable to TLFC.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit
corporation, firm, joint stock company, estate, entity or
Governmental Authority.
"Pooling and Servicing Agreement" means the Pooling and
Servicing Agreement dated as of the date hereof among TLFC, the
Trust and Trans Leasing, in its capacity as the initial servicer
thereunder, as such agreement may be amended, modified or
supplemented from time to time.
"Property" means any interest in any kind of property
or asset, whether real, personal or mixed, whether tangible or
intangible.
"Purchased Assets" means all right, title and interest
of Trans Leasing in, to, and under (i) the Purchased Leases
(including Trans Leasing's obligations under the Purchased
Leases), and all monies due or to become due thereunder after the
date set forth in the related assignments with respect thereto,
(ii) the related Equipment (other than any licensed products that
may accompany any of such Equipment), (iii) the Lease Files for
the Purchased Leases, (iv) any Insurance Policies and the related
Insurance Proceeds with respect to the Purchased Leases and
(v) all income and proceeds relating to the foregoing.
"Purchased Leases" means the Leases listed on the
Purchased Lease Schedule, as amended to reflect the sale by Trans
Leasing to TLFC of certain additional Leases on the Subsequent
Closing Dates, attached to the Original Agreement.
"Required Capital Contribution" has the meaning set
forth in Section 2.02(a).
"Responsible Officer" of any Person means any of the
President, Executive Vice President, Vice President, Chief
Financial Officer, Treasurer, Corporate Controller or Trust
Officer of such Person.
"Scheduled Lease Payments" means with respect to any
Lease, the monthly or quarterly rent payments scheduled to be
made by the related Lessee under the terms of such Lease after
the Cut-Off Date or the related Addition Cut-Off Date, as
applicable.
"Servicer" means, at any time, any Person then acting
as servicer under the Pooling and Servicing Agreement, and shall
initially refer to Trans Leasing in its capacity as the initial
servicer under the Pooling and Servicing Agreement.
"Subsequent Closing Dates" has the meaning set forth in
Section 2.02(b).
"Trust" means TLFC IV Equipment Lease Trust 1995-1, a
Delaware business trust.
"Trust Certificate" has the meaning ascribed to such
term in the Trust Agreement of even date herewith between TLFC
and Bankers Trust (Delaware), as Owner Trustee.
"UCC" means the Uniform Commercial Code as the same
may, from time to time, be in effect in the State of Illinois
provided, however, in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or
priority of the Lien of TLFC or an Interested Party in and to the
Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of Illinois the
term "UCC" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof
relating to such attachment, perfection or priority and for
purposes of definitions related to such provisions.
"Warranty Event" means, with respect to any Lease, that
Trans Leasing is obligated to purchase such Lease pursuant to
Section 3.03.
"Warranty Purchase Price" means, with respect to any
Lease and the related Equipment to be purchased by Trans Leasing,
the amount set forth as such in the Pooling and Servicing
Agreement.
1.02 Other Definitional Provisions.
(a) Terms used in Related Documents. Each
term defined in this Agreement will have the meaning assigned to
such term in this Agreement when used in any certificate or other
document made or delivered pursuant to this Agreement, unless
such term is otherwise defined therein.
(b) Accounting Terms. As used in this Agreement,
accounting terms which are not defined in Section 1.01 have the
respective meanings given to them under generally accepted
accounting principles as in effect on the date of this Agreement.
To the extent that the definitions of accounting terms in this
Agreement are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions
contained in this Agreement will control.
(c) "Hereof," etc. The words "hereof," "herein"
and "hereunder" and words of similar import when used in this
Agreement will refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section, Schedule and
Exhibit references contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement, unless
otherwise specified.
(d) Number and Gender. Each defined term used in
this Agreement has a comparable meaning when used in its plural
or singular form. Each gender-specific term used in this
Agreement has a comparable meaning whether used in a masculine,
feminine or gender-neutral form.
(e) Including. Whenever the term "including"
(whether or not that term is followed by the phrase "but not
limited to" or "without limitation" or words of similar effect)
is used in this Agreement in connection with a listing of items
within a particular classification, that list will be interpreted
to be illustrative only and will not be interpreted as a
limitation on, or an exclusive list of, the items within that
classification.
ARTICLE II
ISSUANCE OF STOCK BY TLFC; CONTRIBUTION
OF CONTRIBUTED ASSETS; SALE OF PURCHASED ASSETS;
SALE OF ADDITIONAL ASSETS
2.01 Issuance of Common Stock by TLFC. On the Initial
Closing Date, TLFC issued (in the name of Trans Leasing) and
delivered to Trans Leasing the Common Stock.
2.02 Contributions and Sales.
(a) Initial Contribution and Sale. In return for
the Common Stock, on the Initial Closing Date, Trans Leasing made
a capital contribution (the "Required Capital Contribution") to
TLFC of certain of the Contributed Assets, and Trans Leasing
delivered to TLFC an executed assignment with respect thereto.
The Required Capital Contribution was made without recourse to
Trans Leasing, subject to the obligations of Trans Leasing
pursuant to Section 3.03. For a purchase price of $60 million in
cash, on the Initial Closing Date, Trans Leasing sold to TLFC
certain of the Purchased Assets and delivered to TLFC an executed
assignment with respect thereto. Except for the obligations of
Trans Leasing pursuant to Section 3.03, the sale of such
Purchased Assets was made without recourse to Trans Leasing.
(b) Subsequent Contributions, Sales and
Transfers. On June 19, 1995, and August 8, 1995 (the "Subsequent
Closing Dates"), Trans Leasing made capital contributions to TLFC
of certain of the Contributed Assets and sold certain of the
Purchased Assets to TLFC for a purchase price of $15,375,000 and
$16,000,000, respectively, in cash, and certain Assets described
below. In each case, Trans Leasing delivered to TLFC an executed
assignment with respect thereto. Except for the obligations of
Trans Leasing pursuant to Section 3.03, the contributions of such
Contributed Assets and the sales of such Purchased Assets were
made without recourse to Trans Leasing. In addition, on the
Subsequent Closing Dates, TLFC transferred to Trans Leasing
certain Assets which theretofore constituted Contributed Assets
and Purchased Assets, and, in each case, TLFC executed an
assignment with respect thereto.
(c) Closing Date Contributions and Sales. Trans
Leasing agrees to contribute and sell to TLFC, and TLFC agrees to
accept and purchase on the date hereof, the Closing Date Assets,
as an additional contribution by Trans Leasing to the equity of
TLFC and in exchange for the payment and delivery to Trans
Leasing by TLFC of $[22,500,000] in cash, the Excluded Assets and
a one percent (1%) interest in the Trust Certificate, with the
value ascribed to each Lease and the related Equipment equal to
the Discounted Lease and Residual Balance with respect to such
Lease. On the date hereof, Trans Leasing will execute and
deliver to TLFC an assignment with respect to the Closing Date
Assets in the form attached as Exhibit A. Such contribution and
sale will be made without recourse, subject to the obligations of
Trans Leasing pursuant to Section 3.03.
(d) Distribution to Trans Leasing. TLFC agrees
to transfer to Trans Leasing the Excluded Assets.
(e) Recordation. Trans Leasing agrees to record
and file at its own expense financing statements and continuation
statements with respect to the Leases meeting the requirements of
applicable state law, in such manner and in such jurisdictions as
are necessary to perfect and to maintain the perfection of the
contributions and sales of the Leases and Trans Leasing's
interests in the related Equipment contributed or sold by Trans
Leasing to TLFC as described in this Section 2.02, and to deliver
a file-stamped copy of such financing statements or other
evidence of such filings to TLFC promptly after the Closing Date;
provided, however, that (i) the Lease Files for the Leases will
not be physically delivered to TLFC but instead will be held by
the Servicer pursuant to the Pooling and Servicing Agreement,
(ii) Trans Leasing will not be required to file any financing or
continuation statements with respect to the Equipment in any
jurisdiction other than in the Filing Locations, (iii) the
financing statements to be filed in the Filing Locations other
than the States of Delaware, Illinois and New York will not be
filed until after the Closing Date (and Trans Leasing agrees to
make such filings within 5 Business Days of the Closing Date) and
(iv) Trans Leasing will not be required to cause the certificate
of title or other title document to any Equipment consisting of
motor vehicles to be transferred to TLFC or transferred from TLFC
to the Trust or the security interest of the Indenture Trustee
granted pursuant to the Indenture marked on such certificate of
title or other title document.
(f) Marking of Lease Management System. On or
prior to the Closing Date, Trans Leasing will, for the benefit of
TLFC and the Interested Parties, at its own expense, cause the
Lease Management System to be marked to show that the Contributed
Assets, the Purchased Assets and the Closing Date Assets have
been contributed and sold to TLFC in accordance with this Agree-
ment, sold by TLFC to the Trust pursuant to the Pooling and
Servicing Agreement and pledged by the Trust to the Indenture
Trustee pursuant to the Indenture.
2.03 Contribution and Sale of Additional Assets.
(a) Additional Sales and Contributions. From
time to time after the date hereof, TLFC may request to purchase
Additional Assets from Trans Leasing. If Trans Leasing so agrees
to sell any Additional Assets, the purchase price thereof shall
be an amount agreed to by Trans Leasing and TLFC and shall be no
less than the fair market value of such Additional Assets as then
determined, including consideration of then current interest
rates, and no less than the Discounted Lease and Residual Balance
of the related Additional Lease (as determined pursuant to the
Pooling and Servicing Agreement) as of the related Addition Cut-Off Date.
From time to time after the date hereof, in connection
with a sale of Additional Assets or otherwise, Trans Leasing may
contribute to TLFC as an additional contribution to the equity of
TLFC, Additional Assets. The date on which any such sale or
contribution of Additional Assets takes place is herein referred
to as a "Addition Date." The purchase price for any Additional
Assets to be purchased by TLFC will be payable by TLFC on the
related Addition Date in cash. On each Addition Date, Trans
Leasing will deliver to TLFC an executed assignment substantially
in the form of Exhibit B attached hereto together with a schedule
identifying each Additional Lease included in the Additional
Assets (an "Additional Lease Schedule"). Except for the
obligations of Trans Leasing pursuant to Section 3.03, the sale
and contribution of any Additional Assets will be without
recourse to Trans Leasing.
(b) Recordation. In connection with any
contribution or sale of Additional Assets, Trans Leasing agrees
to record and file at its own expense financing statements and
continuation statements with respect to the related Additional
Leases meeting the requirements of applicable state law, in such
manner and in such jurisdictions as are necessary to perfect and
to maintain the perfection of the contributions and sales of the
Additional Leases by Trans Leasing to TLFC and Trans Leasing's
interests in the related Equipment contributed or sold by Trans
Leasing to TLFC as described in this Section 2.03, and to deliver
a file-stamped copy of such financing statements or other
evidence of such filings to TLFC promptly after the applicable
Addition Date; provided, however, that (i) the Lease Files for
such Additional Leases will not be physically delivered to TLFC
but instead will be held by the Servicer pursuant to the Pooling
and Servicing Agreement, (ii) Trans Leasing will not be required
to file any financing or continuation statements with respect to
the Equipment in any jurisdiction other than the Filing Locations
and (iii) Trans Leasing will not be required to cause the
certificate of title or other title document of any Equipment
consisting of motor vehicles to be transferred to TLFC or
transferred from TLFC to the Trust or the pledge to the Indenture
Trustee pursuant to the Indenture marked on such certificate of
title or other document.
(c) Marking of Lease Management System. On or
prior to the applicable Addition Date, in connection with any
contribution or sale of Additional Assets, Trans Leasing will, at
its own expense, cause the Lease Management System to be marked
to show that such Additional Assets have been contributed or sold
to TLFC in accordance with this Agreement and, as necessary,
further transferred and pledged.
2.04 Custody of Lease Files. In connection with the
contribution and sale of the Assets, Trans Leasing, in its
capacity as the Servicer pursuant to the Pooling and Servicing
Agreement, will retain custody of the Lease Files and any related
evidence of Insurance Policies, Insurance Proceeds and other
payments.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of Trans Leasing.
Trans Leasing confirms and makes the following representations
and warranties for the benefit of TLFC and the Interested
Parties, on which TLFC has relied in issuing the Common Stock and
has relied and will rely in accepting the contribution of and
purchasing the Assets and on which the Interested Parties will
rely in connection with the transactions contemplated by the
Pooling and Servicing Agreement. Unless otherwise indicated,
such representations and warranties, with respect to the Assets
(other than any Additional Assets), speak as of the Closing Date
and, with respect to any Additional Assets, as of the related
Addition Date, but in each case will survive the contribution and
the sale of the Assets to TLFC and the transfer or grant of a
security interest therein to any Interested Party.
(a) Representations and Warranties with respect
to the Assets. As to the Assets:
(i) the information with respect to the Leases
and the related Equipment in the Lease Schedule is true and
correct in all material respects;
(ii) no provision of any Lease has been waived,
altered or modified in any respect, except by an instrument
or document contained in the related Lease File and except
with respect to a Skipped Payment (as defined in the Pooling
and Servicing Agreement);
(iii) each Lease is a valid and binding payment
obligation of the related Lessee and is enforceable in
accordance with its terms, except as such enforceability may
be limited by (A) applicable bankruptcy, insolvency,
moratorium, reorganization or other similar laws now or
hereafter in effect affecting the enforcement of creditors'
rights generally and (B) general principles of equity
(whether considered in a suit at law or in equity);
(iv) the Leases are not and will not be subject to
rights of rescission, setoff, counterclaim or defense;
(v) the Leases, at the time they were made, did
not violate applicable state or federal laws;
(vi) each Lease contains provisions requiring the
Lessee to assume all risk of loss or malfunction of the
related Equipment;
(vii) except as set forth in the provisos of
Sections 2.02(e) and 2.03(b), all action has or will be
taken by Trans Leasing to transfer all its right, title and
interest in, to and under the Leases and the related
Equipment to TLFC;
(viii) each party to a Lease had the authority and
legal capacity to execute such Lease at the time that it did
so;
(ix) no Asset has been sold, transferred, assigned
or pledged by Trans Leasing to any Person (other than TLFC),
and immediately prior to contributing or selling such Asset
to TLFC, Trans Leasing is the sole owner of, and holder of
title to, the Leases, the related Equipment (or a security
interest therein) and the other Assets free and clear of any
Liens (except for the interests of Lessees under the
Leases), and immediately following the transfer by Trans
Leasing to TLFC of the Assets, the Assets will be free and
clear of all Liens (except for the interests of Lessees
under the Leases and interests of the Interested Parties);
(x) no Lease requires the substitution, addition
or exchange of any item of Equipment which would result in
any reduction of the Scheduled Lease Payments pursuant to
such Lease;
(xi) there is only one secured party's original of
each Lease that constitutes "chattel paper" for purposes of
the UCC and such original has not been delivered to any
Person other than the Servicer pursuant to the Pooling and
Servicing Agreement;
(xii) Trans Leasing has duly fulfilled in all
material respects all obligations on its part in connection
with the Leases and has done nothing to materially impair
the rights of TLFC or any Interested Party in the Leases or
the proceeds with respect thereto;
(xiii) to the best of Trans Leasing's knowledge, no
proceedings or investigations are pending or have been
threatened asserting the invalidity of any Lease or seeking
any determination or ruling that might adversely and
materially affect the validity or enforceability of any
Lease;
(xiv) except as set forth in the provisos of
Sections 2.02(e) and 2.03(b), all filings necessary to
evidence the contribution and sale of the Leases to TLFC
have been made in all appropriate jurisdictions;
(xv) none of the Lessees are, to Trans Leasing's
knowledge, the subject of bankruptcy or other insolvency
proceedings;
(xvi) each Lessee's billing address is in the
United States;
(xvii) all payments under the Leases are required to
be made in United States dollars;
(xviii) the substance of each Lease is substantially
similar to one of the forms of Lease in Exhibit C attached
hereto, except that any guaranty provision may have been
varied or deleted; provided that any such variation or
deletion will not cause any representation herein with
respect to such Lease to be untrue and will not reasonably
be expected to adversely affect the transactions
contemplated by this Agreement and the Pooling and Servicing
Agreement;
(xix) each of the Leases satisfies the criteria set
forth on the Lease Criteria Schedule attached hereto;
(xx) the Lease Schedule (as attached hereto) is a
true and complete list of all Leases and each Additional
Lease Schedule will be a true and complete list of all
Additional Leases to be transferred on the related Addition
Date, in each case identified by, among other things, its
Lease Number, its original Equipment cost, the effective
date of such Lease, the original term of such Lease, and the
amount of Scheduled Lease Payments pursuant to such Lease,
in each case as of the Cut-Off Date or the related Addition
Cut-Off Date, respectively; and
(xxi) (A) as of the Closing Date, the Leases
satisfy, as of the Cut-Off Date, the criteria set forth on
the Specified Portfolio Characteristics Schedule attached
hereto and (B) as of any Addition Date, the addition of the
related Additional Leases will not cause any of the criteria
set forth on the attached Specified Portfolio
Characteristics Schedule attached hereto not to be satisfied
as of the related Addition Cut-Off Date or, if any of such
criteria are not satisfied as of the first day of the month
in which the related Addition Date occurs (without giving
effect to the addition of such Additional Leases), such
addition will not increase the amount by which such criteria
are not satisfied (in each case, based on the
characteristics of such Additional Leases as of the related
Addition Cut-Off Date).
(b) Representations and Warranties as to Trans
Leasing. As to Trans Leasing:
(i) Organization and Good Standing. Trans
Leasing is a corporation duly organized, validly existing
and in good standing under the laws of the State of
Delaware, with all requisite corporate power and authority
to own its properties and to conduct its business as
presently conducted;
(ii) Due Qualification. Trans Leasing is
qualified to do business as a foreign corporation, is in
good standing, and has obtained all licenses and approvals
required under the laws of, all states in which the
ownership or lease of its property, the performance of its
obligations pursuant to this Agreement or the conduct of its
business requires such qualification, standing, license or
approval, except to the extent that the failure to so
qualify, maintain such standing or be so licensed or
approved, would not, in the aggregate, materially and
adversely affect the ability of Trans Leasing to comply with
this Agreement;
(iii) Power and Authority. Trans Leasing has the
corporate power and authority to execute and deliver this
Agreement and to carry out its terms, and Trans Leasing has
duly authorized the execution, delivery, and performance of
this Agreement by all requisite corporate action;
(iv) Valid Contribution and Sale; Binding Obliga-
tions. The contributions and sales of the Contributed
Assets, the Closing Date Assets and the Purchased Assets
constitute, and each contribution and sale of any Additional
Assets will constitute, a legal and valid contribution,
assignment, transfer and conveyance to TLFC of all right,
title and interest of Trans Leasing in, to and under such
Assets, and such Assets will be held by TLFC free and clear
of any Lien of any Person claiming through or under Trans
Leasing, except for Liens permitted under, or to be created
by, the Pooling and Servicing Agreement and the Indenture;
and this Agreement constitutes a legal, valid and binding
obligation of Trans Leasing, enforceable against Trans
Leasing in accordance with its terms, except as such
enforceability may be limited by (A) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect affecting the enforcement of
creditors' rights generally and (B) general principles of
equity (whether considered in a suit at law or in equity);
(v) No Violation. The consummation of the
transactions contemplated by, and the performance of the
terms of, this Agreement by Trans Leasing (with or without
the giving of any notice or the lapse of time) will not
(after giving effect to all consents and waivers received on
or prior to the date hereof or the Addition Date, as the
case may be) (A) conflict with, result in any breach of any
of the terms or provisions of or constitute a default under
the certificate of incorporation or by-laws of Trans Leasing
or any term of any indenture, agreement, mortgage, deed of
trust or other instrument to which Trans Leasing is a party
or by which it is bound; (B) result in the creation or
imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument (other than this
Agreement); or (C) violate any legal requirement applicable
to Trans Leasing or any of its properties in any manner;
which conflict, breach, default, Lien or violation would
have a material and adverse effect on the ability of Trans
Leasing to comply with this Agreement;
(vi) No Consent. No consent, approval, authoriza-
tion, order, registration, filing, qualification, license or
permit of or with any Governmental Authority having
jurisdiction over Trans Leasing or any of its properties or
assets is required to be obtained by or with respect to
Trans Leasing in connection with the execution, delivery and
performance by Trans Leasing of this Agreement and the
consummation of the transactions contemplated herein;
(vii) No Proceedings. To the best of Trans
Leasing's knowledge, there are no proceedings or
investigations pending or threatened before any Governmental
Authority having jurisdiction over Trans Leasing or its
properties against Trans Leasing or its properties
(A) asserting the invalidity of this Agreement, (B) seeking
to prevent the consummation of any of the transactions
contemplated by this Agreement, or (C) seeking any
determination or ruling that might (in the reasonable
judgment of Trans Leasing) materially and adversely affect
the performance by Trans Leasing of its obligations under,
or the validity or enforceability of, this Agreement;
(viii) Insolvency. Trans Leasing is not insolvent
and will not be rendered insolvent by the consummation of
the transactions contemplated by this Agreement;
(ix) Principal Place of Business. Trans Leasing's
principal place of business and chief executive office are
in the State of Illinois, County of Cook;
(x) Ability to Perform. At the date hereof,
Trans Leasing does not believe, nor does it have any
reasonable cause to believe, that it cannot perform each and
every covenant contained in this Agreement;
(xi) Fair Consideration. The consideration
received by Trans Leasing in exchange for the contribution
and sale of the Assets contributed and sold on the Initial
Closing Date and the Subsequent Closing Dates was, and for
the contribution and sale of the Assets on the date hereof
and on each Addition Date will be, fair consideration having
value equivalent to or in excess of the value of the Assets
transferred on each such date;
(xii) Bulk Transfer Provisions. The sale,
transfer, assignment and conveyance of the Leases and its
interests in the related Equipment by Trans Leasing
described in this Agreement is not subject to the bulk
transfer or any similar statutory provisions in effect in
any applicable jurisdiction;
(xiii) Transfer Taxes. The sale, transfer,
assignment and conveyance of the Assets by Trans Leasing
described in this Agreement will not result in the
imposition of any tax Lien or any liability of TLFC for any
tax on such sale, transfer, assignment and conveyance; and
(xiv) Common Stock. Trans Leasing owns all of the
Common Stock free and clear of all mortgages, assignments,
pledges, security interests, warrants, options and rights to
purchase.
3.02 Representations and Warranties of TLFC. TLFC
makes the following representations and warranties on which Trans
Leasing has and will rely in making the Required Capital
Contribution and contributing and selling any Assets. Such
representations and warranties speak as of the Closing Date and
each Addition Date, but will survive the contribution and sale of
the Assets to TLFC and the transfer and pledge of the Assets to
the Interested Parties.
(a) Organization and Good Standing. TLFC is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, with all requisite
corporate power and authority to own its properties and to
conduct its business as presently conducted and to enter into and
perform its obligations under this Agreement;
(b) Due Qualification. TLFC is qualified to do
business as a foreign corporation, is in good standing, and has
obtained all licenses and approvals required under the laws of,
all states in which the ownership or lease of its property or the
conduct of its business requires such qualification, standing,
license or approval, except to the extent that the failure to so
qualify, maintain such standing or be so licensed or approved
would not, in the aggregate, materially and adversely affect the
ability of TLFC to perform its obligations under this Agreement;
(c) Power and Authority. TLFC has the corporate
power and authority to execute and deliver this Agreement and to
carry out its terms, and TLFC has duly authorized the execution,
delivery, and performance of this Agreement by all requisite
corporate action;
(d) Binding Obligations. This Agreement consti-
tutes a legal, valid and binding obligation of TLFC, enforceable
in accordance with its terms, except as such enforcement may be
limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other laws now or hereafter
in effect affecting the enforcement of creditors' rights
generally and (ii) general principles of equity (whether
considered in a suit at law or in equity);
(e) No Violation. The consummation of the
transactions contemplated by, and the fulfillment of the terms
of, this Agreement by TLFC (with or without the giving of any
notice or the lapse of time) will not (after giving effect to all
consents and waivers received on or prior to the date hereof or
such Addition Date, as the case may be) (i) conflict with, result
in any breach of any of the terms and provisions of or constitute
a default under the certificate of incorporation or by-laws of
TLFC or any term of any indenture, agreement, mortgage, deed of
trust or other instrument to which TLFC is a party or by which it
is bound; (ii) result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument
(other than this Agreement); or (iii) violate any legal
requirement applicable to TLFC or any of its properties in any
manner; which conflict, breach, default, Lien or violation would
have a material and adverse effect on the ability of TLFC to
comply with this Agreement;
(f) No Proceedings. To the best of TLFC's
knowledge, there are no proceedings or investigations pending or
threatened before any Governmental Authority having jurisdiction
over TLFC or its properties against TLFC or its properties
(i) asserting the invalidity of this Agreement, (ii) seeking to
prevent the consummation of any of the transactions contemplated
by this Agreement, or (iii) seeking any determination or ruling
that might materially and adversely affect the performance by the
Seller of its obligations under, or the validity or enforce-
ability of, this Agreement;
(g) Insolvency. TLFC is not insolvent and will
not be rendered insolvent by the consummation of the transactions
contemplated by this Agreement and has an adequate amount of
capital to conduct its business in the ordinary course and to
carry out its obligations under this Agreement;
(h) Ability to Perform. As of the date hereof,
TLFC does not believe, nor does it have any reasonable cause to
believe, that it cannot perform each and every covenant contained
in this Agreement;
(i) Common Stock. Trans Leasing is the
registered owner of all the issued and outstanding capital stock
of TLFC, and the Common Stock is validly issued, fully paid and
nonassessable and owned of record by Trans Leasing; and
(j) Places of Business. TLFC's sole places of
business and offices are located in Northbrook, Illinois and
Wilmington, Delaware.
3.03 Purchase of Leases and Equipment by Trans
Leasing. In the event of discovery at any time that a
representation or warranty set forth in Section 3.01 is untrue in
any respect, TLFC (or any Interested Party or other Person to the
extent provided in the Pooling and Servicing Agreement) may by
written notice direct Trans Leasing to purchase each Lease
materially and adversely affected by such untruth, and all
related Equipment, on or prior to the thirtieth day after such
notice is received by Trans Leasing (or such later date as any
Interested Party may specify), and Trans Leasing will purchase
each such Lease and the related Equipment, for the Warranty
Purchase Price, on or prior to such thirtieth (or later) day;
provided that Trans Leasing will not be required to purchase any
such Lease (or the related Equipment) if prior to such thirtieth
(or later) day (i) such untruth has been cured with respect to
such Lease in all material respects and (ii) Trans Leasing
delivers to TLFC (and to other Persons, if any, required by the
Pooling and Servicing Agreement) a certificate of a Responsible
Officer to that effect. In consideration for the purchase of any
such Lease and the related Equipment, Trans Leasing will remit
the Warranty Purchase Price to the Servicer for allocation of
such Warranty Purchase Price pursuant to the terms of the Pooling
and Servicing Agreement or, if not required to be so remitted by
such Agreement, will remit the Warranty Purchase Price to TLFC.
It is understood and agreed that in the event that any
representation or warranty set forth in Section 3.01 is untrue,
the purchase of any affected Lease and the related Equipment as
provided in this Section 3.03 and the indemnification provided in
Section 3.04 will constitute the only remedies available to TLFC
and the Interested Parties in respect of such untruth.
3.04 Indemnification. In addition to any remedy
pursuant to Section 3.03, Trans Leasing agrees to indemnify,
defend and hold TLFC harmless from and against any out of pocket
expense (including interest, penalties, reasonable attorneys'
fees and amounts paid in settlement) to which TLFC may become
subject insofar as such expense arises solely out of or is based
solely upon the untruth of any representation or warranty of
Trans Leasing set forth in Section 3.01. The obligations of
Trans Leasing under this Section 3.04 will be considered to have
been relied upon by TLFC and will survive the execution, delivery
and performance of this Agreement regardless of any investigation
made by TLFC or on its behalf.
ARTICLE IV
COVENANTS OF TRANS LEASING AND TLFC
4.01 Trans Leasing Covenants. Trans Leasing covenants
and agrees with TLFC as follows for the benefit of TLFC and the
Interested Parties:
(a) Merger, Consolidation or Assumption of the
Obligations of Trans Leasing. Any Person (i) into which Trans
Leasing may be merged or consolidated, (ii) resulting from any
merger, conversion or consolidation to which Trans Leasing is a
party, or (iii) succeeding to the business of Trans Leasing
substantially as a whole, which Person in any of the foregoing
cases executes an agreement of assumption to perform every
obligation of Trans Leasing under this Agreement, will be the
successor to Trans Leasing under this Agreement, without the
execution or filing of any document or any further act on the
part of Trans Leasing, TLFC or such Person, anything in this
Agreement to the contrary notwithstanding; provided, however,
that (i) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 3.01 will
have been breached, (ii) Trans Leasing will have delivered to
TLFC a certificate of a Responsible Officer and an Opinion of
Counsel each stating that such consolidation, merger or
succession and such agreement of assumption comply with this
Section 4.01(a) and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have
been complied with and (iii) Trans Leasing will have delivered an
Opinion of Counsel either (A) stating that, in the opinion of
such counsel, all financing statements and continuation
statements and amendments thereto that are necessary fully to
preserve and protect the interests of TLFC in the Leases have
been executed and filed or (B) stating that, in the opinion of
such counsel, no such action is necessary to preserve and protect
such interest.
(b) Limitation of Liability of Trans Leasing and
Others. Trans Leasing and any director, officer, employee or
agent of Trans Leasing may rely in good faith on any document of
any kind submitted by any Person respecting any matters arising
under this Agreement as being prima facie properly executed.
Other than in its capacity as the Servicer pursuant to the
Pooling and Servicing Agreement and except as provided in
Sections 3.04, 4.01(e) and 4.01(i), Trans Leasing will not be
under any obligation to appear in, prosecute or defend any legal
action in any way relating to the Assets that is not incidental
to its obligations as the contributor and seller of the Assets
under this Agreement and that in its opinion may cause it to
incur any expense or liability.
(c) Preservation of Security Interest. Subject
to the provisos contained in Sections 2.02(e) and 2.02(b), Trans
Leasing will execute and file such continuation statements and
any other documents requested by TLFC to be filed or which may be
required to be filed by any legal requirement to preserve fully
and protect the interest of TLFC in, to and under the Assets;
provided, however, that Trans Leasing will not be required to
deliver physical possession of the Lease Files to TLFC and may
retain possession of the Lease Files in its capacity as the
Servicer.
(d) Preservation of Name and Office. Unless
Trans Leasing provides not less than thirty days prior written
notice to TLFC and files such amendments to any previously filed
financing or continuation statements as TLFC may require, Trans
Leasing will not (i) change the location of its principal
executive office, (ii) change its name, identity or corporate
structure in any manner which would make any financing statement
or continuation statement filed by Trans Leasing in accordance
with this Agreement seriously misleading within the meaning of
Article 9-402(7) of the UCC or (iii) delete or otherwise modify
the marking of the Lease Management System referred to in Section
2.02(f) or Section 2.03(c) of this Agreement or in the Pooling
and Servicing Agreement.
(e) Obligations with Respect to Leases; Defense
of Assets. Trans Leasing will do nothing to impair the rights of
TLFC in the Leases or the related Equipment except as it is
expressly permitted to do so in its capacity as the Servicer in
accordance with the terms of the Pooling and Servicing Agreement,
and Trans Leasing will defend the interests of TLFC in the Assets
contributed and sold hereby against all claims of third parties
claiming through or under Trans Leasing.
(f) Compliance with Law. Trans Leasing will
comply, in all material respects, with all legal requirements
applicable to Trans Leasing with respect to the Assets; provided,
however, that Trans Leasing may contest any such legal
requirement in any reasonable manner which will not materially
and adversely affect the rights of TLFC or any Interested Party
in the Assets or the value thereof.
(g) Notification of Breach. Trans Leasing will
advise TLFC, the Servicer (if Trans Leasing is not the Servicer)
and the Indenture Trustee, in reasonable detail, of the
occurrence of any breach by Trans Leasing of any of its
representations, warranties and covenants contained herein,
promptly after it becomes aware of any such breach unless such
breach has been or will be cured in all material respects within
30 days or the related Lease(s) has been repurchased in
accordance with Section 3.03.
(h) Further Assurances. Trans Leasing will make,
execute or endorse, acknowledge and file or deliver to TLFC from
time to time such schedules, confirmatory assignments,
conveyances, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and
take such further steps relating to the Assets and other rights
covered by this Agreement as TLFC may request and reasonably
require.
(i) Indemnification. Trans Leasing agrees to
indemnify, defend and hold TLFC harmless from and against any and
all loss, liability, damage, judgment, claim, deficiency, or
expense (including interest, penalties, reasonable attorneys'
fees and amounts paid in settlement) to which TLFC may become
subject insofar as such loss, liability, damage, judgment, claim,
deficiency or expense arises out of or is based upon a breach by
Trans Leasing of its covenants contained in this Section 4.01.
The obligations of Trans Leasing under this Section 4.01(i) will
be considered to have been relied upon by TLFC and will survive
the execution, delivery and performance of this Agreement
regardless of any investigation made by TLFC or on its behalf.
(j) Insurance Premiums. With respect to any
Lease on which the related Lessee pays insurance premiums
directly to Trans Leasing (or such premiums are otherwise
included in the Scheduled Lease Payments under such Lease), until
such Lease expires, otherwise terminates, is purchased under
Section 3.03 hereof or is charged-off as uncollectible by Trans
Leasing, Trans Leasing shall pay the insurance premiums required
to maintain the insurance on the related Equipment required by
such Lease.
4.02 TLFC Covenants. TLFC covenants and agrees with
Trans Leasing not to disclose to any Person (except as
contemplated by the Pooling and Servicing Agreement) any of the
information contained in the Lease Management System, the Lease
Files, the Lease Schedule or any Additional Lease Schedule,
except as required upon the appointment of a successor Servicer
pursuant to the Pooling and Servicing Agreement or by any legal
requirement. TLFC agrees to take such measures as Trans Leasing
reasonably requests to protect and maintain the security and
confidentiality of such information and, in connection therewith,
will allow Trans Leasing to inspect the applicable security and
confidentiality arrangements during normal business hours. TLFC
will provide Trans Leasing written notice not less than five
Business Days prior to any disclosure which TLFC proposes to make
in accordance with this Section 4.02.
4.03 Assignment; Grant of Security Interest. Trans
Leasing understands that TLFC intends to transfer the Assets
(including certain rights of TLFC under this Agreement) to the
Trust, which will grant a security interest in the Assets to the
Indenture Trustee. Trans Leasing consents to such transfers and
grants. Trans Leasing agrees that the rights of TLFC hereunder
may be exercised by or on behalf of the Interested Parties to the
extent provided in the Pooling and Servicing Agreement or the
Indenture.
ARTICLE V
TERMINATION
5.01 Termination. The respective obligations and
responsibilities of Trans Leasing and TLFC created by this
Agreement will terminate upon the termination of the Pooling and
Servicing Agreement.
5.02 Effect of Termination. No termination, rejection
or failure to assume the executory obligations of this Agreement
in the bankruptcy of Trans Leasing or TLFC will be deemed to
impair or affect the obligations pertaining to any executed
contribution, executed sale or executed obligations, including
breaches of representations and warranties by Trans Leasing or
TLFC prior to termination. Without limiting the foregoing, prior
to termination, the failure of Trans Leasing to pay a Warranty
Purchase Price will not render such contribution, sale or
obligations executory and the continued respective duties of
Trans Leasing and TLFC pursuant to Article IV will not render an
executed sale or contribution executory.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.01 Amendment. This Agreement may be amended only by
written agreement of TLFC and Trans Leasing.
6.02 Governing Law. This Agreement will be governed
by and construed in accordance with the domestic laws of the
State of New York, without giving effect to any choice of law or
conflict provision or rule (whether of the State of New York or
any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York. In
furtherance of the foregoing, the internal law of the State of
New York will control the interpretation and construction of this
Agreement, even in the event that under such jurisdiction's
choice of law or conflict of law analysis the substantive law of
some other jurisdiction would ordinarily apply.
6.03 Notice. Except as otherwise provided in this
Agreement, any notice or other communication herein required or
permitted to be given will be in writing and may be delivered in
person, with receipt acknowledged, or sent by United States mail,
registered or certified, return receipt requested, or by Federal
Express or other nationally recognized overnight courier service,
postage prepaid and confirmation of receipt requested, and
addressed as follows (or at such other address as may be
substituted by notice given as herein provided):
If to TLFC:
TL Lease Funding Corp. IV
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
with a copy (which copy will not constitute
notice to TLFC) to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Jill L. Sugar
If to Trans Leasing:
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, IL 60062
Attention: Chief Financial Officer
with a copy (which copy will not constitute
notice to Trans Leasing) to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Jill L. Sugar
Every notice, demand, request, consent, approval, declaration or
other communication hereunder will be deemed to have been duly
given or served on the date on which the same will have been
personally delivered, with receipt acknowledged, three (3)
Business Days after the same will have been deposited in the
United States mail or on the next succeeding Business Day if the
same has been sent by Federal Express or other nationally
recognized overnight courier service. Failure or delay in
delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons
designated above to receive copies will in no way adversely
affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
6.04 Severability of Provisions. If any covenant,
agreement, provision or term of this Agreement is held invalid
for any reason whatsoever, then such covenant, agreement,
provision or term will be deemed severable from the remaining
covenants, agreements, provisions and terms of this Agreement and
will in no way affect the validity or enforceability of the other
provisions of this Agreement.
6.05 Assignment. This Agreement may not be assigned
by Trans Leasing or TLFC, except as otherwise provided herein.
6.06 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of TLFC or Trans
Leasing, any right, remedy, power or privilege under this
Agreement will operate as a waiver of such right, remedy, power
or privilege, nor will any single or partial exercise of any
right, remedy, power or privilege under this Agreement preclude
any other or further exercise of such right, remedy, power or
privilege. The rights, remedies, powers and privileges provided
under this Agreement are cumulative and not exhaustive of any
other rights, remedies, powers and privileges provided by law.
6.07 Counterparts. This Agreement may be executed in
two or more counterparts (and by different parties on separate
counterparts), each of which will be an original, but all of
which will constitute one and the same instrument.
6.08 Binding Effect; Third-Party Beneficiaries. This
Agreement will inure to the benefit of and be binding upon Trans
Leasing, TLFC and their respective successors and permitted
assigns and will also, to the extent expressly provided in
Section 4.03 or elsewhere in this Agreement, inure to the benefit
of the Servicer and the Interested Parties. Except as otherwise
provided in this Agreement, no other Person will have any right
or obligation pursuant to this Agreement.
6.09 Merger and Integration. Except as specifically
stated otherwise in this Agreement, this Agreement sets forth the
entire understanding of the parties relating to the subject
matter hereof, and all prior understandings, written or oral, are
superseded by this Agreement.
6.10 Headings. The headings used in this Agreement
are for purposes of reference only and will not otherwise affect
the meaning or interpretation of any provision of this Agreement.
6.11 Schedules and Exhibits. The Schedules and
Exhibits constitute a part of this Agreement and are incorporated
into this Agreement for all purposes.
6.12 No Petition Covenants. Notwithstanding any prior
termination of this Agreement, Trans Leasing and TLFC shall not,
prior to the date which is one year and one day after the final
distribution with respect to the Notes and the Trust Certificate
(each as defined in the Pooling and Servicing Agreement),
acquiesce, petition or otherwise invoke or cause the Issuer (as
defined in Pooling and Servicing Agreement) to invoke the process
of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer under any
federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.
6.13 Confidential Information. TLFC agrees that it
shall neither use nor disclose to any Person the names and
addresses of the Lessees or the vendors of the Equipment, except
in connection with the enforcement of TLFC's rights hereunder,
under the Pooling and Servicing Agreement or under the Assets or
as required by law.
* * * * *
<PAGE>
Trans Leasing and TLFC have caused this Amended and
Restated Contribution and Sale Agreement to be duly executed by
their respective officers as of the day and year written above.
TRANS LEASING INTERNATIONAL, INC.
By: ____________________________
Name:
Title:
TL LEASE FUNDING CORP. IV
By: ____________________________
Name:
Title:<PAGE>
EXHIBIT A
FORM OF ASSIGNMENT FOR CLOSING DATE ASSETS
For value received, in accordance with the Amended and
Restated Contribution and Sale Agreement dated as of October 6,
1995 (the "Sale Agreement"), between Trans Leasing International,
Inc., a Delaware corporation ("Trans Leasing"), and TL Lease
Funding Corp. IV, a Delaware corporation ("TLFC"), Trans Leasing
does hereby sell, assign, transfer and otherwise convey unto
TLFC, without recourse, (i) the Closing Date Leases listed on the
Closing Date Lease Schedule attached hereto (including all Trans
Leasing's obligations under such Closing Date Leases) and all
monies due or to become due thereunder after August 31, 1995,
(ii) the related Equipment (other than any licensed products that
may accompany any of such Equipment), (iii) the Lease Files for
such Closing Date Leases, (iv) any Insurance Policies and the
related Insurance Proceeds with respect to such Closing Date
Leases and (v) all income and proceeds relating to the foregoing.
It is the intention of Trans Leasing and TLFC that the
sales, transfers, assignments and conveyances contemplated by
this Assignment constitute a sale of the property described
herein and in the Sale Agreement from Trans Leasing to TLFC and
the beneficial interest in and title to such property will not be
part of Trans Leasing's estate in the event of the filing of a
bankruptcy petition by or against Trans Leasing under any
bankruptcy law.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the
undersigned contained in the Sale Agreement and is to be governed
by the Sale Agreement.
Capitalized terms used herein and not otherwise defined
will have the meanings assigned to them in the Sale Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
Assignment to be duly executed as of October 6, 1995.
TRANS LEASING INTERNATIONAL, INC.
By: _____________________________
Name:
Title:
<PAGE>
EXHIBIT B
FORM OF ASSIGNMENT FOR ADDITIONAL ASSETS
For value received, in accordance with the Amended
Restated Contribution and Sale Agreement dated as of _______ __,
1995 (the "Sale Agreement"), between Trans Leasing International,
Inc., a Delaware corporation ("Trans Leasing") and TL Lease
Funding Corp. IV, a Delaware corporation ("TLFC"), Trans Leasing
does hereby sell, assign, transfer and otherwise convey unto
TLFC, without recourse, (i) the Additional Leases listed on the
Additional Lease Schedule attached hereto (including all Trans
Leasing's obligations under such Additional Leases) and all
monies due or to become due thereunder after [__________], (ii)
the related Equipment (other than any licensed products that may
accompany any of such Equipment), (iii) the Lease Files for such
Additional Leases, (iv) any Insurance Policies and the related
Insurance Proceeds with respect to such Additional Leases and (v)
all income and proceeds relating to the foregoing.
It is the intention of Trans Leasing and TLFC that the
sales, transfers, assignments and conveyances contemplated by
this Assignment constitute a contribution and/or sale of the
property described herein and in the Sale Agreement from Trans
Leasing to TLFC and the beneficial interest in and title to such
property will not be part of Trans Leasing's estate in the event
of the filing of a bankruptcy petition by or against Trans
Leasing under any bankruptcy law.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the
undersigned contained in the Sale Agreement and is to be governed
by the Sale Agreement.
Capitalized terms used herein and not otherwise defined
will have the meanings assigned to them in the Sale Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
Assignment to be duly executed as of _______ __, 199__.
TRANS LEASING INTERNATIONAL, INC.
By: _____________________________
Name:
Title: <PAGE>
EXHIBIT C
FORMS OF LEASE
See Attached.<PAGE>
LEASE SCHEDULE
See Attached.<PAGE>
EXCLUDED LEASE SCHEDULE
See Attached.<PAGE>
LEASE CRITERIA SCHEDULE
1. As of the Cut-Off Date or the applicable Addition Cut-Off Date,
as the case may be, the remaining term of each Lease is
between 6 months and 60 months; provided that there is no Lease
with a term that extends beyond August 31, 2000.
2. As of the Cut-Off Date or the applicable Addition Cut-Off Date,
as the case may be, no unpaid Scheduled Lease Payment
pursuant to any Lease (other than a Skipped Payment, as defined
in the Pooling and Servicing Agreement) has been due and payable
for more than 30 days (other than due to administrative delays,
such as initial billings) and Trans Leasing has received at least
one Scheduled Lease Payment on each Lease.
3. As of the Cut-Off Date or the applicable Addition Cut-Off Date,
as the case may be, no Scheduled Lease Payment on any
Lease was more than 90 days delinquent during the 12-month period
prior to such Date (other than due to administrative delays, such
as initial billings).<PAGE>
SPECIFIED PORTFOLIO CHARACTERISTICS SCHEDULE
1. With respect to the Discounted Lease Balances of
the 25 Leases with the greatest Discounted Lease Balances does
not exceed 10% of the Aggregate Discounted Lease Balance.
2. The sum of the Discounted Lease Balances of all
Leases with respect to which the billing address of the related
Lessees are located in the same state does not exceed 30% of the
Aggregate Discounted Lease Balance.
3. The sum of the Discounted Lease Balances of all
Leases with respect to which the related Equipment is of the same
type (as determined by Trans Leasing in accordance with its
customary procedures) does not exceed 45% of the Aggregate
Discounted Lease Balance.
4. With respect to any Lessee, the aggregate
Discounted Lease Balance of all Leases of such Lessee does not
exceed 0.75% of the Aggregate Discounted Lease Balance.
5. The sum of the Discounted Lease Balances of all
Leases with respect to which the related Equipment was purchased
from one Person (as determined by Trans Leasing in accordance
with its customary procedures) does not exceed 10% of the
Aggregate Discounted Lease Balance.
6. The sum of the Discounted Lease Balances of all
Leases with respect to which the related Lessees operate in the
same industry (as determined by Trans Leasing in accordance with
its customary procedures) does not exceed 30% of the Aggregate
Discounted Lease Balance.
7. The average original acquisition cost of the
Equipment (as capitalized in accordance with GAAP) does not
exceed $20,000.
8. The sum of the Discounted Lease Balances of all
Leases with respect to which the related Lessee is a governmental
agency does not exceed 5% of the Aggregate Discounted Lease
Balance.
9. The sum of the Discounted Lease Balances of all
Leases with respect to which there has been a Skipped Payment (as
defined in the Pooling and Servicing Agreement) prior to the Cut-Off
Date does not exceed 5% of the Aggregate Discounted Lease
Balance as of the Cut-Off Date.
10. The sum of the Discounted Lease Balances of all
Leases with respect to which the related Equipment is motor
vehicles does not exceed 5.5% of the Aggregate Discounted Lease
Balance.
<PAGE>
POOLING AND SERVICING AGREEMENT
among
TRANS LEASING INTERNATIONAL, INC.,
as initial Servicer
TL LEASE FUNDING CORP. IV,
as Seller
and
TLFC IV EQUIPMENT LEASE TRUST 1995-1
Dated as of
October 6, 1995
<PAGE>
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . .1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . .1
1.2 Other Definitional Provisions . . . . . . . . . . . . 17
ARTICLE II CONVEYANCE OF ASSETS. . . . . . . . . . . . . . . . 18
2.1 Conveyance of the Assets. . . . . . . . . . . . . . . 18
2.2 Marking of Lease Management System. . . . . . . . . . 20
2.3 Acceptance by Issuer. . . . . . . . . . . . . . . . . 20
2.4 Representations and Warranties of the Seller. . . . . 20
2.5 Notice of Breach. . . . . . . . . . . . . . . . . . . 23
2.6 Mandatory Purchase of Leases and Indemnification Upon
Breach of Warranty. . . . . . . . . . . . . . . . . . 23
2.7 Covenants of the Seller . . . . . . . . . . . . . . . 25
2.8 Release of Lien on Equipment. . . . . . . . . . . . . 28
ARTICLE III ADMINISTRATION AND SERVICING OF LEASES. . . . . 29
3.1 Appointment and Acceptance; Duties. . . . . . . . . . 29
3.2 Collection of Payments. . . . . . . . . . . . . . . . 31
3.3 Servicer Advances . . . . . . . . . . . . . . . . . . 32
3.4 Realization Upon Defaulted Leases . . . . . . . . . . 33
3.5 Maintenance of Insurance Policies . . . . . . . . . . 33
3.6 Representations and Warranties of Servicer. . . . . . 34
3.7 Covenants of Servicer . . . . . . . . . . . . . . . . 35
3.8 Servicer Compensation . . . . . . . . . . . . . . . . 37
3.9 Payment of Certain Expenses by Servicer . . . . . . . 37
3.10 Monthly Statement; Annual Report. . . . . . . . . . . 37
3.11 Annual Statement as to Compliance . . . . . . . . . . 38
3.12 Annual Independent Public Accountants'
Servicing Statements. . . . . . . . . . . . . . . . . 38
ARTICLE IV RIGHTS OF HOLDERS; ACCOUNTS; ALLOCATION
AND APPLICATION OF THE TRUST ESTATE . . . . . . . . . 39
4.1 Rights of Holders . . . . . . . . . . . . . . . . . . 39
4.2 Establishment of the Collection Account . . . . . . . 39
4.3 Establishment of Note Distribution Account. . . . . . 39
4.4 Investment of Accounts. . . . . . . . . . . . . . . . 39
4.5 Control; Replacement of Trust Accounts. . . . . . . . 40
4.6 Identification of Accounts. . . . . . . . . . . . . . 40
4.7 Deposit of Collections and Other Amounts. . . . . . . 41
4.8 Payments on Payment Dates . . . . . . . . . . . . . . 41
ARTICLE V OTHER MATTERS RELATING TO THE SELLER. . . . . . . . 43
5.1 Substitution of Leases. . . . . . . . . . . . . . . . 43
5.2 Merger or Consolidation of the Seller; Assumption
of the Seller's Obligations . . . . . . . . . . . . . 45
5.3 Compliance with Certificate of Incorporation. . . . . 46
5.4 Limitation of Liability of Seller and Others. . . . . 46
ARTICLE VI OTHER MATTERS RELATING TO THE SERVICER. . . . . . . 46
6.1 Liability of the Servicer and Others. . . . . . . . . 46
6.2 Indemnification by the Servicer . . . . . . . . . . . 48
6.3 Merger or Consolidation of Servicer;
Assumption of Servicer's Obligations. . . . . . . . . 49
6.4 The Servicer Not to Resign. . . . . . . . . . . . . . 50
ARTICLE VII SERVICER DEFAULTS. . . . . . . . . . . . . . . . 50
7.1 Servicer Defaults . . . . . . . . . . . . . . . . . . 50
7.2 Indenture Trustee to Act; Appointment of
Successor . . . . . . . . . . . . . . . . . . . . . . 53
7.3 Notification. . . . . . . . . . . . . . . . . . . . . 54
7.4 Waiver of Past Defaults . . . . . . . . . . . . . . . 54
7.5 Lease Schedule. . . . . . . . . . . . . . . . . . . . 55
ARTICLE VIII TERMINATION. . . . . . . . . . . . . . . . . . . 55
8.1 Termination . . . . . . . . . . . . . . . . . . . . . 55
8.2 Notice of Final Payment . . . . . . . . . . . . . . . 56
8.3 Optional Purchase . . . . . . . . . . . . . . . . . . 56
ARTICLE IX MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . 57
9.1 Amendment . . . . . . . . . . . . . . . . . . . . . . 57
9.2 Evidence of Filings . . . . . . . . . . . . . . . . . 59
9.3 Governing Law . . . . . . . . . . . . . . . . . . . . 59
9.4 Notices . . . . . . . . . . . . . . . . . . . . . . . 59
9.5 Severability of Provisions. . . . . . . . . . . . . . 62
9.6 Assignment. . . . . . . . . . . . . . . . . . . . . . 62
9.7 Schedules and Exhibits. . . . . . . . . . . . . . . . 62
9.8 No Waiver; Cumulative Remedies. . . . . . . . . . . . 62
9.9 Counterparts. . . . . . . . . . . . . . . . . . . . . 62
9.10 Binding Effect; Third-Party Beneficiaries . . . . . . 63
9.11 Merger and Integration. . . . . . . . . . . . . . . . 63
9.12 Headings. . . . . . . . . . . . . . . . . . . . . . . 63
9.13 Certificates and Opinions of Counsel. . . . . . . . . 63
9.14 Assignment to Indenture Trustee . . . . . . . . . . . 63
9.15 No Petition Covenants . . . . . . . . . . . . . . . . 64
9.16 Limitation of Liability of Indenture Trustee and
Owner Trustee . . . . . . . . . . . . . . . . . . . . 64
9.17 Confidential Information. . . . . . . . . . . . . . . 65
9.18 Available Information . . . . . . . . . . . . . . . . 65
LIST OF EXHIBITS
Exhibit A List of Leases
Exhibit B Form of Monthly Statement
Exhibit C Identification of Accounts
Exhibit D Substitute Lease Transfer Agreement<PAGE>
POOLING AND SERVICING AGREEMENT
THIS POOLING AND SERVICING AGREEMENT, is made and
entered into as of October 6, 1995 (this "Agreement"), among
Trans Leasing International, Inc., a Delaware corporation ("Trans
Leasing"), as Servicer, TL Lease Funding Corp. IV, a Delaware
corporation (the "Seller"), and the TLFC IV Equipment Lease Trust
1995-1, a Delaware business trust (the "Issuer" or the "Trust").
Other capitalized terms used in this Agreement are defined in
Section 1.1.
Trans Leasing in the ordinary course of its business
originates equipment leases in the United States;
Pursuant to the Contribution and Sale Agreement,
Trans Leasing has sold and contributed the Leases and interests
in the related Equipment, to the Seller upon the terms and
conditions set forth therein;
Pursuant to this Agreement, the Seller will sell and
convey to the Issuer the Leases and the interests in the related
Equipment it received pursuant to the Contribution and Sale
Agreement and certain of its rights under the Contribution and
Sale Agreement;
The Issuer will pledge its rights in the Leases,
related Equipment and other property received from the Seller to
the Indenture Trustee to secure payments due under the Notes; and
Trans Leasing intends to continue administering and
servicing the Leases and the related Equipment in its capacity as
Servicer pursuant to this Agreement.
In consideration of the mutual agreements contained
in this Agreement, each party agrees as follows for the benefit
of the other Parties and the Holders.
ARTICLE I
DEFINITIONS
1.1 Definitions. Whenever used in this
Agreement, the following words and phrases have the following
respective meanings:
"Administrator" means, Trans Leasing, as
Administrator under the Administration Agreement dated as of the
date hereof among Trans Leasing, as Administrator, and the Trust.
"Affiliate" means, with respect to any Person, each
Person that controls, is controlled by or is under common control
with such Person or any Affiliate of such Person; provided,
however, that in no event shall the Trust be deemed to be an
Affiliate of the Seller for purposes of this Agreement. For the
purpose of this definition, "control" of a Person shall mean the
possession, directly or indirectly, of the power to direct or
cause the direction of its management or policies, whether
through the ownership of voting securities, by contract or
otherwise.
"Aggregate Discounted Lease Balance" means at any
time of determination, an amount equal to the sum of the
Discounted Lease Balances of the Leases.
"Aggregate Discounted Lease and Residual Balance"
means at any time of determination, an amount equal to the sum of
the Discounted Lease and Residual Balances of the Leases.
"Available Amount" means, for any Payment Date, all
amounts on deposit in the Collection Account on such Payment Date
representing (i) Collections received during the related
Collection Period, (ii) Investment Earnings on the Trust Accounts
and (iii) Servicer Advances.
"Business Day" means any day other than a Saturday, a
Sunday or a day on which banking institutions in Chicago,
Illinois, or New York, New York, are authorized or obligated by
any law or regulation to be closed.
"Casualty Loss" means, with respect to any item of
Equipment, the loss, theft, damage beyond repair or governmental
condemnation or seizure of such item of Equipment.
"Casualty Payment" means any payment under a Lease in
connection with a Casualty Loss.
"Certificateholders" means the holders of the Trust
Certificate.
"Class A Interest Arrearage" means, for any Payment
Date, any Class A Interest Payments or portions thereof that were
due on preceding Payment Dates, but remain unpaid as of such
Payment Date.
"Class A Interest Payment Amount" means (i) for the
initial Payment Date, the product of (a) one-twelfth of the Class
A Interest Rate and (b) the Initial Class A Principal Balance and
(ii) for any subsequent Payment Date, (a) the product of one-twelfth
of the Class A Interest Rate and (b) the Outstanding
Class A Principal Balance as of the related Determination Date.
"Class A Interest Rate" means 6.40% per annum.
"Class A Notes" means the Class A 6.40% Lease Backed
Notes in the aggregate principal amount of $89,658,869 issued by
the Issuer pursuant to the Indenture.
"Class A Percentage" means 89.25%.
"Class A Principal Arrearage" means, for any Payment
Date, any Class A Principal Payment Amounts or portions thereof
that were due on preceding Payment Dates, but remain unpaid as of
such Payment Date.
"Class A Principal Payment Amount" means, for any
Payment Date, the sum of (i) the product of (A) the Class A
Percentage and (B) the excess of (1) the Aggregate Discounted
Lease Balance of all Leases as of the last day of the Collection
Period immediately preceding the Collection Period to which such
Payment Date relates (or, in the case of the initial Payment
Date, as of the Cut-Off Date) over (2) the Aggregate Discounted
Lease Balance of all Leases as of the last day of the Collection
Period to which such Payment Date relates (in each case,
calculated after giving effect to all Leases that became
Defaulted Leases or Early Termination Leases or were the subject
of a Warranty Event during such related Collection Period and all
substitutions of Substitute Leases therefor) and (ii) the Class A
Principal Arrearage for such Payment Date; provided, that on the
Stated Final Maturity Date, on the Redemption Date and on each
Payment Date from and after the date on which the Indenture
Trustee or the Holders of the Notes shall have declared the Notes
to be immediately due and payable following the occurrence of an
Event of Default pursuant to the Indenture (unless such
declaration has been rescinded and annulled), the Class A
Principal Payment Amount shall equal the Outstanding Class A
Principal Balance; and provided further, that the Class A
Principal Payment Amount shall never exceed the Outstanding Class
A Principal Balance.
"Class B Interest Arrearage" means, for any Payment
Date, any Class B Interest Payment Amounts or portions thereof
that were due on preceding Payment Dates, but remain unpaid as of
such Payment Date.
"Class B Interest Payment Amount" means (i) for the
initial Payment Date, the product of (a) one-twelfth of the Class
B Interest Rate and (b) the Initial Class B Principal Balance and
(ii) for any subsequent Payment Date, the product of (a) one-twelfth
of the Class B Interest Rate and (b) the Outstanding
Class B Principal Balance as of the related Determination Date.
"Class B Interest Rate" means 7.55% per annum.
"Class B Notes" means the Class B 7.55% Lease Backed
Notes in the aggregate principal amount of $10,802,273 issued by
the Issuer pursuant to the Indenture.
"Class B Percentage" means 10.75%.
"Class B Principal Arrearage" means, for any Payment
Date, any Class B Principal Payment Amounts or portions thereof
that were due on preceding Payment Dates, but remain unpaid as of
such Payment Date.
"Class B Principal Payment Amount" means, for any
Payment Date, the sum of (i) the product of (A) the Class B
Percentage and (B) the excess of (1) the Aggregate Discounted
Lease Balance of all Leases as of the last day of the Collection
Period immediately preceding the Collection Period to which such
Payment Date relates (or, in the case of the initial Payment
Date, as of the Cut-Off Date) over (2) the Aggregate Discounted
Lease Balance of all Leases as of the last day of the Collection
Period to which such Payment Date relates (in each case,
calculated after giving effect to all Leases that became
Defaulted Leases or Early Termination Leases or were the subject
of a Warranty Event during such related Collection Period and all
substitutions of Substitute Leases therefor) and (ii) the Class B
Principal Arrearage for such Payment Date; provided, that, on the
Stated Final Maturity Date, on the Redemption Date and on each
Payment Date from and after the date on which the Indenture
Trustee or the Holders of the Notes shall have declared the Notes
to be immediately due and payable following the occurrence of an
Event of Default pursuant to the Indenture (unless such
declaration has been rescinded and annulled), the Class B
Principal Payment Amount shall equal the Outstanding Class B
Principal Balance; and provided, further, that the Class B
Principal Payment Amount shall never exceed the Outstanding Class
B Principal Balance.
"Closing Date" means October 6, 1995.
"Collection Account" means the collection account
established pursuant to Section 4.2.
"Collection Period" means, with respect to any
Payment Date, the immediately preceding calendar month.
"Collections" means all payments received on or with
respect to the Leases or the related Equipment, including,
without limitation, Scheduled Lease Payments, Liquidation
Proceeds, Warranty Purchase Prices, Insurance Proceeds, Early
Termination Lease Proceeds and Expired Lease Proceeds, all as
related to amounts attributable to the Equipment and the Leases,
but excluding any Excluded Amounts.
"Contribution and Sale Agreement" means the Amended
and Restated Contribution and Sale Agreement dated as of the date
hereof between the Originator and the Seller, together with all
amendments, restatements, supplements and modifications thereof
or thereto.
"Corporate Office" means, at any time, the office of
the Indenture Trustee from which its corporate trust business is
principally administered, which office at the date of this
Agreement is located at One M&T Plaza, Buffalo, New York 14203.
"Credit Agreement" means the Revolving Credit and
Term Loan and Security Agreement between Seller and First Union
Nation Bank of North Carolina, dated as of April 18, 1995, as
amended, together with all amendments, restatements, supplements
and modifications thereof or thereto.
"Cut-Off Date" means, with respect to each Original
Lease, August 31, 1995, and with respect to each Substitute
Lease, the related Substitution Cut-Off Date.
"Defaulted Lease" means a Lease as to which (i) the
Servicer has determined in its sole discretion, in accordance
with its customary servicing procedures, that such Lease is not
collectible, or (ii) all or part of a Scheduled Lease Payment
thereunder (other than a Skipped Payment) is more than 180 days
delinquent.
"Determination Date" means, with respect to a
Collection Period and the related Payment Date, the close of
business on the last Business Day of such Collection Period.
"Discount Rate" means 7.524% per annum.
"Discounted Lease and Residual Balance" means, with
respect to any Lease, at any time of determination, the sum of
(i) the Discounted Lease Balance plus (ii) the Equipment Residual
Value for the related Equipment; provided, however, that the
Discounted Lease and Residual Balance of any Defaulted Lease,
Early Termination Lease or Expired Lease or Lease purchased by
the Originator shall be equal to zero.
"Discounted Lease Balance" means, with respect to any
Lease, at any time of determination, the sum of (i) the present
value of all of the remaining Scheduled Lease Payments becoming
due under such Lease after such date of determination and unpaid
as of such date of determination, discounted monthly at the
Discount Rate in the manner described below and (ii) the
aggregate amount of all Scheduled Lease Payments (due after the
Cut-Off Date) then due and payable under such Lease which have
not been received by the Servicer; provided, however, that the
Discounted Lease Balance of any Defaulted Lease, Early
Termination Lease or Expired Lease or Lease purchased by the
Originator shall be equal to zero.
In connection with all calculations required to be
made pursuant to this Agreement with respect to the determination
of Discounted Lease Balances, for any date of determination the
"Discounted Lease Balance" for each Lease shall be calculated
assuming:
(i) all payments due in any Collection Period
are due on the last day of such Collection
Period;
(ii) payments are discounted on a monthly basis
using a 30 day month and a 360 day year;
(iii) payments are discounted to the last day of
the Collection Period in which the date of
determination falls.
"Early Termination Lease" means any Lease that has
terminated prior to its scheduled expiration date (including
because of a Casualty Loss), other than a Defaulted Lease.
"Early Termination Lease Proceeds" means any and all
cash proceeds or rents realized from the sale or re-lease of
Equipment under an Early Termination Lease (net of Liquidation
Expenses).
"Eligible Deposit Account" means either (i) a
segregated account with an Eligible Institution or (ii) a
segregated trust account with the corporate trust department of a
depository institution organized under the laws of the United
States of America or any one of the states thereof or the
District of Columbia (or any domestic branch of a foreign bank),
having corporate trust powers and acting as trustee for funds
deposited in such account, so long as any of the securities of
such depository institution have a credit rating from the Rating
Agency in a rating category which signifies investment grade or
is otherwise acceptable to the Rating Agency.
"Eligible Institution" means either (a) the corporate
trust department of the Indenture Trustee or the Owner Trustee or
(b) a depository institution organized under the laws of the
United States of America or any one of the states thereof or the
District of Columbia (or any domestic branch of a foreign bank),
which (iA) has either (1)(A) a long-term unsecured debt rating
acceptable to the Rating Agency or (2) a short-term unsecured
debt rating or certificate of deposit rating acceptable to the
Rating Agency, (B) the parent corporation of which has either (1)
a long-term unsecured debt rating acceptable to the Rating Agency
or (2) a short-term unsecured debt rating or certificate of
deposit rating acceptable to the Rating Agency or (C) is
otherwise acceptable to the Rating Agency and (ii) whose deposits
are insured by the FDIC.
"Eligible Investments" means any of the following, in
each case as determined at the time of the investment or
contractual commitment to invest therein:
(a) investments in commercial paper maturing in
270 days or less from the date of issuance which is accorded the
highest rating by the Rating Agency;
(b) investments in direct obligations of the
United States of America, or any agency thereof, or obligations
guaranteed by the full faith and credit of the United States of
America, provided that all such obligations mature in twelve
months or less from the date of acquisition thereof;
(c) investments in certificates of deposit
maturing within one year from the date of origin, rated A-1+ (or
a comparable rating) by the Rating Agency, issued by a bank or
trust company organized under the laws of the United States or
any state thereof, having capital, surplus and undivided profits
aggregating at least $100,000,000;
(d) investments in debt obligations of
corporations organized and existing under the laws of the United
States, any state or the District of Columbia maturing in 12
months or less from the date of acquisition thereof, and rated
AAA (or a comparable rating) by the Rating Agency; and
(e) any other investment with respect to which
the Rating Agency Condition has been satisfied which, as a result
of the ownership thereof, would not cause the Trust to register
as an "investment company" under the Investment Company Act of
1940, as amended.
"Equipment" means the assets leased to a Lessee
pursuant to a Lease and/or, unless the context otherwise
requires, a security interest in such assets.
"Equipment Residual Value" means the anticipated
residual value of the Equipment related to a Lease upon the
expiration of such Lease in accordance with its terms (as such
residual value is estimated by Trans Leasing on or about the date
on which such Lease was created in accordance with its normal
valuation procedures), but not in excess of any purchase option
price with respect thereto.
"Excluded Amounts" means any payments received from a
Lessee in connection with any Late Fees, any taxes, fees or other
charges imposed by any Governmental Authority, any insurance
premiums or fees, any indemnity payments made by a Lessee for the
benefit of the Lessor under the related Lease or any payments
collected from a Lessee relating to servicing and/or maintenance
payments pursuant to the related Lease or maintenance agreement,
as applicable.
"Expired Lease" means any Lease that has terminated
on its scheduled expiration date.
"Expired Lease Proceeds" means any and all cash
proceeds or rents realized from the sale or re-lease of Equipment
under an Expired Lease (net of Liquidation Expenses) and, with
respect to a Lease for a motor vehicle, payments received from
the Lessee as a result of excessive wear and tear on or damage to
such motor vehicle or driving such motor vehicle in excess of the
maximum mileage set forth in such Lease.
"FDIC" means the Federal Deposit Insurance
Corporation, or its successors and assigns.
"Filing Locations" means the states of Alabama,
Arizona, California, Delaware, Florida, Georgia, Illinois,
Indiana, Maryland, New Jersey, New York, North Carolina, Ohio,
Pennsylvania, Texas and Virginia.
"Governmental Authority" means (a) any federal,
state, county, municipal or foreign government, or political
subdivision thereof, (b) any governmental or quasi-governmental
agency, authority, board, bureau, commission, department,
instrumentality or public body, (c) any court or administrative
tribunal or (d) with respect to any Person, any arbitration
tribunal or other non-governmental authority to the jurisdiction
of which such Person has consented.
"Holder" means, with respect to any Note, the Person
in whose name a Note is registered on the Note Register and, with
respect to the Trust Certificate, the Certificateholders.
"Indenture" means that certain Indenture, dated as of
the date hereof, among the Issuer and the Indenture Trustee,
together with all amendments, restatements, supplements and
modifications thereof or thereto.
"Indenture Trustee" means initially, Manufacturers
and Traders Trust Company or its successor in interest, and
thereafter any successor indenture trustee appointed pursuant to
the Indenture, in each case in its capacity as the Indenture
Trustee pursuant to the Indenture.
"Indenture Trust Estate" has the meaning set forth in
the Indenture.
"Initial Class A Principal Balance" means
$89,658,869.
"Initial Class B Principal Balance" means
$10,802,273.
"Insurance Policy" means, with respect to any Lease,
an insurance policy covering physical damage to or loss of the
related Equipment.
"Insurance Proceeds" means, depending on the context,
any amounts payable or any payments made, to the Servicer under
any Insurance Policy.
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended from time to time, and any successor
thereto, in each case including all regulations promulgated
thereunder.
"Investment Earnings" means with respect to any Trust
Account, the investment earnings net of losses and investment
expenses on such Trust Account.
"Late Fees" means any amounts assessed by the
Originator and paid by a Lessee in excess of the Scheduled Lease
Payment due to the delinquency of a Lease payment.
"Lease" means each agreement, including, as
applicable, schedules, subschedules, supplements and amendments
to a master lease, pursuant to which Trans Leasing, as lessor,
leases specified assets to a Lessee at a specified monthly or
quarterly rental, and which is identified in the List of Leases,
including all Original Leases and Substitute Leases; provided,
that, from and after the date on which a Lease is purchased by
Trans Leasing pursuant to Section 3.03 of the Contribution and
Sale Agreement or a Lease is replaced with a Substitute Lease
pursuant to Section 5.1 hereof, such Lease will no longer be a
Lease for purposes of this Agreement.
"Lease File" means, with respect to each Lease, the
Lease and all other documents relating to such Lease held by the
Servicer pursuant to this Agreement.
"Lease Management System" means the computerized
electronic lease management system maintained by the Originator
for all Leases and other agreements similar to the Leases.
"Lease Number" means, with respect to each Lease, the
identifying number assigned to such Lease by the Originator.
"Lessee" means, with respect to any Lease, the Person
or Persons obligated to make payments with respect to such Lease,
including any guarantor thereof.
"Lien" means any mortgage, pledge, hypothecation,
assignment for security, security interest, encumbrance, levy,
lien or charge of any kind, whether voluntarily incurred or
arising by operation of law or otherwise, affecting any Property,
including any agreement to grant any of the foregoing, any
conditional sale or other title retention agreement, any lease in
the nature of a security interest, and the filing of or agreement
to file or deliver any financing statement (other than a
precautionary financing statement with respect to a lease that is
not in the nature of a security interest and, until five (5)
Business Days after the Closing Date, financing statements filed
in connection with the Credit Agreement (as defined in the
Contribution and Sale Agreement), other than those filed in
Delaware, Illinois and New York) under the UCC or comparable law
of any jurisdiction.
"Liquidation Expenses" means, with respect to any
Lease, the aggregate amount of all out-of-pocket expenses
incurred by the Servicer (including any subservicer) in
accordance with the Servicer's customary procedures in connection
with the repossession, refurbishing and disposition of any
related Equipment upon or after the expiration or other
termination of such Lease and other out-of-pocket costs related
to the liquidation of any such Equipment, including the attempted
collection of any amount owing pursuant to such Lease if it is a
Defaulted Lease.
"Liquidation Proceeds" means, with respect to a
Defaulted Lease, proceeds from the sale or other disposition of
the Equipment, proceeds of the related Insurance Policy and any
other recoveries with respect to such Defaulted Lease and the
related Equipment, net of Liquidation Expenses and amounts so
received that are required to be refunded to the Lessee on such
Lease.
"List of Leases" means a list, prepared as of the
Cut-Off Date, of the Original Leases delivered to the Issuer by
the Seller and certified by a Responsible Officer of the Seller
which includes a true and complete list as of the Cut-Off Date,
of all Leases identified by Lease Number, original Equipment
cost, Discounted Lease Balance and Discounted Lease and Residual
Balance as of the Cut-Off Date, effective date and the original
Lease term, in the form attached hereto as Exhibit A, and which
shall have attached to it a list (in printed, microfiche or
computer tape form) showing the Scheduled Lease Payments for each
Original Lease as of the Cut-Off Date. The List of Leases shall
be deemed supplemented and amended to incorporate therein the
amendments delivered in connection with the Substitute Leases
pursuant to Section 5.1 hereof and the deletion of Leases that
are repurchased by Trans Leasing pursuant to Section 3.03 of the
Contribution and Sale Agreement or replaced with a Substitute
Lease pursuant to Section 5.1 hereof or with respect to which all
Liquidation Proceeds or other proceeds from the disposition of
the related Equipment upon expiration or termination thereof have
been deposited in the Collection Account.
"Minimum Required Subordination Amount" means
$4,590,968.
"Monthly Statement" has the meaning set forth in
Section 3.10(a).
"Moody's" means Moody's Investor Service, Inc. and
its successors and assigns.
"Note" means a Class A Note or a Class B Note;
"Notes" means the Class A Notes and the Class B Notes.
"Note Distribution Account" means the note
distribution account established pursuant to Section 4.3.
"Noteholder" means the Holder of any Note.
"Officer's Certificate" of any Person means a
certificate signed by any Responsible Officer of such Person.
"Opinion of Counsel" means a written opinion of legal
counsel (other than in-house legal counsel), who may be counsel
to Trans Leasing.
"Original Lease" means a Lease that is included in
the Trust Estate on the Closing Date.
"Originator" means Trans Leasing, in its capacity as
the transferor of Leases, Equipment and other assets pursuant to
the Contribution and Sale Agreement.
"Outstanding Class A Principal Balance" means, at any
time, an amount equal to the Initial Class A Principal Balance,
reduced by the aggregate of all amounts with respect to Class A
Principal Payment Amounts or otherwise with respect to principal
on the Class A Notes deposited in the Note Distribution Account
for payment to Holders of Class A Notes prior to such time.
"Outstanding Class B Principal Balance" means, at any
time, an amount equal to the Initial Class B Principal Balance,
reduced by the aggregate of all amounts with respect to Class B
Principal Payment Amounts or otherwise with respect to principal
on the Class B Notes deposited in the Note Distribution Account
for payment to Holders of Class B Notes prior to such time.
"Owner Trustee" has the meaning given to such term in
the Trust Agreement.
"Parties" means the signatories hereto.
"Payment Date" means the fifteenth day of each
calendar month (or, if such fifteenth day is not a Business Day,
the next succeeding Business Day), commencing with October 16,
1995.
"Permitted Liens" means:
(a) Liens granted in favor of the Indenture
Trustee under the Indenture;
(b) Lien constituting the rights of Lessees under
the Leases; and
(c) Liens relating to municipal or other local
taxes and other governmental charges if such taxes or
governmental charges are not at the time due and payable or if
the Issuer or the Servicer is then contesting the validity of any
such taxes or charges in good faith by appropriate proceedings
and there has been set aside on the appropriate entity's books
any reserve which is required under generally accepted accounting
principles with respect to such taxes or charges.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit
corporation, firm, joint stock company, estate, entity or
Governmental Authority.
"Proceeds" means proceeds, as that term is defined in
the UCC.
"Property" means any interest in any kind of property
or asset, whether real, personal or mixed, whether tangible or
intangible.
"Purchase Option" has the meaning set forth in
Section 8.3(a).
"Rating Agency" means S&P or such other nationally
recognized statistical rating organization or other comparable
Person requested by the Seller to rate the Notes that are then
rating the Notes, notice of any such request shall be given by
the Seller to the Indenture Trustee, the Owner Trustee and the
Servicer. Any reference herein to a specific rating of S&P shall
apply to (i) if S&P (or its successor) alters its rating system,
the rating designated as the equivalent thereof by S&P (or such
successor) or (ii) if S&P is no longer the Rating Agency, the
equivalent rating of the Person who is then the Rating Agency.
"Rating Agency Condition" means, with respect to any
action and so long as the Class A Notes are outstanding, that the
Rating Agency (if then rating the Class A Notes) has been given
notice of such action and has notified the Servicer and the
Issuer that such action will not result in a reduction or
withdrawal of its then current rating of the Class A Notes, and,
with respect to any action and so long as the Class B Notes are
outstanding, that the Rating Agency (if then rating the Class B
Notes) has been given notice of such action and has notified the
Servicer and the Issuer that such action will not result in a
reduction or withdrawal of its then current rating of the Class B
Notes.
"Receivable" means a Lease together with an interest
in the related Equipment.
"Record Date" means, for any Payment Date, the last
day of the immediately preceding calendar month.
"Redemption Date" has the meaning given to such term
in the Indenture.
"Repurchased Lease" means, at any time, any Lease
which has been purchased by Trans Leasing pursuant to the
Contribution and Sale Agreement or by the Seller pursuant to this
Agreement, in either case, as a result of a Warranty Event.
"Responsible Officer" of any Person means any of the
President, Executive Vice President, Vice President, Assistant
Vice President, Chief Financial Officer, Treasurer, Corporate
Controller or Trust Officer of such Person.
"Restricting Event" shall be deemed to exist on any
Payment Date on which any of the following conditions has
occurred and is continuing: (i) a Servicer Default exists
hereunder, (ii) the average of the sum of the Discounted Lease
Balances of Leases that are more than 90 days delinquent as of
the six (6) preceding Determination Dates exceeds two percent
(2%) of the average of the Aggregate Discounted Lease Balances as
of such six (6) preceding Determination Dates, as reflected on
the most recent Monthly Statement, or (iii) two (2) times the sum
of the Discounted Lease Balances of Leases that became Defaulted
Leases in the six (6) preceding Collection Periods exceeds five
percent (5%) of the average of the Aggregate Discounted Lease
Balances as of the Determination Dates related to such six (6)
preceding Collection Periods, as reflected on the most recent
Monthly Statement.
"S&P" means Standard & Poor's Ratings Services, a
division of McGraw Hill, Inc., and its successors and assigns.
"Scheduled Lease Payment" means, with respect to any
Lease, the monthly or quarterly rent payment to be made by the
related Lessee under the terms of such Lease after the related
Cut-Off Date (it being understood that Scheduled Lease Payments
do not include any Excluded Amounts).
"SEC" means the Securities and Exchange Commission or
any successor thereto.
"Servicer" means initially Trans Leasing and
thereafter any Person appointed as a Successor Servicer pursuant
to this Agreement, in each case, in such Person's capacity as the
Servicer pursuant to this Agreement.
"Servicer Advance" means an advance of Scheduled
Lease Payments made by the Servicer pursuant to Section 3.3.
"Servicer Default" has the meaning set forth in Sec-
tion 7.1(a).
"Servicer's Account" shall mean the account specified
in Exhibit C hereto, or such other account as may be specified
from time to time by the Servicer in writing.
"Servicing Fee" means, for any Payment Date, an
amount equal to the product of (a) one-twelfth of the Servicing
Fee Rate and (b) the Aggregate Discounted Lease Balance on the
first day of the related Collection Period or, in the case of the
October 1995 Payment Date, the Cut-Off Date.
"Servicing Fee Arrearage" means, for any Payment
Date, any Servicing Fee for a prior Payment Date remaining unpaid
as of such Payment Date.
"Servicing Fee Rate" means 1.0% per annum.
"Skipped Payment" has the meaning set forth in
Section 3.2(a).
"Specified Portfolio Characteristics" means the
criteria set forth in the specified Portfolio Characteristics
Schedule attached to the Contribution and Sale Agreement.
"Stated Final Maturity Date" means the Payment Date
in September 2001.
"Subordination Amount" means, for any Payment Date,
(A) the Aggregate Discounted Lease Balance as of the related
Determination Date plus (B) the Available Amount for such Payment
Date minus (C) the Outstanding Class A Principal Balance on such
Payment Date (all calculated after giving effect to all payments
and transfers made or to be made on such Payment Date pursuant to
clauses (a) through (i) of Section 4.8 hereof (but without giving
effect to the provisos in such clause (i)).
"Substitute Lease" means a Lease that is added to the
Trust Estate pursuant to Section 5.1(a).
"Substitute Lease Transfer Agreement" means an
Assignment for Substitute Leases and related Equipment in the
form of Exhibit D to this Agreement pursuant to which Substitute
Leases are transferred to the Issuer by the Seller.
"Substitution Cut-Off Date" means, with respect to a
Substitute Lease, the close of business on the last day of the
month preceding the related Substitution Date.
"Substitution Date" means the date on which a
Substitute Lease is added to the Trust Estate pursuant to Section
5.1 hereof.
"Successor Servicer" means any Person appointed as a
successor to the Servicer pursuant to Section 6.4 or 7.2.
"Tax" means, with respect to any Person, each tax,
assessment or other governmental charge or levy imposed upon such
Person, its income, or any of its properties, franchises or
assets.
"Taxing Authority" means any Governmental Entity
which imposes or collects any Tax.
"Termination Date" means the earliest to occur of
(a) the September 2001 Payment Date, (b) the day after the date
on which the Outstanding Class A Principal Balance and the
Outstanding Class B Principal Balance are first reduced to zero
and (c) the Payment Date related to the first Collection Period
in which all Leases are expired or all Leases and Equipment have
otherwise been liquidated (including as described in Section 9.2
of the Trust Agreement).
"Termination Notice" has the meaning set forth in
Section 7.1(b).
"Transaction Year" means the twelve-month period
ending on June 30 of each year; provided that the initial
Transaction Year will be the period commencing on the Closing
Date and ending on June 30, 1996.
"Trust Accounts" means the Collection Account and the
Note Distribution Account.
"Trust Agreement" means that certain Trust Agreement,
dated as of the date hereof, between the Seller and the Owner
Trustee together with all amendments, restatements, supplements
and modifications thereof or thereto.
"Trust Certificate" means the Trust Certificate (as
defined in the Trust Agreement).
"Trust Estate" means the property transferred by the
Seller to the Issuer pursuant to Section 2.1(a) and any other
property acquired by the Issuer from time to time.
"UCC" means the Uniform Commercial Code, as amended
from time to time, as in effect in the relevant jurisdiction.
"Underwriting Agreement" means that certain
Underwriting Agreement, dated as of September 27, 1995, among the
Seller, Trans Leasing, First Union Capital Markets Corp. and
Prudential Securities Incorporated.
"Unreimbursed Servicer Advances" means, at any time,
the amount of all previous Servicer Advances (or portions
thereof) as to which the Servicer has not been reimbursed as of
such time pursuant to Section 4.7(c) or 4.8 and which the
Servicer has determined in its sole discretion will not be
recoverable from Scheduled Lease Payments with respect to the
related Leases.
"Warranty Event" means, with respect to any Lease,
that either (a) the Originator is obligated to repurchase such
Lease pursuant to the Contribution and Sale Agreement or (b) the
Seller is obligated to repurchase such Lease pursuant to this
Agreement.
"Warranty Purchase Price" means, with respect to a
Lease and date of determination, an amount equal to the
Discounted Lease and Residual Balance as of the preceding
Determination Date, plus one month's interest thereon at the
Discount Rate, but in no event greater than the Discounted Lease
and Residual Balance of such Lease as of the Cut-Off Date or the
Substitution Cut-Off Date, as applicable.
1.2 Other Definitional Provisions.
(a) Terms used in Related Documents. Each term
defined in this Agreement will have the meaning assigned to such
term in this Agreement when used in any certificate or other
document made or delivered pursuant to this Agreement, unless
such term is otherwise defined therein.
(b) Accounting Terms. As used in this Agreement,
accounting terms which are not defined in Section 1.1 have the
respective meanings given to them under generally accepted
accounting principles, as in effect on the date of this
Agreement. To the extent that the definitions of accounting
terms in this Agreement are inconsistent with the meanings of
such terms under generally accepted accounting principles, the
definitions contained in this Agreement will control.
(c) "Hereof," etc. The words "hereof," "herein"
and "hereunder" and words of similar import when used in this
Agreement will refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section, Schedule and
Exhibit references contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement, unless
otherwise specified.
(d) Reference to Payment Date. With respect to
any Payment Date, the "related Determination Date," the "related
Record Date," and the "related Collection Period," will mean the
Determination Date, Record Date, and Collection Period,
respectively, immediately preceding such Payment Date, and the
relationships among Determination Dates, Record Dates, and
Collection Periods will be correlative to the foregoing
relationships.
(e) Number and Gender. Each defined term used in
this Agreement has a comparable meaning when used in its plural
or singular form. Each gender-specific term used in this
Agreement has a comparable meaning whether used in a masculine,
feminine or gender-neutral form.
(f) Including. Whenever the term "including"
(whether or not that term is followed by the phrase "but not
limited to" or "without limitation" or words of similar effect)
is used in this Agreement in connection with a listing of items
within a particular classification, that listing will be
interpreted to be illustrative only and will not be interpreted
as a limitation on, or exclusive listing of, the items within
that classification.
(g) "Receipt" of Funds. For purposes of this
Agreement, funds constituting Collections will be deemed to be
"received" by the Servicer when such funds have been deposited in
a lock-box account maintained by the Servicer or on its behalf
(or, if earlier, when such funds come into the Servicer's actual
possession).
ARTICLE II
CONVEYANCE OF ASSETS
2.1 Conveyance of the Assets.
(a) Conveyance. In consideration of the Issuer's
delivery of the Notes and the Trust Certificate to, or upon the
order of the Seller, the Seller does hereby enter into this
Agreement and agree to fulfill all of its obligations hereunder
and hereby sells, transfers, assigns and otherwise conveys to the
Issuer, without recourse, all right, title and interest of the
Seller in, to and under, the following property, whether now
existing or hereafter arising:
(i) the Leases and all monies due or to become
due thereunder after the related Cut-Off Date and all
Collections;
(ii) its interests in the related Equipment (other
than any licensed products that may accompany any of the
Equipment);
(iii)the related Lease Files;
(iv) the Contribution and Sale Agreement,
including, but not limited to the obligation of Trans
Leasing to repurchase Leases under certain circumstances as
specified therein but excluding the rights of
indemnification from Trans Leasing to Seller under Section
3.04 thereof and rights of the Seller to purchase additional
Receivables thereunder;
(v) the Insurance Policies and any Insurance
Proceeds related to the Leases; and
(vi) all income or proceeds of the foregoing or
relating thereto.
The foregoing sale, transfer, assignment and
conveyance does not constitute, and is not intended to result in,
an assumption by the Issuer, the Owner Trustee, the Indenture
Trustee or any Holder of any obligation of the Originator, the
Seller or any other Person in connection with the Leases or under
any agreement or instrument relating to the Leases.
It is the intention of the Seller and the Issuer that
the transfer and assignment contemplated by this Agreement shall
constitute a sale of the Leases and its interests in the related
Equipment from the Seller to the Issuer (except and to the extent
where applicable law in any jurisdiction requires title to be
vested in a trustee, in which case, to the Owner Trustee) and the
beneficial interest in and title to the Leases and the related
Equipment shall not be a part of the Seller's estate in the event
of the filing of a bankruptcy petition by or against the Seller
under any bankruptcy law. Notwithstanding the foregoing, in the
event a court of competent jurisdiction determines that the
transfer and assignment contemplated by this Agreement did not
constitute such a sale or that such beneficial interest is a part
of the Seller's estate, then the Seller shall be deemed to have
granted to the Issuer a first priority perfected security
interest in all of the Seller's right, title and interest in, to
and under the Leases and its interests in the related Equipment,
and the Seller hereby grants such security interest. For
purposes of such grant, this Agreement shall constitute a
security agreement under the UCC.
(b) Recording and Filings. In connection with
the transfer of the Trust Estate to the Issuer, the Servicer
agrees to record and file, on behalf of the Seller and at the
Servicer's expense, financing statements and continuation
statements with respect to the Trust Estate meeting the
requirements of the UCC in such manner and in such jurisdictions
as are necessary to perfect and maintain the perfection of the
transfer of the Trust Estate to the Issuer. Notwithstanding the
foregoing, the Parties acknowledge and agree that (i) financing
statements will not be recorded or filed with respect to the
Equipment other than in the Filing Locations, (ii) the Lease
Files will not be physically delivered to the Owner Trustee or
the Indenture Trustee but instead will be held by the Servicer as
custodian for the Owner Trustee or the Indenture Trustee in
accordance with the provisions hereof, (iii) the financing
statements to be filed in the Filing Locations other than the
States of Delaware, Illinois and New York will not be filed until
after the Closing Date (and the Servicer, on behalf of the Seller
and at the Servicer's expense) agrees to make such filings within
5 Business Days after the Closing Date), and (iv) Trans Leasing
will not be required to cause the certificate of title or other
title document to any Equipment consisting of motor vehicles to
be transferred to the Seller or transferred from the Seller to
the Owner Trust pursuant to this Agreement or the security
interest of the Indenture Trustee granted pursuant to the
Indenture marked on such certificate of title or other title
document.
2.2 Marking of Lease Management System. The
Servicer will mark the Lease Management System, on behalf of the
Seller at the Servicer's expense, on or prior to the Closing Date
in a manner which indicates that the Leases and related Equipment
have been transferred to the Issuer and pledged to the Indenture
Trustee for the benefit of the Holders.
2.3 Acceptance by Issuer. The Owner Trustee on
behalf of the Issuer does hereby accept all consideration
conveyed by the Seller pursuant to Section 2.1(a) and declares
that the Issuer shall hold such consideration upon the trust set
forth in the Trust Agreement for the benefit of the
Certificateholders, subject to the terms and conditions of the
Indenture and this Agreement.
2.4 Representations and Warranties of the Seller.
The Seller hereby makes the following representations and
warranties which, unless otherwise indicated, speak as of the
Closing Date.
(a) Representations and Warranties with respect
to the Assets. As to the Assets:
(i) no Receivable has been sold, transferred,
assigned or pledged by the Seller to any Person (except
pursuant to the Credit Agreement), and immediately prior to
the sale and assignment of such Receivable to the Issuer
hereunder, the Seller is the sole owner of, and holder of
title to, the Leases and the Equipment (or a security
interest therein) free and clear of any Liens (except for
Permitted Liens, and immediately following the transfer by
the Seller to the Issuer of the Receivables, the Receivables
will be free and clear of all Liens (except for Permitted
Liens); and
(ii) except as described in the provisos contained
in Section 2.1(b), all filings necessary to evidence the
sale and assignment of the Receivables to the Issuer
hereunder have been made in all appropriate jurisdictions.
(b) Representations and Warranties as to the
Seller. As to the Seller:
(i) Organization and Good Standing. The Seller
is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with
all requisite corporate power and authority to own its
properties and to conduct its business as presently
conducted;
(ii) Due Qualification. The Seller is qualified
to do business as a foreign corporation, is in good
standing, and has obtained all licenses and approvals
required under the laws of, all states in which the
ownership of its property or the conduct of its business
requires such qualification, standing, license or approval,
except to the extent that the failure to so qualify,
maintain such standing or be so licensed or approved, would
not, in the aggregate, materially and adversely affect the
ability of the Seller to perform its obligations under this
Agreement and the Contribution and Sale Agreement;
(iii) Power and Authority. The Seller has the
corporate power and authority to execute and deliver this
Agreement and the Contribution and Sale Agreement and to
carry out the terms hereof and thereof, and the Seller has
duly authorized the execution, delivery and performance of
this Agreement and the Contribution and Sale Agreement by
all requisite corporate action;
(iv) Valid Transfer and Sale; Binding Obligations.
The sale of the Leases and related Equipment described in
Section 2.1(a) constitutes, and each sale of any Substitute
Leases and related Equipment will constitute, a legal and
valid sale, assignment, transfer and conveyance to the
Issuer of all right, title, and interest of the Seller in,
to and under such Leases and the related Equipment, or the
Issuer has (or will have with respect to Substitute Leases
and the related Equipment) a first priority perfected
security interest in all of the Seller's right, title and
interests in, to and under such Leases and the related
Equipment (subject to the matters set forth in the provisos
contained in Section 2.1(b)); such Leases and the related
Equipment will be held by the Issuer free and clear of any
Lien of any Person claiming through or under the Seller,
except for Permitted Liens; and each of this Agreement and
the Contribution and Sale Agreement constitutes a legal,
valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms, except as
such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the
enforcement of creditors' rights generally and (ii) general
principles of equity (whether considered in a suit at law or
in equity);
(v) No Violation. The consummation of the
transactions contemplated by, and the performance of the
terms of, this Agreement and the Contribution and Sale
Agreement by the Seller (with or without the giving of any
notice or the lapse of time) will not (after giving effect
to all consents and waivers received on or prior to the date
hereof) (i) conflict with, result in any breach of any of
the terms or provisions of or constitute a default under the
certificate of incorporation or by-laws of the Seller or any
material term of any material indenture, agreement,
mortgage, deed of trust or other instrument to which the
Seller is a party or by which it is bound; (ii) result in
the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument
(other than this Agreement and the Contribution and Sale
Agreement); or (iii) violate any law or regulation
applicable to the Seller or any of its properties in any
manner; which conflict, breach, default, Lien or violation
would have a material and adverse effect on the ability of
the Seller to comply with this Agreement or the Contribution
and Sale Agreement;
(vi) No Consent. No consent, approval, authoriza-
tion, order, registration, filing, qualification, license or
permit of or with any Governmental Authority having
jurisdiction over the Seller or any of its properties or
assets is required to be obtained by or with respect to the
Seller in connection with the execution, delivery and
performance by the Seller of this Agreement and the
Contribution and Sale Agreement and the consummation of the
transactions contemplated herein and therein;
(vii) No Proceedings. There are no proceedings or
investigations pending or, to the best of the Seller's
knowledge, threatened before any Governmental Authority
(A) asserting the invalidity of this Agreement or the
Contribution and Sale Agreement, (B) seeking to prevent the
consummation of any of the transactions contemplated by this
Agreement or the Contribution and Sale Agreement, or
(C) seeking any determination or ruling that might
materially and adversely affect the performance by the
Seller of its obligations under, or the validity or enforce-
ability of, this Agreement or the Contribution and Sale
Agreement;
(viii) Insolvency. The Seller is not insolvent and
will not be rendered insolvent by the consummation of the
transactions contemplated by this Agreement and the
Contribution and Sale Agreement and has an adequate amount
of capital to conduct its business in the ordinary course
and to carry out its obligations under this Agreement and
the Contribution and Sale Agreement;
(ix) Places of Business and Offices. The Seller's
sole places of business and offices are located in
Northbrook, Illinois, and Wilmington, Delaware; and
(x) Ability to Perform. As of the date hereof,
the 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 Contribution
and Sale Agreement.
2.5 Notice of Breach. The representations and
warranties set forth in Section 2.4 will survive the transfer of
the Leases to the Issuer. Upon discovery by the Seller, the
Servicer, the Issuer or the Indenture Trustee of a breach of any
of the representations and warranties set forth in Section 2.4,
the Person discovering such breach will give prompt written
notice to each of the other Parties and the Rating Agency;
provided that no failure to give such notice (or to give such
notice in a prompt manner) will constitute a waiver of such
breach. Each Party will cooperate with the other Parties in
attempting to cure any such breach.
2.6 Mandatory Purchase of Leases and
Indemnification Upon Breach of Warranty.
(a) Representations and Warranties as to the
Leases. Pursuant to Section 2.1(a), the Seller assigned to the
Issuer all of its rights, title and interest in, to and under the
Contribution and Sale Agreement, including the representations
and warranties of the Originator made to the Seller pursuant to
Section 3.01(a) of the Contribution and Sale Agreement, but
excluding the rights of indemnification from the Originator to
Seller under Section 3.04 thereof and rights of the Seller to
purchase additional Receivables thereunder. The Seller hereby
represents and warrants to the Issuer that the Seller has taken
no action which would cause such representations and warranties
of the Originator to be false in any material respect as of the
Closing Date. The Seller further acknowledges that the Issuer
relies on the representations and warranties of the Seller under
this Agreement and the Originator under the Contribution and Sale
Agreement in accepting the Leases in trust and executing and
delivering the Notes and the Trust Certificate. The foregoing
representation and warranty speaks as of the Closing Date (unless
otherwise specified in the Contribution and Sale Agreement), but
shall survive the sale, transfer and assignment of the Leases to
the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(b) Purchase of Leases and Equipment by Seller.
In the event that the Indenture Trustee or the Servicer discovers
or by written notice is informed at any time that a
representation or warranty of the Seller set forth in Section
2.6(a) is untrue in any respect, such Party shall give written
notice to the other Parties and the Seller. The Seller hereby
agrees to purchase each Lease materially and adversely affected
by such untruth (to the extent that such Lease constitutes a part
of the Trust Estate) together with all related Equipment on or
prior to the thirtieth day after such notice (or such later date
as the Seller and the Indenture Trustee may agree), and the
Seller will purchase each such Lease and the related Equipment,
for the Warranty Purchase Price, on or prior to such thirtieth
(or later) day; provided that the Seller will not be required to
purchase any such Lease or the related Equipment if, prior to
such thirtieth (or later) day, either (i)(A) such untruth has
been cured with respect to such Lease in all material respects
and (B) the Seller delivers to the Indenture Trustee a
certificate of a Responsible Officer to that effect or (ii) such
Lease is replaced with a Substitute Lease under Section 5.1
hereof or purchased by the Originator under Section 2.6(c)
hereof. In consideration for the purchase of any such Lease and
the related Equipment, the Seller will remit the Warranty
Purchase Price therefor to the Servicer for deposit into the
Collection Account. It is understood and agreed that in the
event that any representation or warranty of the Seller set forth
in Section 2.6(a) is untrue, the purchase of any affected Lease
and the related Equipment as provided in this Section 2.6(b) will
constitute the only remedies available to the Indenture Trustee,
the Owner Trustee and the Holders in respect of such untruth.
(c) Breach by Originator. In the event that the
Indenture Trustee or the Servicer discovers or by written notice
is informed that any representation or warranty of the Originator
set forth in Section 3.01(a) of the Contribution and Sale
Agreement is untrue in any respect, such Party shall give written
notice to the other Parties, and the Servicer and the Indenture
Trustee will enforce the obligation of the Originator pursuant to
Section 3.03 of the Contribution and Sale Agreement to purchase
each Lease materially and adversely affected by such untruth (to
the extent that such Lease constitutes a part of the Trust
Estate), together with all related Equipment on or prior to the
thirtieth day after such notice (or such later date as the
Originator and the Indenture Trustee may agree); provided that
the Originator will not be required to purchase any such Lease or
related Equipment if, prior to such thirtieth (or later) day,
either (i) the Servicer delivers to the Indenture Trustee an
Officer's Certificate which states that such untruth has been
cured with respect to such Lease and the related Equipment in all
material respects or (ii) such Lease is replaced with a
Substitute Lease under Section 5.1 hereof or purchased by the
Seller under Section 2.6(b) hereof. In consideration of the
purchase of a Lease and related Equipment pursuant to this
Section 2.6(c) by the Originator, the Originator will remit the
Warranty Purchase Price therefor to the Servicer for deposit into
the Collection Account. The Parties understand and agree that in
the event that any representation or warranty set forth in
Section 3.01(a) of the Contribution and Sale Agreement is untrue,
the purchase of any affected Lease and the related Equipment
pursuant to this Section 2.6(c) of this Agreement will constitute
the sole remedy available to the Indenture Trustee, the Owner
Trustee and the Holders in respect of such untruth.
2.7 Covenants of the Seller. The Seller
covenants that:
(a) Security Interests. Except for the
conveyances in accordance with this Agreement and the Indenture
and except for rights and claims relating to the interest of the
Certificateholders, the Seller will not sell, pledge, assign or
transfer to any other Person or grant, create, incur, assume or
suffer to exist any Lien on the Trust Estate (or any interest
therein), and the Seller will defend all right, title and
interest of the Issuer and the Indenture Trustee in, to and under
the Trust Estate against all claims of third parties claiming
through or under the Seller; provided that nothing in this
Section 2.7(a) will prevent or be deemed to prohibit the Seller
from allowing to exist upon the Trust Estate any Permitted Liens.
(b) Delivery of Collections. The Seller agrees
to pay to the Servicer for deposit into the Collection Account
all amounts (if any) received by the Seller in respect of the
Trust Estate as soon as practicable after receipt thereof by the
Seller but, in no event later than two Business Days following
the date thereof.
(c) Obligations with Respect to Leases. The
Seller will duly fulfill all obligations (if any) on its part to
be fulfilled under or in connection with each Lease and will do
nothing to impair the rights of the Issuer, the Owner Trustee,
the Indenture Trustee or the Holders in the Trust Estate.
(d) Compliance with Law. The Seller will comply,
in all material respects, with all laws and regulations of any
Governmental Authority (including the observance of corporate
formalities) applicable to the Seller or the Trust Estate;
provided that the Seller may contest any such laws or regulations
in any reasonable manner which will not materially and adversely
affect (i) the value of (or the rights of the Issuer, the Owner
Trustee, the Indenture Trustee or the Holders with respect to)
the Trust Estate, or the performance by the Seller of its
obligations under this Agreement or the Contribution and Sale
Agreement or (ii) the validity or enforceability of this
Agreement or the Contribution and Sale Agreement.
(e) Preservation of Security Interest. The
Seller will execute and file such financing and continuation
statements and any other documents which are reasonably requested
by the Servicer or the Indenture Trustee to be filed or which may
be required to be filed by any laws and regulations of any
Governmental Authority to preserve and protect fully the interest
of the Issuer, the Indenture Trustee and the Holders in, to and
under the Trust Estate; provided that (i) the Seller will not be
required to file financing or continuation statements with
respect to the Equipment in any jurisdiction other than in the
Filing Locations, (ii) the Lease Files for the Leases will not be
physically delivered to the Owner Trustee or the Indenture
Trustee but will remain in the possession of Trans Leasing, in
its capacity as the Servicer, or any Successor Servicer and (iii)
the Seller will not be required to cause the certificate of title
or other title document to any Equipment consisting of motor
vehicles to be transferred to the Owner Trustee or the security
interest of the Indenture Trustee granted pursuant to the
Indenture to be marked on such certificate of title or other
title document. Upon the appointment of a subservicer other than
Nuvotron, Inc. or any other Affiliate of the Servicer, the
Servicer shall give written notice thereof to the Rating Agency.
(f) Maintenance of Office, etc. Unless the
Seller provides not less than thirty days prior written notice to
the Servicer and the Issuer and files such financing statements
and amendments to financing statements as the Servicer or the
Indenture Trustee may reasonably require, the Seller will not
(i) change the location of its principal executive office or
(ii) change its name, identity or corporate structure in any
manner which would make any financing statement or continuation
statement filed by or on behalf of the Seller in accordance with
this Agreement seriously misleading within the meaning of Article
9-402(7) of the UCC.
(g) Further Assurances. Except as provided in
the final sentence of Section 2.1(b), the Seller from time to
time will make, execute or endorse, acknowledge and file or
deliver to the Indenture Trustee and the Servicer, as
appropriate, such schedules, confirmatory assignments,
conveyances, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments, and
take such further steps relating to the Trust Estate, as the
Indenture Trustee or the Servicer may request and reasonably
require.
(h) Notice of Liens. The Seller will notify the
Servicer and the Indenture Trustee of any Lien on any of the
Trust Estate (other than Permitted Liens) promptly after the
Seller becomes aware of such Lien.
(i) Amendments to Certificate of Incorporation.
The Seller shall not amend its certificate of incorporation
unless the Rating Agency Condition with respect to such amendment
has been satisfied.
(j) Corporate Existence. The Seller will keep in
full effect its existence and good standing as a corporation
under the laws of the State of Delaware, and will obtain and
preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is
required by applicable law, except to the extent that the failure
to so qualify would not, in the aggregate, materially and
adversely affect (i) the Seller, (ii) the value of (or the rights
of the Issuer, the Owner Trustee, the Indenture Trustee or the
Holders with respect to) the Trust Estate, or (iii) the ability
of the Seller to comply with this Agreement or the Contribution
and Sale Agreement.
(k) Independent Directors. The Seller will not
permit an Independent Director (as defined in the certificate of
incorporation of the Seller) to be any person who (i) owns more
than 1% of the outstanding shares of Trans Leasing, (ii) provides
personal services to Trans Leasing or any of its subsidiaries or
affiliates or (iii) is affiliated with a tax-exempt entity that
receives contributions from Trans Leasing or any of its
subsidiaries or affiliates.
(l) Indebtedness. Except for the Notes, the
Seller shall not issue or, if issued by any trust formed by the
Seller, sell any notes, debentures, trust certificates or other
instruments representing indebtedness or enter into any
agreements for borrowed money unless the indebtedness represented
thereby or outstanding thereunder (i) (A) will be rated by the
Rating Agency not lower than the highest rating on the Notes
(prior to giving effect to the incurrence of such indebtedness),
(B) is fully subordinated to the Notes and the documentation
pursuant to which such indebtedness is incurred provides that
such indebtedness does not constitute a claim against the Seller
or any of its assets (other than the assets pledged to secure
such indebtedness) in the event that such pledged assets are
insufficient to satisfy such indebtedness or (C) is nonrecourse
to the Seller and its assets (other than the assets pledged to
secure such indebtedness) and the documentation pursuant to which
such indebtedness is incurred provides that such indebtedness
does not constitute a claim against the Seller or any of its
assets (other than the assets pledged to secure such
indebtedness) in the event that such pledged assets are
insufficient to satisfy such indebtedness and (ii) the holder of
such indebtedness covenants and agrees in the documentation
pursuant to which such indebtedness is incurred not, prior to the
date which is one year and one day after the final distribution
with respect to the Notes, acquiesce, petition or otherwise
involve or cause the Seller to invoke the process of any court or
governmental authority for the purpose of commencing or
sustaining a case against the seller under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequester or other
similar official of the Seller or any substantial part of its
Property, or ordering the winding up or liquidation of the
affairs of the Seller.
2.8 Release of Lien on Equipment. At the same
time as (i) any Lease becomes an Expired Lease and the Equipment
related to such Lease is sold, (ii) any Lease becomes an Early-Termination
Lease and the Equipment related to such Early-Termination Lease is sold,
(iii) the Servicer substitutes or
replaces any unit of Equipment as contemplated in Section 3.1(c)
or (iv) any Lease and related Equipment is substituted as
contemplated in Section 5.1, the Issuer will to the extent
requested by the Servicer release its interest in the Equipment
relating to such Expired Lease or Early-Termination Lease or such
substituted or replaced Equipment or Lease and related Equipment,
as the case may be; provided that such release will not
constitute a release of the Issuer's interest in the proceeds of
such sale (other than with respect to Equipment or Lease and
related Equipment that is replaced pursuant to Section 3.1(c) or
5.1, as the case may be). In connection with any sale of such
Equipment, the Issuer and the Seller will execute and deliver to
the Servicer any assignments, bills of sale, termination
statements and any other releases and instruments as the Servicer
may request in order to effect such release and transfer;
provided that the Issuer and the Seller will make no express
representation or warranty with respect to any such Equipment in
connection with such sale or transfer and assignment other than
with respect to its interest in such Equipment or the absence of
any such interest. Nothing in this Section 2.8 shall diminish
the Servicer's obligations pursuant to Section 3.1(d) with
respect to the proceeds of any such sale.
ARTICLE III
ADMINISTRATION AND SERVICING OF LEASES
3.1 Appointment and Acceptance; Duties.
(a) Appointment of Initial Servicer. Trans
Leasing is hereby appointed as Servicer pursuant to this
Agreement. Trans Leasing accepts the appointment and agrees to
act as the Servicer pursuant to this Agreement.
(b) General Duties. The Servicer will service,
administer and enforce the Leases on behalf of the Issuer and
will have full power and authority to do any and all things in
connection with such servicing and administration which it deems
necessary or desirable. The Servicer will manage, service,
administer and make collections on the Leases with reasonable
care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable equipment leases that it
services for itself or others. The Servicer's duties will
include collection and posting of all payments, responding to
inquiries of Lessees regarding the Leases, investigating
delinquencies, accounting for collections, furnishing monthly and
annual statements with respect to collections and payments in
accordance with Section 3.10, making Servicer Advances in its
discretion, enforcing the Contribution and Sale Agreement and
using its best efforts to maintain the perfected first priority
security interest of the Indenture Trustee in the Leases and the
related Equipment (subject to the matters set forth in the
provisos contained in Section 2.1(b)). The Servicer will follow
its customary standards, policies, and procedures and will have
full power and authority, acting alone, to do any and all things
in connection with such managing, servicing, administration, and
collection that it deems necessary or desirable. If the Servicer
commences a legal proceeding to enforce a Defaulted Lease
pursuant to Section 3.4 or commences or participates in a legal
proceeding (including a bankruptcy proceeding) relating to or
involving a Lease, the Issuer will be deemed to have
automatically assigned such Lease to the Servicer for purposes of
commencing or participating in any such proceeding as a party or
claimant, and the Servicer is authorized and empowered by the
Issuer, pursuant to this Section 3.1(b), to execute and deliver,
on behalf of itself, the Holders, the Issuer and the Indenture
Trustee, any and all instruments of satisfaction or cancellation,
or partial or full release or discharge, and all other notices,
demands, claims, complaints, responses, affidavits or other
documents or instruments in connection with any such proceedings.
If in any enforcement suit or legal proceeding it is held that
the Servicer may not enforce a Lease on the ground that it is not
a real party in interest or a holder entitled to enforce the
Lease, then the Issuer will, at the Servicer's expense and
direction, take steps to enforce the Lease, including bringing
suit in its name.
(c) Consent to Assignment or Replacement. At the
request of a Lessee, the Servicer may in its sole discretion
consent to the assignment of the related Lease or the sublease of
a unit of the related Equipment, so long as such Lessee remains
liable for all of its obligations under such Lease. Upon the
request of any Lessee, the Servicer may, in its sole discretion,
provide for the substitution or replacement of any unit of
Equipment for a substantially similar unit of equipment.
(d) Disposition Upon Termination of Lease. Upon
the expiration or termination of a Lease the Servicer will use
commercially reasonable efforts to dispose of any related Equip-
ment. Without limiting the generality of the foregoing, the
Servicer may dispose of any such Equipment by selling such
Equipment to Trans Leasing for a purchase price equal to the fair
market value thereof. The Servicer will deposit any and all
proceeds realized from the sale or other disposition of Equipment
in accordance with Section 4.7.
(e) Subservicers. The Servicer may enter into
servicing agreements with one or more subservicers (including
Nuvotron, Inc. or any other Affiliate of any Servicer) to perform
all or a portion of the servicing functions on behalf of the
Servicer; provided that the Servicer will remain obligated and be
liable to the Issuer and the Holders for servicing and
administering the Leases in accordance with the provisions of
this Agreement without diminution of such obligation and
liability by virtue of the appointment of such subservicer, to
the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Leases. The
fees and expenses of the subservicer (if any) will be as agreed
between the Servicer and its subservicer and neither the Issuer,
the Owner Trustee, the Indenture Trustee nor the Holders will
have any responsibility therefor. All actions of a subservicer
taken pursuant to such a subservicer agreement will be taken as
an agent of the Servicer with the same force and effect as though
performed by the Servicer.
(f) Further Assurances. The Issuer will furnish
the Servicer, and the Servicer will furnish any subservicer, with
any powers of attorney and other documents necessary or
appropriate to enable the Servicer or a subservicer, as
applicable, to carry out its servicing and administrative duties
under this Agreement.
(g) Notice to Lessees. The Servicer will not be
required to notify any Lessee that such Lessee's Lease or related
Equipment has been sold, transferred, assigned or conveyed to the
Seller pursuant to the Contribution and Sale Agreement or to the
Issuer pursuant to this Agreement or pledged to the Indenture
Trustee pursuant to the Indenture; provided that, in the event
that any Servicer resigns or is replaced, then if the place for
payment pursuant to any Lease is changed, the Successor Servicer
shall prior to such change give each related Lessee prompt
written notice of the appointment of the Successor Servicer and
the place to which such Lessee should make payments pursuant to
each such Lease, and the Servicer that resigned or has otherwise
been replaced shall promptly transfer to the Successor Servicer
any payments it receives after such resignation or replacement.
3.2 Collection of Payments.
(a) Collection Efforts. The Servicer will make
reasonable efforts to collect all payments called for under the
terms and provisions of the Leases as and when the same become
due and will follow those collection procedures which it follows
with respect to all comparable equipment leases that it services
for itself or others. To the extent consistent with the
Originator's past practices, the Servicer may grant extensions,
rebates, or adjustments on a Lease which will not, for purposes
of this Agreement, extend the original due dates or the number of
Scheduled Lease Payments or reduce the amount of any Scheduled
Lease Payment; provided that on only one occasion with respect to
any Lease not more than three consecutive Scheduled Lease
Payments (collectively, a "Skipped Payment") under such Lease may
be deferred to the end of the term of such Lease so long as the
sum of the Discounted Lease Balances of all Leases with respect
to which there has been a Skipped Payment as of a Determination
Date does not exceed 5% of the Aggregate Discounted Lease Balance
as of the Cut-Off Date and such Skipped Payment is deferred to no
later than the last day of the Collection Period related to the
Payment Date that is the Stated Final Maturity Date. No Skipped
Payment shall be considered delinquent for purposes of this
Agreement and no Servicer Advance will be required with respect
thereto. The Servicer may in its discretion waive any late
payment charge or any other fees that may be collected in the
ordinary course of servicing any Lease.
(b) Early Termination Leases. The Servicer may,
in its sole discretion, permit a Lease to become an Early
Termination Lease (which shall not include a Lease that becomes
an Early Termination Lease due to a Casualty Loss), so long as,
unless another Lease is substituted therefor as described in
Section 5.1 herein, (i) the Servicer deposits in the Collection
Account, not later than the second Business Day after receipt
thereof by the Servicer, the sum of (A) the Discounted Lease
Balance of such Lease as of the Determination Date in the month
prior to the month in which such Lease becomes an Early
Termination Lease, and (B) one month's interest thereon at the
Discount Rate and (ii) at the time the Servicer permits a Lease
to become an Early Termination Lease the aggregate principal
amount of all Leases which have become Early Termination Leases
since the Closing Date does not exceed 3% of the Aggregate
Discounted Lease and Residual Balance as of the Cut-Off Date.
(c) Acceleration. The Servicer, in its sole
discretion, may accelerate (or elect not to accelerate) the
maturity of all or any Scheduled Lease Payments under any Lease
under which a default under the terms thereof has occurred and is
continuing (after the lapse of any applicable grace period);
provided that the Servicer is required to accelerate the
Scheduled Lease Payments due under any Lease (and take other
action in accordance with the Servicer's past practice, including
repossessing or otherwise converting the related Equipment, to
realize upon the value of such Lease and the related Equipment)
to the fullest extent permitted by the terms of such Lease
promptly after such Lease becomes a Defaulted Lease.
(d) Taxes and Other Amounts. To the extent
provided for in any Lease, the Servicer will make reasonable
efforts to collect all payments with respect to amounts due for
taxes, assessments and insurance premiums relating to the Leases
or the related Equipment and remit such amounts to the
appropriate Governmental Entity or insurer on or prior to the
date such payments are due.
3.3 Servicer Advances. For each Collection
Period, if the Servicer determines that any Scheduled Lease
Payment (or portion thereof) which was due and payable pursuant
to a Lease during such Collection Period was not received prior
to the end of such Collection Period, the Servicer shall make a
Servicer Advance in an amount up to the amount of such delinquent
Scheduled Lease Payment (or portion thereof), to the extent that
in its sole discretion it determines that it can recoup such
amount from subsequent collections under the related Lease. The
Servicer will deposit any Servicer Advances into the Collection
Account on or prior to 10:00 a.m. (Chicago time) on the related
Payment Date, in immediately available funds. The Servicer will
be entitled to be reimbursed for Servicer Advances pursuant to
Sections 4.7(c), 4.8(b) and 4.8(c).
3.4 Realization Upon Defaulted Leases. The
Servicer will use its best efforts consistent with its customary
and usual practices and procedures in its servicing of equipment
leases to repossess or otherwise comparably convert the ownership
of any Equipment relating to a Defaulted Lease and will act as
sales and processing agent for Equipment which it repossesses.
The Servicer will follow such other practices and procedures as
it deems necessary or advisable and as are customary and usual in
its servicing of equipment leases and other actions by the
Servicer in order to realize upon such Equipment, which practices
and procedures may include reasonable efforts to enforce all
obligations of Lessees and repossessing and selling such
Equipment at public or private sale in circumstances other than
those described in the preceding sentence. Without limiting the
generality of the foregoing, the Servicer may sell any such
Equipment to Trans Leasing for a purchase price equal to the fair
market value thereof. In any case in which any such Equipment
has suffered damage, the Servicer will not expend funds in
connection with any repair or towards the repossession of such
Equipment unless it determines in its discretion that such repair
and/or repossession will increase the Liquidation Proceeds by an
amount greater than the amount of such expenses. The Servicer
will remit to the Collection Account the Liquidation Proceeds
received in connection with the sale or disposition of Equipment
relating to a Defaulted Lease in accordance with Section 4.7(b).
3.5 Maintenance of Insurance Policies. The
Servicer will use its best efforts to ensure that each Lessee
maintains an Insurance Policy with respect to the related
Equipment in an amount at least equal to the sum of the
Discounted Lease and Residual Balance of the related Lease;
provided that the Servicer, in accordance with its customary
servicing procedures, may allow Lessees to self-insure.
Additionally, the Servicer will require that each Lessee maintain
property damage liability insurance during the term of each Lease
in amounts and against risks customarily insured against by the
Lessee on equipment owned by it. If a Lessee fails to maintain
property damage insurance, the Servicer may purchase and maintain
such insurance on behalf of, and at the expense of, the Lessee.
In connection with its activities as Servicer of the Leases, the
Servicer agrees to present, on behalf of itself, the Issuer and
the Holders, claims to the insurer under each Insurance Policy
and any such liability policy and to settle, adjust and
compromise such claims, in each case, consistent with the terms
of each Lease.
3.6 Representations and Warranties of Servicer.
The Servicer represents and warrants to the Issuer (for the
benefit of all Persons who are or may become Holders) that, as of
the Closing Date, insofar as any of the following affects the
Servicer's ability to perform its obligations pursuant to this
Agreement in any material respect:
(a) Organization and Good Standing. The Servicer
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with all
requisite corporate power and authority to own its properties and
to conduct its business as presently conducted and to enter into
and perform its obligations pursuant to this Agreement.
(b) Due Qualification. The Servicer is qualified
to do business as a foreign corporation, is in good standing, and
has obtained all licenses and approvals as required under the
laws of, all states in which the ownership or lease of its
property, the performance of its obligations pursuant to this
Agreement or the other conduct of its business requires such
qualification, standing, license or approval, except to the
extent that the failure to so qualify, maintain such standing or
be so licensed or approved would not, in the aggregate,
materially and adversely affect the ability of the Servicer to
comply with this Agreement.
(c) Power and Authority. The Servicer has the
corporate power and authority to execute and deliver this
Agreement and to carry out its terms. The Servicer has duly
authorized the execution, delivery and performance of this
Agreement by all requisite corporate action.
(d) No Violation. The consummation of the
transactions contemplated by, and the fulfillment of the terms
of, this Agreement by the Servicer (with or without notice or
lapse of time) will not (i) conflict with, result in any breach
of any of the terms or provisions of or constitute a default
under the certificate of incorporation or by-laws of the Servicer
or any material term of any material indenture, agreement,
mortgage, deed of trust or other instrument to which the Servicer
is a party or by which it is bound, (ii) result in the creation
or imposition of any Lien upon any of its Properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument, or (iii) violate any law, regulation,
order, writ, judgment, injunction, decree, determination or award
of any Governmental Authority applicable to the Servicer or any
of its Properties.
(e) No Consent. No consent, approval,
authorization, order, registration, filing, qualification,
license or permit of or with any Governmental Authority having
jurisdiction over the Servicer or any of its Properties or assets
is required to be obtained by or with respect to the Servicer in
connection with the execution, delivery and performance by the
Servicer of this Agreement and the consummation of the
transactions contemplated herein.
(f) Binding Obligation. This Agreement
constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its
terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights generally and (ii) general
principles of equity (whether considered in a suit at law or in
equity).
(g) No Proceedings. To the best of the
Servicer's knowledge, there are no proceedings or investigations
pending or threatened against the Servicer before any
Governmental Authority (i) asserting the invalidity of this
Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (iii) seeking any
determination or ruling that might (in the reasonable judgment of
the Servicer) materially and adversely affect the performance by
the Servicer of its obligations under, or the validity or
enforceability of, this Agreement.
(h) Location of Lease Files. The Lease Files for
all Leases are located at the Servicer's office at 3000 Dundee
Road, Northbrook, Illinois, and the Lease Files have not been
located at any other address during the four-month period prior
to the date hereof. No Person other than the Seller, the Issuer,
the Indenture Trustee and the Servicer has possession of, or any
Lien upon, any Lease Files.
3.7 Covenants of Servicer. The Servicer
covenants that:
(a) Lease Files. The Servicer will, at its own
cost and expense, maintain all Lease Files, as custodian for the
Issuer and the Indenture Trustee and for the benefit of the
Noteholders. Without limiting the generality of the preceding
sentence, the Servicer (i) will not dispose of any documents
constituting the Lease Files in any manner which is inconsistent
with the performance of its obligations as the Servicer pursuant
to this Agreement and will not dispose of any Original Lease
except as contemplated by this Agreement, (ii) will maintain the
Lease Files in a manner which, with the assistance of the
information set forth in the List of Leases, will permit the
Lease Files to be identified and segregated from other documents
in the Servicer's possession which relate to leases or other
contracts or property which are not Leases or Equipment and (iii)
will not permit any Person other than the Issuer, the Indenture
Trustee and the Servicer to maintain possession of, or any Lien
upon, any Lease Files (other than any Lease Files which relate
solely to an Early-Termination Lease, an Expired Lease or a
Repurchased Lease and/or the related Equipment).
(b) Compliance with Law. The Servicer will
comply, in all material respects, with all laws and regulations
of any Governmental Authority applicable to the Servicer or the
Leases and related Equipment and Lease Files or any part thereof;
provided that the Servicer may contest any such law or regulation
in any reasonable manner which will not materially and adversely
affect the value of (or the rights of the Issuer or the Indenture
Trustee on behalf of the Holders, with respect to) the Trust
Estate.
(c) Preservation of Security Interest. The
Servicer will execute and file such financing and continuation
statements and any other documents reasonably requested by the
Issuer or the Indenture Trustee to be filed or which may be
required by any law or regulation of any Governmental Authority
to preserve and protect fully the interest of the Issuer and the
Indenture Trustee in, to and under the Trust Estate; provided
that the Servicer will not be required (i) to file any financing
or continuation statements with respect to the Equipment in any
jurisdiction other than in the Filing Locations, (ii) except as
provided in Article VII, to deliver physical possession of the
Lease Files to the Indenture Trustee (and may permit the Lease
Files to remain in the possession of Trans Leasing, in its
capacity as the Servicer, or any Successor Servicer) or (iii) the
Servicer will not be required to cause the certificate of title
or other title document to any Equipment consisting of motor
vehicles to be transferred to the Seller or transferred to the
Owner Trustee or the security interest of the Indenture Trustee
granted pursuant to the Indenture marked on such certificate of
title or other title document.
(d) Obligations with Respect to Leases. The
Servicer will duly fulfill and comply with, in all material
respects, all obligations on the part of the "lessor" to be
fulfilled or complied with under or in connection with each Lease
and will do nothing to impair the rights of the Issuer, the
Indenture Trustee and the Holders in, to and under the Trust
Estate. The Servicer will perform such obligations under the
Leases and will not change or modify the Leases, except as
otherwise provided herein and except insofar as any such failure
to perform, change or modification would not materially and
adversely affect the value of (or the rights of the Indenture
Trustee, on behalf of the Holders, with respect to) the Leases or
the Equipment.
(e) Location of Lease Files. The Servicer will
not change the location of any material portion of the Lease
Files (other than any Lease Files which relate solely to an
Early-Termination Lease, an Expired Lease or a Repurchased Lease
and/or related Equipment) unless the Servicer gives the Issuer,
the Indenture Trustee and the Owner Trustee notice of such change
not less than ten days prior to such change; provided that at all
times the Lease Files shall remain under the care, custody and
control of the Servicer.
(f) No Bankruptcy Petition. The Servicer agrees
that, prior to the date that is one year and one day after the
payment in full of all amounts owing in respect of the Class A
Notes and the Class B Notes pursuant to this Agreement, it will
not institute against the Issuer or the Seller or join any other
Person in instituting against the Issuer or the Seller any
bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceedings under the
laws of the United States or any state of the United States.
This Section 3.7(f) will survive the termination of this
Agreement.
3.8 Servicer Compensation. The Servicer will be
entitled to receive the Servicing Fee to the extent provided in
Section 4.8. As additional compensation for its services and
duties hereunder (including paying the fees and expenses
described in Section 3.9 below), the Servicer will also be
entitled to retain all Excluded Amounts collected with respect to
the Receivables.
3.9 Payment of Certain Expenses by Servicer. The
Servicer shall pay all expenses incurred by it in connection with
its activities under this Agreement, including fees and
disbursements of independent accountants, the Owner Trustee (in
accordance with Section 7.1 of the Trust Agreement) and the
Indenture Trustee, the fee of the Administrator, taxes imposed on
the Servicer, expenses incurred in connection with payments and
reports pursuant to this Agreement, and all other fees and
expenses not expressly stated under this Agreement for the
account of the Issuer, but excluding Liquidation Expenses
incurred as a result of activities contemplated by Section 3.4.
The Servicer shall pay all reasonable fees and expenses owing to
the Indenture Trustee in connection with the maintenance of the
Trust Accounts.
3.10 Monthly Statement; Annual Report.
(a) Monthly Statement. With respect to each
Payment Date and the related Collection Period, the Servicer will
provide to the Owner Trustee, the Indenture Trustee, the
Certificateholders, the Rating Agency, (unless Definitive Notes
have been issued for the Class A Notes as described in the
Indenture) the Clearing Agency (as defined in the Indenture) and
each Holder of any Class B Note, not less than two Business Days
prior to such Payment Date, a monthly statement (a "Monthly
Statement"), signed by a Responsible Officer of the Servicer and
substantially in the form of Exhibit B.
(b) Annual Statement. The Servicer will provide
to the Owner Trustee, the Indenture Trustee, the
Certificateholders, the Rating Agency and each Holder of any
Note, on or prior to October 31 of each year, commencing October
31, 1996, a cumulative summary of the information required to be
included in the Monthly Statements for the Collection Periods
ending during the immediately preceding Transaction Year.
3.11 Annual Statement as to Compliance. The
Servicer will provide to the Owner Trustee and the Indenture
Trustee on or prior to October 31 of each year, commencing
October 31, 1996, a certificate signed by a Responsible Officer
of the Servicer stating that (a) a review of the activities of
the Servicer, and the Servicer's performance pursuant to this
Agreement, for the period ending on the last day of the
immediately preceding Transaction Year has been made under such
Person's supervision and (b) to the best of such Person's
knowledge, based on such review, the Servicer has performed or
has caused to be performed in all material respects all of its
obligations under this Agreement throughout such Transaction Year
and no Servicer Default has occurred and is continuing (or, if a
Servicer Default has so occurred and is continuing, specifying
each such event, the nature and status thereof and the steps
necessary to remedy such event, and, if a Servicer Default
occurred during such Transaction Year and no notice thereof has
been given to the Indenture Trustee and the Owner Trustee,
specifying such Servicer Default and the steps taken to remedy
such event).
3.12 Annual Independent Public Accountants'
Servicing Statements. The Servicer will cause a firm of
nationally recognized independent public accountants (who may
also render other services to the Servicer) to furnish to each
Holder of any Class B Note, the Owner Trustee and the Indenture
Trustee on or prior to October 31 of each year, commencing
October 31, 1996, a statement relating to the previous
Transaction Year to the effect that (a) such firm has reviewed
certain documents and records relating to the servicing of the
Leases, and (b) based on such examination, such firm is of the
opinion that the Monthly Statements for such Transaction Year
were prepared in compliance with this Agreement, except for such
exceptions as it believes to be immaterial and such other excep-
tions as will be set forth in such firm's report.
ARTICLE IV
RIGHTS OF HOLDERS; ACCOUNTS; ALLOCATION
AND APPLICATION OF THE TRUST ESTATE
4.1 Rights of Holders. The Notes and the Trust
Certificate represent the right to receive payments in respect of
the Trust Estate and other amounts at the times and in the
amounts specified in this Article IV and Article VIII to be paid
to the respective Holders thereof; provided that the right to
such payments shall not exceed (i) for the Holders of the Class A
Notes, in the aggregate, the Outstanding Class A Principal
Balance plus accrued interest thereon calculated at the Class A
Interest Rate in accordance with the provisions of the Indenture
and this Agreement and (ii) for the Holders of the Class B Notes,
in the aggregate, the Outstanding Class B Principal Balance plus
accrued interest thereon calculated at the Class B Interest Rate
in accordance with the provisions of the Indenture and this
Agreement.
4.2 Establishment of the Collection Account. The
Servicer, on behalf of the Issuer and the Indenture Trustee (for
the benefit of the Holders), will establish and maintain or cause
to be so established and maintained, in the name of the Indenture
Trustee, an Eligible Deposit Account (the "Collection Account")
bearing designations clearly indicating that the funds deposited
in such account are held in trust for the benefit of the Holders.
The Collection Account will be established and maintained with
the Indenture Trustee.
4.3 Establishment of Note Distribution Account.
The Servicer, on behalf of the Issuer and the Indenture Trustee
(for the benefit of the Noteholders), will establish and maintain
or cause to be established and maintained, in the name of the
Indenture Trustee, an Eligible Deposit Account (the "Note
Distribution Account") bearing a designation clearly indicating
that the funds deposited in such account are held in trust for
the benefit of the Noteholders. The Note Distribution Account
will be established and maintained with the Indenture Trustee.
4.4 Investment of Accounts. Funds on deposit in
each Trust Account will be invested in Eligible Investments;
provided that all related funds will be available for withdrawal
without loss of principal or interest on the succeeding Payment
Date (except with respect to the Collections received by the
Servicer after the end of the immediately preceding Collection
Period, the proceeds of investments of which need not be
available until the next succeeding Payment Date). Subject to
the restrictions set forth below, the Servicer will have the
authority to instruct the Indenture Trustee in writing with
respect to the investment of funds on deposit in the Trust
Accounts. Receipt of such written instructions by the Indenture
Trustee will be a condition precedent to any investment pursuant
to this Section 4.4. Such instructions will relate to specified
investments which constitute Eligible Investments. None of the
Issuer, the Indenture Trustee, the Owner Trustee or the Servicer
will be liable for any loss incurred in connection with any
investment made pursuant to this Section 4.4 except with respect
to any investment issued or guaranteed by the Indenture Trustee
or the Owner Trustee in its individual capacity. The Indenture
Trustee may make any investments pursuant to this Section 4.4
through its own investment department, in accordance with any
such instructions received from the Servicer. For purposes of
determining the availability of funds in any Trust Account for
any reason under this Agreement, all Investment Earnings
available to be withdrawn from such Trust Account will be deemed
to be available from or on deposit in such Trust Account. All
Eligible Investments which have a specified maturity date will be
held to maturity. The Indenture Trustee will maintain (for the
benefit of the Holders, the Issuer and the Servicer) possession
of all negotiable instruments or securities evidencing the
Eligible Investments from the time of purchase thereof until the
time of sale or maturity.
4.5 Control; Replacement of Trust Accounts. The
Indenture Trustee (for the benefit of the Holders) will possess
all right, title and interest in all funds on deposit from time
to time in the Trust Accounts and in all proceeds thereof. The
Trust Accounts will be under the sole dominion and control of the
Indenture Trustee (for the benefit of the Holders). If, at any
time, the institution holding a Trust Account ceases to be an
Eligible Institution or a Trust Account otherwise ceases to be an
Eligible Deposit Account, the Servicer will, not later than the
thirtieth Business Day after such cessation, establish a new
account that is an Eligible Deposit Account with respect to such
Trust Account and transfer or cause to be transferred any cash
and/or investments in the existing Trust Account to such new
account. From the date such new account is established, it will
constitute the "Collection Account" or "Note Distribution
Account" as the case may be, pursuant to this Agreement.
4.6 Identification of Accounts. Exhibit C
identifies each of the Trust Accounts by its account number,
account designation and the name of the institution with which it
has been established. The Servicer or the Indenture Trustee may
amend or modify Exhibit C from time to time as may be necessary
to reflect any changes in such information.
4.7 Deposit of Collections and Other Amounts.
(a) Initial Deposit. Not later than the second
Business Day after the Closing Date, the Servicer will deposit
(in immediately available funds) into the Collection Account all
Collections received after the Cut-Off Date and through and
including the Closing Date.
(b) Subsequent Deposits. From time to time after
the Closing Date, the Servicer will deposit (in immediately
available funds) all Collections in the Collection Account, as
promptly as possible after the date upon which such Collections
or payments are received (but in no event later than the second
Business Day after such date).
(c) Amounts Exempt from Deposit. Notwithstanding
Sections 4.7(a) and 4.7(b), the following Collections (or
portions thereof) are not required to be deposited into the
Collection Account and, if any such amounts are deposited into
the Collection Account, such amounts may be withdrawn and paid to
the Servicer:
(i) Collections on any Leases on which (and to
the extent that) the Servicer has previously made a Servicer
Advance which has not been reimbursed pursuant to this
Section 4.7(c)(i) or Section 4.8(a), which amounts the
Servicer may retain (as a reimbursement of such Servicer
Advance); and
(ii) Collections from any Repurchased Lease or any
Lease for which a Lease has been substituted as described in
Section 5.1 hereof, which amounts the Servicer may retain to
the extent necessary to reimburse the Servicer for any
related Servicer Advance which has not been reimbursed
pursuant to this Section 4.7(c)(ii) or Section 4.8(a), and
the remainder of which amounts the Servicer will pay to the
Originator or the Seller, as the case may be.
4.8 Payments on Payment Dates. On each Payment
Date (based on information contained in (and in sole reliance on)
the related Monthly Statement delivered pursuant to Section
3.10(a)), the Indenture Trustee will cause the following payments
and transfers to be made from the Available Amount for such
Payment Date (in each case, such payment or transfer to be made
only to the extent of the Available Amount remaining after all
prior payments and transfers for such Payment Date have been
made), in the following order of priority:
(a) to the Servicer by wire transfer to the
Servicer Account, the amount of any Unreimbursed Servicer
Advance;
(b) to the Servicer by wire transfer to the
Servicer Account, any Servicing Fee Arrearage for such Payment
Date;
(c) to the Servicer by wire transfer to the
Servicer Account, the Servicing Fee for such Payment Date;
(d) to the Holders of the Class A Notes by
deposit to the Note Distribution Account, any Class A Interest
Arrearage for such Payment Date;
(e) to the Holders of the Class A Notes by
deposit to the Note Distribution Account, the Class A Interest
Payment Amount for such Payment Date;
(f) to the Holders of the Class B Notes by
deposit to the Note Distribution Account, any Class B Interest
Arrearage for such Payment Date;
(g) to the Holders of the Class B Notes by
deposit to the Note Distribution Account, the Class B Interest
Payment Amount for such Payment Date;
(h) to the Holders of the Class A Notes by
deposit to the Note Distribution Account, the Class A Principal
Payment Amount for such Payment Date;
(i) to the Holders of the Class B Notes by
deposit to the Note Distribution Account, the Class B Principal
Payment Amount for such Payment Date; provided that if the
Outstanding Class A Principal Balance on such Payment Date (after
giving effect to the payments to the Holders of the Class A Notes
of the amount described in (h) above) exceeds zero and the
Subordination Amount would be less than the Minimum Required
Subordination Amount (such difference, the "Subordination Short-
fall"), an amount equal to the least of (x) the Subordination
Shortfall, (y) such Outstanding Class A Principal Balance and (z)
the Class B Principal Payment Amount for such Payment Date shall
be paid to the Holders of the Class A Notes rather than to the
Holders of the Class B Notes; and provided, further, that if a
Restricting Event exists on such Payment Date and the Outstanding
Class A Principal Balance on such Payment Date (after giving
effect to the payments to the Holders of the Class A Notes
described in clause (h) above and in this clause (i) on such
Payment Date) exceeds zero, the amount otherwise required to be
paid to the Holders of the Class B Notes under this clause (i)
(including any amounts otherwise payable to the Holders of the
Class B Notes as described in clause (j)) up to the amount of
such Outstanding Class A Principal Balance shall be paid to the
Holders of the Class A Notes rather than to the Holders of the
Class B Notes;
(j) if a Restricting Event exists on such Payment
Date and the Outstanding Class B Principal Balance on such
Payment Date (after giving effect to the payment to the Holders
of the Class B Notes of the amount described in (i) above on such
Payment Date) exceeds zero, the remaining Available Amount to
Holders of the Class B Notes up to the amount of such Outstanding
Class B Principal Balance; and
(k) to the Certificateholders (pro rata according
to the outstanding balance of the Trust Certificates), any
remaining Available Amount (such amount to be paid as described
on Exhibit C).
Prior to the Stated Final Maturity Date, no principal amount
shall be considered due and payable under this Section 4.8
(including for purposes of Section 5.1 of the Indenture) unless
and to the extent funds are available in the Collection Account
for the payment therefor.
ARTICLE V
OTHER MATTERS RELATING
TO THE SELLER
5.1 Substitution of Leases.
(a) Subject to the provisions of Section 5.1(b)
through (d) hereof, the Seller, upon notice from the Servicer,
may substitute a Lease and the related Equipment for and replace
a Lease and the related Equipment that (i) becomes a Defaulted
Lease or an Early Termination Lease or (ii) is the subject of a
Warranty Event.
(b) Each Substitute Lease shall be a Lease, with
respect to which all of the representations and warranties set
forth in subsections (i) through (xix) of Section 3.01(a) of the
Contribution and Sale Agreement were true as of the related
Substitution Cut-Off Date. No substitution pursuant to Section
5.1(a) hereof shall cause any of the Specified Portfolio
Characteristics to be untrue as of such Substitution Cut-Off
Date, or if any of the Specified Portfolio Characteristics is
untrue as of immediately prior to such Substitution Cut-Off Date,
increase the amount by which any Specified Portfolio
Characteristic is untrue.
(c) Prior to any substitution pursuant to Section
5.1(a) hereof, the Issuer shall have received a Substitute Lease
Transfer Agreement providing for the unconditional sale and
transfer of the Substitute Leases and related Equipment by the
Seller to the Issuer and an amended List of Leases reflecting the
substitution.
(d) The Servicer shall not permit any
substitution under Section 5.1(a) hereof on any Substitution Date
if:
(i) on a cumulative basis from the Closing Date,
the sum of the Discounted Lease Balances (as of the related
Substitution Cut-Off Date) of Leases substituted for
Defaulted Leases would exceed six percent (6%) of the
Aggregate Discounted Lease Balance as of the Closing Date;
(ii) on a cumulative basis from the Closing
Date, the sum of the Discounted Lease Balances (as of the
related Substitution Cut-Off Date) of Leases substituted for
Leases that are the subject of a Warranty Event would exceed
five percent (5%) of the Aggregate Discounted Lease Balance
as of the Closing Date;
(iii) on a cumulative basis from the Closing
Date, the sum of the Discounted Lease Balances (as of the
related Substitution Cut-Off Date) of Leases substituted for
Leases would exceed ten percent (10%) of the Aggregate
Discounted Lease Balance as of the Closing Date;
(iv) as of the related Substitution Cut-Off
Date, each Substitute Lease and the related Equipment has a
Discounted Lease Balance and Discounted Lease and Residual
Balance not less than the Discounted Lease Balance and
Discounted Lease and Residual Balance, respectively, of the
Lease being replaced;
(v) as a result of all substitutions to be made
on such Substitution Date, the sum of the Scheduled Lease
Payments on all Leases due in any Collection Period prior to
the April 1999 Collection Period would be less than the sum
of all Scheduled Lease Payments on the Leases subject to
this Agreement on the Closing Date becoming due during such
Collection Period (a "Payment Deficiency"), or increase the
amount of any Payment Deficiency; and
(vi) with respect to a Lease that has become an
Early Termination Lease or is the subject of a Warranty
Event if either:
(A) a Restricting Event has occurred and is
continuing; or
(B) the amount calculated as (1) the
Aggregate Discounted Lease Balance as of the
Determination Date immediately preceding such
Substitution Date minus (2) the outstanding principal
balance of the Class A Notes on such Substitution
Date is less than the greater of (1) the Minimum
Required Subordination Amount and (2) 17% of the
Aggregate Discounted Lease Balance on the
Determination Date immediately preceding such
Substitution Date.
(e) The Seller shall also have the right to
substitute Equipment under any Lease for comparable Equipment so
long as there is no change in the amount, number or time of the
Scheduled Lease Payments with respect to such Lease and the
present value of the estimated residual value (the "Residual
Value") of the substitute Equipment is not less than the Residual
Value of the original Equipment.
(f) Upon the replacement of a Lease and/or the
Equipment with a Substitute Lease and/or Equipment as described
above, the interest of the Owner Trustee and the Indenture
Trustee in such replaced Lease and/or Equipment and all proceeds
thereon shall be terminated and such replaced Lease and/or
Equipment shall be released to the Seller.
5.2 Merger or Consolidation of the Seller;
Assumption of the Seller's Obligations.
(a) General Prohibition. The Seller will not
consolidate with, merge into, convey or transfer a substantial
part of its Properties to any Person (other than the sale,
transfer, assignment and conveyances described in this
Agreement), unless (i) the Person formed by such consolidation or
merger or which acquires by conveyance or transfer a substantial
part of the properties and assets of the Seller will be organized
and existing under the laws of the United States of America or
any state thereof or the District of Columbia, and is a special
purpose corporation, (ii) such action would not result in a
withdrawal or reduction of the rating then in effect of the Class
A Notes or of the Class B Notes, so long as in each case such
class of Notes is outstanding, by the Rating Agency (as confirmed
by the Rating Agency in writing), (iii) the Person expressly
assumes (by an agreement executed and delivered to the Issuer,
which supplements this Agreement and is in a form satisfactory to
the Issuer) the performance of every covenant and obligation of
the Seller pursuant to this Agreement, as applicable, and (iv)
the Seller has delivered to the Issuer and the Indenture Trustee
an Officer's Certificate of the Seller and an Opinion of Counsel
each to the effect that such consolidation, merger, conveyance or
transfer and such supplemental agreements comply with this
Section 5.4 and that all conditions precedent relating to such
transaction pursuant to this Agreement have been met.
Notwithstanding the preceding sentence, to the extent that any
right, covenant or obligation of the Seller is inapplicable to
the successor entity, such successor entity will be subject to
such covenant, obligation, or benefit from such right, as would
apply, to the extent practicable, to such successor entity.
(b) Assignability of Obligations. The
obligations of the Seller pursuant to this Agreement are not
assignable, and no Person will succeed to the obligations of the
Seller pursuant to this Agreement, except in each case in
accordance with the provisions of this Section 5.2.
5.3 Compliance with Certificate of Incorporation.
The Seller will comply with the provisions of its Certificate of
Incorporation and will not amend its Certificate of
Incorporation, except as provided therein.
5.4 Limitation of Liability of Seller and Others.
The Seller and any director, officer, employee or agent of the
Seller may rely in good faith on any document of any kind
submitted by any Person respecting any matters arising under this
Agreement as being prima facie properly executed. The Seller
will not be under any obligation to appear in, prosecute, or
defend any legal action in any way relating to the Receivables
that is not incidental to its obligations as the seller of the
Receivables under this Agreement and that in its opinion may
cause it to incur any expense or liability.
ARTICLE VI
OTHER MATTERS RELATING
TO THE SERVICER
6.1 Liability of the Servicer and Others.
(a) The Servicer will be liable in accordance
with this Agreement only to the extent of the obligations
specifically undertaken by the Servicer in such capacity. Except
as provided in Section 6.2, the Servicer or any of its respective
directors, officers, employees or agents will not be under any
liability to the Seller, the Issuer, the Owner Trustee, the
Indenture Trustee, the Holders or any other Person for any action
taken or for refraining from the taking of any action in its
capacity as Servicer pursuant to this Agreement whether arising
from express or implied duties under this Agreement; provided,
that this provision will not protect the Servicer against any
liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of duties
or by reason of reckless disregard of obligations and duties
under this Agreement. The Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted
by any other Person respecting any matters arising hereunder.
The Servicer will not be under any obligation to appear in,
prosecute or defend any legal action which is not related to its
duties to service the Leases in accordance with this Agreement
which in its reasonable opinion may involve it in any expense or
liability. No director, officer, employee or agent of the
Servicer will be under any liability to the Owner Trustee, the
Indenture Trustee, the Holders, the Issuer, the Seller or any
other Person pursuant to this Agreement or pursuant to any
document delivered hereunder. It is expressly understood that
all such liability is expressly waived and released as a
condition of, and as consideration for, the execution of this
Agreement and the issuance of the Notes and the Trust
Certificate.
(b) The Servicer and any director or officer or
employee or agent of the Servicer shall be reimbursed by the
Indenture Trustee or the Owner Trustee, as applicable, for any
actual and direct (and not consequential) contractual damages,
liability or expense (including, without limitation, any
obligation of the Servicer to the Indenture Trustee or the Owner
Trustee, as applicable, pursuant to subsection 6.2(c)(x) or (y))
incurred by reason of such trustee's willful misfeasance, bad
faith or gross negligence (except errors in judgment) in the
performance of such trustee's duties under this Agreement, the
Indenture or the Trust Agreement or by reason of reckless
disregard of its obligations and duties under this Agreement.
(c) Except as provided in this Agreement, the
Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to
its duties to service the Leases in accordance with this
Agreement and that in its opinion may involve it in any expense
or liability; provided, however, that the Servicer may undertake
any reasonable action that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the
parties to this Agreement and the interests of the Noteholders
and the Certificateholders under this Agreement and the interests
of the Noteholders under the Indenture and the interests of the
Certificateholders under the Trust Agreement. In such event, the
legal expenses and costs for such action and any liability
resulting therefrom shall be expenses, costs for such action and
liability resulting therefrom shall be expenses, costs and
liabilities of the Trust and the Servicer shall be entitled to be
reimbursed therefor from any amounts recovered in such action.
(d) The Indenture Trustee shall distribute out of
the Collection Account on a Payment Date any amounts permitted
for reimbursement pursuant to subsection 6.1(c) not therefor
reimbursed prior to making the other payments and transfers to be
made under Section 4.8 on such Payment Date.
6.2 Indemnification by the Servicer.
(a) The Servicer shall indemnify, defend and hold
harmless the Indenture Trustee, the Owner Trustee and the Issuer
(and their respective directors, officers, stockholders, agents
and servants) and the Noteholders from and against any taxes that
may at any time be asserted against any such Person with respect
to the transactions contemplated in this Agreement, including,
without limitation, any sales, gross receipts, general
corporation, tangible personal property, privilege or license
taxes (but not including any taxes asserted with respect to, and
as of the date of, the sale of any Leases to the Issuer hereunder
or the issuance and original sale of the Notes or the Trust
Certificate, or asserted with respect to ownership or sale of any
Leases or federal or other income taxes arising out of
distributions or receipt of payment on the Notes or the Trust
Certificate, or any fees or other compensation payable to any
such Person) and costs and expenses in defending against the
same.
(b) The Servicer shall indemnify, defend and hold
harmless the Indenture Trustee, the Owner Trustee and the Issuer
(and their respective directors, officers, stockholders, agents
and servants) and the Holders from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent
that such cost, expense, loss, claim, damage or liability arose
out of, or was imposed upon the Indenture Trustee, the Owner
Trustee, the Issuer or the Holders through the negligence,
willful misfeasance or bad faith of the Servicer in the
performance of its duties under this Agreement, the Indenture or
the Trust Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement, the Indenture or the
Trust Agreement.
(c) The Servicer shall indemnify, defend and hold
harmless the Indenture Trustee and the Owner Trustee, and their
respective directors, officers, stockholders, agents and
servants, from and against all costs, expenses, losses, claims,
damages and liabilities arising out of or incurred in connection
with (x) in the case of the Owner Trustee, the Indenture
Trustee's performance of its duties under the Indenture, (y) in
the case of the Indenture Trustee, the Owner Trustee's
performance of its duties under the Trust Agreement or (z) the
acceptance, administration or performance by, or action or
inaction of, the Indenture Trustee or the Owner Trustee, as
applicable, of the trusts and duties contained in this Agreement,
the Indenture (in the case of the Indenture Trustee), including
the administration of the Indenture Trust Estate, and the Trust
Agreement (in case of the Owner Trustee), including the
administration of the Trust Estate, except in each case to the
extent that such cost, expense, loss, claim, damage or liability:
(A) is due to the willful misfeasance, bad faith or negligence
(except for errors in judgment) of the Person seeking to be
indemnified, (B) to the extent otherwise payable to the Indenture
Trustee in its individual capacity, arises from the Indenture
Trustee's breach of any of its representations or warranties in
Section 6.13 of the Indenture, (C) to the extent otherwise
payable to the Owner Trustee, arises from the Owner Trustee's
breach of any of its representations or warranties set forth in
Section 6.3 of the Trust Agreement or (D) shall arise out of or
be incurred in connection with the performance by the Indenture
Trustee of the duties of successor Servicer hereunder.
(d) Indemnification under this Section 6.2 shall
include any reasonable judgment, award, settlement, reasonable
attorneys' fees and other reasonable costs or expenses incurred
in connection with the defense of any actual or threatened
action, proceeding or claim. Any such indemnification will not
be payable from the assets of the Issuer. The provisions of this
Section 6.2 will run directly to and be enforceable by an injured
party, subject to the limitations set forth in this Section 6.2.
The obligations of the Servicer pursuant Section 3.9 and to this
Section 6.2 will survive the termination of this Agreement and of
the Trust Agreement.
(e) If the Servicer has made any indemnity
payments pursuant to this Section 6.2 and the recipient
thereafter collects any of such amounts from others, the
recipient shall promptly repay such amounts collected to the
Servicer, without interest.
6.3 Merger or Consolidation of Servicer;
Assumption of Servicer's Obligations. The Servicer will not
consolidate with or merge into, convey or transfer all or
substantially all of its Properties to any Person (which shall
not include the contributions and sales pursuant to the
Contribution and Sale Agreement in the Servicer's capacity as the
Originator) unless (i) the Person formed by such consolidation,
merger or which acquires by conveyance or transfer all or
substantially all of the Properties of the Servicer is organized
and existing under the laws of the United States of America or
any state thereof or the District of Columbia, (ii) such Person
expressly assumes (by an agreement, executed and delivered to the
Issuer, which supplements this Agreement and is in a form
reasonably satisfactory to the Indenture Trustee) the performance
of every covenant and obligation of the Servicer pursuant to this
Agreement, and (iii) the Servicer has delivered to the Issuer and
the Indenture Trustee an Officer's Certificate and an Opinion of
Counsel, each to the effect that such consolidation, merger,
conveyance or transfer and such supplemental agreements comply
with this Section 6.3 and that all conditions precedent relating
to such transaction pursuant to this Agreement have been met.
6.4 The Servicer Not to Resign. The Servicer
will not resign from the obligations and duties imposed on it
pursuant to this Agreement except (a) upon a determination that
(i) the performance of its duties pursuant to this Agreement is
impermissible under applicable law and (ii) there is no
reasonable action which the Servicer could take to make the
performance of its duties pursuant to this Agreement permissible
under applicable law. Any determination pursuant to clause (i)
above will be evidenced by an Opinion of Counsel to such effect
and any determination pursuant to clause (ii) above will be
evidenced by an Officer's Certificate, in each case delivered to
the Indenture Trustee. No Servicer resignation will become
effective until the Indenture Trustee or a Successor Servicer has
assumed the responsibilities and obligations of the Servicer in
accordance with Section 7.2. If within 120 days of the date of
any determination described in this Section 6.4, the Indenture
Trustee is unable to appoint a Successor Servicer, the Indenture
Trustee will without further action be appointed a Successor
Servicer. The provisions of Section 7.1 with respect to the
duties of the Servicer in effecting the termination of its
servicing responsibilities and the transfer of such responsibili-
ties to a Successor Servicer will apply to any resignation
pursuant to this Section 6.4.
ARTICLE VII
SERVICER DEFAULTS
7.1 Servicer Defaults.
(a) Definition. Any of the following events will
constitute a "Servicer Default" pursuant to this Agreement:
(i) any failure by the Servicer to make any pay-
ment, transfer or deposit or deliver any Monthly Statement
or Annual Statement which continues beyond the second
Business Day after the date upon which such payment,
transfer, or delivery is required to be made pursuant to
this Agreement;
(ii) any failure by the Servicer to observe
or perform in any material respect any other covenant or
agreement of the Servicer pursuant to this Agreement, if
such failure materially and adversely affects the rights of
the Noteholders and continues unremedied for a period of
thirty days after the earlier of (a) the date on which
written demand that such failure be remedied is given to the
Servicer by the Indenture Trustee, the Holders of Notes
evidencing, in the aggregate, more than 50% of the sum of
the then Outstanding Class A Principal Balance and the then
Outstanding Class B Principal Balance) or (b) the date on
which a Responsible Officer of the Servicer becomes aware of
such failure;
(iii) any delegation of the Servicer's duties
pursuant to this Agreement, except as permitted pursuant to
Section 9.6;
(iv) any representation, warranty or
certification made by the Servicer in this Agreement or in
any certificate delivered pursuant to this Agreement proves
to have been incorrect in any material respect when made and
such incorrect statement has a material and adverse effect
on the rights of the Holders and continues to be incorrect
in any material respect for a period of thirty days after
the earlier of (a) the date on which written demand that
such incorrect statement be remedied is given to the
Servicer by the Indenture Trustee, Holders of Notes
evidencing, in the aggregate, more than 50% of the sum of
the then Outstanding Class A Principal Balance and the then
Outstanding Class B Principal Balance or (b) the date on
which a Responsible Officer of the Servicer becomes aware of
such incorrect statement; or
(v) (A) the Servicer consents to the appointment
of a conservator or receiver or liquidator in any insol-
vency, readjustment of debt, marshalling of assets and
liabilities or similar proceeding of or relating to the
Servicer or all or substantially all of its Property, (B) a
decree or order of a court or agency or supervisory
authority having proper jurisdiction for the appointment of
a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities
or similar proceeding, or for the winding-up or liquidation
of the Servicer's affairs, is entered against the Servicer
and such decree or order remains in force undischarged or
unstayed for a period of 60 days, or (C) the Servicer admits
in writing its inability to pay, or fails to pay, its debts
generally as they become due, files a petition or commences
any case or proceeding to take advantage of any applicable
bankruptcy, insolvency or reorganization statute, makes any
assignment for the benefit of its creditors or voluntarily
suspends payment of its obligations.
(b) Consequences of Servicer Default. If any
Servicer Default occurs, then, so long as such Servicer Default
is continuing, the Indenture Trustee and the Holders of Notes
evidencing, in the aggregate, more than 50% of the sum of the
then Outstanding Class A Principal Balance and the then
Outstanding Class B Principal Balance, by written notice (a
"Termination Notice") to the Servicer (and to the Indenture
Trustee and the Owner Trustee), may terminate all of the rights
and obligations of the Servicer pursuant to this Agreement and
in, to and under the Trust Estate. After the Servicer receives a
Termination Notice, and on the date that a Successor Servicer is
appointed pursuant to Section 7.2, all authority and power of the
Servicer pursuant to this Agreement will pass to and be vested in
the Successor Servicer. The Indenture Trustee is hereby
authorized and empowered (upon the failure of the Servicer to
cooperate) to execute and deliver, on behalf of the Servicer as
attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things,
which are necessary or appropriate to effect the transfer of the
servicing function pursuant to this Agreement. The Servicer
agrees to cooperate with the Indenture Trustee and such Successor
Servicer in effecting the termination of the Servicer's responsi-
bilities and rights pursuant to this Agreement. The Servicer
will promptly transfer the information contained in the Lease
Management System relating to the Leases to the Successor
Servicer in such form as the Successor Servicer may reasonably
request, and will promptly transfer to the Successor Servicer
possession of the Lease Files and all other records,
correspondence and documents necessary for the continued
servicing of the Leases in the manner and at such times as the
Successor Servicer will reasonably request. To the extent that
compliance with this Section 7.1(b) requires the Servicer to
disclose to the Successor Servicer information of any kind which
the Servicer reasonably deems to be confidential, the Servicer
may require the Successor Servicer to enter into such customary
licensing and confidentiality agreements as the Servicer
reasonably deems necessary to protect its interests.
(c) Actions Beyond Servicer's Control.
Notwithstanding the foregoing, any delay in or failure of
performance referred to in Section 7.1(a)(i) for a period not in
excess of five Business Days or under Section 7.1(a)(ii), (iii)
or (iv) for a period not in excess of sixty Business Days (in
each case, without giving effect to any grace period described in
such Section) will not constitute a Servicer Default if such
delay or failure could not be prevented by the exercise of
reasonable diligence by the Servicer and such delay or failure
was caused by an act of God or the public enemy, acts of declared
or undeclared war, public disorder, rebellion or sabotage,
epidemics, landslides, lightning, fire, hurricanes, earthquakes,
floods or similar causes. The preceding sentence will not
relieve the Servicer of the obligation to use its best efforts to
perform its obligations in a timely manner in accordance with the
terms of this Agreement, and the Servicer will provide the
Indenture Trustee, the Issuer, and the Noteholders with an
Officer's Certificate giving prompt notice of such failure or
delay by it, together with a description of its efforts to
perform its obligations.
7.2 Indenture Trustee to Act; Appointment of
Successor.
(a) Servicer's Continued Performance. On and
after the Servicer's receipt of a Termination Notice pursuant to
Section 7.1(b), the Servicer will continue to perform all
servicing functions pursuant to this Agreement until the date
specified by the Indenture Trustee in such Termination Notice or,
if no such date is specified, until a date mutually agreed upon
by the Servicer and the Indenture Trustee.
(b) Appointment; Inability to Appoint. As
promptly as possible after delivery of a Termination Notice the
Indenture Trustee, pursuant to the Indenture, will appoint a
successor to the Servicer. No Person shall act as the Successor
Servicer until such Person accepts its appointment by a written
assumption in a form reasonably acceptable to the Indenture
Trustee. The Indenture Trustee may obtain bids from potential
Successor Servicers. If no Successor Servicer has been appointed
and accepted its appointment at the time when the Servicer ceases
to act as Servicer, the Indenture Trustee, without further
action, will automatically be appointed the Successor Servicer,
unless the Indenture Trustee is legally unable so to act, in
which case the Indenture Trustee will petition a court of
competent jurisdiction to appoint an established servicing entity
having a net worth of not less than $25,000,000 and whose regular
business includes the servicing of leases of equipment which is
of a type or types similar to the Equipment.
(c) Successor's Rights, Duties and Liabilities.
Upon its appointment, the Successor Servicer will be the
successor with respect to servicing functions pursuant to this
Agreement and will be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the
terms and provisions of this Agreement, and all references in
this Agreement to the Servicer will be deemed to refer to the
Successor Servicer.
(d) Compensation. In connection with such
appointment and assumption, the Indenture Trustee will be
entitled to such compensation, or may make such arrangements for
the compensation of the Successor Servicer out of collections, as
it and such Successor Servicer agree; provided that no such
compensation will be in excess of the Servicing Fee permitted to
be paid to the Servicer pursuant to this Agreement.
(e) Cessation of Successor's Authority. All
authority and power granted to a Successor Servicer pursuant to
this Agreement will automatically cease and terminate upon
termination of this Agreement pursuant to Section 8.1 and will
pass to and be vested in the Seller (or Person designated by the
Seller) and the Seller (or Person designated by the Seller) are
hereby authorized and empowered to execute and deliver, on behalf
of such Successor Servicer, as attorney-in-fact or otherwise, all
documents and other instruments, and to do and accomplish all
other acts or things, which are necessary or appropriate to
effect the purposes of such transfer of the servicing function
pursuant to this Agreement. The Successor Servicer agrees to
cooperate with the Seller (or Person designated by the Seller) in
effecting the termination of such Successor Servicer's
responsibilities and rights. The Successor Servicer will
transfer its electronic records relating to the Leases to the
Seller (or Person designated by the Seller) in such electronic
form as the Seller (or Person designated by the Seller) may
reasonably request and will transfer all other records,
correspondence and documents to the Seller (or Person designated
by the Seller) in the manner and at such times as the Seller (or
Person designated by the Seller) will reasonably request. To the
extent that compliance with this Section 7.2(e) requires the
Successor Servicer to disclose to the Seller (or Person
designated by the Seller) information of any kind which the
Successor Servicer deems to be reasonably confidential, the
Successor Servicer may require the Seller (or Person designated
by the Seller) to enter into such customary licensing and
confidentiality agreements as the Successor Servicer reasonably
deems necessary to protect the Successor Servicer's interests.
7.3 Notification. Promptly upon the occurrence
of any Servicer Default (and, in any event, within two Business
Days after the Servicer becomes aware thereof), the Servicer will
give the Indenture Trustee, the Owner Trustee, the Rating Agency
and the Issuer written notice of such Servicer Default, and the
Indenture Trustee thereupon will give written notice of such
Servicer Default to each Noteholder. The Indenture Trustee
promptly will give written notice of any termination or
appointment of a Successor Servicer pursuant to this Article VII
to each Noteholder and the Rating Agency.
7.4 Waiver of Past Defaults. The Holders of
Notes evidencing, in the aggregate, more than 50% of the sum of
the then Outstanding Class A Principal Balance and the then
Outstanding Class B Principal Balance may, on behalf of all
Holders, waive any default by the Servicer or the Seller in the
performance of their respective obligations under this Agreement
and the consequences of any such default, other than a default in
the failure to make any required deposits, transfers or payments
in accordance with Section 4.8. Upon any such waiver of a past
default, such default will cease to exist, and any default
arising from or relating to such default will be deemed to have
been remedied and cured for all purposes under this Agreement.
No such waiver will extend to any subsequent or other default or
impair any right upon any such subsequent default except to the
extent expressly so waived.
7.5 Lease Schedule. The Servicer will maintain
true, correct and complete copies of the List of Leases and the
Lease Schedule (as defined in the Contribution and Sale
Agreement). Each time the List of Leases or the Lease Schedule
is amended, the Servicer shall promptly forward to the Indenture
Trustee such List of Leases or Lease Schedule as so amended (or
an amendment to be attached to the previous List of Leases or
Lease Schedule so delivered to the Indenture Trustee). The
Indenture Trustee shall maintain (and make available to
interested parties during normal business hours) at its Corporate
Office such List of Leases and Lease Schedule as so amended (or
previous List of Leases and Lease Schedule together with all
amendments), which shall constitute the List of Leases and the
Lease Schedule referred to in the UCC financing statements filed
pursuant to the Contribution and Sale Agreement, this Agreement
or the Indenture, as applicable.
ARTICLE VIII
TERMINATION
8.1 Termination.
(a) If the Termination Date occurs as described
in clause (a) of the definition of Termination Date and at such
time, after giving effect to all payments to be made under
Section 4.8 on such Termination Date, there is any Class A
Interest Arrearage or Class B Interest Arrearage or the
Outstanding Class A Principal Balance or Outstanding Class B
Principal Balance is not zero, then the Indenture Trustee will
sell, dispose of or otherwise liquidate the remaining Leases and
Equipment (or, if applicable, a portion of the remaining Leases
and Equipment to the extent necessary to provide proceeds suffi-
cient to pay any such unpaid amounts (and any accrued interest on
any Outstanding Class A Principal Balance or Outstanding Class B
Principal Balance at the Class A Interest Rate or Class B
Interest Rate, as the case may be)) in a commercially reasonable
manner and on commercially reasonable terms. The proceeds of
such sale, disposition or liquidation will be treated as
Collections, and deposited into the Collection Account and paid
and distributed in accordance with Section 4.8 on the next
Payment Date.
(b) On the date after the Termination Date (or,
if the Termination Date occurs as described in clause (a) of the
definitions of Termination Date, on the day after the proceeds of
the sale, disposition or liquidation described in Section 8.1(a)
are paid and distributed as described in Section 8.1(a)), after
the payment to the Indenture Trustee, the Owner Trustee, the
Servicer and the Noteholders of all amounts required to be paid
under this Agreement, the Indenture and the Trust Agreement, all
amounts on deposit in the Trust Accounts (other than, in the case
of the Note Distribution Account, amounts to be paid to the Note-
holders) shall be paid to the Certificateholders (as described on
Exhibit C) and all other assets of the Issuer shall be
transferred to the Certificateholders, in each case pro rata
according to the outstanding balance of the Trust Certificates as
a distribution on the Trust Certificates.
(c) This Agreement and the respective obligations
and responsibilities of the Issuer, the Seller, the Servicer and
the Indenture Trustee created pursuant to this Agreement (other
than the obligations of the Indenture Trustee under this Article
VIII) will terminate, except with respect to the duties described
in Section 6.2, upon the payment and transfer to the
Certificateholders described in Section 8.1(b).
8.2 Notice of Final Payment. As promptly as
practicable the Servicer, on behalf of the Issuer, will give
written notice to the Indenture Trustee and the Owner Trustee
that the final payment of principal and interest on the Class A
Notes or the Class B Notes will be made on a Payment Date. Such
notice will be accompanied by an Officer's Certificate setting
forth the information which would be specified in a statement
given pursuant to Section 3.10(b) relating to the period during
the then current Transaction Year through the final Payment Date
specified in such notice.
8.3 Optional Purchase.
(a) Requirements. The Servicer will have the
option (but not the obligation) (the "Purchase Option") to
purchase all of the assets of the Issuer (other than the Trust
Accounts) on any Payment Date (i) if on such Payment Date (after
giving effect to the transfers and payments otherwise to be made
pursuant to Section 4.8 on such Payment Date) the sum of the
Outstanding Class A Principal Balance and the Outstanding Class B
Principal Balance is or would be less than 10% of the sum of the
Initial Class A Principal Balance and the Initial Class B
Principal Balance and (ii) the Servicer Purchase Price (as
defined in (b) below) together with the other amounts on deposit
or to be on deposit in the Note Distribution Account on the
Redemption Date equals or exceeds the amount required to pay in
full the principal amount of the Notes together with accrued
interest thereon through the Redemption Date at the Class A
Interest Rate or the Class B Interest Rate, as applicable.
(b) Exercise of Purchase Option. To exercise the
Purchase Option as of any Payment Date, the Servicer shall
deposit in the Collection Account on or prior to such Payment
Date an amount (the "Servicer Purchase Price") equal to the
Aggregate Discounted Lease and Residual Balances as of the
related Determination Date plus the appraised value of any other
property (other than the Trust Accounts) held by the Trust (such
value to be mutually agreed upon (or determined by an appraiser
mutually agreed upon) by the Servicer, the Owner Trustee and the
Indenture Trustee). Upon such deposit, the Servicer shall
succeed to all interests in and to the Trust (other than the
Trust Accounts). The amount so deposited shall be included in
the Available Amount on such Payment Date.
(c) Notice of Exercise. The Servicer shall
timely provide to the Issuer and the Indenture Trustee and the
Owner Trustee notice of the Servicer's election to exercise the
Purchase Option.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Amendment.
(a) This Agreement may be amended by the Seller,
the Servicer and the Issuer with the consent of the Indenture
Trustee and the Owner Trustee, but without the consent of any of
the Noteholders or the Certificateholders, (i) to cure any
ambiguity, (ii) to correct or supplement any provision in this
Agreement that may be defective or inconsistent with any other
provision in this Agreement, (iii) to add or supplement any
credit enhancement for the benefit of the Noteholders (provided
that if any such addition shall affect any class of Noteholders
differently than any other class of Noteholders then such
addition shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any
class of Noteholders), (iv) add to the covenants, restrictions or
obligations of the Seller, the Servicer, the Issuer, the Owner
Trustee or the Indenture Trustee or (v) add, change or eliminate
any other provision of this Agreement in any manner that shall
not, as evidenced by an Opinion of Counsel, adversely affect in
any material respect the interests of the Noteholders.
(b) This Agreement may also be amended from time
to time by the Seller, the Servicer and the Issuer with the
consent of the Indenture Trustee and the Owner Trustee, and the
consent of Noteholders whose Notes evidence, in the aggregate,
more than 50% of the sum of the then Outstanding Class A
Principal Balance and the then Outstanding Class B Principal
Balance, in each case as of the preceding Payment Date (which
consent, shall be conclusive and binding on such Person and on
all future Noteholders and holders of any Note issued upon the
transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Note)
and the consent of the Certificateholders 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 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 Receivables or payments
that shall be required to be made on any Note or the interest
rate for any class of Notes, or (ii) reduce the aforesaid
percentage required to consent to any such amendment, without the
consent of all of the Noteholders.
(c) Prior to the execution of any such amendment
or consent, the Indenture Trustee shall furnish written
notification of the substance of such amendment or consent to the
Rating Agency.
(d) Promptly after the execution of any such
amendment or consent, the Indenture Trustee shall furnish written
notification of the substance of such amendment or consent or a
true copy thereof to each Noteholder and Certificateholder.
(e) It shall not be necessary for the consent of
Noteholders or the Certificateholders pursuant to subsection
9.1(b) to approve the particular form of any proposed amendment
or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such
consents (and any other consents of Noteholders or the
Certificateholders provided for in this Agreement) and of
evidencing the authorization of the execution thereof by
Noteholders and the Certificateholders shall be subject to such
reasonable requirements as the Indenture Trustee may prescribe,
including the establishment of record dates.
(f) Prior to the execution of any amendment to
this Agreement, the Indenture Trustee and the Owner Trustee shall
be entitled to receive and rely upon an Opinion of Counsel
stating that the execution of such amendment is authorized or
permitted by this Agreement. The Indenture Trustee may, but
shall not be obligated to, enter into any such amendment which
affects the Indenture Trustee's or the Owner Trustee's,
respectively, own rights, duties or immunities under this
Agreement or otherwise.
(g) Each of Trans Leasing and the Seller agrees
that it shall not amend or agree to any amendment of the
Contribution and Sale Agreement unless such amendment would be
permissible under the terms of this Section 9.1, as if this
Section 9.1 were contained in the Contribution and Sale
Agreement.
9.2 Evidence of Filings. Subject to the provisos
in Section 2.1(b), the Servicer will cause this Agreement, all
amendments to this Agreement, and all financing statements and
continuation statements and any other necessary documents
relating to the Indenture Trustee's right, title and interest to
the Trust Estate, to be promptly recorded, registered and filed
(and at all times to be kept recorded, registered and filed) all
in such manner and in such places as may be required by law to
preserve and protect fully the right, title and interest of the
Indenture Trustee to all property comprising the Trust Estate,
all as provided in, and subject to, Sections 2.1(b) and 3.7(c).
The Servicer will deliver to the Indenture Trustee a file-stamped
copy of, or filing receipt for, any document recorded, registered
or filed as provided in Section 2.1(b) or 3.7(c), promptly after
such copy or receipt becomes available. The Seller will
cooperate fully with the Servicer in connection with the perfor-
mance of such Sections and will execute any and all documents
reasonably required to fulfill the intent of such Sections.
9.3 Governing Law. THIS AGREEMENT WILL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICT OF
LAW PROVISIONS AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
9.4 Notices. Except as otherwise provided in
this Agreement, any notice or other communication herein required
or permitted to be given shall be in writing and may be delivered
in person, with receipt acknowledged, or sent by United States
mail, registered or certified, postage prepaid and return receipt
requested, or by Federal Express or other nationally recognized
overnight courier service, postage prepaid and confirmation of
receipt requested, and addressed as follows (or at such other
address as may be substituted by notice given as herein
provided):
If to the Seller:
TL Lease Funding Corp. IV
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, DE 19801
with a copy (which copy will not constitute
notice to Seller) to each of:
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, IL 60062
Attention: Chief Financial Officer
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Jill L. Sugar
If to the Issuer:
Bankers Trust (Delaware)
1001 Jefferson Street
Suite 550
Wilmington, Delaware 19801
with a copy (which copy will not constitute
notice to the Transferor) to each of:
Bankers Trust Company
4 Albany Street
New York, New York 10006
Attention: Corporate Trust & Agency Group -
Structured Finance
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, IL 60062
Attention: Chief Financial Officer
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Jill L. Sugar
If to the Servicer:
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, IL 60062
Attention: Chief Financial Officer
with a copy (which copy will not constitute
notice to the Servicer) to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Jill L. Sugar
If to the Indenture Trustee:
Manufacturers and Traders Trust Company
One M&T Plaza, 7th Floor
Buffalo, NY 14203
Attention: Neil B. Witoff, Assistant Vice
President, Corporate Trust
Administration
If to the Owner Trustee:
Bankers Trust (Delaware)
1001 Jefferson Street
Suite 550
Wilmington, Delaware 19801
with a copy to:
Bankers Trust Company
4 Albany Street
New York, New York 10006
Attention: Corporate Trust & Agency Group
- Structured Finance
If to the Rating Agency:
Standard & Poor's Ratings Services
26 Broadway
15th Floor
New York, NY 10004
Attention: Asset Backed Surveillance
Every notice, demand, request, consent, approval, declaration or
other communication hereunder shall be deemed to have been duly
given or served on the date on which the same shall have been
personally delivered, with receipt acknowledged, three (3)
Business Days after the same shall have been deposited in the
United States mail or on the next succeeding Business Day if the
same has been sent by Federal Express or other nationally
recognized overnight courier service. Failure or delay in
delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the Persons
designated above to receive copies shall in no way adversely
affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
9.5 Severability of Provisions. If any covenant,
agreement, provision or term of this Agreement is held invalid
for any reason whatsoever, then such covenant, agreement,
provision or term will be deemed severable from the remaining
covenants, agreements, provisions and terms of this Agreement and
will in no way affect the validity or enforceability of the other
provisions of this Agreement or of the Notes or the Trust
Certificate or rights of the Noteholders or the
Certificateholders.
9.6 Assignment. This Agreement may not be
assigned by the Servicer, except as provided in Sections 3.1(e),
6.3, 6.4 or 7.2, without the prior consent of Holders of Notes
evidencing not less than 50% of the sum of the then Outstanding
Class A Principal and the then Outstanding Class B Principal
Balance, and the Certificateholders.
9.7 Schedules and Exhibits. The Schedules and
Exhibits constitute a part of this Agreement and are incorporated
into this Agreement for all purposes.
9.8 No Waiver; Cumulative Remedies. No failure
to exercise and no delay in exercising, on the part of the
Seller, the Servicer, the Indenture Trustee, the Owner Trustee or
any Holder, of any right, remedy, power or privilege under this
Agreement, will operate as a waiver of such right, remedy, power
or privilege; nor will any single or partial exercise of any
right, remedy, power or privilege under this Agreement preclude
any other or further exercise of such right, remedy, power or
privilege or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges provided
under this Agreement are cumulative and not exhaustive of any
other rights, remedies, powers and privileges which may be
provided by law.
9.9 Counterparts. This Agreement may be executed
in two or more counterparts (and by different parties on separate
counterparts), each of which will be an original, but all of
which together will constitute one and the same instrument.
9.10 Binding Effect; Third-Party Beneficiaries.
This Agreement will inure to the benefit of and be binding upon
the Parties, the Holders and their respective successors and
permitted assigns. Except as otherwise provided in this
Agreement, no other Person will have any right or obligation
pursuant to this Agreement.
9.11 Merger and Integration. Except as
specifically stated otherwise in this Agreement, this Agreement
sets forth the entire understanding of the Parties relating to
the subject matter hereof, and all prior understandings, written
or oral, are superseded by this Agreement. This Agreement may
not be modified, amended, waived or supplemented except as
expressly provided in this Agreement.
9.12 Headings. The headings used in this
Agreement are for the purpose of reference only and will not
otherwise affect the meaning or interpretation of any provision
of this Agreement.
9.13 Certificates and Opinions of Counsel. Any
certificate delivered by any Person in connection with this
Agreement or the transactions contemplated hereby may be based,
insofar as it relates to legal matters, upon an Opinion of
Counsel, unless the Person delivering such certificate knows, or
in the exercise of reasonable care should know, that such Opinion
of Counsel is erroneous. Any Opinion of Counsel or certificate
delivered under this Agreement may be based, insofar as it
relates to factual matters, upon a certificate of, or
representations by, a Responsible Officer or Responsible Officers
of the Servicer or the Originator, as the case may be, stating
that the information with respect to such factual matters is in
the possession of the Servicer or the Originator, as the case may
be, unless the Person delivering such Opinion of Counsel or
certificate knows, or in the exercise of reasonable care should
know, that such certificate, opinion or representations with
respect to such matters are erroneous. Any exception or
qualification contained in any Opinion of Counsel delivered in
connection with this Agreement or the transactions contemplated
hereby must be reasonably satisfactory to the Indenture Trustee
and the Owner Trustee. Any such Opinion of Counsel or
certificate may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by
an independent public accountant or firm of accountants, unless
such counsel or the Person delivering such Opinion of Counsel or
certificate knows, or in the exercise of reasonable care should
know, that the certificate, opinions or representations with
respect to the accounting matters are erroneous.
9.14 Assignment to Indenture Trustee. The Seller
hereby acknowledges and consents to any mortgage, pledge, assign-
ment and grant of a security interest by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of
the Noteholders and (only to the extent expressly provided in the
Indenture) the Certificateholders of all right, title and
interest of the Issuer in, to and under the Receivables and/or
the assignment of any or all of the Issuer's rights and
obligations hereunder to the Indenture Trustee.
9.15 No Petition Covenants. Notwithstanding any
prior termination of this Agreement, the Servicer and the Seller
shall not, prior to the date which is one year and one day after
the final distribution with respect to the Notes and the Trust
Certificate, acquiesce, petition or otherwise invoke or cause the
Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the
Issuer under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of its Property, or ordering the
winding up or liquidation of the affairs of the Issuer.
9.16 Limitation of Liability of Indenture Trustee
and Owner Trustee.
(a) Notwithstanding anything contained herein to
the contrary, this Agreement has been acknowledged and accepted
by Manufacturers and Traders Trust Company not in its individual
capacity but solely as Indenture Trustee and in no event shall
Manufacturers and Traders Trust Company have any liability for
the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as
to all of which recourse shall be had solely to the assets of the
Issuer. For all purposes of this Agreement, in the performance
of any duties or obligations of the Issuer hereunder, the
Indenture Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of the Indenture.
(b) Notwithstanding anything contained herein to
the contrary, this Agreement has been executed by Bankers Trust
(Delaware) not in its individual capacity but solely in its
capacity as Owner Trustee of the Issuer and in no event shall
Bankers Trust (Delaware) in its individual capacity or, except as
expressly provided in the Trust Agreement, as Owner Trustee of
the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse
shall be had solely to the assets of the Issuer. For all
purposes of this Agreement, in the performance of its duties or
obligations hereunder or in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and
provisions of the Trust Agreement.
9.17 Confidential Information. Each of the Issuer
and the Indenture Trustee hereby agrees that it shall neither use
nor disclose to any Person the names and addresses of the Lessees
or the vendors of the Equipment, except in connection with the
enforcement of the Issuer's rights hereunder, under the Indenture
or under the Receivables or as required by law.
9.18 Available Information. So long as the Class
B Notes are outstanding and are "restricted securities" within
the meaning of Rule 144 (a)(3) under the Securities Act, the
Seller shall provide to any Holder of Class B Notes and to any
prospective purchase of Class B Notes designated by a Holder of
Class B Notes, upon request of such Holder or prospective
purchaser, the information required to be delivered pursuant to
Rule 144A under the Securities Act to permit compliance with Rule
144A under the Securities Act in connection with transfers of the
Class B Notes.
* * * *<PAGE>
IN WITNESS WHEREOF, the Seller, the Servicer and the
Trust have caused this Pooling and Servicing Agreement to be duly
executed by their respective officers as of the day and year
written above.
TRANS LEASING INTERNATIONAL, INC.,
as Servicer
By:________________________________
Name:
Title:
TL LEASE FUNDING CORP. IV
By:________________________________
Name:
Title:
TLFC IV EQUIPMENT LEASE TRUST 1995-1
By: BANKERS TRUST (DELAWARE)
not in its individual capacity
but solely as Owner Trustee of
the Trust
By:________________________________
Name:
Title:
Acknowledged and Accepted:
MANUFACTURERS AND TRADERS TRUST COMPANY,
not in its individual capacity but solely
as Indenture Trustee
By:________________________________
Name:
Title:<PAGE>
Exhibit C
COLLECTION ACCOUNT
No. 185258167
Designation: MANUFACTURERS AND TRADERS TRUST
COMPANY, FOR THE BENEFIT OF TL
LEASE FUNDING CORP. IV
Where established: MANUFACTURERS AND TRADERS TRUST
COMPANY (ABA #022000046)
SERVICER ACCOUNT
No. 7804563
Designation: TRANS LEASING INTERNATIONAL, INC.
Where established: BANK OF AMERICA ILLINOIS (ABA
#071000039)
NOTE DISTRIBUTION ACCOUNT
No. 185258175
Designation: MANUFACTURERS AND TRADERS TRUST
COMPANY, FOR THE BENEFIT OF TL
LEASE FUNDING CORP. IV
Where established: MANUFACTURERS AND TRADERS TRUST
COMPANY (ABA #022000046)
Payments to the
Certificateholders
shall be made by
deposit into
the Servicer Account
or as otherwise
directed by the
Certificateholders
<PAGE>
_________________________________________________________________
TLFC IV EQUIPMENT LEASE TRUST 1995-1
Class A 6.40% Lease Backed Notes
Class B 7.55% Lease Backed Notes
INDENTURE
Dated as of October 6, 1995
Manufacturers and Traders Trust Company
Indenture Trustee
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Incorporation by Reference. . . .2
SECTION 1.1 Definitions. . . . . . . . . . . . . . . . .2
SECTION 1.2 Other Definitional Provisions. . . . . . . .8
SECTION 1.3 Incorporation by Reference of Trust
Indenture Act. . . . . . . . . . . . . . . .9
ARTICLE II The Notes . . . . . . . . . . . . . . . . . . . .9
SECTION 2.1 Form . . . . . . . . . . . . . . . . . . . .9
SECTION 2.2 Execution, Authentication and Delivery . . 10
SECTION 2.3 Temporary Notes. . . . . . . . . . . . . . 11
SECTION 2.4 Registration; Registration of Transfer or
Exchange . . . . . . . . . . . . . . . . . 11
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen
Notes. . . . . . . . . . . . . . . . . . . 13
SECTION 2.6 Persons Deemed Owner . . . . . . . . . . . 14
SECTION 2.7 Payment of Principal and Interest. . . . . 14
SECTION 2.8 Cancellation . . . . . . . . . . . . . . . 15
SECTION 2.9 Release of Collateral. . . . . . . . . . . 16
SECTION 2.10 Book-Entry Notes . . . . . . . . . . . . . 16
SECTION 2.11 Notices to Clearing Agency . . . . . . . . 17
SECTION 2.12 Definitive Class A Notes . . . . . . . . . 17
SECTION 2.13 Certain Noteholders. . . . . . . . . . . . 18
SECTION 2.14 Tax Treatment. . . . . . . . . . . . . . . 18
SECTION 2.15 Special Terms Applicable to Class B
Notes. . . . . . . . . . . . . . . . . . . 18
ARTICLE III Covenants . . . . . . . . . . . . . . . . . . . 19
SECTION 3.1 Payment of Principal and Interest. . . . . 19
SECTION 3.2 Maintenance of Office or Agency. . . . . . 20
SECTION 3.3 Money for Payments To Be Held in Trust . . 20
SECTION 3.4 Existence. . . . . . . . . . . . . . . . . 22
SECTION 3.5 Protection of Indenture Trust Estate . . . 22
SECTION 3.6 Opinions as to Indenture Trust Estate. . . 23
SECTION 3.7 Performance of Obligations; Servicing of
Leases . . . . . . . . . . . . . . . . . . 24
SECTION 3.8 Negative Covenants . . . . . . . . . . . . 25
SECTION 3.9 Annual Statement as to Compliance. . . . . 26
SECTION 3.10 Consolidation, Merger, etc. of Issuer;
Disposition of Trust Assets. . . . . . . . 27
SECTION 3.11 Successor or Transferee. . . . . . . . . . 29
SECTION 3.12 No Other Business. . . . . . . . . . . . . 29
SECTION 3.13 No Borrowing . . . . . . . . . . . . . . . 29
SECTION 3.14 Servicer's Obligations . . . . . . . . . . 30
<PAGE>
SECTION 3.15 Guarantees, Loans, Advances and Other
Liabilities. . . . . . . . . . . . . . . . 30
SECTION 3.16 Capital Expenditures . . . . . . . . . . . 30
SECTION 3.17 Removal of Administrator . . . . . . . . . 30
SECTION 3.18 Restricted Payments. . . . . . . . . . . . 30
SECTION 3.19 Notice of Events of Default. . . . . . . . 31
SECTION 3.21 Trustee's Assignment of Interest in
Certain Receivables. . . . . . . . . . . . 31
SECTION 3.22 Representations and Warranties by the
Issuer to the Indenture Trustee. . . . . . 32
ARTICLE IV Satisfaction and Discharge. . . . . . . . . . . 32
SECTION 4.1 Satisfaction and Discharge of Indenture. . 32
SECTION 4.2 Application of Trust Money . . . . . . . . 34
SECTION 4.3 Repayment of Monies Held by Paying Agent . 34
ARTICLE V Remedies. . . . . . . . . . . . . . . . . . . . 34
SECTION 5.1 Events of Default. . . . . . . . . . . . . 34
SECTION 5.2 Acceleration of Maturity; Rescission and
Annulment. . . . . . . . . . . . . . . . . 36
SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee . . . . . 36
SECTION 5.4 Remedies; Priorities . . . . . . . . . . . 39
SECTION 5.5 Optional Preservation of the Indenture . . 40
SECTION 5.6 Limitation of Suits. . . . . . . . . . . . 41
SECTION 5.7 Unconditional Rights of Noteholders To
Receive Principal and Interest . . . . . . 42
SECTION 5.8 Restoration of Rights and Remedies . . . . 42
SECTION 5.9 Rights and Remedies Cumulative . . . . . . 42
SECTION 5.10 Delay or Omission Not a Waiver . . . . . . 42
SECTION 5.11 Control by Noteholders . . . . . . . . . . 43
SECTION 5.12 Waiver of Past Defaults. . . . . . . . . . 43
SECTION 5.13 Undertaking for Costs. . . . . . . . . . . 44
SECTION 5.14 Waiver of Stay or Extension Laws . . . . . 44
SECTION 5.15 Action on Notes. . . . . . . . . . . . . . 44
SECTION 5.16 Performance and Enforcement of Certain
Obligations. . . . . . . . . . . . . . . . 45
ARTICLE VI Indenture Trustee . . . . . . . . . . . . . . . 46
SECTION 6.1 Duties of Indenture Trustee. . . . . . . . 46
SECTION 6.2 Rights of Indenture Trustee. . . . . . . . 48
SECTION 6.3 Individual Rights of Indenture Trustee . . 48
SECTION 6.4 Indenture Trustee's Disclaimer . . . . . . 48
SECTION 6.5 Notice of Events of Default. . . . . . . . 49
SECTION 6.6 Reports by Indenture Trustee to Holders. . 49
SECTION 6.7 Compensation and Indemnity . . . . . . . . 49
SECTION 6.8 Replacement of Indenture Trustee . . . . . 50
SECTION 6.9 Successor Indenture Trustee by Merger. . . 51
<PAGE>
SECTION 6.10 Appointment of Co-Trustee or Separate
Trustee. . . . . . . . . . . . . . . . . . 52
SECTION 6.11 Eligibility; Disqualification. . . . . . . 53
SECTION 6.12 Preferential Collection of Claims
Against Issuer . . . . . . . . . . . . . . 53
SECTION 6.13 Representations and Warranties of
Indenture Trustee. . . . . . . . . . . . . 54
SECTION 6.14 Indenture Trustee May Enforce Claims
Without Possession of Notes. . . . . . . . 55
ARTICLE VII Noteholders' Lists and Reports. . . . . . . . . 55
SECTION 7.1 Issuer to Furnish Indenture Trustee
Names and Addresses of Noteholders . . . . 55
SECTION 7.2 Preservation of Information;
Communications to Noteholders. . . . . . . 55
SECTION 7.3 Reports by Issuer. . . . . . . . . . . . . 56
SECTION 7.4 Reports by Indenture Trustee . . . . . . . 56
ARTICLE VIII Accounts, Disbursements and Releases. . . . . . 57
SECTION 8.1 Collection of Money. . . . . . . . . . . . 57
SECTION 8.2 Trust Accounts . . . . . . . . . . . . . . 57
SECTION 8.3 General Provisions Regarding Accounts. . . 58
SECTION 8.4 Release of Indenture Trust Estate. . . . . 59
SECTION 8.5 Opinion of Counsel . . . . . . . . . . . . 59
ARTICLE IX Supplemental Indentures . . . . . . . . . . . . 60
SECTION 9.1 Supplemental Indentures Without
Consent of Noteholders . . . . . . . . . . 60
SECTION 9.2 Supplemental Indentures with Consent
of Noteholders . . . . . . . . . . . . . . 61
SECTION 9.3 Execution of Supplemental Indentures . . . 63
SECTION 9.4 Effect of Supplemental Indenture . . . . . 63
SECTION 9.5 Conformity with Trust Indenture Act. . . . 64
SECTION 9.6 Reference in Notes to Supplemental
Indentures . . . . . . . . . . . . . . . . 64
ARTICLE X Redemption of Notes . . . . . . . . . . . . . . 64
SECTION 10.1 Redemption . . . . . . . . . . . . . . . . 64
SECTION 10.2 Form of Redemption Notice. . . . . . . . . 65
SECTION 10.3 Notes Payable on Redemption Date . . . . . 65
ARTICLE XI Miscellaneous . . . . . . . . . . . . . . . . . 66
SECTION 11.1 Compliance Certificates and
Opinions, etc. . . . . . . . . . . . . . . 66
SECTION 11.2 Form of Documents Delivered to
Indenture Trustee. . . . . . . . . . . . . 68
SECTION 11.3 Acts of Noteholders. . . . . . . . . . . . 69
SECTION 11.4 Notices, etc., to Indenture Trustee,
Issuer and Rating Agency . . . . . . . . . 70
SECTION 11.5 Notices to Noteholders; Waiver . . . . . . 71
SECTION 11.6 Alternate Payment and Notice Provisions. . 71
SECTION 11.7 Conflict with Trust Indenture Act. . . . . 72
SECTION 11.8 Effect of Headings and Table of Contents . 72
SECTION 11.9 Successors and Assigns . . . . . . . . . . 72
SECTION 11.10 Severability . . . . . . . . . . . . . . . 72
SECTION 11.11 Benefits of Indenture. . . . . . . . . . . 72
SECTION 11.12 Legal Holidays . . . . . . . . . . . . . . 72
SECTION 11.13 GOVERNING LAW. . . . . . . . . . . . . . . 73
SECTION 11.14 Counterparts . . . . . . . . . . . . . . . 73
SECTION 11.15 Recording of Indenture . . . . . . . . . . 73
SECTION 11.16 No Recourse. . . . . . . . . . . . . . . . 73
SECTION 11.17 No Petition. . . . . . . . . . . . . . . . 74
SECTION 11.18 Inspection . . . . . . . . . . . . . . . . 74
EXHIBITS
Testimonium, Signatures and Seals
Acknowledgments
Exhibit A Form of Class A Note
Exhibit B Form of Class B Note
Exhibit C Form of Depository Agreement
Exhibit D Form of Certificate
Exhibit E Form of Undertaking Letter
<PAGE>
- - - - - - ---------------------------------------------------------------------
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- - - - - - ---------------------------------------------------------------------
310 (a) (1) ! ..................! 6.11
(a) (2) ! ..................! 6.11
(a) (3) ! ..................! 6.10, 6.11
(a) (4) ! ..................! 6.11, 6.14
(b) ! ..................! 6.11
(c) ! ..................! N.A.
311 (a) ! ..................! 6.12
(b) ! ..................! 6.12
(c) ! ..................! N.A.
312 (a) ! ..................! 7.1, 7.2
(b) ! ..................! 7.2
(c) ! ..................! 7.2
313 (a) ! ..................! 7.4(a), 7.4(b)
(b) (1) ! ..................! 7.4(a)
(b) (2) ! ..................! 7.4(a)
(c) ! ..................! 7.3(a), 7.4(a)
(d) ! ..................! 7.4(a)
314 (a) ! ..................! 7.3(a), 3.9
(b) ! ..................! 3.6
(c) (1) ! ..................! 2.2, 2.9, 4.1, 8.4, 11.1(a)
! ..................! 11.1(a)
(c) (2) ! ..................! 2.2, 2.9, 4.1, 8.4, 11.1(a)
! ..................! 11.1(a)
(c) (3) ! ..................! 2.9, 4.1, 8.4, 11.1(a)
(d) ! ..................! 2.9, 8.4, 11.1(b)
(e) ! ..................! 11.1(a)
(f) ! ..................! 11.1(a)
315 (a) ! ..................! 6.1(b)
(b) ! ..................! 6.5
(c) ! ..................! 6.1(a)
(d) ! ..................! 6.2, 6.1(c)
(e) ! ..................! 5.13
316 (a)last ! ..................!
sentance ! ..................! 1.1
(a) (1)(A)! ..................! 5.11
(a) (1)(B)! ..................! 5.12
(a) (2) ! ..................! Omitted
316 (b),(c) ! ..................! 5.7
317 (a) (1) ! ..................! 5.3(b)
(a) (2) ! ..................! 5.3(d)
(b) ! ..................! 3.3
318 (a) ! ..................! 11.7
N.A. means Not Applicable
- - - - - - ---------------------------------------------------------------------
Note: This cross reference table shall not, for any purpose,
be deemed to be part of this Indenture
<PAGE>
This INDENTURE dated as of October 6, 1995, between TLFC
IV EQUIPMENT LEASE TRUST 1995-1, a Delaware business trust (the
"Issuer"), and Manufacturers and Traders Trust Company, a banking
corporation organized and existing under the laws of New York,
solely as trustee and not in its individual capacity (the
"Indenture Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the
Notes:
GRANTING CLAUSE
The Issuer hereby grants to the Indenture Trustee, as
trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest in, to and under the following
property, whether now existing or hereafter arising: (a) the
Leases and all monies due thereon after the Cut-Off Date; (b) the
Issuer's interest in the related Equipment; (c) the Insurance
Policies and any Insurance Proceeds related to the Leases; (d)
all funds on deposit from time to time in the Trust Accounts and
in all investments and proceeds thereof (including all income
thereon); (e) the Pooling and Servicing Agreement (including all
rights of the Seller under the Contribution and Sale Agreement
assigned to the Issuer pursuant to the Pooling and Servicing
Agreement (including the right to cause the Originator to
repurchase Leases under certain circumstances in accordance with
the provisions of the Contribution and Sale Agreement)); and (f)
all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments
on or under and all proceeds of every kind and nature whatsoever
in respect of any or all of the foregoing, including all proceeds
of the conversion, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights
to payment of any and every kind and other forms of obligations
and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any
of the foregoing (collectively, the "Collateral").
The foregoing grant is made in trust to secure the
payment of principal of and interest on, and any other amounts
owing in respect of, the Notes, equally and ratably without
prejudice, priority or distinction (except as otherwise provided
herein) and to secure compliance with the provisions of this
Indenture, all as provided in this Indenture.
The foregoing grant includes all rights, powers and
options (but none of the obligations, if any) of the Issuer under
any agreement or instrument included in the Collateral, including
the immediate and continuing right to claim for, collect, receive
and give receipt for principal and interest payments in respect
of the Leases included in the Collateral and all other monies
payable under the Collateral, to give and receive notices and
other communications, to make waivers or other agreements, to
exercise all rights and options, to bring Proceedings in the name
of the Issuer or otherwise and generally to do and receive
anything that the Issuer is or may be entitled to do or receive
under or with respect to the Collateral.
The Indenture Trustee, as Indenture Trustee on behalf
of the Noteholders, acknowledges such grant and accepts the
trusts under this Indenture in accordance with the provisions of
this Indenture.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1 Definitions. Except as otherwise
specified herein or as the context may otherwise require, the
following terms have the respective meanings set forth below for
all purposes of this Indenture.
"Act" has the meaning specified in Section 11.3(a).
"Authorized Officer" means, with respect to the Issuer,
any officer of the Owner Trustee or of Bankers Trust Company who
is authorized to act for the Owner Trustee in matters relating to
the Issuer and who is identified on the list of Authorized
Officers, containing the specimen signature of each such Person,
delivered by the Owner Trustee to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from
time to time thereafter).
"Basic Documents" means this Indenture, the Pooling and
Servicing Agreement, the Trust Agreement, the Contribution and
Sale Agreement, the Administration Agreement, the Depository
Agreement and the other documents and certificates delivered in
connection therewith.
"Benefit Plan" means any one of (a) an employee benefit
plan (as described in Section 3(3) of ERISA) that is subject to
the provisions of Title I of ERISA, (b) a plan described in
Section 4975(e)(1) of the Code or (c) any entity whose underlying
assets include plan assets by reason of a plan's investment in
such entity.
"Book Entry Notes" means a beneficial interest in the
Class A Notes, ownership and transfers of which shall be made
through book entries by a Clearing Agency as described in Section
2.10.
"Certificate" has the meaning assigned to it in the
Trust Agreement.
"Certificateholder" has the meaning assigned to it in
the Trust Agreement.
"Certificate of Trust" has the meaning assigned to it
in the Trust Agreement.
"Class A Note" means a Class A 6.40% Lease Backed Note,
substantially in the form of Exhibit A, executed by the Issuer
and authenticated by the Indenture Trustee.
"Class B Note" means a Class B 7.55% Lease Backed Note,
substantially in the form of Exhibit B, executed by the Issuer
and authenticated by the Indenture Trustee.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other Person for whom from
time to time a Clearing Agency effects book-entry transfers and
pledges of securities deposited with the Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated
thereunder.
"Collateral" has the meaning specified in the Granting
Clause of this Indenture.
"Contribution and Sale Agreement" means the Amended and
Restated Contribution and Sale Agreement dated as of the date
hereby by and between the Seller and the Originator, as amended
or supplemented from time to time.
"Corporate Trust Office" means the principal office of
the Indenture Trustee at which at any particular time its
corporate trust business shall be administered which office as of
the date of the execution of this Indenture is located at One M&T
Plaza, Buffalo, New York 14203, Attention: Corporate Trust
Department (7th Floor); or at such other address as the
Indenture Trustee may designate from time to time by notice to
the Noteholders and the Issuer, or the principal corporate trust
office of any successor Indenture Trustee (the addresses of which
the successor Indenture Trustee will notify the Noteholders and
the Issuer).
"Default" means any occurrence that is, or with notice
or the lapse of time or both would become, an Event of Default.
"Definitive Class A Notes" has the meaning specified in
Section 2.10.
"Depository Agreement" means the agreement among the
Issuer, the Indenture Trustee, and The Depository Trust Company,
as the initial Clearing Agency, dated as of the Closing Date,
substantially in the form of Exhibit C.
"Event of Default" has the meaning specified in
Section 5.1.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Executive Officer" means, with respect to any
corporation, the Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer, President, any Executive Vice
President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any
general partner thereof.
"Holder" or "Noteholder" means the Person in whose name
a Class A Note or a Class B Note is registered on the Note
Register.
"Indenture" means this Indenture as amended or
supplemented from time to time.
"Indenture Trustee" means Manufacturers and Traders
Trust Company, a banking corporation organized and existing under
the laws of New York, as Indenture Trustee under this Indenture,
or any successor Indenture Trustee under this Indenture.
"Indenture Trust Estate" means all money, instruments,
rights and other property that are subject or intended to be
subject to the lien and security interest of this Indenture for
the benefit of the Noteholders (including, without limitation,
all property and interests granted to the Indenture Trustee),
including all proceeds thereof.
"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 Seller 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 Seller or any
Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Seller or
any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
"Independent Certificate" means a certificate or
opinion to be delivered to the Indenture Trustee under the
circumstances described in, and otherwise complying with, the
applicable requirements of Section 11.1, made by an Independent
appraiser or other expert appointed by an Issuer Order, such
opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer
is Independent within the meaning thereof.
"Issuer" means TLFC IV Equipment Lease Trust 1995-1
until a successor replaces it and, thereafter, means the
successor and, for purposes of any provision contained herein and
required by the TIA, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written
order or request signed in the name of the Issuer by any one of
its Authorized Officers and delivered to the Indenture Trustee.
"Note Owner" means, with respect to a Book-Entry Note,
the Person who is the owner of such Book-Entry Note, as reflected
on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in
each case in accordance with the rules of such Clearing Agency).
"Note Register" and "Note Registrar" have the
respective meanings specified in Section 2.4.
"Notes" means the Class A Notes and the Class B Notes.
"Officer's Certificate" means a certificate signed by
any Authorized Officer of the Issuer, under the circumstances
described in, and otherwise complying with, the applicable
requirements of Section 11.1, and delivered to the Indenture
Trustee. Unless otherwise specified, any reference in this
Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions
of counsel who may, except as otherwise expressly provided in
this Indenture, be employees of or counsel to the Issuer and who
shall be acceptable to the Indenture Trustee, and which opinion
or opinions shall be addressed to the Indenture Trustee as
Indenture Trustee, and shall comply with any applicable
requirements of Section 11.1.
"Originator" means Trans Leasing International, Inc., a
Delaware corporation, in its capacity as transferor of certain
assets pursuant to the Contribution and Sale Agreement and its
successors.
"Outstanding" means, as of the date of determination,
all Notes theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore cancelled by the Note Registrar
or delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which
money in the necessary amount has been theretofore deposited with
the Indenture Trustee or any Paying Agent in trust for the
Holders of such Notes (provided, however, that if such Notes are
to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor, satisfactory to
the Indenture Trustee); and
(iii) Notes in exchange for or in lieu of other Notes
which have been authenticated and delivered pursuant to this
Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Notes are held by a bona fide purchaser;
provided that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or
under any Basic Document, Notes owned by the Issuer, any other
obligor upon the Notes, the Seller or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture
Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Notes that the Indenture Trustee knows to be so owned shall be so
disregarded. Notes so owned that have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes, a Certificateholder or
any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal
amount of all Notes, or a Class of Notes, as applicable,
Outstanding at the date of determination.
"Owner Trustee" means Bankers Trust (Delaware), a
Delaware banking corporation, not in its individual capacity but
solely as Owner Trustee under the Trust Agreement, or any
successor Owner Trustee under the Trust Agreement.
"Paying Agent" means the Indenture Trustee or any
Person that meets the eligibility standards for the Indenture
Trustee specified in Section 6.11 authorized by the Issuer to
make the payments to and distributions from the Collection
Account and the Note Distribution Account, including payment of
principal of or interest on the Notes on behalf of the Issuer.
"Pooling and Servicing Agreement" means the Pooling and
Servicing Agreement dated as of the date hereof by and among the
Seller, the Issuer and Trans Leasing International, Inc., a
Delaware corporation, as Servicer, as such agreement may be
amended, modified or supplemented from time to time.
"Predecessor Note" means, with respect to any
particular Note, every previous Note evidencing all or a portion
of the same debt as that evidenced by such particular Note; and,
for the purpose of this definition, any Note authenticated and
delivered under Section 2.5 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or
other judicial or administrative proceeding.
"Record Date" means, with respect to a Payment Date or
a Redemption Date, the close of business on the last day of the
calendar month preceding the calendar month in which such Payment
Date or Redemption Date occurs.
"Redemption Date" means the Payment Date specified as
such by the Servicer or the Issuer as described in Section 10.1
and 10.2.
"Redemption Price" means (a) in the case of a
redemption of the Notes pursuant to Section 10.1(a), an amount
equal to the unpaid principal amount of the Notes redeemed plus
accrued and unpaid interest thereon to but excluding the
Redemption Date, or (b) in the case of a payment made to
Noteholders pursuant to Section 10.1(b), the amount on deposit in
the Note Distribution Account, but not in excess of the amount
specified in clause (a) above.
"Registered Holder" means the Person in whose name a
Note is registered on the Note Register on the applicable Record
Date.
"Responsible Officer" means, with respect to the
Indenture Trustee, any officer within the Corporate Trust Office
of the Indenture Trustee, including any Vice President, Assistant
Vice President, Trust Officer, Secretary, Assistant Secretary, or
any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above
designated officers and also, with respect to a particular
matter, any other officer to whom such matter is referred because
of such officer's knowledge of and familiarity with the
particular subject.
"State" means any one of the 50 states of the United
States of America or the District of Columbia.
"Trust Indenture Act" or "TIA" means the Trust
Indenture Act of 1939 as in force on the date hereof, unless
otherwise specifically provided.
SECTION 1.2 Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise
defined have the meanings assigned to them in the Pooling and
Servicing Agreement or, if not defined therein, in the Trust
Agreement.
(b) All terms defined in this Indenture shall have the
defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined
therein.
(c) As used in this Indenture and in any certificate
or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Indenture or in any such
certificate or other document, and accounting terms partly
defined in this Indenture or in any such certificate or other
document to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting
principles in effect on the date hereof. To the extent that the
definitions of accounting terms in this Indenture or in any such
certificate or other document are inconsistent with the meanings
of such terms under generally accepted accounting principles, the
definitions contained in this Indenture or in any such
certificate or other documents shall control.
(d) The words "hereof," "herein," "hereunder," and
words of similar import when used in this Indenture shall refer
to this Indenture as a whole and not to any particular provision
of this Indenture; Section and Exhibit references contained in
this Indenture are references to Sections and Exhibits in or to
this Indenture unless otherwise specified; and the term
"including" shall mean "including without limitation."
(e) The definitions contained in this Indenture are
applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter
genders of such terms.
SECTION 1.3 Incorporation by Reference of Trust
Indenture Act. Whenever this Indenture refers to a provision of
the TIA, that provision is incorporated by reference in and made
a part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the Securities and Exchange
Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means
Indenture Trustee.
"obligor" on the indenture securities means the Issuer
and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by Commission rule have the meaning assigned to them
by such definitions.
ARTICLE II
The Notes
SECTION 2.1 Form. The Class A Notes and Class B
Notes, in each case together with the Indenture Trustee's
certificate of authentication, shall be in substantially the
forms set forth in Exhibits A and B, respectively, with such
appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may
have such letters, numbers or other marks of identification and
such legends or endorsements placed thereon as may, consistently
herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the
text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Definitive Class A Notes and the Class B Notes
shall be typewritten, printed, lithographed or engraved or
produced by any combination of methods (with or without steel
engraved borders), all determined by the officers executing such
Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its
authentication. Each Note shall be a registered Note in the
minimum denomination of $1,000 and, to the extent practicable,
integral multiples thereof (except in the case of the Class B
Notes, which shall be registered Notes in the minimum
denomination of $500,000 and, to the extent practicable, integral
multiples of $100,000 in excess thereof. The terms of the Notes
set forth in Exhibits A and B are part of the terms of this
Indenture.
SECTION 2.2 Execution, Authentication and Delivery.
(a) The Notes shall be executed on behalf of the
Issuer by any of its Authorized Officers. The signature of any
such Authorized Officer on the Notes may be manual or facsimile.
(b) Notes bearing the manual or facsimile signature of
individuals who were at any time Authorized Officers of the
Issuer shall bind the Issuer, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
(c) The Indenture Trustee shall upon Issuer Order
authenticate and deliver Class A Notes for original issue in an
aggregate principal amount of $89,658,869 and Class B Notes for
an original issue in an aggregate principal amount of
$10,802,273. The aggregate principal amount of Class A and Class
B Notes Outstanding at any time may not exceed such amounts,
respectively, except as provided Section 2.5.
(d) No Note shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose, unless
there appears on such Note a certificate of authentication
substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its
Responsible Officers, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder.
The Indenture Trustee's certificate of authentication
shall be substantially in the following form:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and
referred to in the within-mentioned Indenture.
Date: _________, 199_ _________________________________,
not in its individual capacity but
solely as Indenture Trustee
By:______________________
Authorized Signature
SECTION 2.3 Temporary Notes. Pending the preparation
of definitive Notes to be issued in exchange for Book-Entry Notes,
the Issuer may execute, and upon receipt of an Issuer Order the
Indenture Trustee shall authenticate and deliver, temporary Notes
which are printed, lithographed, typewritten, mimeographed or
otherwise produced, of the tenor of the definitive Notes in lieu of
which they are issued and with such variations not inconsistent
with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are so issued, the Issuer will cause
definitive Notes to be prepared without unreasonable delay. After
preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Issuer to be maintained as
provided in Section 3.2, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the
Issuer shall execute and the Indenture Trustee upon Issuer Order
shall authenticate and deliver in exchange therefor a like
principal amount of definitive Notes of authorized denominations.
Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive
Notes.
SECTION 2.4 Registration; Registration of Transfer or
Exchange. The Issuer shall cause to be kept a register (the "Note
Register") in which, subject to such reasonable regulations as it
may prescribe, the Issuer shall provide for the registration of
Notes and the registration of transfers of Notes. The Indenture
Trustee shall initially be "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon
any resignation of any Note Registrar, the Issuer shall promptly
appoint a successor or, if it elects not to make such an
appointment, assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed
by the Issuer as Note Registrar, the Issuer will give the Indenture
Trustee prompt written notice of the appointment of such Note
Registrar and of the location, and any change in the location, of
the Note Register, and the Indenture Trustee shall have the right
to inspect the Note Register at all reasonable times and to obtain
copies thereof, and the Indenture Trustee shall have the right to
rely upon a certificate executed on behalf of the Note Registrar by
an Executive Officer thereof as to the names and addresses of the
Holders of the Notes and the principal amounts and number of such
Notes.
Upon surrender for registration of transfer of any Note
at the office or agency of the Issuer to be maintained as provided
in Section 3.2, the Issuer shall execute, the Indenture Trustee
shall authenticate and the Noteholders shall obtain from the
Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes of the same series in any
authorized denominations of a like aggregate principal amount.
At the option of the Noteholder, Notes may be exchanged
for other Notes of the same class in any authorized denominations,
of a like aggregate principal amount, upon surrender of such Notes
to be exchanged at the office or agency of the Issuer, the Issuer
shall execute (with such execution constituting an Issuer Order to
authenticate), and the Indenture Trustee shall authenticate and the
Noteholder shall obtain from the Indenture Trustee, such Notes
which the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Notes surrendered upon such registration of
transfer or exchange.
Every Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed by, or be accompanied
by a written instrument of transfer in the form satisfactory to the
Indenture Trustee and the Note Registrar (including, without
limitation, the form of assignment set forth in Exhibits A and B),
duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the
Indenture Trustee which requirements will include membership or
participation in STAMP or such other "signature guarantee program"
as may be determined by the Indenture Trustee in addition to, or in
substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Issuer may
require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 2.3 or 9.6 not involving any transfer.
The preceding provisions of this Section 2.4
notwithstanding, the Issuer shall not be required to make and the
Note Registrar need not register transfers or exchanges (i) of
Notes selected for redemption pursuant to Article X; (ii) of any
Note for a period of 30 days preceding the due date for the final
repayment of principal with respect to the Note; or (iii) if
Section 2.15 has not been complied with in connection with such
transfer, if applicable.
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen
Notes. If (i) any mutilated Note is surrendered to the Indenture
Trustee, or the Indenture Trustee receives evidence to its
satisfaction of the destruction, loss or theft of any Note, and
(ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the
Issuer, the Note Registrar or the Indenture Trustee that such Note
has been acquired by a bona fide purchaser, the Issuer shall
execute (with such execution constituting an Issuer Order to
authenticate) and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note of
the same class; provided, however, that if any such destroyed, lost
or stolen Note, but not a mutilated Note, shall have become or
within seven days shall be due and payable, or shall have been
called for redemption, instead of issuing a replacement Note, the
Issuer may pay such destroyed, lost or stolen Note when so due or
payable or upon the Redemption Date without surrender thereof. If,
after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the
preceding sentence, a bona fide purchaser of the original Note in
lieu of which such replacement Note was issued presents for payment
such original Note, the Issuer and the Indenture Trustee shall be
entitled to recover such replacement Note (or such payment) from
(i) the Person to whom it was delivered or (ii) any Person taking
such replacement Note from such Person to whom such replacement
Note was delivered or (iii) any assignee of such Person, except a
bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss,
damage, cost or expense incurred by the Issuer or the Indenture
Trustee in connection therewith.
Upon the issuance of any replacement Note under this
Section, the Issuer may require the payment by the Holder of such
Note of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the
Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall
constitute an original additional contractual obligation of the
Issuer, whether or not the mutilated, destroyed, lost or stolen
Note shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost
or stolen Notes.
SECTION 2.6 Persons Deemed Owner. Prior to due
presentment for registration of transfer of any Note, the Issuer,
the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name any Note is registered
(as of the day of determination) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not
such Note be overdue, and neither the Issuer, the Indenture Trustee
nor any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.
SECTION 2.7 Payment of Principal and Interest.
(a) The Class A Notes and the Class B Notes shall accrue
interest from each Payment Date (or, in the case of the October
1995 Payment Date, from September 15, 1995) to, but excluding, the
following Payment Date at the Class A Interest Rate and the Class
B Interest Rate, respectively, which interest shall be payable on
each Payment Date as specified in the Pooling and Servicing
Agreement. Any installment of interest or principal, if any,
payable on any Note shall be punctually paid or duly provided for
by a deposit by or at the direction of the Issuer into the Note
Distribution Account on the applicable Payment Date as described in
the Pooling and Servicing Agreement. The Indenture Trustee shall
promptly make payment thereof to the Person in whose name such Note
(or one or more Predecessor Notes) is registered on the Record
Date, by check mailed first-class, postage prepaid to such Person's
address as it appears on the Note Register on such Record Date,
except that (i) unless Definitive Class A Notes have been issued
pursuant to Section 2.12, with respect to Class A Notes registered
on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), and (ii) with
respect to Class B Notes registered on the Record Date in the name
of the Person that is the Registered Holder of Class B Notes
representing more than 50% of the Outstanding Amount of Class B
Notes on such Record Date, payment will be made by wire transfer in
immediately available funds to the account designated by such
nominee or Person and except for the final installment of principal
payable with respect to such Note (and except for the Redemption
Price for any Note called for redemption pursuant to Article X),
which shall be payable as provided below. The funds represented by
any such checks returned undelivered shall be held in accordance
with Section 3.3.
(b) The principal of each Note shall be payable in
installments on each Payment Date to the extent provided in the
Pooling and Servicing Agreement. The unpaid principal amount of
each Note is due and payable on the earlier of the Stated Final
Maturity Date and the Redemption Date, if any, pursuant to Section
10.1(a). Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable, if not
previously paid, if and when the Notes are declared to be
immediately due and payable in the manner provided in Section 5.2.
All principal payments on each Class of Notes shall be made pro
rata to the Noteholders of such Class entitled thereto. Upon
notice to the Indenture Trustee by the Issuer, the Indenture
Trustee shall notify the Person in whose name a Note is registered
at the close of business on the Record Date related to the Payment
Date on which the Issuer expects that the final installment of
principal of and interest on such Note will be paid. Such notice
shall be mailed no later than five Business Days prior to such
final Payment Date and shall specify that such final installment
will be payable only upon presentation and surrender of such Note
and shall specify the place where such Note may be presented and
surrendered for payment of such installment. Notices in connection
with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.2.
SECTION 2.8 Cancellation. All Notes surrendered for
payment, registration of transfer, exchange or redemption shall, if
surrendered to any Person other than the Indenture Trustee, be
delivered to the Indenture Trustee and shall be promptly cancelled
by the Indenture Trustee. The Issuer may at any time deliver to
the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall
be promptly cancelled by the Indenture Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as
provided in this Section, except as expressly permitted by this
Indenture. All cancelled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or
disposal policy as in effect at the time unless the Issuer shall
direct by an Issuer Order that they be destroyed or returned to it;
provided that such Issuer Order is timely and the Notes have not
been previously disposed of by the Indenture Trustee. The
Indenture Trustee shall certify to the Issuer that surrendered
Notes have been duly cancelled and retained or destroyed, as the
case may be.
SECTION 2.9 Release of Collateral. The Indenture
Trustee shall release property from the Lien of this Indenture,
other than as permitted by Sections 3.21, 8.2, 8.4 an 11.1, only
upon receipt of an Issuer Order accompanied by an Officer's
Certificate, an Opinion of Counsel and (to the extent required by
the TIA) Independent Certificates in accordance with TIA ss 314(c)
and 314(d)(1) or an Opinion of Counsel in lieu of such Independent
Certificates to the effect that the TIA does not require any such
Independent Certificates.
SECTION 2.10 Book-Entry Notes. The Class A Notes, upon
original issuance, will be issued in the form of a typewritten Note
or Notes representing the Book-Entry Notes, to be delivered to The
Depository Trust Company, as the initial Clearing Agency, by, or on
behalf of, the Issuer. Such Notes shall initially be registered on
the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner will receive a
Definitive Note (as hereinafter defined) representing such Note
Owner's interest in such Notes, except as provided in Section 2.12.
Unless and until definitive, fully registered Notes (the
"Definitive Class A Notes") have been issued to Note Owners
pursuant to Section 2.12:
(i) the provisions of this Section shall be
in full
force and effect;
(ii) the Note Registrar and the Indenture Trustee
shall be entitled to deal with the Clearing Agency for
all purposes of this Indenture (including the payment of
principal of and interest on such Notes and the giving of
instructions or directions hereunder) as the sole holder
of such Notes, and shall have no obligation to such Note
Owners;
(iii) to the extent that the provisions of this
Section conflict with any other provisions of this
Indenture, the provisions of this Section shall control;
(iv) the rights of such Note Owners shall be
exercised only through the Clearing Agency and shall be
limited to those established by law and agreements
between such Note Owners and the Clearing Agency and/or
the Clearing Agency Participants and, pursuant to the
Depository Agreement, unless and until Definitive Class
A Notes are issued pursuant to Section 2.12, the initial
Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit
payments of principal of and interest on such Notes to
such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits
actions to be taken based upon instructions or directions
of Holders of Notes evidencing a specified percentage of
the Outstanding Amount of the Notes, the Clearing Agency
shall be deemed to represent such percentage only to the
extent that it has (i) 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 such
Notes and (ii) has delivered such instructions to the
Indenture Trustee.
SECTION 2.11 Notices to Clearing Agency. With respect
to the Class A Notes, whenever a notice or other communication to
Noteholders is required under this Indenture, unless and until
Definitive Class A Notes representing such Class A Notes shall have
been issued to Note Owners pursuant to Section 2.12, the Indenture
Trustee shall give all such notices and communications specified
herein to be given to such Noteholders to the Clearing Agency, and
shall have no obligation to the related Note Owners or other
Holders of such Notes.
SECTION 2.12 Definitive Class A Notes. If, with
respect to the Book-Entry Notes, (i) the Indenture Trustee is
notified in writing that the Clearing Agency is no longer willing
or able to properly discharge its responsibilities with respect to
such Notes, and the Indenture Trustee is unable to locate a
qualified successor, (ii) the Indenture Trustee, at its option,
elects to terminate the book-entry system through the Clearing
Agency or (iii) after the occurrence of an Event of Default or a
Servicer Default, Note Owners representing beneficial interests
aggregating at least a majority of the Outstanding Amount of Class
A Notes advise the Clearing Agency in writing that the continuation
of a book-entry system through the Clearing Agency is no longer in
the best interests of such Note Owners, then the Clearing Agency
shall notify all such Note Owners and the Indenture Trustee of the
occurrence of any such event and of the availability of Definitive
Class A Notes to such Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Note or Notes
representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute
(with such execution constituting an Issuer Order to authenticate)
and the Indenture Trustee shall authenticate the Definitive Class
A Notes in accordance with the instructions of the Clearing Agency.
None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Class A Notes,
the Indenture Trustee shall recognize the Holders of the Definitive
Class A Notes as Noteholders.
SECTION 2.13 Certain Noteholders. The Seller, in its
individual or any other capacity, may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its affiliates
with the same rights it would have if it were not the Seller.
SECTION 2.14 Tax Treatment. The Issuer and the
Indenture Trustee, by entering into this Indenture, and the
Noteholders and the Note Owners, by acquiring any Note or interest
therein, (i) express their intention that the Notes qualify under
applicable tax law as indebtedness secured by the Collateral and
(ii) unless otherwise required by appropriate taxing authorities,
agree to treat the Notes as indebtedness secured by the Collateral
for the purpose of federal income, state and local income and
franchise taxes, and any other taxes imposed upon, measured by or
based upon gross or net income.
SECTION 2.15 Special Terms Applicable to Class B Notes.
(a) The Class B Notes shall not be registered under the
Securities Act or the securities laws of any other jurisdiction.
Consequently, such Notes shall not be transferable other than
pursuant to an exemption from the registration requirements of the
Securities Act and satisfaction of certain other provisions
specified herein. Except for the transfers of the Class B Notes on
Closing Date by the Seller no sale, pledge or other transfer of any
Class B Note (or interest therein) may be made by any Person unless
such sale, pledge or other transfer is made (i) to a "qualified
institutional buyer" (as defined under Rule 144A under the
Securities Act) in a transaction which meets the requirements of
Rule 144A under the Securities Act, (ii) to First Union Capital
Markets Corp., (iii) through First Union Capital Markets Corp. to
an "institutional accredited investor" (as described in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) in a
transaction approved by First Union Capital Markets Corp. or (iv)
in a transaction exempt from the registration requirements of the
Securities Act. In each such case, (A) the Indenture Trustee shall
require that both the prospective transferor and the prospective
transferee certify to the Indenture Trustee and the
Certificateholders in writing the facts surrounding such transfer
and the status of such transferee, which certification shall be
substantially in the form of the Certificate attached hereto as
Exhibit D, and (B) in the case of sales, pledges and transfers
pursuant to clause (iv) above, the Indenture Trustee shall require
a written opinion of counsel (which shall not be at the expense of
the Certificateholders, the Issuer, the Owner Trustee, the Servicer
or the Indenture Trustee), satisfactory to the Certificateholders
and the Issuer, to the effect that such transfer will not violate
the Securities Act. None of the Seller, the Certificateholders,
the Issuer, the Owner Trustee, or the Indenture Trustee shall be
obligated to register any Class B Notes under the Securities Act,
qualify any Class B Notes under the securities laws of any state or
provide registration rights to any purchaser or holder thereof.
(b) The Class B Notes may not be acquired by or for the
account of a Benefit Plan. By accepting and holding a Class B
Note, the Holder thereof shall be deemed to have represented and
warranted that it is not a Benefit Plan and, if requested to do so
by the Seller or the Issuer, the Holder of a Class B Note shall
execute and deliver to the Indenture Trustee an undertaking letter
to such effect in form and substance satisfactory to the Issuer and
the Seller.
(c) Each Class B Note shall bear legends to the effect
set forth in the form of the Class B Note attached hereto as
Exhibit B.
ARTICLE III
Covenants
SECTION 3.1 Payment of Principal and Interest. The
Issuer will duly and punctually pay the principal of and interest,
if any, on the Notes in accordance with the terms of the Notes and
this Indenture. Without limiting the foregoing, the Issuer will
cause to be distributed all amounts on deposit in the Note
Distribution Account on a Payment Date (not including Investment
Earnings thereon, if any). Amounts properly withheld under the
Code by any Person from a payment to any Noteholder of interest
and/or principal shall be considered as having been paid by the
Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.2 Maintenance of Office or Agency. So long
as any of the Notes remain Outstanding, the Issuer will maintain in
the Borough of Manhattan, the City of New York, an office or agency
where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Indenture Trustee to serve as its
agent for the foregoing purposes. The Issuer will give prompt
written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If at any
time the Issuer shall fail to maintain any such office or agency or
shall fail to furnish the Indenture Trustee with the address
thereof, such surrenders, notices and demands may be made or served
at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders,
notices and demands.
SECTION 3.3 Money for Payments To Be Held in Trust.
(a) As provided in Section 8.2(a) and (b), all payments
of amounts due and payable with respect to any Notes that are to be
made from amounts withdrawn from the Note Distribution Account
pursuant to Section 8.2(c) shall be made on behalf of the Issuer by
the Indenture Trustee or by another Paying Agent, and no amounts so
withdrawn from the Note Distribution Account for payments of Notes
shall be paid over to the Issuer except as provided in this
Section.
(b) On or before each Payment Date and Redemption Date,
the Issuer shall deposit or cause to be deposited in the Note
Distribution Account the aggregate amount described in Section 4.8
of the Pooling and Servicing Agreement, such amount to be held in
trust for the benefit of the Persons entitled thereto and (unless
the Paying Agent is the Indenture Trustee) shall promptly notify
the Indenture Trustee of its action or failure so to act.
(c) The Issuer will cause each Paying Agent other than
the Indenture Trustee to execute and deliver to the Indenture
Trustee an instrument in which such Paying Agent shall agree with
the Indenture Trustee (and if the Indenture Trustee acts as Paying
Agent, it hereby so agrees), subject to the provisions of this
Section, that such Paying Agent will:
(i) hold sums held by it for the payment of amounts
due with respect to the Notes in trust for the benefit of
the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein
provided;
(ii) give the Indenture Trustee notice of any
default by the Issuer of which it has actual knowledge
(or any other obligor upon the Notes) in the making of
any payment required to be made with respect to the
Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture
Trustee, forthwith pay to the Indenture Trustee all sums
so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and
forthwith pay to the Indenture Trustee all sums held by
it in trust for the payment of Notes if at any time it
ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it
on any Notes of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting
requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for
any other purpose, by Issuer Order direct any Paying Agent to pay
to the Indenture Trustee all sums held in trust by such Paying
Agent, such sums to be held by the Indenture Trustee upon the same
terms as those upon which the sums were held by such Paying Agent;
and upon such payment by any Paying Agent to the Indenture Trustee,
such Paying Agent shall be released from all further liability with
respect to such money.
(e) Subject to applicable laws with respect to escheat
of funds, any money held by the Indenture Trustee or any Paying
Agent in trust for the payment of any amount due with respect to
any Note and remaining unclaimed for one year after such amount has
become due and payable shall be discharged from such trust, and the
Indenture Trustee or such Paying Agent, as the case may be, shall
give prompt notice of such occurrence to the Issuer and shall
release such money to the Issuer on Issuer Request; and the Holder
of such Note shall thereafter, as an unsecured general creditor,
look only to the Issuer for payment thereof (but only to the extent
of the amounts so paid to the Issuer), and all liability of the
Indenture Trustee or such Paying Agent with respect to such trust
money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any
such release of such money to the Issuer, may at the expense of the
Issuer cause to be published once, in a newspaper published in the
English language, customarily published on each Business Day and of
general circulation in the City of New York, notice that such money
remains unclaimed and that, after the date specified therein, which
shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid
to the Issuer. The Indenture Trustee may also adopt and employ, at
the expense of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to,
mailing notice of such repayment to Holders whose Notes have been
called but have not been surrendered for redemption or whose right
to or interest in moneys due and payable but not claimed is
determinable from the records of the Indenture Trustee or of any
Paying Agent, at the last address of record for each such Holder).
SECTION 3.4 Existence. The Issuer will keep in full
effect its existence, rights and franchises as a business trust
under the laws of the State of Delaware (unless it becomes, or any
successor Issuer hereunder is or becomes, organized under the laws
of any other State or of the United States of America, in which
case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary
to protect the validity and enforceability of this Indenture, the
Notes, the Collateral and each other instrument or agreement
included in the Indenture Trust Estate.
SECTION 3.5 Protection of Indenture Trust Estate. The
Issuer will from time to time prepare, execute, deliver and file
all such supplements and amendments hereto and all such UCC
financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other
action necessary or advisable to:
(i) establish, maintain or preserve the Lien and
security interest (and the priority thereof) of this
Indenture or carry out more effectively the purposes
hereof;
(ii) perfect, publish notice of or protect the
validity of any grant of a security interest made or to
be made by this Indenture;
(iii) enforce the rights of the Indenture Trustee and
the Noteholders in any of the Collateral; or
(iv) preserve and defend title to the Indenture
Trust Estate and the rights of the Indenture Trustee and
the Noteholders in the Indenture Trust Estate against the
claims of all Persons and parties.
The Issuer hereby designates the Indenture Trustee, and hereby
authorizes the Indenture Trustee as its agent and attorney-in-fact,
to execute any financing statement, continuation statement or other
instrument required by the Indenture Trustee pursuant to this
Section. Notwithstanding such designation, the Indenture Trustee
shall not be responsible for the execution or filing of any
financing statement, continuation statement or other instrument
unless the Indenture Trustee shall have been explicitly directed to
take such action pursuant to an Issuer Order.
SECTION 3.6 Opinions as to Indenture Trust Estate.
(a) On the Closing Date, the Issuer shall furnish to the
Indenture Trustee an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to
the recording and filing of this Indenture, any indentures
supplemental hereto, and other requisite documents, and with
respect to the execution and filing of any financing statements and
continuation statements, as are necessary to perfect and make
effective the Lien and security interest of this Indenture and
reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such
lien and security interest effective.
(b) On or before August 15 in each calendar year,
beginning in 1996, the Issuer shall furnish to the Indenture
Trustee an Opinion of Counsel either stating that, in the opinion
of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any UCC financing
statements and continuation statements as is necessary to maintain
the lien and security interest created by this Indenture and
reciting the details of such action or stating that in the opinion
of such counsel no such action is necessary to maintain such lien
and security interest. Such Opinion of Counsel shall also describe
the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements
and continuation statements that will, in the opinion of such
counsel, be required to maintain the lien and security interest of
this Indenture until August 15 in the following calendar year. The
Indenture Trustee shall not be responsible for taking any action in
response to the delivery of such Opinion of Counsel (unless one or
more actions are specifically directed in an Issuer Order).
SECTION 3.7 Performance of Obligations; Servicing of
Leases.
(a) The Issuer will not take any action and will use its
best efforts not to permit any action to be taken by others that
would release any Person from any of such Person's material
covenants or obligations under any instrument or agreement included
in the Indenture Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument
or agreement, except as expressly provided in this Indenture, the
Pooling and Servicing Agreement, the Administration Agreement or
such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist
it in performing its duties under this Indenture, and any
performance of such duties by a Person identified to the Indenture
Trustee in an Officer's Certificate of the Issuer shall be deemed
to be action taken by the Issuer. Initially, the Issuer has
contracted with the Servicer and the Administrator to assist the
Issuer in performing its duties under this Indenture. The
Indenture Trustee may acknowledge and accept such contractual
arrangements and accept delivery of all agreements documenting of
such contractual arrangements.
(c) The Issuer will punctually perform and observe all
of its obligations and agreements contained in this Indenture, the
Basic Documents and in the instruments and agreements included in
the Indenture Trust Estate, including but not limited to filing or
causing to be filed all UCC financing statements and continuation
statements required to be filed by the terms of this Indenture and
the Pooling and Servicing Agreement in accordance with and within
the time periods provided for herein and therein.
(d) If the Issuer shall have knowledge of the occurrence
of a Servicer Default under the Pooling and Servicing Agreement,
the Issuer shall promptly notify the Indenture Trustee thereof and
shall specify in such notice the action, if any, the Issuer is
taking with respect to such default. If a Servicer Default shall
arise from the failure of the Servicer to perform any of its duties
or obligations under the Pooling and Servicing Agreement with
respect to the Leases, the Issuer shall take all reasonable steps
available to it to remedy such failure.
(e) If the Indenture Trustee shall succeed to the
Servicer's duties as Servicer of the Leases as provided in the
Pooling and Servicing Agreement, it shall do so in its capacity as
Servicer and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI hereof shall be
inapplicable to the Indenture Trustee in its duties as the
successor to the Servicer and the servicing of the Leases. In case
the Indenture Trustee shall become successor to the Servicer under
the Pooling and Servicing Agreement, the Indenture Trustee shall be
entitled to appoint as Servicer any one of its affiliates, provided
that it shall be fully liable for the actions and omissions of such
affiliate in such capacity as Successor Servicer.
(f) Upon any termination of the Servicer's rights and
powers pursuant to the Pooling and Servicing Agreement, the Issuer
shall promptly notify the Indenture Trustee. As soon as a
Successor Servicer is appointed, the Issuer shall notify the
Indenture Trustee of such appointment, specifying in such notice
the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the
assignment granted to the Indenture Trustee under this Indenture or
the rights of the Indenture Trustee hereunder, the Issuer agrees
that it will not, without the prior written consent of the
Indenture Trustee or the Holders of a least a majority in
Outstanding Amount of the Notes, amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any
Collateral (except to the extent otherwise provided in the Pooling
and Servicing Agreement) or the Basic Documents, or waive timely
performance or observance by the Servicer or the Seller under the
Pooling and Servicing Agreement, or the Seller or the Originator
under the Contribution and Sale Agreement; provided, however, that
no such amendment shall (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of
payments on Leases or distributions that are required to be made
for the benefit of the Noteholders or (ii) reduce the aforesaid
percentage of the Notes which are required to consent to any such
amendment, without the consent of the holders of all the
Outstanding Notes. If any such amendment, modification, supplement
or waiver shall be so consented to by the Indenture Trustee or such
Holders, the Issuer agrees, promptly following a request by the
Indenture Trustee to do so, to execute and deliver, in its own name
and at its own expense, such agreements, instruments, consents and
other documents as the Indenture Trustee may reasonably deem
necessary or appropriate in the circumstances.
SECTION 3.8 Negative Covenants. So long as any Notes
are Outstanding, the Issuer shall not:
(i) sell, transfer, exchange or otherwise dispose
of any of the properties or assets of the Issuer,
including those included in the Indenture Trust Estate,
except the Issuer may (A) collect, liquidate, sell or
otherwise dispose of the Issuer's interest in Receivables
(including Defaulted Leases and Early Termination Leases
and Leases that are subject to a Warranty Event), (B)
make payments and distributions and (C) take other
actions, in each case as contemplated by the Basic
Documents;
(ii) claim any credit on, or make any deduction from
the principal or interest payable in respect of, the
Notes (other than amounts properly withheld from such
payments under the Code) or assert any claim against any
present or former Noteholder by reason of the payment of
the taxes levied or assessed upon any part of the
Indenture Trust Estate; or
(iii) either (A) permit the validity or effectiveness
of this Indenture to be impaired, or permit the Lien of
this Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect
to the Notes under this Indenture except as may be
expressly permitted hereby, or (B) permit any lien,
charge, excise, claim, security interest, mortgage or
other encumbrance (other than the Lien of this Indenture)
to be created on or extend to or otherwise arise upon or
burden the Indenture Trust Estate or any part thereof or
any interest therein or the proceeds thereof (other than
tax liens, mechanics' liens and other liens that arise by
operation of law, in each case on Equipment and arising
solely as a result of an action or omission of the
related Lessee) or (C) permit the lien of this Indenture
not to constitute a valid first priority (other than with
respect to any such tax, mechanics' or other lien)
security interest in the Indenture Trust Estate.
SECTION 3.9 Annual Statement as to Compliance. The
Issuer will deliver to the Indenture Trustee, within 120 days after
the end of each fiscal year of the Issuer (commencing with the
fiscal year 1996), an Officer's Certificate stating, as to the
Authorized Officer signing such Officer's Certificate, that
(i) a review of the activities of the Issuer during
the 12-month period ending at the end of such fiscal year
(or in the case of the initial Transaction Year, the
period from the Closing Date to June 30, 1996) and of
performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's
knowledge, based on such review, the Issuer has complied
in all material respects with all of its obligations
under this Indenture throughout such year, or, if there
has been a default in the fulfillment of any such
obligation, specifying each such default known to such
Authorized Officer and the nature and status thereof. A
copy of such certificate may be obtained by any
Noteholder by a request in writing to the Issuer
addressed to the Corporate Trust Office of the Indenture
Trustee; the Indenture Trustee is hereby specifically
authorized to provide such copy as agent of the Issuer.
SECTION 3.10 Consolidation, Merger, etc. of Issuer;
Disposition of Trust Assets.
(a) The Issuer shall not consolidate or merge with or
into any other Person, unless:
(i) the Person (if other than the Issuer) formed by
or surviving such consolidation or merger shall be a
Person organized and existing under the laws of the
United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and
the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have
occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have delivered to the
Indenture Trustee an Officer's Certificate and an Opinion
of Counsel addressed to the Issuer, each stating (A) that
such transaction will not have any material adverse tax
consequence to the Trust, the Issuer or any Noteholder
and (B) that all conditions precedent herein provided for
in this Section 3.10 have been complied with, which shall
include any filing required by the Exchange Act;
(v) any action as is necessary to maintain the Lien
and security interest created by this Indenture shall
have been taken; and
(vi) the Issuer shall have delivered to the
Indenture Trustee an Officer's Certificate and an Opinion
of Counsel each stating that such consolidation or merger
and such supplemental indenture comply with this Article
III and that all conditions precedent herein provided for
relating to such transaction have been complied with
(including any filing required by the Exchange Act).
(b) Except as otherwise expressly permitted by this
Indenture or the other Basic Documents, the Issuer shall not convey
or transfer any material portion of its properties or assets
included in the Indenture Trust Estate to any Person, unless:
(i) the Person that acquires by conveyance or
transfer the properties and assets of the Issuer the
conveyance or transfer of which is hereby restricted
shall (A) be a United States citizen or a Person
organized and existing under the laws of the United
States of America or any State, (B) expressly assumes, by
an indenture supplemental hereto, executed and delivered
to the Indenture Trustee, the due and punctual payment of
the principal of and interest on all Notes and the
performance or observance of every agreement and covenant
of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein, (C)
expressly agrees by means of such supplemental indenture
that all right, title and interest so conveyed or
transferred shall be subject and subordinate to the
rights of the Noteholders, (D) unless otherwise provided
in such supplemental indenture, expressly agrees to
indemnify, defend and hold harmless the Issuer against
and from any loss, liability or expense arising under or
related to this Indenture and the Notes and (E) expressly
agrees by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified
Person) shall make all filings with the Commission (and
any other appropriate Person) required by the Exchange
Act in connection with the Notes;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have
occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have delivered to the
Indenture Trustee an Officer's Certificate and an Opinion
of Counsel addressed to the Issuer, each stating (A) that
such transaction will not have any material adverse tax
consequence to the Trust, the Issuer, any Noteholder or
any Certificateholder and (B) that all conditions
precedent herein provided for in this Section 3.10 have
been complied with, which shall include any filing
required by the Exchange Act;
(v) any action as is necessary to maintain the lien
and security interest created by this Indenture shall
have been taken; and
(vi) the Issuer shall have delivered to the
Indenture Trustee an Officer's Certificate and an Opinion
of Counsel each stating that such conveyance or transfer
and such supplemental indenture comply with this Article
III and that all conditions precedent herein provided for
relating to such transaction have been complied with
(including any filing required by the Exchange Act).
SECTION 3.11 Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in
accordance with Section 3.10(a), the Person formed by or surviving
such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right
and power of, the Issuer under this Indenture with the same effect
as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of a material portion
of the assets and properties of the Issuer included in the
Indenture Trust Estate pursuant to Section 3.10(b), the Issuer will
be released from every covenant and agreement of this Indenture to
be observed or performed on the part of the Issuer with respect to
the Notes immediately upon the delivery to and acceptance by the
Indenture Trustee of the Officer's Certificate and Opinion of
Counsel specified in Section 3.10(b)(vi) stating that the Issuer is
to be so released.
SECTION 3.12 No Other Business. The Issuer shall not
engage in any business other than financing, purchasing, owning,
selling and managing the Leases in the manner contemplated by this
Indenture and the Basic Documents, issuing the Notes and the
Certificates and activities incidental thereto.
SECTION 3.13 No Borrowing. The Issuer shall not issue,
incur, assume, guarantee or otherwise become liable, directly or
indirectly, for any indebtedness except for money borrowed in
respect of the Notes or in accordance with the Basic Documents.
SECTION 3.14 Servicer's Obligations. The Issuer shall
use its best efforts to cause the Servicer to comply with Sections
3.7, 3.9, 3.10, 3.11, 3.12 and 7.3 of the Pooling and Servicing
Agreement.
SECTION 3.15 Guarantees, Loans, Advances and Other
Liabilities. Except as contemplated by the Pooling and Servicing
Agreement or this Indenture, the Issuer shall not make any loan or
advance or credit to, or guarantee (directly or indirectly
another's payment or performance on any obligation or capability of
so doing or otherwise), endorse or otherwise become contingently
liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or
securities of, or any other interest in, or make any capital
contribution to, any other Person.
SECTION 3.16 Capital Expenditures. The Issuer shall
not make any expenditure (by long-term or operating lease or
otherwise) for capital assets (real, personal or intangible
property) other than the purchase of the Leases, interests in the
related Equipment and other property and rights from the Seller on
the Closing Date and from time to time thereafter pursuant to the
Pooling and Servicing Agreement.
SECTION 3.17 Removal of Administrator. So long as any
Notes are Outstanding, the Issuer shall not remove the
Administrator without cause unless the Rating Agency Condition
shall have been satisfied in connection with such removal.
SECTION 3.18 Restricted Payments. Except for payments
of principal or interest on or redemption of the Notes, so long as
any Notes are Outstanding, the Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, to the Owner Trustee or any
owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of
the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest
or security or (iii) set aside or otherwise segregate any amounts
for any such purpose; provided, however, that the Issuer may make,
or cause to be made, distributions to the Servicer, the Seller, the
Owner Trustee and the Certificateholders as permitted by, and to
the extent funds are available for such purpose under, the Pooling
and Servicing Agreement, the Trust Agreement or the other Basic
Documents. The 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 3.19 Notice of Events of Default. The Issuer
agrees to give the Indenture Trustee prompt written notice of each
Event of Default hereunder and, within five days after obtaining
knowledge of any of the following occurrences, written notice of
each default on the part of the Servicer or the Seller of its
obligations under the Pooling and Servicing Agreement and each
default on the part of the Seller or the Originator under the
Contribution and Sale Agreement.
SECTION 3.20 Further Instruments and Acts. Upon
request of the Indenture Trustee, the Issuer will execute and
deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the
purpose of this Indenture.
SECTION 3.21 Trustee's Assignment of Interest in
Certain Receivables.
(a) The Indenture Trustee shall assign, without
recourse, representation or warranty, to the Servicer, the Seller
or the Originator, as applicable, all the Indenture Trustee's
right, title and interest in and to any Lease assigned by the
Issuer to the Servicer pursuant to or in connection with the
Pooling and Servicing Agreement, such assignment being an
assignment outright and not for security; and the Servicer, the
Seller or the Originator, as applicable, shall thereupon own such
Lease, and all such security and documents, free of any further
obligation to the Indenture Trustee, the Noteholders or the
Certificateholders with respect thereto. If in any enforcement
suit or legal proceeding it is held that the Servicer may not
enforce a Lease on the ground that it is not a real party in
interest or a holder entitled to enforce the Lease, the Indenture
Trustee shall, at the Servicer's expense, take such steps as the
Servicer deems necessary to enforce the Lease, including bringing
suit in the Indenture Trustee's name or the names of the
Noteholders or the Certificateholders.
(b) The Lien and security interest of the Indenture
Trustee in any Lease and the related Equipment shall be released
upon (i) any disposition of such Equipment in accordance with the
Pooling and Servicing Agreement (including any sale to a Lessee
exercising a purchase option) and deposit of the proceeds of such
sale in the Collection Account as required pursuant to the Pooling
and Servicing Agreement, (ii) any purchase of such Lease and
related Equipment by the Originator as contemplated by Section
2.6(b) of the Pooling and Servicing Agreement, (iii) the
substitution of a Substitute Lease and/or Equipment therefor as
contemplated by Section 5.1 of the Pooling and Servicing Agreement
or (iv) the substitution or replacement of any unit of Equipment as
contemplated in Section 3.1(c) of the Pooling and Servicing
Agreement. In connection with any such disposition, purchase,
substitution or replacement or termination, the Indenture Trustee
shall execute and deliver to the Servicer any assignments, bills of
sale, termination statements and any other releases and instruments
as the Servicer may request to in order to effect such release.
SECTION 3.22 Representations and Warranties by the
Issuer to the Indenture Trustee. The Issuer hereby represents and
warrants to the Indenture Trustee as follows:
(a) Good Title. No interest in any Lease or the related
Equipment conveyed to the Issuer has been sold, transferred,
assigned or pledged by the Issuer to any Person other than the
Indenture Trustee; immediately prior to the conveyance of such
Leases and the related Equipment pursuant to this Indenture, the
Issuer had good and marketable title thereto, free of any Lien;
and, upon execution and delivery of this Indenture by the Issuer,
the Indenture Trustee shall have all of the right, title and
interest of the Issuer in, to and under such Leases, free of any
Lien; and
(b) All Filings Made. All filings (including, without
limitation, Uniform Commercial Code filings) necessary in any
jurisdiction to give the Indenture Trustee, upon the acquisition by
the Issuer of any Lease, a first priority perfected security
interest in the Issuer's interest in such Lease and in the related
Equipment (other than motor vehicles) if such Equipment is located
in a Filing Location (subject to Permitted Liens and Liens which
have priority by operation of law) have been made, or with respect
to such Equipment will be made within 5 Business Days after the
date hereof.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1 Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect with respect to
the Notes except as to (i) rights of registration of transfer and
exchange, (ii) substitution of mutilated, destroyed, lost or stolen
Notes, (iii) rights of Noteholders to receive payments of principal
thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.12, 3.13 and 3.21, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights
of the Indenture Trustee under Section 6.7 and the obligations of
the Indenture Trustee under Section 4.2) and (vi) the rights of
Noteholders as beneficiaries hereof with respect to the property so
deposited with the Indenture Trustee payable to all or any of them,
and the Indenture Trustee, on demand of and at the expense of the
Issuer, shall execute proper instruments acknowledging satisfaction
and discharge of this Indenture with respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and
delivered (other than (i) Notes that have been destroyed,
lost or stolen and that have been replaced or paid as
provided in Section 2.5 and (ii) Notes for whose payment
money has theretofore been deposited in trust or
segregated and held in trust or discharged form such
trust, as provided in Section 3.3) have been delivered to
the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the
Indenture Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at the Final
Scheduled Payment Date within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Indenture Trustee for the giving of notice of
redemption by the Indenture Trustee in the name,
and at the expense, of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) of
subsection (2) above, has irrevocably deposited or caused
to be irrevocably deposited with the Indenture Trustee
cash or direct obligations of or obligations guaranteed
by the United States of America (which will mature prior
to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the
entire indebtedness on such Notes including accrued
interest thereon not theretofore delivered to the
Indenture Trustee for cancellation when due;
(B) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required
by the TIA) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable
requirements of Section 11.1(a) and each stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been
complied with.
SECTION 4.2 Application of Trust Money. All moneys
deposited with the Indenture Trustee pursuant to Section 4.1 hereof
shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either
directly or through any Paying Agent, as the Indenture Trustee may
determine, to the Holders of the particular Notes for the payment
or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for
principal and interest; but such moneys need not be segregated from
other funds except to the extent required herein or in the Pooling
and Servicing Agreement or required by law.
SECTION 4.3 Repayment of Monies Held by Paying Agent.
In connection with the satisfaction and discharge of this Indenture
with respect to the Notes, all moneys then held by any Paying Agent
other than the Indenture Trustee under the provisions of this
Indenture with respect to such Notes shall, upon demand of the
Issuer, be paid to the Indenture Trustee to be held and applied
according to Section 3.3 and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
ARTICLE V
Remedies
SECTION 5.1 Events of Default. "Event of Default,"
wherever used herein, means any one of the following events
(whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body):
(i) failure to pay any interest on any Note when
the same becomes due and payable as described in the
Pooling and Servicing Agreement, and such failure
continues unremedied for a period of five days; or
(ii) (A) except as set forth in (B), failure to pay
any installment of the principal of any Note when the
same is due and payable, and such failure continues
unremedied for a period of thirty (30) days or (B)
failure to pay in full the Outstanding Amount on any Note
on or prior to the Stated Final Payment Date; or
(iii) default in the observance or performance of any
covenant or agreement of the Issuer made in this
Indenture (other than a covenant or agreement, a default
in the observance or performance of which is elsewhere in
this Section specifically dealt with) or any
representation or warranty of the Issuer made in this
Indenture, which default has a material adverse effect on
the Noteholders, and such default shall continue or not
be cured, or the circumstance or condition in respect of
which such representation or warranty was incorrect shall
not have been eliminated or otherwise cured, for a
period of 30 days after there shall have been given, by
registered or certified mail, to the Issuer by the
Indenture Trustee or to the Issuer and the Indenture
Trustee by the Holders of at least 25% of the Outstanding
Amount of the Notes, a written notice specifying such
default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(iv) the filing of a decree or order for relief by
a court having jurisdiction in the premises in respect of
the Issuer or any substantial part of the Indenture Trust
Estate in an involuntary case under any applicable
Federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or
similar official for the Issuer or for any substantial
part of the Indenture Trust Estate, or ordering the
winding-up or liquidation of the Issuer's affairs, and
such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary
case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in
effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such
law, or the consent by the Issuer to the appointment or
taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of
the Issuer or for any substantial part of the Indenture
Trust Estate, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure
by the Issuer generally to pay its debts as such debts
become due, or the taking of action by the Issuer in
furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within
five days after the occurrence thereof, written notice in the form
of an Officer's Certificate of any event which with the giving of
notice and the lapse of time would become an Event of Default under
clause (iii), its status and what action the Issuer is taking or
proposes to take with respect thereto.
SECTION 5.2 Acceleration of Maturity; Rescission and
Annulment. If an Event of Default should occur and be continuing,
then and in every such case, unless the principal amount of the
Notes shall have already become due and payable, the Indenture
Trustee or the Holders of Notes representing a majority of the
Outstanding Amount of the Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer
(and to the Indenture Trustee if given by Noteholders), and upon
any such declaration the unpaid principal amount of the Notes,
together with accrued and unpaid interest thereon through the date
of acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of
maturity has been made and before a judgment or decree for payment
of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, the Holders of Notes
representing a majority of the Outstanding Amount of the Notes, by
written notice to the Issuer and the Indenture Trustee, may rescind
and annul such declaration and its consequences; provided, however,
that no such rescission and annulment shall extend to or affect any
subsequent Event of Default or impair any right consequent thereto;
and provided, further, that if the Indenture Trustee shall have
proceeded to enforce any right under this Indenture and such
proceedings shall have been discontinued or abandoned because of
such rescission and annulment or for any other reason, or shall
have been determined adversely to the Indenture Trustee, then and
in every such case, the Indenture Trustee, the Issuer and the
Noteholders, as the case may be, shall be restored to their
respective former positions and rights hereunder, and all rights,
remedies and powers of the Indenture Trustee, the Issuer and the
Noteholders, as the case may be, shall continue as though no such
proceedings had been commenced.
SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee.
(a) The Issuer covenants that if there shall occur an
Event of Default under Sections 5.1(i) or (ii) which has not been
waived pursuant to Section 5.12, the Issuer will, upon demand of
the Indenture Trustee, pay to the Indenture Trustee, for the
ratable benefit of the Noteholders in accordance with their
respective principal amounts, the whole amount then due and payable
on such Notes for principal and interest, with interest upon the
overdue principal for each Class of Notes at the interest rate
borne by such Notes and in addition thereto such further amount as
shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such
amounts upon such demand, the Indenture Trustee, in its own name
and as trustee of an express trust, may institute a Proceeding for
the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the
same against the Issuer or other obligor upon such Notes and
collect in the manner provided by law out of the property of the
Issuer or other obligor upon such Notes, wherever situated, the
moneys adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the
Indenture Trustee may, as more particularly provided in Section
5.4, in its discretion, proceed to protect and enforce its rights
and the rights of the Noteholders, by such appropriate Proceedings
as the Indenture Trustee shall deem most effective to protect and
enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other
proper remedy or legal or equitable right vested in the Indenture
Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the
Issuer or any other obligor upon the Notes or any Person having or
claiming an ownership interest in the Indenture Trust Estate,
Proceedings under Title 11 of the United States Code or any other
applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of the Issuer or its
property or such other obligor or Person, or in case of any other
comparable judicial Proceedings relative to the Issuer or other
obligor upon the Notes, or to the creditors or property of the
Issuer or such other obligor, the Indenture Trustee, irrespective
of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any
demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or
otherwise:
(i) to file and prove a claim or claims for the
whole amount of principal and interest owing and unpaid
in respect of the Notes and to file such other papers or
documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (including any
claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of
negligence or bad faith) and of the Noteholders allowed
in such Proceedings;
(ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Holders of Notes in
any election of a trustee, a standby trustee or Person
performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other
property payable or deliverable on any such claims and to
distribute all amounts received with respect to the
claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee or the Holders
of Notes allowed in any judicial proceedings relative to
the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar
official in any such Proceeding is hereby authorized by each of
such Noteholders to make payments to the Indenture Trustee, and, in
the event that the Indenture Trustee shall consent to the making of
payments directly to such Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by
the Indenture Trustee and each predecessor Indenture Trustee except
as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to
authorize the Indenture Trustee to authorize or consent to or vote
for or accept or adopt on behalf of any Noteholder any plan of
reorganization, arrangement, adjustment or composition affecting
the Notes or the rights of any Holder thereof or to authorize the
Indenture Trustee to vote in respect of the claim of any Noteholder
in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under
this Indenture, or under any of the Notes, may be enforced by the
Indenture Trustee without the possession of any of the Notes or the
production thereof in any trial of other Proceedings relative
thereto, and any such action or Proceedings instituted by the
Indenture Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment
of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the
Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee
(and also any Proceedings involving the interpretation of any
provision of this Indenture to which the Indenture Trustee shall be
a party), the Indenture Trustee shall be held to represent all the
Holders of the Notes, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
SECTION 5.4 Remedies; Priorities.
(a) If an Event of Default shall have occurred and be
continuing and the Notes have been accelerated under Section 5.2,
the Indenture Trustee may (but shall not be required to) do one or
more of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as
trustee of an express trust for the collection of all
amounts then payable on the Notes or under this Indenture
with respect thereto, whether by declaration of
acceleration or otherwise, enforce any judgment obtained,
and collect from the Issuer and any other obligor upon
such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with
respect to the Indenture Trust Estate;
(iii) exercise any remedies of a secured party under
the UCC and take any other appropriate action to protect
and enforce the rights and remedies of the Indenture
Trustee and the Holders of the Notes; and
(iv) sell the Indenture Trust Estate or any portion
thereof or rights or interest therein, at one or more
public or private sales called and conducted in any
manner permitted by law or elect to have the Issuer
maintain possession of the Indenture Trust Estate,
including the Leases included therein, and continue to
apply Collections on such Leases as if there had been no
declaration of acceleration;
provided, however, that the Indenture Trustee may not sell or
otherwise liquidate the Indenture Trust Estate following an Event
of Default unless (A) the Holders of 100% of the Outstanding Amount
of the Notes consent thereto, (B) the proceeds of such sale or
liquidation distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon such Notes
for principal and interest or (C) the Indenture Trustee determines
that the Indenture Trust Estate will not continue to provide
sufficient funds for the payment of principal of and interest on
the Notes as they would have become due if the Notes had not been
declared due and payable, and the Indenture Trustee obtains the
consent of Holders of 66-2/3% of the Outstanding Amount of the
Notes. In determining such sufficiency or insufficiency with
respect to clause (B) and (C), the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of
the Indenture Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or
property pursuant to this Article V, it shall pay out the money or
property in the following order:
FIRST: to the Indenture Trustee for amounts due under
Section 6.7; and
SECOND: to the Collection Account for distribution and
payment in accordance with Section 4.8 of the Pooling and
Servicing Agreement.
SECTION 5.5 Optional Preservation of the Indenture
Trust Estate. If the Notes have been declared to be due and
payable under Section 5.2 following an Event of Default and such
declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Indenture Trust Estate. It is the
desire of the parties hereto and the Noteholders that there be at
all times sufficient funds for the payment of principal of and
interest on the Notes, and the Indenture Trustee shall take such
desire into account when determining whether or not to maintain
possession of the Indenture Trust Estate, the Indenture Trustee
may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national
reputation as to the feasibility of such for such purpose.
SECTION 5.6 Limitation of Suits. No Holder of any
Note shall have any right to institute any Proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment
of a receiver or trustee, or for any other remedy hereunder,
unless:
(i) such Holder has previously given written notice
to the Indenture Trustee of a continuing Event of
Default;
(ii) the Holders of not less than 25% of the
Outstanding Amount of the Notes have made written request
to the Indenture Trustee to institute such Proceeding in
respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the
Indenture Trustee indemnity against the costs, expenses
and liabilities to be incurred in complying with such
request;
(iv) the Indenture Trustee for 60 days after its
receipt of such notice, request and offer of indemnity
has failed to institute such Proceeding; and
(v) no direction inconsistent with such written
request has been given to the Indenture Trustee during
such 60-day period by the Holders of a majority of the
Outstanding Amount of the Notes;
it being understood and intended that no one or more Holders of
Notes shall have any right in any manner whatsoever by virtue of,
or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other Holders of Notes or to
obtain or seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive
conflicting or inconsistent requests and indemnity from two or more
groups of Holders of Notes, each representing less than a majority
of the Outstanding Amount of the Notes, the Indenture Trustee in
its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture, and
shall have no liability to any person for such action or inaction.
SECTION 5.7 Unconditional Rights of Noteholders To
Receive Principal and Interest. Notwithstanding any other
provisions in this Indenture, the Holder of any Note shall have the
right, which is absolute and unconditional, to receive payment of
the principal and the interest, if any, on such Note on or after
the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the
Redemption Date) and to institute suit for the enforcement of any
such payment, and such right shall not be impaired without the
consent of such Holder.
SECTION 5.8 Restoration of Rights and Remedies. If
the Indenture Trustee or any Noteholder has instituted any
Proceeding to enforce any right or remedy under this Indenture and
such Proceeding has been discontinued or abandoned for any reason
or has been determined adversely to the Indenture Trustee or to
such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any
determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter
all rights and remedies of the Indenture Trustee and the
Noteholders shall continue as though no such Proceeding had been
instituted.
SECTION 5.9 Rights and Remedies Cumulative. No right
or remedy herein conferred upon or reserved to the Indenture
Trustee or to the Noteholders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right
or remedy.
SECTION 5.10 Delay or Omission Not a Waiver. No delay
or omission of the Indenture Trustee or any Holder of any Note to
exercise any right or remedy accruing upon any Default or Event of
Default shall impair any such right or remedy or constitute a
waiver of any such Default or Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee or to the Noteholders may be exercised
from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.11 Control by Noteholders. The Holders of a
majority of the Outstanding Amount of the Notes shall, subject to
provision being made for indemnification against costs, expenses
and liabilities in a form satisfactory to the Indenture Trustee,
have the right to direct the time, method and place of conducting
any Proceeding for any remedy available to the Indenture Trustee
with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that
(i) such direction shall not be in conflict with
any rule of law or with this Indenture;
(ii) subject to the express terms of Section 5.4,
any direction to the Indenture Trustee to sell or
liquidate the Indenture Trust Estate shall be by the
Holders of Notes representing not less than 100% of the
Outstanding Amount of the Notes;
(iii) if the conditions set forth in Section 5.5 have
been satisfied and the Indenture Trustee elects to retain
the Indenture Trust Estate pursuant to such Section, then
any direction to the Indenture Trustee by Holders of
Notes representing less than 100% of the Outstanding
Amount of the Notes to sell or liquidate the Indenture
Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not
inconsistent with such direction;
provided, however, that, subject to Section 6.1, the Indenture
Trustee need not take any action that it determines might involve
it in liability (a) with respect to which the Indenture Trustee
shall have reasonable grounds to believe that adequate indemnity
against such liability is not assured to it and (b) which might
materially adversely affect the rights of any Noteholders not
consenting to such action.
SECTION 5.12 Waiver of Past Defaults. Prior to the
declaration of the acceleration of the maturity of the Notes as
provided in Section 5.2, the Holders of Notes of not less than a
majority of the Outstanding Amount of the Notes may waive any past
Default or Event of Default and its consequences except a Default
(a) in payment of principal of or interest on any of the Notes or
(b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of each Note.
In the case of any such waiver, the Issuer, the Indenture Trustee
and the Holders of the Notes shall be restored to their former
positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other Default or impair any right
consequent thereto.
Upon any such waiver, such Default shall cease to exist
and be deemed to have been cured and not to have occurred, and any
Event of Default arising therefrom shall be deemed to have been
cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent
thereto.
SECTION 5.13 Undertaking for Costs. All parties to
this Indenture agree, and each Holder of any Note by such Holder's
acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by
it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such
suit, having due regard to the merits and good faith of the claims
or defenses made by such party litigant; but the provisions of this
Section shall not apply to (a) any suit instituted by the Indenture
Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 50% of
the Outstanding Amount of the Notes or (c) any suit instituted by
any Noteholder for the enforcement of the payment of principal of
or interest on any Note on or after the respective due dates
expressed in such Note and in this Indenture (or, in the case of
redemption, on or after the Redemption Date).
SECTION 5.14 Waiver of Stay or Extension Laws. The
Issuer covenants (to the extent it may lawfully do so) that it will
not at any time insist upon, or plead or in any manner whatsoever,
claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, that
may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Indenture Trustee, but will suffer
and permit the execution of every such power as though no such law
has been enacted.
SECTION 5.15 Action on Notes. The Indenture Trustee's
right to seek and recover judgment on the Notes or under this
Indenture shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to this
Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee
against the Issuer or by the levy of any execution under such
judgment upon any portion of the Indenture Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by
the Indenture Trustee shall be applied in accordance with Section
5.4(b).
SECTION 5.16 Performance and Enforcement of Certain
Obligations.
(a) Promptly following a request from the Indenture
Trustee to do so, the Issuer agrees to take all such lawful action
as the Indenture Trustee may request to compel or secure the
performance and observance by the Seller and the Servicer, as
applicable, of each of their obligations to the Issuer under or in
connection with the Pooling and Servicing Agreement or by the
Seller or the Originator under or in connection with the
Contribution and Sale Agreement in accordance with the terms
thereof, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection
with the Pooling and Servicing Agreement to the extent and in the
manner directed by the Indenture Trustee, including the
transmission of notices of default on the part of the Seller or the
Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the
Pooling and Servicing Agreement.
(b) If an Event of Default has occurred and is
continuing, the Indenture Trustee at the written direction of the
Holders of 66-2/3% of the Outstanding Amount of the Notes shall
exercise all rights, remedies, powers, privileges and claims of the
Issuer against the Seller or the Servicer under or in connection
with the Pooling and Servicing Agreement, including the right or
power to take any action to compel or secure performance or
observance by the Seller or the Servicer of each of their
obligations to the Issuer thereunder and to give any consent,
request, notice, direction, approval, extension or waiver under the
Pooling and Servicing Agreement, and any right of the Issuer to
take such action shall be suspended.
(c) Promptly following a request from the Indenture
Trustee to do so, the Issuer agrees to take all such lawful action
as the Indenture Trustee may request to compel or secure the
performance and observance in accordance with the terms thereof by
the Originator of each of its obligations to the Seller under or in
connection with the Contribution and Sale Agreement, and to
exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the
Contribution and Sale Agreement to the extent and in the manner
directed by the Indenture Trustee, including the transmission of
notices of default on the part of the Seller thereunder and the
institution of legal or administrative actions or proceedings to
compel or secure performance by the Originator of such obligations.
(d) If an Event of Default has occurred and is
continuing, the Indenture Trustee at the written direction of the
Holders of 66-2/3% of the Outstanding Amount of the Notes shall
exercise all rights, remedies, powers, privileges and claims of the
Seller against the Originator under or in connection with the
Contribution and Sale Agreement, including the right or power to
take any action to compel or secure performance or observance by
the Originator of each of its obligations to the Seller thereunder
and to give any consent, request, notice, direction, approval,
extension or waiver under the Contribution and Sale Agreement, and
any right of the Seller to take such action shall be suspended.
ARTICLE VI
Indenture Trustee
SECTION 6.1 Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is
continuing, the Indenture Trustee shall exercise the rights and
powers vested in it by this Indenture and use the same degree of
care and skill in their exercise as a prudent person would exercise
or use under the circumstances in the conduct of such person's own
affairs, including, without limitation, continuing to hold the
Indenture Trust Estate and receive collections on the Leases
included therein and provided in the Pooling and Servicing
Agreement.
(b) Except during continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform
such duties and only such duties as are specifically set
forth in this Indenture and the Pooling and Servicing
Agreement and no implied covenants or obligations shall
be read into this Indenture against the Indenture
Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, the
Indenture Trustee shall examine the certificates and
opinions to determine whether or not they conform on
their face to the requirements of this Indenture.
The Indenture Trustee shall not be required to determine, confirm
or recalculate the information contained in any statement of the
Servicer delivered to it pursuant to Section 3.10 of the Pooling
and Servicing Agreement.
(c) The Indenture Trustee may not be relieved from
liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Indenture Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer unless it is proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good
faith in accordance with a direction received by it
pursuant to Section 5.11 or otherwise from Holders under
the Indenture.
(d) The Indenture Trustee shall not be liable for
interest on any money received by it except as the Indenture
Trustee may agree in writing with the Issuer.
(e) Money held in trust by the Indenture Trustee need
not be segregated from other funds except to the extent required by
law or the terms of this Indenture or the Pooling and Servicing
Agreement.
(f) No provision of this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if it
shall have reasonable grounds to believe that repayments of such
funds or adequate indemnity satisfactory to it against such loss,
liability or expense is not reasonably assured to it.
(g) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to
the Indenture Trustee shall be subject to the provisions of this
Section and to the provisions of the TIA.
SECTION 6.2 Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document
believed by it to be genuine and to have been signed or presented
by the proper person. The Indenture Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from
acting, it may require an Officer's Certificate from the Issuer or
an Opinion of Counsel that such action or omission is required or
permitted hereunder. The Indenture Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on
the Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys or a custodian or nominee, and
the Indenture Trustee shall not be responsible for any misconduct
or negligence on the part of, or for the supervision of, any such
agent, attorney, custodian or nominee appointed with due care by it
hereunder.
(d) The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes to
be authorized or within its rights or powers; provided, however,
that the Indenture Trustee's conduct does not constitute wilful
misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and
the advice or opinion of counsel with respect to legal matters
relating to this Indenture and the Notes shall be full and complete
authorization and protection from liability in respect to any
action taken, omitted or suffered by it hereunder in good faith and
in accordance with the advice or opinion of such counsel.
SECTION 6.3 Individual Rights of Indenture Trustee.
The Indenture Trustee in its individual or any other capacity may
become the owner or pledgee of Notes and may otherwise deal with
the Issuer or its affiliates with the same rights it would have if
it were not Indenture Trustee; provided, however, the Indenture
Trustee must comply with Sections 6.10 and 6.11. Any Paying Agent,
Note Registrar, co-registrar or co-paying agent may do the same
with like rights.
SECTION 6.4 Indenture Trustee's Disclaimer. The
Indenture Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of the Indenture
Trust Estate, this Indenture or the Notes, it shall not be
accountable for the Issuer's use of the proceeds from the Notes,
and it shall not be responsible for any statement of the Issuer in
the Indenture or in any document issued in connection with the sale
of the Notes or in the Notes other than the Indenture Trustee's
certificate of authentication.
SECTION 6.5 Notice of Events of Default. If an Event
of Default occurs and is continuing and if a Responsible Officer of
the Indenture Trustee has actual knowledge of such Event of
Default, the Indenture Trustee shall mail to each Noteholder notice
of such Event of Default within 60 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any
Note (including payments pursuant to the mandatory redemption
provision of such Note), the Indenture Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the
interests of Noteholders; and provided that in the case of any
default of the character specified in Section 5.1(iii), no such
notice to Holders shall be given until at least 30 days after the
occurrence thereof.
SECTION 6.6 Reports by Indenture Trustee to Holders.
Subject to the proviso in Section 7.4(b), the Indenture Trustee
shall deliver to each Noteholder the information and documents set
forth in Article VII, and in addition, all such information as may
be required to enable such Noteholder to prepare its Federal and
state income tax returns. The Indenture Trustee shall only be
required to provide to the Noteholders the information given to it
by the Servicer. The Indenture Trustee shall not be required to
determine, confirm or recompute any such information.
SECTION 6.7 Compensation and Indemnity. The Issuer
shall cause the Servicer pursuant to Section 3.9 of the Pooling and
Servicing Agreement to pay to the Indenture Trustee from time to
time reasonable compensation for its services. The Indenture
Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Issuer shall
cause the Servicer pursuant to Section 3.9 of the Pooling and
Servicing Agreement to reimburse the Indenture Trustee for all
reasonable out-of-pocket expenses incurred or made by it, including
costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation
and expenses, disbursements and advances of the Indenture Trustee's
agents, counsel, accountants and experts. The Issuer shall cause
the Servicer pursuant to the Pooling and Servicing Agreement to
indemnify the Indenture Trustee in accordance with Section 6.2 of
the Pooling and Servicing Agreement. The Indenture Trustee shall
notify the Issuer and the Servicer promptly of any claim for which
it may seek indemnity. Neither the Issuer nor the Servicer need
reimburse any expense or indemnify against any loss, liability or
expense incurred by the Indenture Trustee through the Indenture
Trustee's own wilful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section shall survive the discharge of this
Indenture. When the Indenture Trustee incurs expenses after the
occurrence of a Default specified in Section 5.1(iv) or (v) with
respect to the Issuer, the expenses are intended to constitute
expenses of administration under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or
similar law.
SECTION 6.8 Replacement of Indenture Trustee.
(a) The Indenture Trustee may at any time give notice of
its intent to resign by so notifying the Issuer; provided that no
such resignation shall become effective and the Indenture Trustee
shall not resign prior to the time set forth in Section 6.8(c).
The Holders of a majority in Outstanding Amount of the Notes may
remove the Indenture Trustee by so notifying the Indenture Trustee
and may appoint a successor Indenture Trustee. Such resignation or
removal shall become effective in accordance with Section 6.8(c).
The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with
Section 6.11;
(ii) the Indenture Trustee is adjudged bankrupt or
insolvent;
(iii) a receiver or other public officer takes charge
of the Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes
incapable of acting.
(b) If the Indenture Trustee gives notice of its intent
to resign or is removed or if a vacancy exists in the office of
Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee),
the Issuer shall promptly appoint and designate a successor
Indenture Trustee, which successor shall be, if the Originator is
the Servicer, reasonably acceptable to the Seller.
(c) A successor Indenture Trustee shall deliver a
written acceptance of its appointment to the retiring Indenture
Trustee and to the Issuer. Thereupon the resignation or removal of
the retiring Indenture Trustee shall become effective, and the
successor Indenture Trustee shall have all the rights, powers and
duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession
to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the
successor Indenture Trustee.
(d) If a successor Indenture Trustee does not take
office within 60 days after the retiring Indenture Trustee resigns
or is removed, the retiring Indenture Trustee, the Issuer or the
Holders of a majority in Outstanding Amount of the Notes may
petition any court of competent jurisdiction for the appointment of
a successor Indenture Trustee.
(e) If the Indenture Trustee fails to comply with
Section 6.11, any Noteholder may petition any court of competent
jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.
(f) Notwithstanding the replacement of the Indenture
Trustee pursuant to this Section, the Issuer's obligations under
Section 6.7 and the Servicer's corresponding obligations under the
Pooling and Servicing Agreement shall continue for the benefit of
the retiring Indenture Trustee.
SECTION 6.9 Successor Indenture Trustee by Merger. If
the Indenture Trustee consolidates with, merges or converts into,
or transfers all or substantially all its corporate trust business
or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation or banking
association shall be the successor Indenture Trustee, without the
execution or filing of any instrument or any further act on the
part of any of the parties to this Indenture, anything in this
Indenture to the contrary notwithstanding, provided that such
corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide
the Rating Agency prior written notice of any such transaction.
In case at the time such successor or successors shall
succeed to the trusts created by this Indenture any of the Notes
shall have been authenticated but not delivered, any such successor
to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes
so authenticated; and in case at that time any of the Notes shall
not have been authenticated, any successor to the Indenture Trustee
may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Indenture Trustee;
and in all such cases such certificates shall have the full force
which it is anywhere in the Notes or in this Indenture provided
that the certificate of the Indenture Trustee shall have.
SECTION 6.10 Appointment of Co-Trustee or Separate
Trustee.
(a) Notwithstanding any other provisions of this
Indenture, at any time, for the benefit of the Noteholders or any
class of the Noteholders or for the purpose of meeting any legal
requirement of any jurisdiction in which any part of the Trust may
at the time be located, including any requirement of the TIA, the
Indenture Trustee shall have the power and may execute and deliver
all instruments to appoint one or more Persons reasonably
acceptable to the Seller to act as a co-trustee or co-trustees, or
separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and
for the benefit of the Noteholders, such title to the Trust, or any
part hereof, and, subject to the other provisions of this Section,
such powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor trustee under Section 6.11
and no notice to Noteholders of the appointment of any co-trustee
or separate trustee shall be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Indenture Trustee shall be
conferred or imposed upon and exercised or performed by
the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act
separately without the Indenture Trustee joining in such
act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent
or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations
(including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee
or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee
hereunder; and
(iii) the Indenture Trustee may at any time accept
the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the
then separate trustees and co-trustees, as effectively as if given
to each of them. Every instrument appointing any separate trustee
or co-trustee shall refer to this Indenture and the conditions of
this Article VI. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the
estates or property specified in its instrument of appointment,
either jointly with the Indenture Trustee or separately, as may be
provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating
to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall
be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact
with full power and authority, to the extent not prohibited by law,
to do any lawful act under or in respect of this Indenture on its
behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in
and be exercised by the Indenture Trustee, to the extent permitted
by law, without the appointment of a new or successor trustee.
SECTION 6.11 Eligibility; Disqualification. The
Indenture Trustee shall at all times satisfy the requirements of
TIA s 310(a) and Section 26(a) of the Investment Company Act. The
Indenture Trustee shall have a combined capital and surplus, and an
aggregate capital, surplus and undivided profits, of at least
$50,000,000.00 as set forth in its most recent published annual
report of condition. The Indenture Trustee shall comply with TIA
s 310(b); provided, however, that there shall be excluded from the
operation of TIA s 310(b)(1) any indenture or indentures under
which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA s 310(b)(1) are
met.
SECTION 6.12 Preferential Collection of Claims Against
Issuer. The Indenture Trustee shall comply with TIA s 311(a),
excluding any creditor relationship listed in TIA s 311(b). An
indenture trustee who has resigned or been removed shall be subject
to TIA s 311(a) to the extent indicated.
SECTION 6.13 Representations and Warranties of Inden-
ture Trustee. The Indenture Trustee represents and warrants as of
the Closing Date that:
(a) the Indenture Trustee is a New York banking
corporation duly organized, validly existing and in good standing
under the laws of the State of New York and the eligibility
requirements set forth in Section 6.11 are satisfied with respect
to the Indenture Trustee;
(b) the Indenture Trustee has full power, authority and
legal right to execute, deliver and perform this Indenture, and has
taken all necessary action to authorize the execution, delivery and
performance by it of this Indenture;
(c) the execution, delivery and performance by the
Indenture Trustee of this Indenture (i) shall not violate any
provision of any law or regulation governing the banking and trust
powers of the Indenture Trustee or any order, writ, judgment or
decree of any court, arbitrator, or Governmental Authority
applicable to the Indenture Trustee or any of its assets, (ii)
shall not violate any provision of the corporate charter or by-laws
of the Indenture Trustee or (iii) shall not violate any provision
of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of any lien
on any properties included in the Indenture Trust Estate pursuant
to the provisions of any mortgage, indenture, contract, agreement
or other undertaking to which it is a party, which violation,
default or lien could reasonably be expected to have a materially
adverse effect on the Indenture Trustee's performance or ability to
perform its duties under this Indenture or on the transactions
contemplated in this Indenture;
(d) the execution, delivery and performance by the
Indenture Trustee of this Indenture shall not require the
authorization, consent or approval of, the giving of notice to, the
filing or registration with, or the taking of any other action in
respect of, any Governmental Authority or agency regulating the
banking and corporate trust activities of the Indenture Trustee;
and
(e) this Indenture has been duly executed and delivered
by the Indenture Trustee and constitutes the legal, valid and
binding agreement of the Indenture Trustee, enforceable in
accordance with its terms.
SECTION 6.14 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 the
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 the Indenture Trustee shall be brought in
its own name as Indenture Trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its
agents and counsel, be for the ratable benefit of the Noteholders
and (only to the extent expressly provided herein) the
Certificateholders in respect of which such judgment has been
obtained.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1 Issuer to Furnish Indenture Trustee Names
and Addresses of Noteholders. The Issuer will furnish or cause to
be furnished to the Indenture Trustee (a) not more than five days
after the earlier of (i) each Record Date and (ii) three months
after the last Record Date, a list, in such form as the Indenture
Trustee may reasonably require, of the names and addresses of the
Holders of Notes as of such Record Date, (b) at such other times as
the Indenture Trustee may request in writing, within 15 days after
receipt by the Issuer of any such request, a list of similar form
and content as of a date not more than 10 days prior to the time
such list is furnished; provided, however, that so long as the
Indenture Trustee is the Note Registrar, no such list shall be
required to be furnished.
SECTION 7.2 Preservation of Information; Communica-
tions to Noteholders.
(a) The Indenture Trustee shall preserve, in as current
a form as is reasonably practicable, the names and addresses of the
Holders of Notes contained in the most recent list furnished to the
Indenture Trustee as provided in Section 7.1 and the names and
addresses of Holders of Notes received by the Indenture Trustee in
its capacity as Note Registrar. The Indenture Trustee may destroy
any list furnished to it as provided in such Section 7.1 upon
receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA s 312(b)
with other Noteholders with respect to their rights under this
Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note
Registrar shall have the protection of TIA s 312(c).
SECTION 7.3 Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days
after the Issuer is required to file the same with the
Commission, copies of the annual reports and of the
information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe)
which the Issuer may be required to file with the
Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee and the
Commission in accordance with rules and regulations
prescribed from time to time by the Commission such
additional information, documents and reports with
respect to compliance by the Issuer with the conditions
and covenants of this Indenture as may be required from
time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the
Indenture Trustee shall transmit by mail to all
Noteholders described in TIA s 313(c)) such summaries of
any information, documents and reports required to be
filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.3(a) as may be required by rules and
regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal
year of the Issuer shall end on June 30 of each year.
SECTION 7.4 Reports by Indenture Trustee.
(a) If required by TIA s 313(a), within 60 days after
each February 1 beginning with February 1, 1996, the Indenture
Trustee shall mail to each Noteholder as required by TIA s 313(c)
a brief report dated as of such date that complies with TIA
s 313(a). The Indenture Trustee also shall comply with TIA
s 313(b). A copy of each report at the time of its mailing to
Noteholders shall be filed by the Indenture Trustee with the
Commission and each stock exchange, if any, on which the Notes are
listed. The Issuer shall notify the Indenture Trustee if and when
the Notes are listed on any stock exchange.
(b) On each Payment Date, the Indenture Trustee shall
include with each payment to each Holder of a Class A Note a copy
of the statement for the related Collection Period applicable to
such Payment Date as required pursuant to Section 3.10 of the
Pooling and Servicing Agreement; provided, however, that unless and
until Definitive Notes representing Class A Notes have been issued
as described in Section 2.12, the Servicer shall deliver such
Monthly Reports to the Clearing Agency as described in Section 3.10
of the Pooling and Servicing Agreement.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1 Collection of Money. Except as otherwise
expressly provided herein, the Indenture Trustee may demand payment
or delivery of, and shall receive and collect, directly and without
intervention or assistance of any fiscal agent or other
intermediary, all money and other property payable to or receivable
by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in
this Indenture. Except as otherwise expressly provided in this
Indenture, if any default occurs in the making of any payment or
performance under any agreement or instrument that is part of the
Indenture Trust Estate, the Indenture Trustee may take such action
as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any
right to claim a Default or Event of Default under this Indenture
and any right to proceed thereafter as provided in Article V.
SECTION 8.2 Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall
cause the Servicer to establish and maintain, in the name of the
Indenture Trustee, for the benefit of the Noteholders and the
Certificateholders, the Trust Accounts as provided in Sections 4.2
and 4.3 of the Pooling and Servicing Agreement.
(b) On or before each Payment Date, the amount required
under Section 4.8 of the Pooling and Servicing Agreement will be
transferred from the Collection Account and deposited in the Note
Distribution Account.
(c) On each Payment Date, the Indenture Trustee shall
pay all amounts on deposit in the Note Distribution Account to
Noteholders in respect of the Notes (to the extent such amounts
have been deposited in the Note Distribution Account as described
in Section 4.8 of the Pooling and Servicing Agreement) in the
following amounts and in the following order of priority:
(i) to the Class A Noteholders to the extent of the
Class A Interest Arrearage and Class A Interest Payment
Amount for such Payment Date;
(ii) to the Class B Noteholders to the extent of the
Class B Interest Arrearage and the Class B Interest
Payment Amount for such Payment Date;
(iii) to the Class A Noteholders to the extent of the
Class A Principal Payment Amount for such Payment Date
plus any additional amount payable to the Holders of the
Class A Notes on such Payment Date as described in clause
(i) of Section 4.8 in the Pooling and Servicing
Agreement; and
(iv) to the Class B Noteholders to the extent of the
Class B Principal Payment Amount for such Payment Date
(reduced by any amounts payable to the Holders of the
Class A Notes as described in clause (i) of Section 4.8
in the Pooling and Servicing Agreement).
Any payments on the Notes will be made pro rata based
upon the outstanding principal balance.
SECTION 8.3 General Provisions Regarding Accounts.
(a) Subject to Section 6.1(c), the Indenture Trustee
shall not in any way be held liable by reason of any insufficiency
in any of the Trust Accounts resulting from any loss on any
Eligible Investment included therein except for losses attributable
to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as Indenture
Trustee, in accordance with their terms.
(b) If (i) the Issuer shall have failed to give
investment directions for any funds on deposit in the Trust
Accounts to the Indenture Trustee by 12:00 noon New York Time (or
such other time as may be agreed by the Issuer and Indenture
Trustee) on any Business Day; or (ii) a Default or Event of Default
shall have occurred and be continuing with respect to the Notes but
the Notes shall not have been declared due and payable pursuant to
Section 5.2, or, if such Notes shall have been declared due and
payable following an Event of Default, amounts collected or
receivable from the Indenture Trust Estate are being applied in
accordance with Section 5.3 as if there had not been such a
declaration; then the Indenture Trustee shall, to the fullest
extent practicable, invest and reinvest funds in the Trust Accounts
in one or more Eligible Investments.
SECTION 8.4 Release of Indenture Trust Estate.
(a) Subject to the payment of its fees and expenses
pursuant to Section 6.7, the Indenture Trustee may, and when
required by the provisions of this Indenture shall, execute
instruments to release property from the Lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner
and under circumstances that are not inconsistent with the
provisions of this Indenture. No party relying upon an instrument
executed by the Indenture Trustee as provided in this Article VIII
shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to
the application of any monies.
(b) The Indenture Trustee shall, at such time as there
are no Notes Outstanding and all sums due the Indenture Trustee
pursuant to Section 6.7 have been paid, release any remaining
portion of the Indenture Trust Estate that secured the Notes from
the lien of this Indenture and release to the Issuer or any other
Person entitled thereto any funds then on deposit in the Trust
Accounts only upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel and (if required by
the TIA) Independent Certificates in accordance with TIA ss 314(c)
and 314(d)(1) meeting the applicable requirements of Section 11.1.
SECTION 8.5 Opinion of Counsel. The Indenture Trustee
shall receive at least seven days' prior written notice when
requested by the Issuer to take any action pursuant to
Section 8.4(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require as a condition to such
action, an Opinion of Counsel, in form and substance satisfactory
to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of such
action have been complied with and such action will not materially
and adversely impair the security for the Notes or the rights of
the Noteholders in contravention of the provisions of this
Indenture; provided, however, that such Opinion of Counsel shall
not be required to express an opinion as to the fair value of the
Indenture Trust Estate. Counsel rendering any such opinion may
rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the
Indenture Trustee in connection with any such action.
ARTICLE IX
Supplemental Indentures
SECTION 9.1 Supplemental Indentures Without Consent of
Noteholders.
(a) Without the consent of the Holders of any Notes but
with prior notice to the Rating Agency, the Issuer and the
Indenture Trustee, when authorized by an Issuer Order, at any time
and from time to time, may enter into one or more indentures
supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution
thereof), in form satisfactory to the Indenture Trustee, for any of
the following purposes:
(i) to correct or amplify the description of any
property at any time subject to the lien of this
Indenture, or better to assure, convey and confirm unto
the Indenture Trustee any property subject or required to
be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with
the applicable provisions hereof, of another person to
the Issuer, and the assumption by any such successor of
the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of the Notes, or to surrender any
right or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge
any property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement
any provision herein or in any supplemental indenture
which may be inconsistent with any other provision herein
or in any supplemental indenture or to make any other
provisions with respect to matters or questions arising
under this Indenture or in any supplemental indenture;
provided that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material
respect the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of
the appointment hereunder by a successor trustee with
respect to the Notes and to add to or change any of the
provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by
more than one trustee, pursuant to the requirements of
Article VI;
(vii) to restrict transfers of Class B Notes (or
interests therein) or as otherwise required to prevent
the Issuer from being treated as a "publicly traded
partnership" under Section 7704 of the Code; or
(viii) to modify, eliminate or add to the provisions
of this Indenture to such extent as shall be necessary to
effect the qualification of this Indenture under the TIA
or under any similar Federal statute hereafter enacted
and to add to this Indenture such other provisions as may
be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture and to make any
further appropriate agreements and stipulations that may be therein
contained.
(b) The Issuer and the Indenture Trustee, when
authorized by an Issuer Order, may, also without the consent of any
of the Holders of the Notes but with prior notice to the Rating
Agency, enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, this Indenture or
of modifying in any manner the rights of the Holders of the Notes
under this Indenture; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Noteholder.
SECTION 9.2 Supplemental Indentures with Consent of
Noteholders.
(a) The Issuer and the Indenture Trustee, when
authorized by an Issuer Order, also may, with prior notice to the
Rating Agency and with the consent of the Holders of not less than
a majority of the Outstanding Amount of the Notes, by Act of such
Holders delivered to the Issuer and the Indenture Trustee, enter
into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of
modifying in any manner the right of the Holders of the Notes under
this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(i) change the date of payment of any installment
of principal amount thereof, the interest rate thereon or
the Redemption Price with respect thereto, change the
provision of this Indenture relating to the application
of collections on, or the proceeds of the sale of, the
Indenture Trust Estate to payment of principal of or
interest on the Notes, or change any place of payment
where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to
institute suit for the enforcement of the provisions of
this Indenture requiring the application of funds
available therefor, as provided in Article V, to the
payment of any such amount due on the Notes on or after
the respective due dates thereof (or, in the case of
redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount
of the Notes, the consent of the Holders of which is
required for any such supplemental indenture, or the
consent of the Holders of which is required for any
waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their
consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso
to the definition of the term "Outstanding;"
(iv) reduce the percentage of the Outstanding Amount
of the Notes required to direct the Indenture Trustee to
direct the Issuer to sell or liquidate the Indenture
Trust Estate pursuant to Section 5.4 if the proceeds of
such sale would be insufficient to pay the principal
amount of and accrued but unpaid interest on all
Outstanding Notes;
(v) modify any provision of this Section 9.2 to
decrease the required minimum percentage necessary to
approve any amendments to any provisions of this
Indenture;
(vi) modify any of the provisions of this Indenture
in such manner as to affect the calculation of the amount
of any payment of interest or principal due on any Note
on any Payment Date (including the calculation of any of
the individual components of such calculation) or to
affect the rights of the Holders of Notes to the benefit
of any provisions for the mandatory redemption of the
Notes contained herein; or
(vii) permit the creation of any lien ranking prior
to or on a parity with the lien of this Indenture with
respect to any part of the Indenture Trust Estate or,
except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at
any time subject hereto or deprive the Holder of any Note
of the security provided by the lien of this Indenture.
(b) The Indenture Trustee may in its discretion
determine whether or not any Notes would be affected (such that the
consent of each Noteholder would be required) by any supplemental
indenture and any such determination shall be conclusive upon the
Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
(c) It shall not be necessary for any Act of Noteholders
under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof.
(d) Promptly after the execution by the Issuer and the
Indenture Trustee of any supplemental indenture pursuant to this
Section, the Indenture Trustee shall mail to the Holders of the
Notes to which such amendment or supplemental indenture relates a
notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to
mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental
indenture.
SECTION 9.3 Execution of Supplemental Indentures. In
executing, or permitting the additional trusts created by, any
supplemental indenture permitted by this Article IX or the
modifications thereby of the trusts created by this Indenture, the
Indenture Trustee shall be entitled to receive, and subject to
Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture and that all
conditions precedent to the execution of any such amendment have
been satisfied. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon
the execution of any supplemental indenture pursuant to the
provisions hereof, this Indenture shall be and be deemed to be
modified and amended in accordance therewith with respect to the
notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this
Indenture of the Indenture Trustee, the Issuer and the Holders of
the Notes shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.5 Conformity with Trust Indenture Act.
Every amendment of this Indenture and every supplemental indenture
executed pursuant to this Article IX shall conform to the
requirements of the Trust Indenture Act as then in effect so long
as this Indenture shall then be qualified under the Trust Indenture
Act.
SECTION 9.6 Reference in Notes to Supplemental
Indentures. Notes authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article IX may, and
if required by the Indenture Trustee shall, bear a notation in form
approved by the Indenture Trustee as to any matter provided for in
such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such
supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Indenture Trustee in
exchange for Outstanding Notes of the same series.
ARTICLE X
Redemption of Notes
SECTION 10.1 Redemption.
(a) The Notes are subject to redemption, on any
Redemption Date, in whole, but not in part, upon the exercise by
the Servicer of its Purchase Option pursuant to Section 8.3 of the
Pooling and Servicing Agreement for a purchase price equal to the
applicable Redemption Price; provided, however, that the Issuer has
available funds sufficient to pay the Redemption Price. If any
Notes are to be redeemed, the Servicer or the Issuer shall furnish
the Rating Agency notice of such redemption. If the Notes are to
be redeemed pursuant to this Section 10.1(a), the Servicer or the
Issuer shall furnish notice of such election to the Indenture
Trustee not later than 15 days prior to the Redemption Date and, on
or prior to the Redemption Date, the Issuer shall deposit into the
Note Distribution Account (to the extent not otherwise on deposit
therein) the aggregate Redemption Price of the Notes to be
redeemed.
(b) In the event that the assets of the Trust are sold
pursuant to Section 9.2 of the Trust Agreement or 8.1(a) of the
Pooling and Servicing Agreement, all amounts deposited into the
Note Distribution Account shall be paid to the Noteholders (in the
amounts as described in Section 4.8 of the Pooling and Servicing
Agreement). If amounts are to be paid to Noteholders pursuant to
this Section 10.1(b), the Servicer or the Issuer shall, to the
extent practicable, furnish notice of such event to the Indenture
Trustee not later than 15 days prior to the Redemption Date
whereupon all such amounts shall be payable on the Redemption Date.
SECTION 10.2 Form of Redemption Notice.
(a) Notice of redemption under Section 10.1(a) shall be
given by the Indenture Trustee by first-class mail, postage
prepaid, mailed not less than five days prior to the applicable
Redemption Date to each Holder of Notes, as of the close of
business on the Record Date related to the applicable Redemption
Date, at such Holder's address appearing in the Note Register.
All notices of redemption shall state:
(i) the applicable Redemption Date;
(ii) the applicable Redemption Price; and
(iii) the place where such Notes are to be
surrendered for payment of the Redemption Price (which
shall be the office or agency of the Issuer to be
maintained as provided in Section 3.2).
Notice of redemption of the Notes shall be given by the
Indenture Trustee in the name and at the expense of the Issuer.
Failure to give notice of redemption, or any defect therein, to any
Holder of any Note shall not impair or affect the validity of the
redemption of any other Note.
(b) Prior notice of redemption under Section 10.1(b) is
not required to be given to Noteholders.
SECTION 10.3 Notes Payable on Redemption Date. The
Notes to be redeemed shall, following notice of redemption as
required by Section 10.2 (in the case of redemption pursuant to
Section 10.1(a)), on the Redemption Date cease to the Outstanding
for purposes of this Indenture and shall thereafter represent only
the right to receive the applicable Redemption Price and (unless
the Issuer shall default in the payment of the Redemption Price) no
interest shall accrue on the Redemption Price for any period after
the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
ARTICLE XI
Miscellaneous
SECTION 11.1 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the
Indenture Trustee to take any action under any provision of this
Indenture, the Issuer shall furnish to the Indenture Trustee (i) an
Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action
have been complied with, (ii) an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any,
have been complied with and (iii) (if required by the TIA) an
Independent Certificate from a firm of certified public accountants
meeting the applicable requirements of this Section, except that,
in the case of any such application or request as to which the
furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall
include:
(i) a statement that each signatory of such
certificate or opinion has read or has caused to be read
such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of
the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or
investigation as is necessary to enable such signatory to
express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of
each such signatory, such condition or covenant has been
complied with.
(b) (i) Except with respect to the substitution of
Leases as contemplated by Section 5.1 of the Pooling and
Servicing Agreement, of prior to the deposit of any
Collateral or other property or securities with the
Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien
of this Indenture, the Issuer shall, in addition to any
obligation imposed in Section 11.1(a) or elsewhere in
this Indenture, furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion
of each person signing such certificate as to the fair
value (within 90 days of such deposit) to the Issuer of
the Collateral or other property or securities to be so
deposited.
(ii) Whenever the Issuer is required to furnish to
the Indenture Trustee an Officer's Certificate certifying
or stating the opinion of any signer thereof as to the
matters described in clause (i) above, the Issuer shall
also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to
the Issuer of the securities to be so deposited and of
all other such securities made the basis of any such
withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and
this clause (ii), is 10% or more of the Outstanding
Amount of the Notes, but such a certificate need not be
furnished with respect to any securities so deposited, if
the fair value thereof to the Issuer as set forth in the
related Officer's Certificate is less than $50,000 or
less than one percent of the Outstanding Amount of the
Notes.
(iii) Other than with respect to the release of any
Early Termination Leases, Defaulted Leases or Leases
subject to a Warranty Event, whenever any property or
securities are to be released from the lien of this
Indenture, the Issuer shall also furnish to the Indenture
Trustee an Officer's Certificate certifying or stating
the opinion of each person signing such certificate as to
the fair value (within 90 days of such release) of the
property or securities proposed to be released and
stating that in the opinion of such person the proposed
release will not impair the security under this Indenture
in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to
the Indenture Trustee an Officer's Certificate certifying
or stating the opinion of any signer thereof as to the
matters described in clause (iii) above, the Issuer shall
also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of
the property or securities and of all other property
other than Purchased Leases and Defaulted Leases, or
securities released from the lien of this Indenture since
the commencement of the then current calendar year, as
set forth in the certificates required by clause (iii)
above and this clause (iv), equals 10% or more of the
Outstanding Amount of the Notes, but such certificate
need not be furnished in the case of any release of
property or securities if the fair value thereof as set
forth in the related Officer's Certificate is less than
$50,000 or less than one percent of the then Outstanding
Amount of the Notes.
(v) Notwithstanding Section 2.9 or any other
provision of this Section, the Issuer may (A) collect,
liquidate, sell or otherwise dispose of Leases and
related Collateral and proceeds of both as and to the
extent permitted or required by the Basic Documents, (B)
make cash payments out of the Trust Accounts as and to
the extent permitted or required by the Basic Documents
and (C) take any other action not inconsistent with the
TIA or the Basic Documents.
SECTION 11.2 Form of Documents Delivered to Indenture
Trustee. In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it
is not necessary that all such matters be certified by, or covered
by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person
may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an Authorized Officer of
the Issuer may be based, insofar as it relates to legal matters,
upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion
is based are erroneous. Any such certificate of an Authorized
Officer or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Servicer, the
Seller or the Issuer, stating that the information with respect to
such factual matters is in the possession of the Servicer, the
Seller or the Issuer, unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but
need not, be consolidated and form one instrument.
Whenever in this Indenture, in connection with any
application or certificate or report to the Indenture Trustee, it
is provided that the Issuer shall deliver any document as a
condition of the granting of such application, or as evidence of
the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report
(as the case may be), of the facts and opinions stated in such
document shall in such case be conditions precedent to the right of
the Issuer to have such application granted or to the sufficiency
of such certificate or report. The foregoing shall not, however,
be construed to affect the Indenture Trustee's right to rely upon
the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI.
SECTION 11.3 Acts of Noteholders.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture
to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor
signed by such Noteholders in person or by agents duly appointed in
writing; and except as herein otherwise expressly provided such
action shall become effective when such instrument or instruments
are deliver to the Indenture Trustee, and, where it is hereby
expressly required, to the Issuer. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing of
such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to
Section 6.1) conclusive in favor of the Indenture Trustee and the
Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of
any such instrument or writing may be proved in any manner that the
Indenture Trustee deems sufficient.
(c) The ownership of Notes shall be provided by the Note
Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any Notes
shall bind the Holder of every Note issued upon the registration
thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation
of such action is made upon such Note.
(e) The Indenture Trustee shall solicit, obtain and
otherwise act in accordance with any request, demand,
authorization, direction, notice, consent, waiver or other action
given or taken by the Noteholders in appropriate number in
accordance with the terms of this Indenture.
SECTION 11.4 Notices, etc., to Indenture Trustee,
Issuer and Rating Agency. Any request, demand, authorization,
direction, notice, consent, waiver or Act of Noteholders or other
documents provided or permitted by this Indenture to be made upon,
given or furnished to or filed with:
(a) The Indenture Trustee by any Noteholder or by the
Issuer shall be sufficient for every purpose hereunder if
made, given, furnished or filed in writing to or with the
Indenture Trustee and received at its Corporate Trust Office,
or
(b) the Issuer by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if
in writing and mailed, first-class, postage prepaid, to the
Issuer addressed to: TLFC IV Equipment Lease Trust, 1995-1, in
care of Bankers Trust (Delaware), 1001 Jefferson Street,
Wilmington, Delaware 19801, with a copy to Bankers Trust
Company, 4 Albany Street, New York, New York 10006, Attention:
Corporate Trust and Agency Group Structured Finance, or at
any other address previously furnished in writing to the
Indenture Trustee by Issuer. The Issuer shall promptly
transmit any notice received by it from the Noteholders to the
Indenture Trustee.
Notices required to be given to the Rating Agency by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in
writing, personally delivered or mailed by certified mail, return
receipt requested to the following address: Standard & Poor's
Ratings Services, 26 Broadway (15th Floor), New York, New York
10004, Attention of Asset Backed Surveillance Department; or at
such other address as shall be designated by written notice to the
other parties.
SECTION 11.5 Notices to Noteholders; Waiver. Where
this Indenture provides for notice to Noteholders of any event,
such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class, postage
prepaid to each Noteholder affected by such event, at his address
as it appears on the Note Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given
by mail, neither the failure to mail such notice nor any defect in
any notice so mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and
any notice that is mailed in the manner herein provided shall
conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner,
such notice may be waived in writing by any Person entitled to
receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice
by Noteholders shall be filed with the Indenture Trustee but such
filing shall not be a condition precedent to the validity of any
action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail
service as a result of a strike, work stoppage or similar activity,
it shall be impractical to mail notice of any event to Noteholders
when such notice is required to be given pursuant to any provision
of this Indenture, then any manner of giving such notice as shall
be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating
Agency, failure to give such notice shall not affect any other
rights or obligations created hereunder, and shall not under any
circumstance constitute a Default or Event of Default.
SECTION 11.6 Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes
to the contrary, to the extent satisfactory to the Indenture
Trustee, the Issuer may enter into any agreement with any Holder of
a Note providing for a method of payment, or notice by the
Indenture Trustee or any Paying Agent to such Holder, that is
different from the methods provided for in this Indenture for such
payments or notices. The Issuer will furnish to the Indenture
Trustee a copy of each such agreement and the Indenture Trustee
will cause payments to be made and notices to be given in
accordance with such agreements.
SECTION 11.7 Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflict with another
provision hereof that is required to be included in this Indenture
by any of the provisions of the Trust Indenture Act, such required
provision shall control.
The provisions of TIA ss 310 through 317 that impose
duties on any person (including the provisions automatically deemed
included herein unless expressly excluded by this Indenture) are a
part of and govern this Indenture, whether or not physically
contained herein.
SECTION 11.8 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction
hereof.
SECTION 11.9 Successors and Assigns. All covenants and
agreements in this Indenture and the Notes by the Issuer shall bind
its successors and assigns, whether so expressed or not.
All covenants agreements of the Indenture Trustee in this
Indenture shall bind its successors and assigns, whether so
expressed or not.
SECTION 11.10 Severability. In case any provision in
this Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 11.11 Benefits of Indenture. Nothing in this
Indenture or in the Notes, express or implied, shall give to any
Person, other than the parties hereto and their successors
hereunder, and the Noteholders and (only to the extent expressly
provided herein) the Certificateholders, and any other party
secured hereunder, and any other Person with an ownership interest
in any part of the Indenture Trust Estate, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
SECTION 11.12 Legal Holidays. In any case where the
date on which any payment is due shall not be a Business Day, then
(notwithstanding any other provision of the Notes or this
Indenture) payment need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect
as if made on the date on which nominally due, and no interest
shall accrue for the period from and after any such nominal date.
SECTION 11.13 GOVERNING LAW. THIS INDENTURE SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Counterparts. This Indenture may be
executed in any number of counterparts, each of which so executed
shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.15 Recording of Indenture. If this Indenture
is subject to recording in any appropriate public recording
offices, such recording is to be effected by the Issuer and at its
expense accompanied by an Opinion of Counsel (which may be counsel
to the Indenture Trustee or any other counsel reasonably acceptable
to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or
remedy granted to the Indenture Trustee under this Indenture.
SECTION 11.16 No Recourse.
(a) Each Noteholder or Note Owner, by acceptance of a
beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Indenture Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial
interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner
Trustee in its individual capacity, except as any such Person may
have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the
performance of any duties or obligations of the Issuer hereunder,
the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI, VII and VIII of the
Trust Agreement.
(b) Except as expressly provided in the Basic Documents,
neither the Seller, the Servicer, the Indenture Trustee nor the
Owner Trustee in their respective individual capacities, any owner
of a beneficial interest in the Issuer, nor any of their respective
partners, owners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable for,
nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications
contained in the Notes or this Indenture, it being expressly
understood that said covenants, obligations and indemnifications
have been made by the Owner Trustee solely as the Owner Trustee in
the assets of the Issuer. Each Noteholder or Note Owner by the
acceptance of a Note (or beneficial interest therein) will agree
that, except as expressly provided in the Basic Documents, in the
case of an Event of Default under this Indenture, the Holder shall
have no claim against any of the foregoing for any deficiency, loss
or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in this Indenture or in the
Notes.
SECTION 11.17 No Petition. The Indenture Trustee, by
entering into this Indenture, and each Noteholder, by accepting a
Note, or in the case of a Note Owner, by accepting a beneficial
interest in a Note, hereby covenant and agree that they will not at
any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations
relating to the Notes, this Indenture or any of the Basic
Documents.
SECTION 11.18 Inspection. The Issuer agrees that, upon
reasonable request, on reasonable prior notice, it will permit any
representative of the Indenture Trustee, during the Issuer's normal
business hours and at offices designated by the Issuer, to examine
all the books of account, records, reports, and other papers of the
Issuer relating to the Collateral or the Notes, to make copies and
extracts therefrom, to cause such books to be audited by
independent certified public accountants, and to discuss the
Issuer's affairs, finances and accounts relating to the Collateral
or the Notes with the Issuer's officers, employees, and independent
certified public accountants, and at such reasonable times and as
often as may be reasonably requested and subject to the Issuer's
normal security and confidentiality procedure. The Indenture
Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may
be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent
that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder. Nothing
in this Section 11.18 will derogate from any obligation under this
agreement or obligation of the Issuer or the Servicer to observe
any applicable law or agreement prohibiting disclosure of
information regarding the Lessees, and the failure to provide
information or access as provided in this Section 11.18 by reason
of any such obligation will not constitute a breach of this Section
11.18.<PAGE>
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee
have caused this Indenture to be duly executed by their respective
officers, thereunto duly authorized, all as of the day and year
first above written.
TLFC IV EQUIPMENT LEASE TRUST
1995-1,
By: Bankers Trust (Delaware) not in
its individual capacity but
solely as Owner Trustee,
By: ______________________________
Name:
Title:
Manufacturers and Traders Trust
Company, not in its individual
capacity but solely as Indenture
Trustee,
By: _________________________
Name:
Title:<PAGE>
STATE OF _________ )
) ss.:
COUNTY OF ________ )
BEFORE ME, the undersigned authority, a Notary Public in
and for said County and State, on this day personally appeared
______________, known to me to be the person and officer whose name
is subscribed to the foregoing instrument and acknowledged to me
that the same was the act of the said TLFC IV Equipment Lease Trust
1995-1, a Delaware business trust, and that he executed the same as
the act of the said business trust for the purpose and
consideration therein expressed, and in the capacities therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of
October __, 1995.
_________________________
Notary Public
My commission expires:
__________________________<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF BRONX )
BEFORE ME, the undersigned authority, a Notary Public in
and for said County and State, on this day personally appeared Neil
B. Witoff, known to me to be the person and officer whose name is
subscribed to the foregoing instrument and acknowledged to me that
the same was the act of Manufacturers and Traders Trust Company and
that he executed the same as the corporation for the purposes and
consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of
October 6, 1995.
_________________________
Notary Public
My commission expires:
__________________________<PAGE>
EXHIBIT E
UNDERTAKING LETTER
TL Lease Funding Corp. IV
Corporate Trust Center
1209 Orange Street
Wilmington, Delaware 19801
Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, New York 14203
Attn: Corporate Trust Administration (Neil B. Witoff)
as Indenture Trustee for TLFC IV Equipment Lease Trust 1995-1
Ladies and Gentlemen:
In connection with our purchase of record or beneficial
ownership of a Class B 7.55% Lease Backed Note subject to the
provisions of Section 2.15 of the Indenture dated as of October 6,
1995 (the "Unregistered Note") of the TLFC IV Equipment Lease Trust
1995-1, the undersigned purchaser, record owner or beneficial owner
hereby acknowledges, represents and warrants that such purchaser,
record owner or beneficial owner:
(1) is not, and has not acquired the Unregistered Note
by or for the benefit of, (i) an employee benefit plan (as defined
in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) that is subject to the provisions of
Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of
the Internal Revenue Code of 1986, as amended, or (iii) any entity
whose underlying assets include plan assets by reason of a plan's
investment in such entity; and
(2) acknowledges that you and others will rely on our
acknowledgements, representations and warranties, and agrees to
notify you promptly in writing if any of our acknowledgments,
representations or warranties herein cease to be accurate and
complete.
______________________________
Name of Note Owner
By:___________________________
Name:
Title:
Date: ________________________<PAGE>
EXHIBIT C
Form of Depository Agreement
<PAGE>
EXHIBIT A
REGISTERED $_____________
No. R-A_
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. __________
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF
THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.
TLFC IV EQUIPMENT LEASE TRUST 1995-1
CLASS A 6.40% LEASE BACKED NOTE
TLFC IV Equipment Lease Trust 1995-1, a business trust
organized and existing under the laws of the State of Delaware
(herein referred to as the "Issuer"), for value received, hereby
promises to pay to Cede & Co., or registered assigns, the principal
sum of $89,658,869, payable on each Payment Date in the amounts and
to the extent described in the Indenture; provided, however, that
the entire unpaid principal amount of this Note shall be due and
payable on the earlier of the Payment Date in September 2001 and
the Redemption Date, if any, pursuant to Section 10.1(a) of the
Indenture. The Issuer will pay interest on this Note on each
Payment Date in the amounts and to the extent described in the
Indenture.
The principal of and interest on this Note are payable in
such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private
debts. All payments made by the Issuer with respect to this Note
shall be applied first to interest due and payable on this Note as
provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note
set forth on the reverse hereof, which shall have the same effect
as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by
manual signature, this Note shall not be entitled to any benefit
under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument
to be signed, manually or in facsimile, by its Authorized Officer.
Date: ________ __, 199_ TLFC IV EQUIPMENT LEASE TRUST
1995-1,
By: Bankers Trust (Delaware),
not in its individual
capacity but solely as
Owner Trustee,
By: _________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to
in the within-mentioned Indenture.
Date: _________ __, 199_ Manufacturers and Traders Trust
Company, not in its individual
capacity but solely as
Indenture Trustee,
By: _________________________
Authorized Signatory
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of
the Issuer, designated as its Class A 6.40% Lease Backed Notes
(herein called the "Class A Notes"), all issued under an Indenture
dated as of October 6, 1995 (such indenture, as supplemented or
amended, is herein called the "Indenture"), between the Issuer and
Manufacturers and Traders Trust Company, as indenture trustee (the
"Indenture Trustee", which term includes any successor indenture
trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Notes. The Class A Notes
are one of two duly authorized Classes of Notes of the Issuer
issued pursuant to the Indenture (collectively, the "Notes"). The
Notes are governed by and subject to all terms of the Indenture
(which terms are incorporated herein and made a part hereof). All
terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture, as so supplemented or amended.
The Notes are and will be equally and ratably secured by
the Collateral pledged as security therefor as provided in the
Indenture.
Principal of the Notes will be payable on each Payment
Date in an amount and to the extent described in the Indenture.
"Payment Date" means the 15th day of each calendar month or, if any
such date is not a Business Day, the next succeeding Business Day,
commencing October 16, 1995.
As described above, the entire unpaid principal amount of
this Note shall be due and payable on the earlier of the Payment
Date in September 2001 and the Redemption Date, if any, pursuant to
Section 10.1(a) of the Indenture. Notwithstanding the foregoing,
the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have
occurred and be continuing and the Indenture Trustee or the Holders
of the Notes shall have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2 of the Indenture.
All principal payments on the Notes of a Class shall be made pro
rata to the Noteholders of such Class entitled thereto.
Payments of interest on this Note on each Payment Date,
together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made by check mailed to
the Person whose name appears as the Registered Holder of this Note
(or one or more Predecessor Notes) on the Note Register as of the
close of business on each Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of
the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transferring immediately available
funds to the account designated by such nominee. Such checks shall
be mailed to the Person entitled thereof at the address of such
Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any
payments made on any Payment Date shall be binding upon all future
Holders of this Note and of any Note issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Payment Date,
then the Indenture Trustee, in the name of and on behalf of the
Issuer, will notify the Person who was the Registered Holder hereof
as of the related Record Date by notice mailed within five days of
such Payment Date and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the
office of the Indenture Trustee located in the Borough of
Manhattan, the City of New York.
Each Noteholder or Note Owner, by acceptance of a Note
or, in the case of a Note Owner, a beneficial interest in a Note,
covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the
Owner Trustee or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder
of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed and except that any such
partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or
call owing to such entity.
The Issuer and the Indenture Trustee, by entering into
the Indenture, and the Noteholders and the Note Owners, by
acquiring any Note or beneficial interest therein, (i) express
their intention that the Notes qualify under applicable tax law as
indebtedness secured by the Collateral and (ii) unless otherwise
required by appropriate taxing authorities, agree to treat the
Notes as indebtedness secured by the Collateral for the purpose of
federal income, state and local income and franchise taxes, and any
other taxes imposed upon, measured by or based upon gross or net
income.
Each Noteholder or Note Owner, by acceptance of a Note
or, in the case of a Note Owner, a beneficial interest in a Note,
covenants and agrees that it will not, until one year and one day
after the final payment on the Notes, institute against the Seller
or the Issuer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under any United States
Federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Basic
Documents.
Prior to the due presentment for registration of transfer
of this Note, the Issuer, the Indenture Trustee and any agent of
the Issuer or the Indenture Trustee may treat the Person in whose
name this Note (as of the day of determination or as of such other
date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights
and obligations of the Issuer and the rights of the Holders of the
Notes under the Indenture at any time by the Issuer with the
consent of the Holders of Notes representing a majority of the
Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the
Notes, on behalf of the Holders of all the Notes, to waive
compliance by the Issuer with certain provisions of the Indenture
and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this
Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or
in exchange hereof or in lieu hereof whether or not notation of
such consent or waiver is made upon this Note. The Indenture also
permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder. In addition, the Indenture
may be amended without the consent of the Holders of the Notes to
prevent the Issuer from being treated as a "publicly traded
partnership" under Section 7704 of the Internal Revenue Code.
The term "Issuer" as used in this Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of
the Indenture Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain
limitations therein set forth.
The Notes and the Indenture shall be construed in
accordance with the laws of the State of New York, without
reference to its conflict of law provisions, and the obligations,
rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the obligation
of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note at the time, place, and
rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except
as expressly provided in the Basic Documents, neither the Owner
Trustee, in its individual capacity, the Indenture Trustee, in its
individual capacity, any owner of a beneficial interest in the
Issuer, nor any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on, or
performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the
Indenture, it being expressly understood that said covenants,
obligations and indemnifications have been made by the Owner
Trustee for the sole purposes of binding the interests of the Owner
Trustee in the assets of the Issuer. The Holder of this Note by
the acceptance hereof agrees that, except as expressly provided in
the Basic Documents, in the case of an Event of Default under the
Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency loss or claim therefrom; provided,
however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note to the extent provided therein and
herein.<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee
_________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto ______________________________
_________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints attorney, to transfer said Note on the
books kept for registration thereof, with full power of
substitution in the premises.
Dated: ______________ ___________________________________
NOTE: The signature to this assign-
ment must correspond with the name
of the registered owner as it
appears on the face of the within
Note in every particular, without
alteration, enlargement or any
change whatsoever.
Signature Guaranteed:
___________________________________
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Indenture Trustee which requirements
will include membership or partici-
pation in STAMP or such other "sig-
nature guarantee program" as may be
determined by the Indenture Trustee
in addition to, or in substitution
for, STAMP, all in accordance with
the Securities Act of 1934, as
amended.
___________________
<PAGE>
EXHIBIT B
REGISTERED $____________
No. R-B_
SEE REVERSE FOR CERTAIN DEFINITIONS
THE CLASS B NOTES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT, OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION.
CONSEQUENTLY, SUCH NOTES ARE NOT TRANSFERABLE OTHER THAN PURSUANT
TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND SATISFACTION OF CERTAIN OTHER PROVISIONS
SPECIFIED HEREIN. NO SALE, PLEDGE OR OTHER TRANSFER OF ANY CLASS
B NOTE (OR INTEREST THEREIN) MAY BE MADE BY ANY PERSON UNLESS SUCH
SALE, PLEDGE OR OTHER TRANSFER IS MADE (I) TO A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED UNDER RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION WHICH MEETS THE REQUIREMENTS OF
RULE 144A UNDER THE SECURITIES ACT, (II) TO FIRST UNION CAPITAL
MARKETS CORP., (III) THROUGH FIRST UNION CAPITAL MARKETS CORP. TO
AN "INSTITUTIONAL ACCREDITED INVESTOR" (AS DESCRIBED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) IN A
TRANSACTION APPROVED BY FIRST UNION CAPITAL MARKETS CORP., OR (IV)
IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. IN EACH SUCH CASE (A) THE PROSPECTIVE TRANSFEROR
AND THE PROSPECTIVE TRANSFEREE SHALL CERTIFY TO THE INDENTURE
TRUSTEE AND THE SELLER IN WRITING THE FACTS SURROUNDING SUCH
TRANSFER AND THE STATUS OF SUCH TRANSFEREE, WHICH CERTIFICATE SHALL
BE SUBSTANTIALLY IN THE FORM OF THE CERTIFICATE ATTACHED TO THE
INDENTURE AS EXHIBIT D, AND (B) IN THE CASE OF SALES, PLEDGES AND
TRANSFERS PURSUANT TO CLAUSE (IV) ABOVE, THE ISSUER SHALL HAVE
RECEIVED A WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE AT THE
EXPENSE OF THE SELLER, THE ISSUER, THE OWNER TRUSTEE, THE SERVICER
NOR THE INDENTURE TRUSTEE), SATISFACTORY IN FORM AND SUBSTANCE TO
THE SELLER AND THE INDENTURE TRUSTEE, TO THE EFFECT THAT SUCH
TRANSFER WILL NOT VIOLATE THE SECURITIES ACT. NEITHER THE SELLER,
THE OWNER TRUSTEE, THE ISSUER NOR THE INDENTURE TRUSTEE SHALL BE
OBLIGATED TO REGISTER ANY CLASS B NOTES UNDER THE SECURITIES ACT,
QUALIFY ANY CLASS B NOTES UNDER THE SECURITIES LAWS OF ANY STATE OR
PROVIDE REGISTRATION RIGHTS TO ANY PURCHASER OR HOLDER THEREOF.
THE CLASS B NOTES MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF
A BENEFIT PLAN. BY ACCEPTING AND HOLDING A CLASS B NOTE, THE
HOLDER THEREOF SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED
THAT IT IS NOT A BENEFIT PLAN AND, IF REQUESTED TO DO SO BY THE
SELLER OR THE INDENTURE TRUSTEE, THE HOLDER OF A CLASS B NOTE SHALL
EXECUTE AND DELIVER TO THE INDENTURE TRUSTEE AN UNDERTAKING LETTER
TO SUCH EFFECT IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER AND
THE SELLER.
NO SALE, PLEDGE OR OTHER TRANSFER OF THIS NOTE MAY BE
MADE TO ANY PERSON IN A FACE AMOUNT OF LESS THAN $500,000. ANY
ATTEMPTED TRANSFER IN CONTRAVENTION OF THIS RESTRICTION WILL BE
VOID AB INITIO AND THE PURPORTED TRANSFEROR WILL CONTINUE TO BE
TREATED AS THE OWNER OF THIS NOTE FOR ALL PURPOSES.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF
THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. PAYMENTS HEREUNDER ARE SUBORDINATED TO PAYMENTS ON THE
ISSUER'S CLASS A 6.40% LEASE BACKED NOTES ISSUED UNDER THE
INDENTURE TO THE EXTENT DESCRIBED HEREIN.
TLFC IV EQUIPMENT LEASE TRUST 1995-1
CLASS B 7.55% LEASE BACKED NOTE
TLFC IV Equipment Lease Trust 1995-1, a business trust
organized and existing under the laws of the State of Delaware
(herein referred to as the "Issuer"), for value received, hereby
promises to pay to _________________, or registered assigns, the
principal sum of $____________, payable on each Payment Date in the
amounts and to the extent described in the Indenture; provided,
however, that the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Payment Date in September
2001 and the Redemption Date, if any, pursuant to Section 10.1(a)
of the Indenture. The Issuer will pay interest on this Note on
each Payment Date in the amounts and to the extent described in the
Indenture.
The principal of and interest on this Note are payable in
such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private
debts. All payments made by the Issuer with respect to this Note
shall be applied first to interest due and payable on this Note as
provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note
set forth on the reverse hereof, which shall have the same effect
as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by
manual signature, this Note shall not be entitled to any benefit
under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument
to be signed, manually or in facsimile, by its Authorized Officer.
Date: _________ __, 199_ TLFC IV EQUIPMENT LEASE TRUST
1995-1,
By: Bankers Trust (Delaware),
not in its individual
capacity but solely as
Owner Trustee,
By: _________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to
in the within-mentioned Indenture.
Date: _________ __, 199_ Manufacturers and Traders Trust
Company, not in its individual
capacity but solely as
Indenture Trustee,
By: _________________________
Authorized Signatory
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of
the Issuer, designated as its Class B 7.55% Lease Backed Notes
(herein called the "Class B Notes"), all issued under an Indenture
dated as of October 6, 1995 (such indenture, as supplemented or
amended, is herein called the "Indenture"), between the Issuer and
Manufacturers and Traders Trust Company, as indenture trustee (the
"Indenture Trustee", which term includes any successor indenture
trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Notes. The Class B Notes
are one of two duly authorized Classes of Notes of the Issuer
issued pursuant to the Indenture (collectively, the "Notes"). The
Notes are governed by and subject to all terms of the Indenture
(which terms are incorporated herein and made a part hereof). All
terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture, as so supplemented or amended.
The Notes are and will be equally and ratably secured by
the Collateral pledged as security therefor as provided in the
Indenture.
Principal of the Notes will be payable on each Payment
Date in an amount and to the extent described in the Indenture.
"Payment Date" means the 15th day of each calendar month or, if any
such date is not a Business Day, the next succeeding Business Day,
commencing October 16, 1995.
As described above, the entire unpaid principal amount of
this Note shall be due and payable on the earlier of the Payment
Date in September 2001 and the Redemption Date, if any, pursuant to
Section 10.1(a) of the Indenture. Notwithstanding the foregoing,
the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have
occurred and be continuing and the Indenture Trustee or the Holders
of the Notes shall have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2 of the Indenture.
All principal payments on the Notes of a Class shall be made pro
rata to the Noteholders of such Class entitled thereto. Payments
on the Class B Notes are subordinated to payments on the Class A
Notes to the extent described in the Pooling and Servicing
Agreement.
Payments of interest on this Note on each Payment Date,
together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made by check mailed to
the Person whose name appears as the Registered Holder of this Note
(or one or more Predecessor Notes) on the Note Register as of the
close of business on each Record Date, except that if such Person
is the Registered Holder of Class B Notes representing more than
50% of the Outstanding Amount of Class B Notes, payments will be
made by wire transferring immediately available funds to the
account designated by such Person. Such checks shall be mailed to
the Person entitled thereof at the address of such Person as it
appears on the Note Register as of the applicable Record Date
without requiring that this Note be submitted for notation of
payment. Any reduction in the principal amount of this Note (or
any one or more Predecessor Notes) effected by any payments made on
any Payment Date shall be binding upon all future Holders of this
Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not
noted hereon. If funds are expected to be available, as provided
in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify
the Person who was the Registered Holder hereof as of the related
Record Date by notice mailed within five days of such Payment Date
and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture
Trustee located in the Borough of Manhattan, the City of New York.
Each Noteholder or Note Owner, by acceptance of a Note
or, in the case of a Note Owner, a beneficial interest in a Note,
covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the
Owner Trustee or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder
of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed and except that any such
partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or
call owing to such entity.
The Issuer and the Indenture Trustee, by entering into
the Indenture, and the Noteholders and the Note Owners, by
acquiring any Note or beneficial interest therein, (i) express
their intention that the Notes qualify under applicable tax law as
indebtedness secured by the Collateral and (ii) unless otherwise
required by appropriate taxing authorities, agree to treat the
Notes as indebtedness secured by the Collateral for the purpose of
federal income, state and local income and franchise taxes, and any
other taxes imposed upon, measured by or based upon gross or net
income.
Each Noteholder or Note Owner, by acceptance of a Note
or, in the case of a Note Owner, a beneficial interest in a Note,
covenants and agrees that it will not, until one year and one day
after the final payment on the Notes, institute against the Seller
or the Issuer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under any United States
Federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Basic
Documents.
Prior to the due presentment for registration of transfer
of this Note, the Issuer, the Indenture Trustee and any agent of
the Issuer or the Indenture Trustee may treat the Person in whose
name this Note (as of the day of determination or as of such other
date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights
and obligations of the Issuer and the rights of the Holders of the
Notes under the Indenture at any time by the Issuer with the
consent of the Holders of Notes representing a majority of the
Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the
Notes, on behalf of the Holders of all the Notes, to waive
compliance by the Issuer with certain provisions of the Indenture
and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this
Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or
in exchange hereof or in lieu hereof whether or not notation of
such consent or waiver is made upon this Note. The Indenture also
permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder. In addition, the Indenture
may be amended without the consent of the Holders of the Notes to
prevent the Issuer from being treated as a "publicly traded
partnership" under Section 7704 of the Internal Revenue Code.
The term "Issuer" as used in this Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of
the Indenture Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain
limitations therein set forth.
The Notes and the Indenture shall be construed in
accordance with the laws of the State of New York, without
reference to its conflict of law provisions, and the obligations,
rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the obligation
of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note at the time, place, and
rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except
as expressly provided in the Basic Documents, neither the Owner
Trustee, in its individual capacity, the Indenture Trustee, in its
individual capacity, any owner of a beneficial interest in the
Issuer, nor any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on, or
performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the
Indenture, it being expressly understood that said covenants,
obligations and indemnifications have been made by the Owner
Trustee for the sole purposes of binding the interests of the Owner
Trustee in the assets of the Issuer. The Holder of this Note by
the acceptance hereof agrees that, except as expressly provided in
the Basic Documents, in the case of an Event of Default under the
Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency loss or claim therefrom; provided,
however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note to the extent provided therein and
herein.<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee
____________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____________________________________________
________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints attorney, to transfer said Note on the
books kept for registration thereof, with full power of
substitution in the premises.
Dated: _______________ ________________________NOTE:
The signature to this assignment
must correspond with the name of the
registered owner as it appears on
the face of the within Note in every
particular, without alteration,
enlargement or any change
whatsoever.
Signature Guaranteed:
_________________________
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Indenture Trustee which requirements
will include membership or
participation in STAMP or such other
"signature guarantee program" as may
be determined by the Indenture
Trustee in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
_________________________
EXHIBIT D
CERTIFICATE
TL Lease Funding Corp. IV
Corporate Trust Center
1209 Orange Street
Wilmington, Delaware 19801
Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, New York 14203
Attn: Corporate Trust Administration (Neil B. Witoff)
as Indenture Trustee for the of TLFC IV Equipment Lease Trust
1995-1
Ladies and Gentlemen:
In connection with the purchase of a Class B 7.55% Lease
Backed Note subject to Section 2.15 of the Indenture dated as of
October 6, 1995 (the "Unregistered Note") of the TLFC IV Equipment
Lease Trust 1995-1, the undersigned buyer ("Buyer") hereby
acknowledges, represents and agrees that:
(a) The Buyer has received the Confidential Private
Placement Memorandum, dated September 27, 1995 (including exhibits
thereto).
(b) The Buyer understands that the Unregistered Note
has not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), and are not transferable except as
permitted in the following sentence. The Buyer agrees, on its own
behalf and on behalf of any accounts for which it is acting as
hereinafter stated, that such Unregistered Note may be resold,
pledged or transferred only (i) through First Union Capital Markets
Corp. to an institutional investor that is an "Accredited Investor"
as defined in Rule 501(a)(1),(2),(3) or (7) (an "Institutional
Accredited Investor") under the Securities Act acting for its own
account (and not for the account of others) or as a fiduciary or
agent for others (which others also are Institutional Accredited
Investors unless the holder is a bank acting in its fiduciary
capacity) that, if so requested by the Seller or the Indenture
Trustee, executes a certificate in the form hereof, (ii) to a
"qualified institutional buyer" as defined under Rule 144A under
the Securities Act ("Rule 144A") acting for its own account (and
not for the account of others) or as a fiduciary or agent for
others (which others also are "qualified institutional buyers")
that, if so requested by the Seller or the Indenture Trustee,
executes a certificate in the form hereof in a transaction which
meets the requirements of Rule 144A under the Securities Act, (iii)
to First Union Capital Markets Corp. or (iv) in a transaction
otherwise exempt from the registration requirements of the
Securities Act, in which case (A) the prospective transferor and
the prospective transferee will certify to the Indenture Trustee
and the Seller in writing the facts surrounding such transfer,
which certification shall be in form and substance satisfactory to
the Indenture Trustee and the Seller, and (B) the Indenture Trustee
shall require a written opinion of counsel (which will not be at
the expense of the Seller, the Servicer or the Indenture Trustee)
satisfactory in the form and substance to the Seller and the
Indenture Trustee to the effect that such transfer will not violate
the Securities Act. The Buyer will notify any purchaser of the
Unregistered Note from it of the above resale restrictions, if then
applicable. The Buyer further understands that in connection with
any transfer of the Unregistered Note by it that the Seller and the
Indenture Trustee may request, and if so requested the Buyer will
furnish, such certificates and other information as they may
reasonably require to confirm that any such transfer complies with
the foregoing restrictions.
(c)
CHECK ONE
i. The transaction is through First Union Capital
Markets to a Buyer who is an institutional investor and an
"accredited investor" (as defined in Rule 501(a)(1),(2),(3) or (7)
of Regulation D under the Securities Act) acting for its own
account (and not for the account of others) or as a fiduciary or
agent for others (which others also are Institutional Accredited
Investors unless the Buyer is bank acting in its fiduciary
capacity). The Buyer has such knowledge and experience in
financial and business matters as to be capable of evaluating the
merits and risks of its investment in the Unregistered Note, and
the Buyer and any accounts for which it is acting is able to bear
the economic risk of investment in the Unregistered Note for an
indefinite period of time. The Buyer is acquiring the Unregistered
Note for investment and not with a view to, or for offer and sale
in connection with, a public distribution.
ii. The transaction meets the requirements of Rule
144A under the Securities Act and the Buyer is a "qualified insti-
tutional buyer" as defined under Rule 144A under the Securities Act
and is acquiring the Unregistered Note for its own account (and not
for the account of others) or as a fiduciary or agent for others
(which others also are "qualified institutional buyers"). The
Buyer is familiar with Rule 144A under the Securities Act and is
aware that the seller of the Unregistered Note and other parties
intend to rely on the statements made herein and the exemption from
the registration requirements of the Securities Act provided by
Rule 144A.
iii. The Buyer is First Union Capital Markets Corp.
iv. The transaction is otherwise exempt from the
registration requirements of the Securities Act. The Buyer
certifies that (A) the description of the facts surrounding the
transfer attached hereto as Annex A is true and correct in all
material respects and (B) attached hereto as Annex B is an opinion
of counsel to the effect that such transfer will not violate the
Securities Act.
(d) The Buyer is not, and has not acquired the
Unregistered Note by or for the benefit of, (i) an employee benefit
plan (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) that is subject to the
provisions of Title I of ERISA, (ii) a plan described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended, or
(iii) any entity whose underlying assets include plan assets by
reason of a plan's investment in such entity.
(e) You are entitled to rely upon this letter and you
are irrevocably authorized to produce this letter or a copy hereof
to any interested party in any administrative or legal proceeding
or official inquiry with respect to the matters covered hereby.
______________________________
Print Name of Buyer
By: __________________________
Name:
Title:
Date: ________________________
AUTHORIZED OFFICERS
<PAGE>
TRUST AGREEMENT
between
TL LEASE FUNDING CORP. IV
as Seller
and
Bankers Trust (Delaware),
a Delaware banking corporation
not in its individual capacity but solely as Owner Trustee,
Dated as of October 6, 1995
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . .1
SECTION 1.1 Capitalized Terms . . . . . . . . . . . . . . .1
SECTION 1.2 Other Definitional Provisions . . . . . . . . .3
ARTICLE II ORGANIZATION. . . . . . . . . . . . . . . . . .4
SECTION 2.1 Name. . . . . . . . . . . . . . . . . . . . . .4
SECTION 2.2 Office. . . . . . . . . . . . . . . . . . . . .4
SECTION 2.3 Purposes and Powers . . . . . . . . . . . . . .4
SECTION 2.4 Appointment of Owner Trustee. . . . . . . . . .5
SECTION 2.5 Initial Capital Contribution
of Trust Estate . . . . . . . . . . . . . . . .5
SECTION 2.6 Declaration of Trust. . . . . . . . . . . . . .5
SECTION 2.7 Liability of the Certificateholders . . . . . .6
SECTION 2.8 Title to Trust Property . . . . . . . . . . . .7
SECTION 2.9 Situs of Trust. . . . . . . . . . . . . . . . .7
SECTION 2.10 Representations and Warranties of
the Seller. . . . . . . . . . . . . . . . . . .7
SECTION 2.11 Books and Records; Tax Returns. . . . . . . . .8
ARTICLE III THE CERTIFICATES. . . . . . . . . . . . . . . .9
SECTION 3.1 The Certificate . . . . . . . . . . . . . . . .9
SECTION 3.2 Execution and Delivery. . . . . . . . . . . . .9
SECTION 3.3 Mutilated, Destroyed, Lost or Stolen
Certificate . . . . . . . . . . . . . . . . . 10
SECTION 3.4 Limitation on Transfer. . . . . . . . . . . . 10
SECTION 3.5 Acts of the Certificateholders and
Noteholders . . . . . . . . . . . . . . . . . 10
SECTION 3.6 Distributions to the Certificateholders . . . 11
ARTICLE IV ACTIONS BY THE OWNER TRUSTEE. . . . . . . . . 12
SECTION 4.1 Prior Notice to the Certificateholders
with Respect to Certain Matters . . . . . . . 12
SECTION 4.2 Action by the Certificateholders with
Respect to Certain Matters. . . . . . . . . . 12
SECTION 4.3 Action by the Certificateholders with
Respect to Bankruptcy . . . . . . . . . . . . 13
SECTION 4.4 Rights of the Certificateholders to
Direct Owner Trustee. . . . . . . . . . . . . 13
SECTION 4.5 Suits for Enforcement . . . . . . . . . . . . 13
SECTION 4.6 Owner Trustee May Enforce Claims
without Possession of the Certificate . . . . 13
SECTION 4.7 Limitation on Rights of the
Certificateholders. . . . . . . . . . . . . . 14
<PAGE>
ARTICLE V AUTHORITY AND DUTIES OF THE OWNER TRUSTEE. . . . 15
SECTION 5.1 General Authority . . . . . . . . . . . . . 15
SECTION 5.2 General . . . . . . . . . . . . . . . . . . 15
SECTION 5.3 Action upon Instruction . . . . . . . . . . 16
SECTION 5.4 No Duties Except as Specified in this
Agreement or in Instructions . . . . . . . . . . 17
SECTION 5.5 No Action Except Under Specified
Documents or Instructions. . . . . . . . . . . . 17
SECTION 5.6 Restrictions. . . . . . . . . . . . . . . . 17
ARTICLE VI CONCERNING THE OWNER TRUSTEE . . . . . . . . . . 17
SECTION 6.1 Acceptance of Trusts and Duties . . . . . . 17
SECTION 6.2 Furnishing of Documents . . . . . . . . . . 19
SECTION 6.3 Representations and Warranties. . . . . . . 19
SECTION 6.4 Reliance; Advice of Counsel . . . . . . . . 20
SECTION 6.5 Owner Trustee Not Liable
for Certificates or Leases . . . . . . . . . . . 21
SECTION 6.6 Not Acting in Individual Capacity . . . . . 21
ARTICLE VII COMPENSATION AND INDEMNIFICATION OF
OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . 22
SECTION 7.1 Owner Trustee's Fees and Expenses . . . . . 22
SECTION 7.2 Indemnification . . . . . . . . . . . . . . 22
ARTICLE VIII SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER
TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.1 Eligibility Requirements for Owner
Trustee. . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.2 Resignation or Removal of Owner Trustee . . 23
SECTION 8.3 Successor Owner Trustee . . . . . . . . . . 24
SECTION 8.4 Merger or Consolidation of Owner Trustee. . 24
SECTION 8.5 Appointment of Co-Owner Trustee or
Separate Owner Trustee . . . . . . . . . . . . . 25
ARTICLE IX TERMINATION OF TRUST AGREEMENT . . . . . . . . . 26
SECTION 9.1 Termination . . . . . . . . . . . . . . . . 26
SECTION 9.2 Dissolution upon Bankruptcy of the
Seller . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE X MISCELLANEOUS. . . . . . . . . . . . . . . . . . 28
SECTION 10.1 Supplements and Amendments. . . . . . . . . 28
SECTION 10.2 Notices . . . . . . . . . . . . . . . . . . 30
SECTION 10.3 Merger and Integration. . . . . . . . . . . 31
SECTION 10.4 Headings. . . . . . . . . . . . . . . . . . 31
SECTION 10.5 Governing Law . . . . . . . . . . . . . . . 31
SECTION 10.6 Counterparts. . . . . . . . . . . . . . . . 32
<PAGE>
SECTION 10.7 No Legal Title to Trust Estate in
Certificateholders . . . . . . . . . . . . . . . 32
SECTION 10.8 Limitation on Rights of Others. . . . . . . 32
SECTION 10.9 Severability. . . . . . . . . . . . . . . . 32
SECTION 10.10 Successors and Assigns. . . . . . . . . . . 32
SECTION 10.11 No Implied Waiver . . . . . . . . . . . . . 33
SECTION 10.12 No Petition . . . . . . . . . . . . . . . . 33
SECTION 10.13 No Recourse . . . . . . . . . . . . . . . . 33
SECTION 10.14 Indemnification by and Reimbursement
of the Servicer. . . . . . . . . . . . . . . . . 34
SECTION 10.15 Confidential Information. . . . . . . . . . 34
Exhibit A Form of Certificate . . . . . . . . . . . . . . . .A-1
Exhibit B Certificate of Trust. . . . . . . . . . . . . . . .B-1
<PAGE>
THIS TRUST AGREEMENT, dated as of October 6, 1995
(the "Trust Agreement"), between TL LEASE FUNDING CORP. IV, a
Delaware corporation (the "Seller"), and Bankers Trust (Delaware),
a Delaware banking corporation, not in its individual capacity but
solely as trustee (together with its permitted successors in the
Trust hereunder, the "Owner Trustee") of the TLFC IV Equipment
Lease Trust 1995-1 (the "Trust").
NOW, THEREFORE, in consideration of the foregoing
premises and the mutual agreements, covenants and undertakings
herein contained, the parties intending to be legally bound,
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Capitalized Terms. For all purposes
of this Agreement, the following terms shall have the meanings
set forth below:
"Administration Agreement" means the Administration
Agreement dated as of the date hereof by and among the Trust and
the Administrator, as such agreement may be amended, modified or
supplemented from time to time.
"Administrator" means Trans Leasing International,
Inc., a Delaware corporation, in its capacity as the
administrator under the Administration Agreement or any successor
administrator under the Administration Agreement.
"Agreement" means this Trust Agreement as
originally executed and, if from time to time supplemented or
amended by one or more amendments entered into pursuant to the
applicable provisions hereof, as so supplemented or amended.
"Basic Documents" means this Agreement, the Pooling
and Servicing Agreement, the Indenture, the Contribution and Sale
Agreement, the Administration Agreement, the Depository Agreement
and the other documents and certificates delivered in connection
therewith.
"Business Trust Statute" means Chapter 38 of Title
12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as
the same may be amended from time to time.
"Certificate" means a Certificate evidencing a
beneficial interest in the Trust, executed and delivered by the
Owner Trustee substantially in the form of Exhibit A.
"Certificate of Trust" has the meaning set forth in
Section 2.6.
"Certificateholder" means the Person in whose name
a Certificate is issued. The Certificateholders shall initially
be the Seller and, upon the consummation of the transactions
contemplated by the Contribution and Sale Agreement, the
Originator.
"Contribution and Sale Agreement" means the
Contribution and Sale Agreement dated as of the date hereof by
and between the Seller and Trans Leasing International, Inc., as
such agreement may be amended, modified or supplemented from time
to time.
"Corporate Trust Office" means the office of the
Owner Trustee located at 1001 Jefferson Street, Wilmington,
Delaware 19801, with a copy to Bankers Trust Company, 4 Albany
Street, New York, NY 10006, Attention: Corporate Trust and Agency
Group - Structured Finance; or at such other address as the Owner
Trustee may designate by notice to the Certificateholders and the
Seller, or the principal trust office of any successor Owner
Trustee.
"Indenture" means the Indenture, dated as of the
date hereof, between Manufacturers and Traders Trust Company, a
banking corporation organized and existing under the laws of New
York, not in its individual capacity but solely as Indenture
Trustee, and the Trust, as such agreement may be amended,
modified or supplemented from time to time.
"Originator" means Trans Leasing International,
Inc., a Delaware corporation, in its capacity as transferor of
certain assets pursuant to the Contribution and Sale Agreement,
and its successors.
"Owner Trustee" means Bankers Trust (Delaware), a
Delaware banking corporation, not in its individual capacity but
solely as trustee under this Agreement, until a successor Owner
Trustee shall have been appointed pursuant to the applicable
provisions of this Agreement, and thereafter such successor Owner
Trustee.
"Pooling and Servicing Agreement" means the Pooling
and Servicing Agreement dated as of the date hereof by and among
the Seller, the Trust and Trans Leasing International, Inc., a
Delaware corporation, as Servicer, as such agreement may be
amended, modified or supplemented from time to time.
"Trust Estate" means all right, title and interest
of the Trust in and to the property and rights assigned to the
Trust pursuant to the Pooling and Servicing Agreement, all funds
on deposit from time to time in the Trust Accounts and all other
property of the Trust from time to time, including any rights of
the Owner Trustee and the Trust pursuant to the Pooling and
Servicing Agreement.
SECTION 1.2 Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined
have the meanings assigned to them in the Pooling and Servicing
Agreement or, if not defined therein, in the Indenture.
(b) All terms defined in this Agreement shall
have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise
defined therein.
(c) As used in this Agreement and in any
certificate or other document made or delivered pursuant hereto
or thereto, accounting terms not defined in this Agreement or in
any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the
respective meanings given to them under generally accepted
accounting principles in effect on the date hereof. To the
extent that the definitions of accounting terms in this Agreement
or in any such certificate or other document are inconsistent
with the meanings of such terms under generally accepted
accounting principles, the definitions contained in this
Agreement or in any such certificate or other documents shall
control.
(d) The words "hereof," "herein," "hereunder,"
and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular
provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and
Exhibits in or to this Agreement unless otherwise specified; and
the term "including" shall mean "including without limitation."
(e) The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and
neuter genders of such terms.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name. The Trust created hereby shall
be known as "TLFC IV Equipment Lease Trust 1995-1," in which name
the Owner Trustee may conduct the business of the Trust, make and
execute contracts and other instruments on behalf of the Trust
and sue and be sued.
SECTION 2.2 Office. The office of the Trust shall
be in care of the Owner Trustee at the Corporate Trust Office or
at such other address as the Owner Trustee may designate by
written notice to the Certificateholders and the Seller.
SECTION 2.3 Purposes and Powers. (a) The purpose
of the Trust is to engage in the following activities:
(i) to acquire, manage and hold the
Leases, interests in the related Equipment and other related
assets to be transferred to the Trust from time to time
pursuant to the Pooling and Servicing Agreement;
(ii) to issue the Notes pursuant to the
Indenture and the Certificates pursuant to this Agreement
and to sell, transfer or exchange the Notes and/or
Certificates in one or more transactions;
(iii) to acquire property and assets from
the Seller pursuant to the Pooling and Servicing Agreement,
to make payments or distributions pursuant to the Basic
Documents and to pay the organizational, start-up and
transactional expenses of the Trust;
(iv) with the proceeds of the sale of the
Notes and the Certificates, to pay such proceeds to, or as
directed in writing by, the Seller;
(v) 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 terms of the Pooling and
Servicing Agreement any portion of the Trust Estate released
from the Lien of, and remitted to the Trust pursuant to, the
Indenture;
(vi) to enter into and perform its
obligations under the Basic Documents to which it is to be a
party;
(vii) 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
(viii) 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 and payments to the
Certificateholders and the Noteholders.
The Trust shall not engage in any activity other than in
connection with the foregoing or other than as required or
authorized by the terms of this Agreement or the Basic Documents.
SECTION 2.4 Appointment of Owner Trustee. The
Seller hereby appoints the Owner Trustee as trustee of the Trust
effective as of the date hereof, to have all the rights, powers
and duties set forth herein.
SECTION 2.5 Initial Capital Contribution of Trust
Estate. The Seller hereby sells, assigns, transfers, conveys and
sets over to the Owner Trustee, as of the date hereof, the sum of
$1. The Owner Trustee hereby acknowledges receipt in trust from
the Seller, as of the date hereof, of the foregoing contribution,
which shall constitute the initial Trust Estate. The Seller
shall pay organizational expenses of the Trust as they may arise
or shall, upon the request of the Owner Trustee, promptly
reimburse the Owner Trustee for any such expenses paid by the
Owner Trustee.
SECTION 2.6 Declaration of Trust. The Owner
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 the Trust under the Basic Documents. It is the
intention of the parties hereto that the Trust constitute a
business trust under the Business Trust Statute, that this
Agreement constitute the governing instrument of such business
trust and that the Certificates represent the equity interests
therein. The rights of the Certificateholders shall be
determined as set forth herein and in the Business Trust Statute.
By entering into this Agreement, the parties hereto express their
intention that, for purposes of federal, state and local income
and franchise taxes and any other tax imposed on, measured by or
based upon gross or net income (in the aggregate, "Tax"), the
Notes will be treated as indebtedness and, except to the extent
otherwise required by law, (i) each Noteholder, by acceptance of
its Note, agrees to treat the interests evidenced by the Notes as
indebtedness, and further agrees that any Person acquiring an
interest in a Note from or through it may do so only subject to
an obligation to comply with this Agreement as to the treatment
of such Note as indebtedness for Tax purposes, and (ii) the
Certificateholders agree to treat the transactions contemplated
by this Agreement as a financing and to include in the
computation of its Tax liabilities all items of income, gain,
loss, deduction and credit attributable to the ownership of the
Trust Estate, subject to the indebtedness represented by the
Notes. Effective as of the date hereof, the Owner Trustee shall
have all rights, powers and duties set forth in this Agreement,
the Pooling and Servicing Agreement and the Business Trust
Statute with respect to accomplishing the purposes of the Trust.
The Owner Trustee agrees to file the certificate required under
s 3810 et seq. of the Business Trust Statute (the "Certificate of
Trust") in connection with the formation of the Trust as a
business trust under the Business Trust Statute.
SECTION 2.7 Liability of the Certificateholders.
(a) The Seller shall be liable directly to and will indemnify
the Noteholders or any other injured party for all losses,
claims, damages, liabilities and expenses of the Trust (including
expenses, to the extent not paid out of the Trust Estate) to the
extent that the Seller would be liable if the Trust were a
limited partnership under the Delaware Revised Uniform Limited
Partnership Act in which the Seller were a general partner;
provided, however, that the Seller shall not be liable (i) to any
Noteholder for any losses incurred by such Noteholder in the
capacity of an investor in the Notes, (ii) to any Person for any
losses incurred by such Person as a result of the fraudulent
actions, misrepresentations or willful misconduct of such Person
or (iii) any losses, claims, damages, liabilities and expenses
arising out of the imposition by any taxing authority of any
federal income, state or local income or franchise taxes, or any
other taxes imposed on or measured by gross or net income, gross
or net receipts, capital, net worth and similar items (including
any interest, penalties or additions with respect thereto) upon
the Noteholders, the Owner Trustee or the Indenture Trustee
(including any liabilities, costs or expenses with respect
thereto) with respect to any Leases not specifically indemnified
or represented to hereunder. In addition, any third party
creditors of the Trust (other than in connection with the
obligations described in the preceding sentence for which the
Seller shall not be liable) shall be deemed third party
beneficiaries of this subsection 2.7(a). The obligations of the
Seller under this subsection 2.7(a) shall be evidenced by the
Certificate issued in the name of the Seller pursuant to Section
3.2. The Certificate issued to the Seller shall be deemed to be
a separate class of Certificates from all other Certificates
issued by the Trust for purposes of the Business Trust Statute;
provided, however, that except as contemplated by this Section
2.7(a), the rights and obligations evidenced by all Certificates
shall be identical.
(b) The Certificateholders (other than, in the
case of the Seller, to the extent set forth in paragraph (a)
above) shall not have any personal liability for any liability or
obligation of the Trust.
SECTION 2.8 Title to Trust Property. Legal title
to all the Trust Estate shall be vested at all times in the Trust
as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Trust Estate to be
vested in a trustee or trustees, in which case title shall be
deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
SECTION 2.9 Situs of Trust. The Trust will be
located and administered in the State of Delaware. All bank
accounts maintained by the Owner Trustee on behalf of the Trust
shall be located in the State of Delaware, the State of Illinois
or the State of New York. The Trust shall not have any employees
in any state other than Delaware; provided, however, that nothing
herein shall restrict or prohibit the Owner Trustee from having
employees within or without the State of Delaware. Payments
shall be received by the Trust only in Delaware, Illinois or New
York, and payments and distributions shall be made by the Trust
only from Delaware, Illinois or New York. The only office of the
Trust will be at the Corporate Trust Office in Delaware.
SECTION 2.10 Representations and Warranties of the
Seller. The Seller hereby represents and warrants to the Owner
Trustee that:
(a) The Seller is duly organized and validly
existing as a corporation in good standing under the laws of the
State of Delaware, with 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 now has, power, authority and legal
right to acquire and own the Leases contemplated to be
transferred to the Trust pursuant to the Pooling and Servicing
Agreement.
(b) The Seller is duly qualified to do business
as a foreign corporation and is in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the
conduct of its business shall require such qualifications.
(c) The Seller has the corporate power and
authority to execute and deliver this Agreement and to carry out
its terms; the Seller has full power and authority to sell and
assign the property to be sold and assigned to and deposited with
the Trust and the Seller has duly authorized such sale and
assignment and deposit to the Trust by all necessary corporate
action; the execution, delivery and performance of this Agreement
has been duly authorized by the Seller by all necessary corporate
action; and this Trust Agreement constitutes a legal, valid and
binding obligation of Seller, enforceable in accordance with its
terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights generally and (ii) general
principles of equity (whether considered in a suit at law or in
equity).
(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 Articles of Incorporation or
by-laws of the Seller or any indenture, agreement or other
instrument to which the Seller is a party or by which it is
bound; nor result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to
the Basic Documents); nor violate any law or any order, rule or
regulation applicable to the Seller of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller
or its properties.
(e) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with
any Governmental Authority having jurisdiction over Seller or any
of its properties or assets is required to be obtained by or with
respect to Seller in connection with the execution, delivery and
performance by Seller of this Trust Agreement and the
consummation of the transactions contemplated herein.
SECTION 2.11 Books and Records; Tax Returns.
Except as otherwise expressly provided in this Agreement, the
Owner Trustee shall be responsible for the keeping of all
appropriate books and records relating to the receipt and
disbursement by the Owner Trustee of all monies under this
Agreement or any agreement contemplated hereby. The Owner
Trustee agrees not to file any application with the Internal
Revenue Service for a taxpayer identification number with respect
to the Trust created hereby. Unless otherwise required by the
final determination of a court of competent jurisdiction which is
not subject to further appeal (or for which the time to appeal
has expired), none of the parties hereto will prepare or file (or
cause to be prepared or filed) any Tax returns for the Trust
under federal law, or under any state or local law which follows
federal law with respect to the characterization of entities.
Subject to the preceding sentence, the Owner Trustee and the
Certificateholders, upon request, will furnish each other with
all such information as may reasonably be requested and shall
otherwise cooperate with each other in connection with the
preparation of such Tax returns. The Owner Trustee shall keep
copies of all returns delivered to or filed by it. The Owner
Trustee will give to the Certificateholders, upon request,
periodic information concerning receipts and disbursements by it
with respect to the Trust created by this Agreement.
ARTICLE III
THE CERTIFICATES
SECTION 3.1 The Certificates. The Certificates
shall be substantially in the form of Exhibit A. The
Certificates shall represent the entire beneficial interest in
the Trust. By accepting a Certificate, the holder thereof agrees
to be bound by the provisions hereof and assumes the rights and
obligations of a Certificateholder hereunder. The right to
receive payments with respect to the Certificates is subordinated
to the prior payment in full of all amounts of principal and
interest on the Notes as set forth in the Indenture and the
Pooling and Servicing Agreement.
SECTION 3.2 Execution and Delivery. On the Closing
Date, concurrently with the initial sale, transfer and assignment
of Leases, interests in the related Equipment and the other
related assets to the Trust pursuant to the Pooling and Servicing
Agreement, the Owner Trustee shall cause a Certificate or
Certificates to be executed on behalf of the Trust and delivered
to or upon the written order of the Seller. Each such
Certificate shall be executed by the Owner Trustee on behalf of
the Trust by the manual signature of an Authorized Officer of the
Owner Trustee. Signatures of individuals on any Certificate who
were at the time the proper officers or authorized signatories of
the Owner Trustee shall bind the Owner Trustee, notwithstanding
that such individuals or any of them have ceased to hold such
offices or positions prior to the delivery of such Certificate or
did not hold such offices or positions at the date of such
Certificate. Each Certificate shall be dated the date of its
execution.
SECTION 3.3 Mutilated, Destroyed, Lost or Stolen
Certificate.
(a) If (i) a Certificate is mutilated and is
surrendered to the Owner Trustee, or the Owner Trustee receives
evidence to its satisfaction of the destruction, loss or theft of
a Certificate and (ii) there is delivered to the Owner Trustee
and the Trust such security or indemnity as may be required by
the Owner Trustee to hold it harmless, then, the Owner Trustee
shall execute on behalf of the Trust and the Owner Trustee shall
deliver in exchange for or in lieu of the mutilated, destroyed,
lost or stolen Certificate, a replacement Certificate.
(b) In connection with the issuance of a
replacement Certificate under this Section 3.3, the Owner Trustee
may require the payment by the Certificateholder of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other reasonable expenses
(including the fees and expenses of the Owner Trustee) connected
therewith.
(c) A duplicate Certificate issued pursuant to
this Section 3.3 in replacement of a mutilated, destroyed, lost
or stolen Certificate shall constitute the beneficial interest in
the Trust and shall be entitled to all the benefits of this
Agreement to which the mutilated, destroyed, lost or stolen
Certificate was entitled, whether or not such Certificate shall
be found at any time thereafter. If the original Certificate is
found subsequent to the issuance of a duplicate Certificate
therefor, it shall be cancelled by the Owner Trustee.
(d) The provisions of this Section 3.3 are
exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement or payment of
the mutilated, destroyed, lost or stolen Certificate.
SECTION 3.4 Limitation on Transfer. Following the
transfer of a portion of the original Certificate from the Seller
to the Originator as contemplated by the Contribution and Sale
Agreement, Certificates shall not be transferable, and each of
the Seller and the Originator, by accepting a Certificate, agrees
that it shall not assign any of its interest in a Certificate to
any Person; provided, that the Seller and the Originator may
pledge their rights to distributions with respect to a
Certificate. Any transfer of a Certificate in violation of the
foregoing shall be null and void and of no effect.
SECTION 3.5 Acts of the Certificateholders and
Noteholders. (a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Agreement to be given or taken by the Certificateholders or
Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by the
Certificateholders or Noteholders in person or by agent duly
appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument
or instruments are delivered to the Owner Trustee. Proof of
execution of any such instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Agreement
and conclusive in favor of the Owner Trustee, the
Certificateholders and the Administrator, if made in the manner
provided in this Section.
(b) The fact and date of the execution by the
Certificateholders or any Noteholder of any such instrument or
writing may be proved in any reasonable manner which the Owner
Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the
Note Register.
(d) Any request, demand, authorization,
direction, notice, consent, waiver or other act by a Noteholder
shall bind every holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done or omitted to be done
by the Owner Trustee, the Certificateholders or the Administrator
in reliance thereon, whether or not notation of such action is
made upon such Note.
(e) Except as expressly provided herein, any
request, demand, authorization, direction, notice, consent,
waiver or other action that may be taken or given by the
Certificateholders under this Agreement or the other Basic
Documents shall be effective if taken or given by the
Certificateholders representing a majority of the beneficial
interests in the Trust.
(f) The Owner Trustee may require such additional
proof of any matter referred to in this Section as it shall deem
necessary.
SECTION 3.6 Distributions to the
Certificateholders. The Owner Trustee, by executing this
Agreement, is deemed to have instructed the Indenture Trustee to
distribute directly to the Certificateholders (pro rata according
to their respective beneficial interests in the Trust) amounts as
and when described in Article IV and Section 8.1(b) of the
Pooling and Servicing Agreement.
ARTICLE IV
ACTIONS BY THE OWNER TRUSTEE
SECTION 4.1 Prior Notice to the Certificateholders
with Respect to Certain Matters. With respect to the following
matters, the Owner Trustee shall not take action unless, at least
30 days before the taking of such action, the Owner Trustee shall
have notified the Certificateholders in writing of the proposed
action and the Certificateholders shall not have notified the
Owner Trustee in writing prior to the 30th day after such notice
is given that the Certificateholders have withheld consent or
provided alternative direction:
(a) the initiation of any claim or lawsuit by the
Trust (except claims or lawsuits brought in connection with the
collection of the Leases) and the compromise of any action, claim
or lawsuit brought by or against the Trust (except with respect
to the aforementioned claims or lawsuits for collection on
Leases);
(b) the election by the Trust to file an
amendment to the Certificate of Trust, a conformed copy of which
is attached hereto as Exhibit B;
(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
Administration Agreement, except to cure any ambiguity or to
amend or supplement any provision in a manner that would not
materially adversely affect the interests of the Certificate-
holders; and
(f) the appointment pursuant to the Indenture of
a successor Note Registrar, Paying Agent or Indenture Trustee, or
the consent to the assignment by the Note Registrar, Paying Agent
or Indenture Trustee of its obligations under the Indenture, as
applicable.
SECTION 4.2 Action by the Certificateholders with
Respect to Certain Matters. The Owner Trustee shall not have
the power, except upon the written direction of the
Certificateholders, to (a) remove the Administrator under the
Administration Agreement pursuant to Section 10 thereof, (b)
appoint a successor Administrator pursuant to Section 10(e) of
the Administration Agreement, (c) remove the Servicer under the
Pooling and Servicing Agreement pursuant to Section 7.1(b)
thereof or (d) except as expressly provided in the Basic
Documents, sell the Leases transferred to the Trust pursuant to
the Pooling and Servicing Agreement or any interest therein after
the termination of the Indenture.
SECTION 4.3 Action by the Certificateholders with
Respect to Bankruptcy. The Owner Trustee shall not have the
power to commence a voluntary proceeding in bankruptcy relating
to the Trust without the prior approval of the Certificateholders
and the delivery to the Owner Trustee by the Certificateholders
of a certificate certifying that the Certificateholders
reasonably believe that the Trust is insolvent.
SECTION 4.4 Rights of the Certificateholders to
Direct Owner Trustee. The Certificateholders shall have the
right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Owner Trustee, or
exercising any trust or power conferred on the Owner Trustee;
provided, however, that, the Owner Trustee shall have the right
to decline to follow any such direction if the Owner Trustee,
being advised by counsel, determines that the action so directed
may not lawfully be taken, or if the Owner Trustee in good faith
determines that the action so directed would be illegal or
involve it in personal liability; and provided, further that
nothing in this Agreement shall impair the right of the Owner
Trustee to take any action deemed proper by the Owner Trustee and
which is not inconsistent with such direction by the
Certificateholders.
SECTION 4.5 Suits for Enforcement. The Owner
Trustee, in its discretion may, subject to the provisions of this
Article IV, proceed to protect and enforce its rights and the
rights of the Certificateholders under this Agreement by a suit,
action or proceeding in equity or at law or otherwise, whether
for the specific performance of any covenant or agreement
contained in this Agreement or in aid of the execution of any
power granted in this Agreement or for the enforcement of any
other legal, equitable or other remedy, as the Owner Trustee,
being advised by counsel, shall deem most effectual to protect
and enforce any of the rights of the Owner Trustee or the
Certificateholders.
SECTION 4.6 Owner Trustee May Enforce Claims
without Possession of the Certificate. All rights of action and
claims under this Agreement or the Certificate may be prosecuted
and enforced by the Owner Trustee without the possession of the
Certificate or the production thereof in any proceeding relating
thereto, and any such proceedings instituted by the Owner Trustee
shall be brought in its own name or in its capacity as Owner
Trustee. Any recovery of judgment shall, after provision of or
the payment of the reasonable compensation, expenses,
disbursements and advances of the Owner Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in
respect of which such judgment has been recovered.
SECTION 4.7 Limitation on Rights of the
Certificateholders. (a) The Certificateholders shall not direct
the Owner Trustee to take or refrain from taking any action if
such action or inaction would be contrary to any obligation of
the Trust or the Owner Trustee under this Agreement or any of the
Basic Documents or would be contrary to Section 2.3, nor shall
the Owner Trustee be obligated to follow any such direction, if
given.
(b) Except as provided herein, the
Certificateholders shall not have the right to vote or in any
manner otherwise control the operation and management of its
interest or the obligations of the parties hereto.
(c) The Certificateholders shall not have the
right by virtue or by availing itself of any provisions of this
Agreement to institute any suit, action, or proceeding in equity
or at law upon or under or with respect to this Agreement on
behalf of the Trust, unless the Certificateholders previously
shall have given to the Owner Trustee a written notice of default
and of the continuance thereof as hereinbefore provided, and
unless the Certificateholders shall have made written request
upon the Owner Trustee to institute such action, suit or
proceeding on behalf of the Trust or in its own name as Owner
Trustee hereunder and shall have offered to the Owner Trustee
such reasonable indemnity as the Owner Trustee may require
against the costs, expenses, and liabilities to be incurred
therein or thereby, and the Owner Trustee, for 30 days after its
receipt of such notice, request, and offer of indemnity, shall
have neglected or refused to institute any such actions, suit, or
proceeding; it being understood and intended, and being expressly
covenanted by the Certificateholders and the Owner Trustee, that
the Certificateholders shall not have the right in any manner
whatever by virtue or by availing itself of any provisions of
this Agreement to enforce any right under this Agreement, except
in the manner herein provided. For the protection and
enforcement of the provisions of this Section, the
Certificateholders and the Owner Trustee shall be entitled to
such relief as can be given either at law or in equity.
ARTICLE V
AUTHORITY AND DUTIES OF THE OWNER TRUSTEE
SECTION 5.1 General Authority. The Owner Trustee
is authorized and directed to execute and deliver the Basic
Documents to which the Trust is to be a party and each
certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a
party, in each case, in such form as the Seller shall have
approved as evidenced conclusively by the Owner Trustee's
execution thereof. Notwithstanding the foregoing, the Owner
Trustee is authorized, but shall not be obligated, to take any or
all actions required of the Trust pursuant to the Basic
Documents. The Owner Trustee is further authorized from time to
time to take such action as the Administrator recommends with
respect to the Basic Documents. The Owner Trustee acknowledges
that actions to be taken by the Issuer (including under the
Indenture) may be taken by the Administrator in accordance with
the Administration Agreement.
SECTION 5.2 General Duties of Owner Trustee. (a) The
Owner Trustee undertakes to perform such duties, and
only such duties, as are specifically set forth in this Agreement
and the other Basic Documents, including the administration of
the Trust in the interest of the Certificateholders, subject to
the Basic Documents and in accordance with the provisions of this
Agreement.
(b) Notwithstanding the foregoing, the Owner
Trustee shall be deemed to have discharged its duties and
responsibilities hereunder and under the Basic Documents to the
extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the
Owner Trustee hereunder or under any Basic Document, and the
Owner Trustee shall not be liable for the default or failure of
the Administrator to carry out its obligations under the
Administration Agreement.
(c) In the absence of bad faith on its part, the
Owner Trustee may conclusively rely upon certificates or opinions
furnished to the Owner Trustee and conforming to the requirements
of this Agreement in determining the truth of the statements and
the correctness of the opinions contained therein; provided,
however, that the Owner Trustee shall have examined such
certificates or opinions so as to determine compliance of the
same with the requirements of this Agreement.
(d) The Owner Trustee may not be relieved from
liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(i) this subsection 5.2(d) shall not limit the effect
of subsection 5.2(a) or (b);
(ii) the Owner Trustee shall not be liable for any
error of judgment made in good faith unless it is proved
that the Owner Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Owner Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to
Section 4.1, 4.2 or 5.4.
(e) Subject to the Pooling and Servicing Agreement,
monies received by the Owner 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 the
Owner Trustee shall not be liable for any interest thereon.
SECTION 5.3 Action upon Instruction. (a) Subject
to Article IV, the Certificateholders may by written instruction
direct the Owner Trustee in the management of the Trust. Such
direction may be exercised at any time by written instruction of
the Certificateholders pursuant to Article IV.
(b) Notwithstanding the foregoing, the Owner Trustee
shall not be required to take any action hereunder or under any
Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such
action is likely to result in liability on the part of the Owner
Trustee or is contrary to the terms hereof or of any Basic
Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide
between alternative courses of action permitted or required by
the terms of this Agreement or under any Basic Document, the
Owner 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 the Owner Trustee acts in good faith in
accordance with any written instruction of the Certificateholders
received, the Owner Trustee shall not be liable on account of
such action to any Person. If the Owner Trustee shall not have
received appropriate instruction from the Certificateholders
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 5.4 No Duties Except as Specified in this
Agreement or in Instructions. The Owner Trustee shall not have
any duty or obligations 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 the Owner Trustee is a party, except as expressly
provided by the terms of this Agreement or in any document or
written instruction received by the Owner Trustee pursuant to
Section 5.3; and no implied duties or obligations shall be read
into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for
filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it
hereunder or to record this Agreement or any Basic Document. The
Owner Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to
discharge any liens on any part of the Trust Estate that result
from actions by, or claims against, the Owner Trustee that are
not related to the ownership or the administration of the Trust
Estate.
SECTION 5.5 No Action Except Under Specified
Documents or Instructions. The Owner Trustee shall not manage,
control, use, sell, dispose of or otherwise deal with any part of
the Trust Estate except (i) in accordance with the powers granted
to and the authority conferred upon the Owner Trustee pursuant to
this Agreement, (ii) in accordance with the Basic Documents and
(iii) in accordance with any document or instruction delivered to
the Owner Trustee pursuant to Section 5.3.
SECTION 5.6 Restrictions. The Owner Trustee shall
not take any action that is inconsistent with the purposes of the
Trust set forth in Section 2.3. or would, to the actual knowledge
of an Authorized Officer of the Owner Trustee, result in the
Trust's becoming taxable as a corporation for federal income tax
purposes.
ARTICLE VI
CONCERNING THE OWNER TRUSTEE
SECTION 6.1 Acceptance of Trusts and Duties. The
Owner Trustee accepts the Trust hereby created and agrees to
perform its duties hereunder with respect to the Trust but only
upon the express terms of this Agreement. The Owner 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. The Owner Trustee shall not be
answerable or accountable hereunder or under any Basic Document
under any circumstances, except (i) for its own willful
misconduct or negligence or (ii) in the case of the inaccuracy of
any representation or warranty contained in Section 6.3 expressly
made by the Owner Trustee. In particular, but not by way of
limitation (and subject to the exceptions set forth in the
preceding sentence):
(a) the Owner Trustee shall not be liable for any
error of judgment made by an Authorized Officer of the Owner
Trustee absent willful misconduct or negligence by such officer;
(b) the Owner Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in accordance
with the instructions of the Administrator or the
Certificateholders;
(c) no provision of this Agreement or any Basic
Document shall require the Owner Trustee to expend or risk funds
or otherwise incur any financial liability in the performance of
any of its rights or powers hereunder or under any Basic Document
if the Owner Trustee shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be
liable for indebtedness evidenced by or arising under any of the
Basic Documents, including the principal of and interest on the
Notes or for any amounts due with respect to the Certificate;
(e) the Owner Trustee shall not be responsible for or
in respect of the validity or sufficiently of this Agreement or
for the due execution hereof by the Seller 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 Certificates, and the Owner Trustee shall
in no event assume or incur any liability, duty or obligation to
any Noteholder or to the Certificateholders, other than is
expressly provided for herein and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the
default or misconduct of the Seller, the Indenture Trustee or the
Servicer or any other Person under any of the Basic Documents or
otherwise; and
(g) the Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Agreement, or to institute, conduct or defend any litigation
under this Agreement or otherwise or in relation to this
Agreement or any Basic Document, at the request, order or
direction of the Certificateholders, unless the
Certificateholders have offered to the Owner Trustee security or
indemnity satisfactory to the Owner Trustee against the costs,
expenses and liabilities that may be incurred by the Owner
Trustee therein or thereby. The right of the Owner Trustee to
perform any discretionary act enumerated in this Agreement or in
any Basic Document shall not be construed as a duty, and the
Owner Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of any such
act.
SECTION 6.2 Furnishing of Documents. The Owner
Trustee shall furnish to the Certificateholders promptly upon
receipt of a written request therefor, duplicates or copies of
all reports, notices, requests, demands, certificates, financial
statements and any other instruments furnished to the Owner
Trustee under the Basic Documents, and the Owner Trustee shall
furnish to the Noteholders and the Certificateholders, promptly
upon receipt of a written request therefor, copies of the Pooling
and Servicing Agreement, the Administration Agreement, and this
Agreement.
SECTION 6.3 Representations and Warranties. The
Owner Trustee hereby represents and warrants to the Seller, for
the benefit of the Certificateholders, that:
(a) It is a banking corporation duly organized and
validly existing in good standing under the laws of the State of
Delaware. It has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement
and the other Basic Documents to which it is a party.
(b) It has taken all corporate action necessary to
authorize the execution and delivery by it of this Agreement and
such other Basic Documents to which it is a party, and this
Agreement and such other documents will be executed and delivered
by one of its officers who is duly authorized to execute and
deliver this Agreement and such other documents on its behalf.
(c) None of (i) the execution nor the delivery by it
of this Agreement and the other Basic Documents to which it is a
party, (ii) the consummation by it of the transactions
contemplated hereby or thereby or (iii) compliance by it with any
of the terms or provisions hereof or thereof will contravene any
federal or state law, governmental rule or regulation governing
the banking or trust powers of the Owner Trustee or any judgment
or order binding on it or constitute any default under its
charter documents or by-laws.
(d) The execution, delivery and performance by the
Owner Trustee of this Agreement shall not require the
authorization, consent or approval of, the giving of notice to,
the filing or registration with, or the taking of any other
action in respect of any Governmental Authority regulating the
banking and corporate trust activities of banks or trust
companies in the jurisdiction in which the Trust was formed.
(e) This Agreement has been duly executed and
delivered by the Owner Trustee and constitutes the legal, valid
and binding agreement of the Owner Trustee, enforceable in
accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights in
general and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in
equity or at law.
SECTION 6.4 Reliance; Advice of Counsel. (a) The
Owner Trustee shall incur no liability to anyone in acting upon
any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or
paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may
accept a certified copy of a resolution of the board of directors
or other governing body of any corporate party as conclusive
evidence that such resolution has been duly adopted by such body
and that the same is in full force and effect. As to any fact or
matter the method of the determination of which is not
specifically prescribed herein, the Owner Trustee may, for all
purposes hereof, rely on a certificate, signed by the President
or any Vice President or by the Treasurer or Chief Financial
Officer or other authorized officer of the relevant party, as to
such fact of matter and such certificate shall constitute full
protection to the Owner Trustee for any action taken or omitted
to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts
hereunder and in the performance of its duties and obligations
under this Agreement or the Basic Documents, the Owner Trustee
(i) may act directly or through its agents or attorneys, pursuant
to agreements entered into with any of them, including, without
limitation, the power of attorney from the Owner Trustee to
certain officers of Bankers Trust Company, and the Owner Trustee
shall not be liable for the conduct or misconduct of such agents
or attorneys if such agents or attorneys shall have been selected
by the Owner Trustee with reasonable care, and (ii) may consult
with counsel, accountants and other skilled persons to be
selected with reasonable care and employed by it. The Owner
Trustee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the written
opinion or advice of any such counsel, accountants or other such
persons and not contrary to this Agreement or any Basic Document.
SECTION 6.5 Owner Trustee Not Liable for
Certificates or Leases. (a) Except as specifically set forth in
Section 6.3, the Owner Trustee makes no representations as to the
validity or sufficiency of this Agreement, any other Basic
Document or of the Certificates (other than its execution
thereof) or of any Lease or related document.
(b) The Owner Trustee shall have no responsibility for
or with respect to (i) the Leases, including, without limitation
the validity of any security interest in any Lease, the
perfection of any such security interest (whether as of the date
hereof or at any future time), the maintenance of or the taking
of any action to maintain such perfection, the existence or
validity of any Lease, the validity of the assignment of any
Lease to the Trust or of any intervening assignment, the review
of any Lease, the completeness of any Lease, the performance or
enforcement of any Lease and the existence and enforceability of
any insurance thereon, (ii) the compliance by the Servicer, the
Seller or the Indenture Trustee with any covenant, warranty or
representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation,
the acts or omissions of the Servicer, the Seller, the Indenture
Trustee or any Lessee, any action of the Servicer taken in the
name of the Owner Trustee or the Trust or any action by the Owner
Trustee taken at the instruction of the Servicer or (iii) the
preparation and filing of tax returns for the Trust. No recourse
shall be had for any claim based on any provision of this
Agreement, the Basic Documents, the Certificates or any Lease or
assignment thereof against Bankers Trust (Delaware) in its
individual capacity, and Bankers Trust (Delaware) shall not have
any personal obligation, liability or duty whatsoever to the
Certificateholders or any other Person with respect to any such
claim, and any such claim shall be asserted solely against the
Trust or any indemnitor who shall furnish indemnity as provided
herein, except for such liability as is finally determined to
have resulted from its own gross negligence or willful
misconduct.
SECTION 6.6 Not Acting in Individual Capacity. In
accepting the trusts hereby created, the Owner Trustee acts in
its individual capacity. In the performance of its duties as
Owner Trustee hereunder and under any document authorized hereby,
the Owner Trustee acts solely as trustee hereunder and not in its
individual capacity, except to the extent expressly agreed
otherwise, and all Persons, other than the Certificateholders as
provided herein, having any claim against the Owner Trustee by
reason of the transactions contemplated hereby shall look only to
the Trust Estate for payment or satisfaction thereof, except to
the extent, if any, the Owner Trustee shall expressly agree
otherwise in any Basic Document to which it is a party.
ARTICLE VII
COMPENSATION AND INDEMNIFICATION OF OWNER TRUSTEE
SECTION 7.1 Owner Trustee's Fees and Expenses. The
Owner Trustee shall receive as compensation for its services
hereunder such fees as have been separately agreed upon before
the date hereof between the Servicer and the Owner Trustee, and
the Owner Trustee shall be entitled to be reimbursed by the
Servicer for its other reasonable expenses hereunder, including
the reasonable compensation, expenses and disbursements of such
agents, custodians, nominees, representatives, experts and
counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder.
Such fees and expenses shall be paid as provided for in Section
3.9 of the Pooling and Servicing Agreement.
SECTION 7.2 Indemnification. The Servicer shall
indemnify the Owner Trustee and its officers, directors,
shareholders, successors, assigns, agents and servants in
accordance with the provisions of Section 6.2 of the Pooling and
Servicing Agreement. The indemnities contained in this Section
6.2 of the Pooling and Servicing Agreement shall survive the
resignation or termination of the Owner Trustee or the
termination of this Agreement.
ARTICLE VIII
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 8.1 Eligibility Requirements for Owner
Trustee. The Owner Trustee shall at all times satisfy the
requirements of Section 26(a)(1) of the Investment Company Act.
The Owner Trustee shall at all times: (a) be a corporation
satisfying the provisions of Section 3807(a) of the Business
Trust Statute; (b) be authorized to exercise corporate trust
powers; (c) have an aggregate capital, surplus and undivided
profits of at least $50,000,000; and (d) be subject to
supervision or examination by federal or state authorities. If
such corporation shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this
Section 8.1, the aggregate capital, surplus and undivided profits
of such corporation shall be deemed to be its aggregate capital,
surplus and undivided profits as set forth in its most recent
report of condition so published. If at any time the Owner
Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.1, the Owner Trustee shall resign
immediately in the manner and with the effect specified in
Section 8.2.
SECTION 8.2 Resignation or Removal of Owner Trustee.
(a) The Owner Trustee may at any time give notice of its intent
to resign and be discharged from the trusts hereby created by
giving written notice thereof to the Administrator; provided that
no such resignation shall become effective, and the Owner Trustee
shall not resign, prior to the time set forth in Section 8.2(c).
The Administrator may appoint a successor Owner Trustee by
delivering written instrument, in duplicate, to the resigning
Owner Trustee and the successor Owner Trustee. If no successor
Owner Trustee shall have been appointed and have accepted
appointment within 30 days after the giving of such notice, the
resigning Owner Trustee giving such notice may petition any court
of competent jurisdiction for the appointment of a successor
Owner Trustee. The Administrator shall remove the Owner Trustee
if:
(i) the Owner Trustee shall cease to be eligible
in accordance with the provisions of Section 8.1 and shall
fail to resign after written request therefor by the
Administrator;
(ii) the Owner Trustee shall be adjudged bankrupt
or insolvent;
(iii) a receiver or other public officer shall be
appointed or take charge or control of the Owner Trustee or
of its property or affairs for the purpose of
rehabilitation, conservation or liquidation; or
(iv) the Owner Trustee shall otherwise be
incapable of acting.
(b) If the Owner Trustee resigns or is removed or if a
vacancy exists in the office of Owner Trustee for any reason, the
Administrator shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate (one copy of which instrument
shall be delivered to the outgoing Owner Trustee so removed and
one copy to the successor Owner Trustee), and shall pay all fees
owed to the outgoing Owner Trustee.
(c) Any resignation or removal of the Owner Trustee
and appointment of a successor Owner Trustee pursuant to any of
the provisions of this Section 8.2 shall not become effective,
and no such resignation shall be deemed to have occurred, until a
written acceptance of appointment is delivered by the successor
Owner Trustee to the outgoing Owner Trustee and the Administrator
and all fees and expenses due to the outgoing Owner Trustee are
paid. The Administrator shall provide notice of such resignation
or removal of the Owner Trustee to the Rating Agency.
(d) The predecessor Owner Trustee shall upon payment
of its fees and expenses deliver to the successor Owner Trustee
all documents and statements and monies held by it under this
Agreement. The Administrator and the predecessor Owner Trustee
shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly
vesting and confirming in the successor Owner Trustee all such
rights, powers, duties and obligations.
SECTION 8.3 Successor Owner Trustee. (a) Any
successor Owner Trustee appointed as provided in Section 8.2
shall execute, acknowledge and deliver to the Seller and to its
predecessor Owner Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal
of the predecessor Owner Trustee shall become effective and such
successor Owner Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as Owner Trustee.
(b) No successor Owner Trustee shall accept
appointment as provided in this Section 8.3 unless, at the time
of such acceptance, such successor Owner Trustee shall be
eligible under the provisions of Section 8.1.
(c) Upon acceptance of appointment by a successor
Owner Trustee as provided in this Section 8.3, the successor
Owner Trustee shall mail notice of such succession to the
Indenture Trustee and the Certificateholders at the addresses
shown in Section 10.2 of this Agreement.
SECTION 8.4 Merger or Consolidation of Owner
Trustee. Any Person into which the Owner Trustee may be merged
or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which
the Owner Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Owner Trustee, shall be the
successor for the Owner Trustee hereunder, provided such Person
shall be eligible under the provisions of Section 8.1, without
the execution or filing of any paper or any further act on the
party of any of the parties hereto.
SECTION 8.5 Appointment of Co-Owner Trustee or
Separate Owner Trustee. (a) Notwithstanding any other
provisions of this Agreement, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any
part of the Trust Estate or any Lease may at the time be located,
the Administrator and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Owner Trustee to act
as co-trustee, jointly with the Owner Trustee, or separate
trustee or separate trustees, of all or any part of the Trust
Estate, and to vest in such Person, in such capacity, 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 the Administrator and the Owner
Trustee may consider necessary or desirable. If the
Administrator shall not have joined in such appointment within 15
days after receipt by it of a request so to do, the Owner Trustee
alone shall have the power to make such appointment. No
co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor Owner
Trustee pursuant to Section 8.1, and no notice of the appointment
of any co-trustee or separate trustee shall be required pursuant
to Section 8.3.
(b) Each separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Owner Trustee shall be
conferred upon and exercised or performed by the Owner
Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner Trustee
joining in such act), except to the extent that under any
law of any jurisdiction in which any particular act or acts
are to be performed, the Owner Trustee shall be incompetent
or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the
holding of title to the Trust or any portion thereof in any
such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, solely at the
direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be
personally liable by reason of any act or omission of any
other trustee under this Agreement; and
(iii) the Administrator and the Owner Trustee
acting jointly may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Owner Trustee shall be deemed to have been given to each of the
then separate trustees and co-trustees, as effectively as if
given to each of them. Every instrument appointing any separate
trustee or co-trustee shall refer to this Agreement and the
conditions of this Article. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument
of appointment, either jointly with the Owner Trustee or
separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting
the liability of, or affording protection to, the Owner Trustee.
Each such instrument shall be filed with the Owner Trustee and a
copy thereof given to the Administrator.
(d) Any separate trustee or co-trustee may at any time
appoint the Owner 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 the Owner Trustee, to the extent
permitted by law, without the appointment of a new or successor
trustee.
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.1 Termination.
(a) The Trust shall terminate on the date (the "Trust
Termination Date") on which the first of the following occurs:
(i) the termination of the Pooling and Servicing Agreement as
provided in Section 8.1(c) thereof or (ii) at the time provided
in Section 9.2. This Agreement and the obligations of the
parties hereunder (other than Section 7.1 and 7.2 hereof and as
otherwise expressly provided herein) shall terminate and be of no
further force or effect (i) if the Trust Termination Date is
determined pursuant to clause (i) above, on the Trust Termination
Date, or (ii) if the Trust Termination Date is determined
pursuant to clause (ii) above, at the time provided in Section
9.2.
(b) The bankruptcy liquidation or dissolution of any
Certificateholder (other than the Seller as described in Section
9.2) shall not (i) operate to terminate this Agreement or the
Trust, (ii) entitle such Certificateholder's legal
representatives or successors to claim an accounting or take any
action or proceeding in any court for a partition or winding up
of all or any part of the Trust or the Trust Estate or (iii)
otherwise effect the rights, obligations or liabilities of the
parties hereto. Neither the Seller nor the Certificateholders
shall be entitled to revoke or terminate the Trust, nor shall the
Trust be terminated, except as provided in Section 9.1(a).
(c) Upon the winding up of the Trust and its termina-
tion, the Owner Trustee shall cause the Certificate of Trust to
be cancelled by filing a certificate of cancellation with the
Secretary of State in accordance with the provisions of Section
3810 of the Business Trust Statute.
SECTION 9.2 Dissolution upon Bankruptcy of the
Seller. In the event that any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other
proceeding, voluntary or involuntary, under any federal or state
bankruptcy or similar law (each, an "Insolvency Event") shall
occur with respect to the Seller, the Trust shall terminate,
subject to the liquidation, winding-up and dissolution procedures
described below and subject to the continuation and
reconstitution of the Trust as described below, and provided that
the rights and obligations of the parties to this Agreement shall
not terminate during such liquidation, winding-up and
dissolution. Promptly after the occurrence of any Insolvency
Event with respect to the Seller: (i) the Seller shall give the
Indenture Trustee and the Owner Trustee written notice of such
Insolvency Event; (ii) the Owner Trustee shall, upon the receipt
of such written notice from the Certificateholder, give prompt
written notice to the Indenture Trustee and the other
Certificateholders of the occurrence of such event; and (iii) the
Indenture Trustee shall, upon receipt of written notice of such
Insolvency Event from the Owner Trustee or the Certificateholder,
give prompt written notice to the Noteholders of the occurrence
of such event; provided, however, that any failure to give a
notice required by this sentence shall not prevent or delay in
any manner a termination of the Trust pursuant to the first
sentence of this Section 9.2. Ninety days after the date the
Seller gives the notice described in the preceding sentence,
unless the Owner Trustee shall have received written instructions
from the Noteholders owning Class A Notes representing more than
50% of the outstanding principal balance of the Class A Notes,
from Noteholders owning Class B Notes representing more than 50%
of the outstanding principal balance of the Class B Notes and
from Certificateholders (other than the Seller) representing more
than 50% of the beneficial interests in the Trust (excluding the
Seller) to the effect that each such party disapproves of the
liquidation of the assets held by the Trust and the termination
of the Trust and wishes to continue and reconstitute the Trust
pursuant to terms corresponding to the terms of this Agreement,
the Owner Trustee shall direct the Indenture Trustee promptly to
sell, dispose or otherwise liquidate the assets of the Trust in a
commercially reasonable manner and on commercially reasonable
terms (which may include continuing to hold the Leases and
receiving collections thereon). The proceeds of any such sale,
disposition or liquidation shall be treated as collections on the
Leases under the Pooling and Servicing Agreement and deposited in
the Collection Account, and thereupon this Agreement and the
respective obligations and responsibilities of the Seller, the
Servicer, the Owner Trustee and the Indenture Trustee shall
terminate (except as otherwise expressly provided herein).
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Supplements and Amendments.
(a) This Agreement may be amended from time to time by
the Owner Trustee and the Seller, without the consent of any of
the Noteholders or any Certificateholder, to (i) cure any
ambiguity, (ii) correct or supplement any provisions herein that
may be defective or inconsistent with any other provisions
herein, (iii) add or supplement any liquidity, credit or other
enhancement arrangement for the benefit of any Noteholders
(provided that if any such addition shall affect any class of
Noteholders differently than any other class of Noteholders, then
such addition shall not, as evidenced by an opinion of counsel
for the Seller or the Administrator, adversely affect in any
material respect the interests of any series of Noteholders),
(iv) add to the covenants, restrictions or obligations of the
Seller or the Owner Trustee for the benefit of the Noteholders,
(v) evidence and provide for the acceptance of the appointment of
a successor trustee with respect to the Trust Estate and add to
or change any provisions as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee
pursuant to Article VIII or (vi) add, change or eliminate any
other provision of this Agreement in any manner that shall not,
as evidenced by an opinion of counsel for the Seller or the
Administrator, adversely affect in any material respect the
interests of the Noteholders.
(b) This Agreement may also be amended from time to
time by the Seller and the Owner Trustee, with the consent of the
Certificateholders and the consent of Noteholders owning a
majority in principal amount of the Notes outstanding as of the
close of business on the preceding Payment Date (which consent
shall be obtained by the Indenture Trustee as provided in Section
11.3 of the Indenture, and which consent, whether given pursuant
to this Section 10.1 or pursuant to any other provision of this
Agreement, shall be conclusive and binding on such Person and on
all future holders of such Notes and of any Notes issued upon the
transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Notes),
for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Certificateholders
or the Noteholders; provided, however, that no such amendment
shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections on Leases or
payments that are required to be made on any Note, (ii) adversely
effect the rating of any class of Notes without the consent of
Noteholders owning a majority in principal amount of such class
of Notes as of the close of business on the preceding Payment
Date or (iii) reduce the aforesaid percentage of Note principal
balance required to consent to any such amendment, without the
unanimous consent of the Noteholders.
(c) Promptly after the execution of any amendment to
the Certificate of Trust, the Owner Trustee shall cause the
filing of such amendment with the Secretary of State if and as
required by the Business Trust Statute.
(d) It shall not be necessary for the consent of the
Noteholders under this Section 10.1 to approve the particular
form of any proposed amendment, but it shall be sufficient if
such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of
the execution thereof by the Noteholders shall be subject to such
reasonable requirements as the Owner Trustee may prescribe.
(e) The Owner Trustee may, but shall not be obligated
to, enter into any such amendment which affects the Owner
Trustee's own rights, duties or immunities under this Agreement
or otherwise.
(f) Upon the execution of any amendment to this
Agreement, this Agreement shall be modified in accordance
therewith, and such amendment shall form a part of this Agreement
for all purposes; and every holder of a Certificate theretofore
or thereafter executed and delivered hereunder shall be bound
thereby.
(g) In connection with any amendment pursuant to this
Section 10.1 the Owner Trustee shall be entitled to receive an
opinion of counsel to the Seller or the Administrator acceptable
to the Owner Trustee to the effect that such amendment is
authorized or permitted by the Agreement.
SECTION 10.2 Notices. All demands, communications
and notices pursuant hereto to the Certificateholders, the
Seller, the Administrator, the Owner Trustee or the Indenture
Trustee shall be in writing and delivered or mailed to it at the
following address:
If to the Certificateholders:
To the Seller at the address set forth below for the
Seller and to the Originator at:
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, IL 60062
Attention: Chief Financial Officer
Telecopy Number: (708) 272-2174
If to the Seller:
TL Lease Funding Corp. IV
Corporate Trust Center
1209 Orange Street
Wilmington, Delaware 19801
Attention: Chief Financial Officer
with a copy to:
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, IL 60062
Attention: Chief Financial Officer
Telecopy Number: (708) 272-2174
If to the Administrator:
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, IL 60062
Attention: Chief Financial Officer
Telecopy Number: (708) 272-2174
If to the Owner Trustee:
Bankers Trust (Delaware)
1001 Jefferson Street
Wilmington, Delaware 19801
with a copy to:
Bankers Trust Company
4 Albany Street
New York, NY 10006
Attention: Corporate Trust and Agency Group-
Structured Finance
Telecopy Number: (212) 250-6439
If to the Indenture Trustee or to the Noteholders:
Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, New York 14203
Attention: Corporate Trust Administration
Telecopy Number: (716) 842-4474
or at such other address as the party may designate by notice to
the other parties hereto, which shall be effective when received.
Any notice required or permitted to be given to the
Certificateholders shall be given by first-class mail, postage
prepaid, at the address as shown in this Section 10.2. Any
notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether
or not the Certificateholders receives such notice.
SECTION 10.3 Merger and Integration. Except as
specifically stated otherwise herein, this Agreement sets forth
the entire understanding of the parties relating to the subject
matter hereof, and all prior understandings, written or oral, are
superseded by this Agreement. This Agreement may not be
modified, amended, waived, or supplemented except as provided
herein.
SECTION 10.4 Headings. The headings of the various
Articles and Sections herein and the Table of Contents are for
convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 10.5 Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF DELAWARE, WITHOUT REFERENCE TO THE PRINCIPLES OF
CONFLICTS OF LAW THEREOF OR OF ANY OTHER JURISDICTION, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.6 Counterparts. This Agreement may be
executed in two or more counterparts (and by different parties on
separate counterparts), each of which shall be an original, but
all of which together shall constitute one and the same
instrument.
SECTION 10.7 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 its
ownership interest only in accordance with Section 3.6 and
Article IX. No transfer, by operation of law or otherwise, of
any right, title or interest of the Certificateholders to and in
its 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 10.8 Limitation on Rights of Others. Except
for the terms of Section 2.7 and 10.1, nothing in this Agreement,
whether express or implied, shall be construed to give to any
Person other than the Owner Trustee, the Seller and the
Certificateholders any legal or equitable right, remedy or claim
under or in respect of this Trust Agreement or any covenants,
conditions or provisions contained herein. Such covenants,
conditions and provisions are, and shall be held to be, for the
sole and exclusive benefit of the Owner Trustee, the Seller and
the Certificateholders.
SECTION 10.9 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 or of any provision in any other
Basic Document, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction. The provisions of this
Agreement shall remain valid and enforceable notwithstanding the
invalidity, unenforceability, impossibility or illegality of
performance of any Basic Document.
SECTION 10.10 Successors and Assigns. All covenants
and agreements contained herein shall be binding upon, and inure
to the benefit of, the Owner Trustee, the Seller and the
Certificateholders and their respective successors and assigns.
Any request, notice, direction, consent, waiver or other
instrument or action by the Certificateholders shall bind its
successors and assigns.
SECTION 10.11 No Implied Waiver. No term or provision
of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing entered
into as provided in Section 10.1 hereof; and any such waiver of
the terms hereof shall be effective only in the specific instance
and for the specific purpose given.
SECTION 10.12 No Petition. The Owner Trustee (not in
its individual capacity but solely as Owner Trustee), by entering
into this Agreement, the Certificateholders, by accepting the
Certificates, and the Indenture Trustee and each Noteholder by
accepting the benefits of this Agreement, hereby covenant and
agree that they will not, until one year and one day after
termination of this Agreement, institute against the Seller or
the Trust, or join in any institution against the Seller or the
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 Certificates, the Notes, this
Agreement or any of the Basic Documents.
SECTION 10.13 No Recourse. Each of the Certificate-
holders, by accepting a Certificate, acknowledges that such
Certificate represents a beneficial interest in the Trust only
and does not represent interests in or obligations of the Seller,
the Administrator, the Owner Trustee, the Indenture Trustee or
any Affiliate thereof and no recourse may be had against such
parties or their assets, except as may be expressly set forth or
contemplated in this Agreement, the Certificates or the Basic
Documents. Except as expressly provided in the Basic Documents,
none of the Seller, the Administrator or the Owner Trustee, in
their respective individual capacities, or any of their respective
partners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable
for, or shall recourse be had to any of them for, the distribution
of any amounts owed the Certificateholders with respect to
or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in the
Certificates or this Agreement, it being expressly understood
that said covenants, obligations and indemnifications have been
made by the Owner Trustee solely as the Owner Trustee. Each of
the Certificateholders, by the acceptance of a Certificate (or
beneficial interest therein), shall agree that, except as expressly
provided in the Basic Documents, in the case of nonpayment of any
amounts with respect to a Certificate, it shall have
no claim against any of the foregoing for any deficiency, loss or
claim therefrom.
SECTION 10.14 Indemnification by and Reimbursement of
the Servicer. The Owner Trustee acknowledges and agrees to
reimburse the Servicer and its directors, officers, employees and
agents in accordance with Section 6.1(b) of the Pooling and
Servicing Agreement. The Owner Trustee further acknowledges and
accepts the conditions and limitations with respect to the
Servicer's obligation to indemnify, defend and hold the Owner
Trustee harmless as set forth in Section 6.2 of the Pooling and
Servicing Agreement.
SECTION 10.15 Confidential Information. The Owner
Trustee agrees that it shall neither use nor disclose to any
Person the names and addresses of the Lessees or the vendors of
the Equipment, except in connection with the enforcement of the
Trust's rights under the Pooling and Servicing Agreement, under
the Indenture or under the Receivables or as required by law.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized this 6th day of October, 1995.
TL LEASE FUNDING CORP. IV
By:
Name:
Title:
Bankers Trust (Delaware),
not in its individual capacity
but solely as Owner Trustee of
TLFC IV EQUIPMENT LEASE TRUST 1995-1
By:
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF CERTIFICATE
Form of Face of Certificate
TLFC IV EQUIPMENT LEASE TRUST 1995-1
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
AN INTEREST IN TRANS LEASING INTERNATIONAL, INC., TL LEASE
FUNDING CORP. IV, BANKERS TRUST (DELAWARE) OR ANY AFFILIATES
THEREOF.
THIS CERTIFICATE IS NON-TRANSFERABLE.
No. RC-__
This certifies that ___________________________ is the
registered owner of a _____________ (_____%) beneficial interest
in the TLFC IV Equipment Lease Trust 1995-1 (the "Trust"). The
Trust Estate held by the Trust includes among its assets a pool
of leases (the "Leases"), the related equipment (or a security
interest therein) and Collections thereon. The Trust has been
created pursuant to a Trust Agreement dated as of October 6, 1995
between TL Lease Funding Corp. IV, a Delaware corporation, and
Bankers Trust (Delaware), a Delaware banking corporation, not in
its individual capacity but solely as Owner Trustee (herein,
together with its permitted successors in the trusts hereunder,
called the "Owner Trustee").
This Certificate is a Certificate described in the
Trust Agreement, dated as of October 6, 1995 (the "Trust Agreement")
and is issued pursuant and subject to the Trust Agreement.
By acceptance of this Certificate, the holder (the
"Certificateholder") assents to and becomes bound by the Trust
Agreement. To the extent not defined herein, all capitalized
terms have the meanings assigned to them in the Trust Agreement.
Distributions on this Certificate will be made in
accordance with the terms of the Pooling and Servicing Agreement
by wire transfer to a bank account previously identified by the
Certificateholder, without the presentation or surrender of this
Certificate or the making of any notation hereon.
Reference is hereby made to the further provisions of
the Certificate set forth on the reverse hereof, which further
provisions shall have the same effect as if set forth at this
place.
The holder hereof, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Trust
Estate to the extent available for distribution to the holder
hereof as provided in the Pooling and Servicing Agreement for
payment hereunder and that the Owner Trustee in its individual
capacity is not personally liable to the holder hereof for any
amounts payable under the Certificate, the Trust Agreement or the
Pooling and Servicing Agreement or, except as expressly provided
in the Trust Agreement, subject to any liability under the Trust
Agreement or any Basic Document.
This Certificate does not purport to summarize the
Trust Agreement and reference is made to the Trust Agreement for
information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Owner Trustee. Copies of the Trust
Agreement and all amendments thereto will be provided to the
Certificateholder free of charge upon a written request to the
Owner Trustee.
IN WITNESS WHEREOF, the Trust has caused this Certificate
to be duly executed by an Authorized Officer of the Owner
Trustee.
Date: _________ __, 199_ TLFC IV EQUIPMENT LEASE TRUST 1995-1
By: Bankers Trust (Delaware), not
in its individual capacity but
solely as Owner Trustee
By:___________________________
Authorized Officer<PAGE>
Form of Reverse of Certificate
This Certificate represents a ________________ (___%)
beneficial interest in the Trust. This Certificate is limited in
right of payment to certain collections respecting the Leases and
related assets, all as more specifically set forth herein and in
the Trust Agreement and the Pooling and Servicing Agreement.
This Certificate is not insured or guaranteed by any person or
governmental agency.
The Trust Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of
the rights and obligations of the Certificateholder under the
Trust Agreement from time to time by the Owner Trustee and the
Seller with the consent of Noteholders owning a majority in
principal amount of the Notes outstanding. Any such consent by
the Noteholders shall be conclusive and binding on the N
oteholders and on all future holders of such Notes. The Trust
Agreement also permits, with certain exceptions therein provided,
the amendment thereof, and the modification of the rights and
obligations of the Certificateholders under the Trust Agreement
from time to time by the Owner Trustee and the Seller without the
consent of the Noteholders.
As provided for in the Trust Agreement, following the
transfer of a portion of the original Certificate from the Seller
to the Originator as contemplated by the Contribution and Sale
Agreement, Certificates shall not be transferable and each
Certificateholder, by accepting a Certificate, agrees that it
shall not assign any of its interest in a Certificate to any
Person.
As provided in the Trust Agreement, the Owner Trustee
shall establish reasonable procedures to replace the Certificate
in the event the Certificate is mutilated, destroyed, lost or
stolen.
The Owner Trustee and any agent of the Owner Trustee
may treat the person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Owner
Trustee nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the
Trust Agreement (other than Article VII) and the Trust created
thereby shall terminate as provided in Article IX of the Trust
Agreement.<PAGE>
EXHIBIT B
Form of Certificate of Trust
CERTIFICATE OF TRUST OF
TLFC IV EQUIPMENT LEASE TRUST 1995-1
THIS Certificate of Trust of TLFC IV Equipment Lease
Trust 1995-1 (the "Trust"), dated as of October 6, 1995, is being
duly executed and filed by Bankers Trust (Delaware), a Delaware
banking corporation, as trustee, to form a business trust under
the Delaware Business Trust Act (12 Del. C s3801 et seq.).
1. Name. The name of the business trust form hereby
is TLFC IV Equipment Lease Trust 1995-1.
2. Delaware Trustee. The name and business address
of the trustee of the Trust in the State of Delaware is Bankers
Trust (Delaware), 1001 Jefferson Street, Wilmington, Delaware
19801.
3. This Certificate of Trust shall be effective on
October 6, 1995.
IN WITNESS WHEREOF, the undersigned, being the sole
trustee of the Trust, has executed this Certificate of Trust as
the date first-above written.
BANKERS TRUST (DELAWARE), not in
its individual capacity but solely
as Owner Trustee under a Trust
Agreement dated as of October 6,
1995
By:_______________________________
Name:
Title:
<PAGE>
ADMINISTRATION AGREEMENT
Between
TLFC IV EQUIPMENT LEASE TRUST 1995-1
Issuer
and
TRANS LEASING INTERNATIONAL, INC.
Administrator
Dated as of October 6, 1995
<PAGE>
ADMINISTRATION AGREEMENT, dated as of October 6, 1995,
between TLFC IV EQUIPMENT LEASE TRUST 1995-1, a Delaware business
trust (the "Issuer"), and TRANS LEASING INTERNATIONAL, INC., a
Delaware corporation, as administrator (the "Administrator").
W I T N E S S E T H :
WHEREAS, the Issuer is issuing Notes pursuant to an
Indenture, dated as of the date hereof (as amended and
supplemented from time to time, the "Indenture"), between the
Issuer and the Indenture Trustee;
WHEREAS, the Issuer has entered into (or assumed)
certain agreements in connection with the issuance of the Notes
and the Certificates, including (i) the Pooling and Servicing
Agreement, (ii) the Depository Agreement, (iii) the Indenture and
(iv) the Trust Agreement;
WHEREAS, pursuant to the Basic Documents, the Issuer
and Bankers Trust (Delaware), as Owner Trustee, are required to
perform certain duties in connection with (a) the Notes and the
Collateral and (b) the Certificates;
WHEREAS, the Issuer and the Owner Trustee desire to
have the Administrator perform certain of the duties of the
Issuer and the Owner Trustee referred to in the preceding clause
and to provide such additional services consistent with the terms
of this Agreement and the Basic Documents as the Issuer and the
Owner Trustee may from time to time request;
WHEREAS, the Administrator has the capacity to provide
the services required hereby and is willing to perform such
services for the Issuer and the Owner Trustee on the terms set
forth herein;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, the parties agree as
follows:
1. Certain Definitions. Certain capitalized terms
used in this Agreement are defined in and shall have the
respective meanings assigned them in (a) the Pooling and
Servicing Agreement, dated as of the date hereof, among the
Issuer, TL Lease Funding Corp. IV, a Delaware corporation (the
"Seller"), and Trans Leasing International, Inc., a Delaware
corporation, as initial Servicer (as amended and supplemented
from time to time, the "Pooling and Servicing Agreement"), (b)
the Trust Agreement, dated as of the date hereof, between Bankers
Trust (Delaware) as Owner Trustee and the Seller (as amended and
supplemented from time to time, the "Trust Agreement") and (c)
the Indenture. All references herein to "the Agreement" or "this
Agreement" are to this Administration Agreement, and all
references herein to Sections are to Sections of this Agreement
unless otherwise specified.
2. Duties of the Administrator.
(a) Duties with Respect to the Depository Agreement
and the Indenture. The Administrator agrees to perform all its
duties as Administrator and the duties of the Issuer under the
Indenture and the Depository Agreement. In addition, the
Administrator shall consult with the Owner Trustee regarding the
duties of the Issuer under the Indenture and the Depository
Agreement. The Administrator shall monitor the performance of
the Issuer and shall advise the Owner Trustee when action is
necessary to comply with the Issuer's duties under the Indenture
and the Depository Agreement. The Administrator shall prepare
for execution by the Issuer or shall cause the preparation by
other appropriate persons of all such documents, reports,
filings, instruments, certificates, notices and opinions as it
shall be the duty of the Issuer to prepare, file or deliver
pursuant to the Indenture and the Depository Agreement. In
furtherance of the foregoing, the Administrator shall take all
appropriate action that it is the duty of the Issuer to take
pursuant to the Indenture including, without limitation, such of
the foregoing as are required with respect to the following
matters under the Indenture (references are to sections of the
Indenture):
(i) the preparation of or obtaining of the documents
and instruments required for authentication of the Notes and
delivery of the same to the Indenture Trustee (Section 2.2);
(ii) the duty to cause the Note Register to be kept and
to give the Indenture Trustee notice of any appointment of a
new Note Registrar and the location, or change in location,
of the Note Register (Section 2.4);
(iii) the notification of the Noteholders of the final
principal payment on their Notes (Section 2.7(b));
(iv) the preparation, obtaining or filing of the
instruments, opinions and certificates and other documents
required for the release of the Collateral (Section 2.9);
(v) the preparation of Definitive Class A Notes and
arranging the delivery thereof (Section 2.12);
(vi) the obtaining and approving of opinions and
certificates in connection with the transfers of Class B
Notes (Section 2.15);
(vii) the maintenance of an office in the Borough of
Manhattan, the City of New York, for registration of trans-
fer or exchange of Notes (Section 3.2);
(viii) the duty to cause newly appointed Paying Agents,
if any, to deliver to the Indenture Trustee the instrument
specified in the Indenture regarding funds held in trust
(Section 3.3(c));
(ix) the direction to the Indenture Trustee to deposit
monies with Paying Agents, if any, other than the Indenture
Trustee (Section 3.3(c));
(x) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which
such qualification is or shall be necessary to protect the
validity and enforceability of the Indenture, the Notes, the
Collateral and each other instrument and agreement included
in the Indenture Trust Estate (Section 3.4);
(xi) the preparation of all supplements, amendments,
financing statements, continuation statements, instruments
of further assurance and other instruments, in accordance
with Section 3.5 of the Indenture, necessary to protect the
Indenture Trust Estate (Section 3.5);
(xii) the delivery of the Opinion of Counsel on the
Closing Date, in accordance with Section 3.6 of the Inden-
ture, as to the Indenture Trust Estate, and the annual
delivery of the Officer's Certificate and certain other
statements, in accordance with Section 3.9 of the Indenture,
as to compliance with the Indenture (Sections 3.6 and 3.9);
(xiii) the identification to the Indenture Trustee in an
Officer's Certificate of a Person with whom the Issuer has
contracted to perform its duties under the Indenture
(Section 3.7(b));
(xiv) the notification of the Indenture Trustee of a
Servicer Default pursuant to the Pooling and Servicing
Agreement and, if such Servicer Default arises from the
failure of the Servicer to perform any of its duties under
the Pooling and Servicing Agreement, the taking of all
reasonable steps available to remedy such failure (Section
3.7(d));
(xv) the preparation and obtaining of documents and
instruments required for the release of the Issuer from its
obligations under the Indenture (Section 3.11);
(xvi) the delivery of notice to the Indenture Trustee of
each Event of Default under the Indenture, each default by
the Servicer or Seller under the Pooling and Servicing
Agreement and each default by the Originator or the Seller
under the Contribution and Sale Agreement (Section 3.19);
(xvii) the monitoring of the Issuer's obligations as to
the satisfaction and discharge of the Indenture and the
preparation of an Officer's Certificate and the obtaining of
the Opinion of Counsel and the Independent Certificate
relating thereto (Section 4.1);
(xviii) the compliance with any written directive of the
Indenture Trustee with respect to the sale of the Indenture
Trust Estate in a commercially reasonable manner if an Event
of Default shall have occurred and be continuing (Section
5.4(a));
(xix) the preparation and delivery of notice to the
Noteholders of the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee (Section 6.8);
(xx) the preparation of any written instruments
required to confirm more fully the authority of any co-trustee
or separate trustee and any written instruments
necessary in connection with the resignation or removal of
any co-trustee or separate trustee (Sections 6.8 and 6.10);
(xxi) the furnishing of the Indenture Trustee with the
names and addresses of the Noteholders during any period
when the Indenture Trustee is not the Note Registrar
(Section 7.1);
(xxii) the preparation and, after execution by the
Issuer, the filing with the Commission, any applicable state
agencies and the Indenture Trustee of documents required to
be filed on a periodic basis with, and summaries thereof as
may be required by rules and regulations prescribed by, the
Commission and any applicable state agencies and the
transmission of such summaries, as necessary, to the
Noteholders (Section 7.3);
(xxiii) the opening of one or more accounts in the
Indenture Trustee's name and all other actions necessary
with respect to the investment and reinvestment of funds in
the Trust Accounts (Sections 8.2 and 8.3);
(xxiv) the preparation of an Issuer Request and Officer's
Certificate and the obtaining of an Opinion of Counsel and
Independent Certificates, if necessary, for the release of
the Indenture Trust Estate as defined in the Indenture
(Sections 8.4 and 8.5);
(xxv) the preparation of Issuer Orders and the obtaining
of Opinions of Counsel with respect to the execution of
supplemental indentures and the mailing to the Noteholders
of notices with respect to such supplemental indentures
(Sections 9.1, 9.2 and 9.3);
(xxvi) the execution and delivery of new Notes conforming
to any supplemental indenture (Section 9.6);
(xxvii) the notification of the Indenture Trustee, the
Noteholders and the Rating Agency of redemption of the Notes
or the duty to cause the Indenture Trustee to provide such
notification (Sections 10.1 and 10.2);
(xxviii) the preparation of all Officer's Certificates,
Opinions of Counsel and (if required by the TIA) Independent
Certificates with respect to any requests by the Issuer to
the Indenture Trustee to take any action under the Indenture
(Section 11.1(a));
(xxix) the preparation and delivery of Officer's Cer-
tificates and the obtaining of Independent Certificates, if
necessary, for the release of any property or securities
from the lien of the Indenture (Section 11.1(b));
(xxx) the notification of the Rating Agency, upon the
failure of the Indenture Trustee to give such notification,
of the information required pursuant to Section 11.4
(Section 11.4);
(xxxi) the preparation and delivery to the Noteholders
and the Indenture Trustee of any agreements with respect to
alternate payment and notice provisions (Section 11.6); and
(xxxii) the recording of the Indenture, if applicable
(Section 11.15).
(b) Additional Duties.
(i) In addition to the duties of the Administrator set
forth above, the Administrator shall perform such
calculations and shall prepare for execution by the Issuer
or the Owner Trustee or shall cause the preparation by other
appropriate persons of all such documents, reports, filings,
instruments, certificates, notices and opinions as it shall
be the duty of the Issuer or the Owner Trustee to prepare,
file or deliver pursuant to the Basic Documents, and at the
request of the Owner Trustee shall take all appropriate
action that it is the duty of the Issuer or the Owner
Trustee to take pursuant to the Basic Documents. Subject to
Section 7 of this Agreement, and in accordance with the
directions of the Owner Trustee, the Administrator shall
administer, perform or supervise the performance of such
other activities in connection with the Collateral
(including the Basic Documents) as are not covered by any of
the foregoing provisions and as are expressly requested by
the Owner Trustee and are reasonably within the capability
of the Administrator.
(ii) The Administrator is authorized to execute on
behalf of the Issuer all such documents, reports, filings,
instruments, certificates and opinions as it shall be the
duty of the Issuer to prepare, file or deliver pursuant to
the Basic Documents. Upon request, the Issuer shall execute
and deliver to the Administrator a power of attorney
appointing the Administrator its agent and attorney in fact
to execute all such documents, reports, filings,
instruments, certificates and opinions.
(iii) Notwithstanding anything in this Agreement or the
Basic Documents to the contrary, the Administrator shall be
responsible for performance of the duties of the Owner
Trustee set forth in Section 2.11 of the Trust Agreement
with respect to, among other things, the keeping of all
appropriate books and records of the Trust.
(iv) The Administrator may satisfy any obligations it
may have with respect to clause (ii) above by retaining, at
the expense of the Trust payable by the Administrator, a
firm of independent public accountants acceptable to the
Owner Trustee which shall perform the obligations of the
Administrator thereunder.
(v) The Administrator shall perform the duties of the
Administrator specified in Section 8.2 of the Trust
Agreement required to be performed in connection with the
resignation or removal of the Owner Trustee, and any other
duties expressly required to be performed by the Administra-
tor under the Trust Agreement.
(vi) In carrying out the foregoing duties or any of its
other obligations under this Agreement, the Administrator
may enter into transactions with or otherwise deal with any
of its Affiliates; provided, however, that the terms of any
such transactions or dealings shall be in accordance with
any directions received from the Issuer and shall be, in the
Administrator's opinion, no less favorable to the Issuer
than would be available from Persons that are not Affiliates
of the Administrator.
(c) Non-Ministerial Matters.
(i) With respect to matters that in the reasonable
judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless, within a
reasonable time before the taking of such action, the Admin-
istrator shall have notified the Owner Trustee of the
proposed action and the Owner Trustee shall not have with-
held consent or provided an alternative direction. For the
purpose of the preceding sentence, "non-ministerial matters"
shall include, without limitation:
(A) the amendment of or any supplement to the
Indenture;
(B) the initiation of any claim or lawsuit by the
Issuer and the compromise of any action, claim or lawsuit
brought by or against the Issuer;
(C) the amendment, change or modification of any
of the Basic Documents;
(D) the appointment of successor Note Registrars,
successor Paying Agents and successor Indenture Trustees
pursuant to the Indenture or the appointment of successor
Administrators or Successor Servicers, or the consent to the
assignment by the Note Registrar, Paying Agent or Indenture
Trustee of its obligations under the Indenture; and
(E) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this
Agreement, the Administrator shall not be obligated to, and
shall not, (A) make any payments to the Noteholders under
the Basic Documents, (B) sell the Indenture Trust Estate
pursuant to Section 5.4 of the Indenture or (C) take any
other action that the Issuer directs the Administrator not
to take on its behalf.
3. Successor Servicer and Administrator. The Issuer
shall undertake, as promptly as possible after the giving of a
Termination Notice to the Servicer pursuant to Section 7.1(b) of
the Pooling and Servicing Agreement, to enforce the provisions of
Sections 7.1, 7.2 and 7.3 of the Pooling and Servicing Agreement
with respect to the appointment of a successor Servicer. Such
successor Servicer shall, upon compliance with Sections 10(e)(ii)
and (iii), become the successor Administrator hereunder.
4. Records. The Administrator shall maintain appro-
priate books of account and records relating to services
performed hereunder, which books of account and records shall be
accessible for inspection by the Issuer and the Owner Trustee at
any time during normal business hours.
5. Compensation. As compensation for the performance
of the Administrator's obligations under this Agreement and as
reimbursement for its expenses related thereto, the Servicer
shall pay the Administrator a fee in the amount of $1,500 per
month.
6. Additional Information to be Furnished to the
Issuer. The Administrator shall furnish to the Issuer from time
to time such additional information regarding the Collateral as
the Issuer shall reasonably request.
7. Independence of the Administrator. For all
purposes of this Agreement, the Administrator shall be an
independent contractor and shall not be subject to the
supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the
Issuer, the Administrator shall have no authority to act for or
represent the Issuer or the Owner Trustee in any way and shall
not otherwise be deemed an agent of the Issuer or the Owner
Trustee.
8. No Joint Venture. Nothing contained in this
Agreement (a) shall constitute the Administrator and either of
the Issuer or the Owner Trustee as members of any partnership,
joint venture, association, syndicate, unincorporated business or
other separate entity, (b) shall be construed to impose any
liability as such on any of them or (c) 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.
9. Other Activities of Administrator. Nothing herein
shall prevent the Administrator or its Affiliates from engaging
in other businesses or, in its sole discretion, from acting in a
similar capacity as an administrator for any other person or
entity even though such person or entity may engage in business
activities similar to those of the Issuer, the Owner Trustee or
the Indenture Trustee.
10. Term of Agreement; Resignation and Removal of
Administrator.
(a) This Agreement shall continue in force until the
termination of the Trust Agreement, upon which event this
Agreement shall automatically terminate.
(b) Subject to Section 10(e), the Administrator may
resign its duties hereunder by providing the Issuer with at least
60 days' prior written notice.
(c) Subject to Section 10(e), the Issuer may remove
the Administrator without cause by providing the Administrator
with at least 60 days' prior written notice.
(d) Subject to Section 10(e), at the sole option of
the Issuer, the Administrator may be removed immediately upon
written notice of termination from the Issuer to the
Administrator if any of the following events shall occur:
(i) the Administrator shall default in the performance
of any of its duties under this Agreement and, after notice
from the Issuer of such default, shall not cure such default
within ten days (or, if such default cannot be cured in such
time, shall not give within ten days such assurance of cure
as shall be reasonably satisfactory to the Issuer);
(ii) a court having jurisdiction in the premises shall
enter a decree or order for relief, and such decree or order
shall not have been vacated within 60 days, in respect of
the Administrator in any involuntary case under any
applicable bankruptcy, insolvency or other similar law now
or hereafter in effect or appoint a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar
official for the Administrator or any substantial part of
its property or order the winding-up or liquidation of its
affairs; or
(iii) the Administrator shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, shall consent to the entry
of an order for relief in an involuntary case under any such
law, or shall consent to the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator or
similar official for the Administrator or any substantial
part of its property, shall consent to the taking of
possession by any such official of any substantial part of
its property, shall make any general assignment for the
benefit of creditors or shall fail generally to pay its
debts as they become due.
The Administrator agrees that if any of the events
specified in clauses (ii) or (iii) of this Section 10(d) shall
occur, it shall give written notice thereof to the Issuer within
seven days after the happening of such event.
(e) No resignation or removal of the Administrator
pursuant to this Section 10 shall be effective until (i) a
successor Administrator shall have been appointed by the Issuer,
(ii) such successor Administrator shall have agreed in writing to
be bound by the terms of this Agreement in the same manner as the
Administrator is bound hereunder, and (iii) the Rating Agency
Condition has been satisfied with respect to such proposed
appointment.
11. Action upon Termination, Resignation or Removal.
Promptly upon the effective date of termination of this Agreement
pursuant to Section 10(a) or the resignation or removal of the
Administrator pursuant to Section 10(b) or (c), respectively, the
Administrator shall be entitled to be paid all fees and
reimbursable expenses accruing to it to the effective date of
such termination, resignation or removal. The Administrator
shall forthwith upon such termination pursuant to Section 10(a)
deliver to the Issuer all property and documents of or relating
to the Collateral then in the custody of the Administrator. In
the event of the resignation or removal of the Administrator
pursuant to Section 10(b) or (c), respectively, the Administrator
shall cooperate with the Issuer and take all reasonable steps
requested to assist the Issuer in making an orderly transfer of
the duties of the Administrator.
12. Notices. Except as otherwise provided in this
Agreement, any notice or other communication herein required or
permitted to be given shall be in writing and may be delivered in
person, with receipt acknowledged, or sent by United States mail,
registered or certified, postage prepaid and return receipt
requested, or by Federal Express or other nationally recognized
overnight courier service, postage prepaid and confirmation of
receipt requested, and addressed as follows (or at such other
address as may be substituted by notice given as herein
provided):
If to the Issuer or the Owner Trustee:
Bankers Trust (Delaware)
1001 Jefferson Street
Suite 550
Wilmington, Delaware 19801
with a copy (which copy will not constitute notice
to the Issuer or the Owner Trustee) to each of:
Bankers Trust Company
4 Albany Street
New York, New York 10006
Attention: Corporate Trust & Agency Group
- Structured Finance
If to the Administrator:
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, IL 60062
Attention: Chief Financial Officer
with a copy (which copy will not constitute notice
to the Administrator) to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Jill L. Sugar
Every notice, demand, request, consent, approval, declaration or
other communication hereunder shall be deemed to have been duly
given or served on the date on which the same shall have been
personally delivered, with receipt acknowledged, three (3)
Business Days after the same shall have been deposited in the
United States mail or on the next succeeding Business Day if the
same has been sent by Federal Express or other nationally
recognized overnight courier service. Failure or delay in
delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the Persons
designated above to receive copies shall in no way adversely
affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
13. Amendments.
(a) This Agreement may be amended from time to time
with prior notice to the Rating Agency by a written amendment
duly executed and delivered by the Issuer and the Administrator
with the written consent of the Owner Trustee, without the
consent of the Noteholders or the Certificateholders, for any of
the following purposes:
(i) to add provisions hereof for the benefit of the
Noteholders and the Certificateholders or to surrender any
right or power herein conferred upon the Administrator;
(ii) to cure any ambiguity or to correct or supplement
any provision herein which may be inconsistent with any
other provision herein;
(iii) to evidence and provide for the appointment of a
successor Administrator hereunder and to add to or change
any of the provisions of this Agreement as shall be
necessary to facilitate such succession; and
(iv) to add any provisions to or change in any manner
or eliminate any of the provisions of this Agreement or of
modify in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such amendment
under this Section 13(a)(iv) shall not, as evidenced by an
Opinion of Counsel, materially and adversely affect in any
material respect the interest of any Noteholder or any
Certificateholder.
(b) This Agreement may also be amended by the Issuer
and the Administrator with prior notice to the Rating Agency and
with the written consent of the Owner Trustee, the
Certificateholders and the Holders of Notes evidencing at least a
majority in the Outstanding Amount of the Notes as of the close
of the immediately preceding Payment Date for the purpose of
adding any provisions to, 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 may (i) increase or
reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on the Leases or payments or
distributions that are required to be made for the benefit of the
Noteholders or the Certificateholders, (ii) reduce the percentage
of the Noteholders which are required to consent to any amendment
of this Agreement or (iii) modify or alter any provision of this
Section 13, except to provide that certain additional provisions
of this Agreement and the Basic Documents cannot be modified or
waived without the consent of each Noteholder and each
Certificateholder affected thereby, without, in any such case,
the consent of the holders of all the outstanding Notes and all
outstanding Certificates.
(c) Notwithstanding Sections 13(a) and (b), the
Administrator may not amend this Agreement without the permission
of the Owner Trustee, which permission shall not be unreasonably
withheld.
14. Successors and Assigns. This Agreement may not be
assigned by the Administrator unless such assignment is
previously consented to in writing by the Issuer and the Owner
Trustee and subject to the satisfaction of the Rating Agency
Condition in respect thereof. An assignment with such consent
and satisfaction, if accepted by the assignee, shall bind the
assignee hereunder in the same manner as the Administrator is
bound hereunder. Notwithstanding the foregoing, this Agreement
may be assigned by the Administrator without the consent of the
Issuer or the Owner Trustee to a corporation or other
organization that is a successor (by merger, consolidation or
purchase of assets) to the Administrator, provided that such
successor organization executes and delivers to the Issuer and
the Owner Trustee an agreement in which such corporation or other
organization agrees to be bound hereunder by the terms of such
assignment in the same manner as the Administrator is bound
hereunder. Subject to the foregoing, this Agreement shall bind
any successors or assigns of the parties hereto.
15. 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.
16. Headings. The section headings hereof have been
inserted for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
17. Separate Counterparts, This Agreement may be
executed by the parties 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.
18. Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement
shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or
terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of
the Certificate or the rights of the holder thereof.
19. Not Applicable to Trans Leasing International,
Inc. in Other Capacities. Nothing in this Agreement shall affect
any obligation Trans Leasing International, Inc. may have in any
other capacity.
20. Limitation of Liability of Owner Trustee.
Notwith-standing anything contained herein to the contrary, this
instrument has been signed by Bankers Trust (Delaware), not in
its individual capacity but solely as Owner Trustee and in no
event shall Bankers Trust (Delaware) have any liability for the
representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as
to all of which recourse shall be had solely to the assets of the
Issuer. For all purposes of this Agreement, in the performance
of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the
terms and provisions of Articles V, VI and VII of the Trust
Agreement.
21. Third-Party Beneficiary. The Owner Trustee is a
third-party beneficiary to this Agreement and is entitled to the
rights and benefits hereunder and may enforce the provisions
hereof as if it were a party hereto.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed by their respective officers as of
the day and year first above written.
TLFC IV EQUIPMENT LEASE TRUST 1995-1
By: BANKERS TRUST (DELAWARE),
not in its individual capacity,
but solely as Owner
Trustee on behalf of the Trust
By:
Name:
Title:
TRANS LEASING INTERNATIONAL, INC., as
Administrator
By:
Name:
Title:
Acknowledged and Accepted:
MANUFACTURERS AND TRADERS TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By: __________________________________
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1995
<CASH> 2917
<SECURITIES> 0
<RECEIVABLES> 255748
<ALLOWANCES> 7232
<INVENTORY> 0
<CURRENT-ASSETS> 223549
<PP&E> 7647
<DEPRECIATION> 1572
<TOTAL-ASSETS> 234555
<CURRENT-LIABILITIES> 8594
<BONDS> 197156
<COMMON> 48
0
0
<OTHER-SE> 25914
<TOTAL-LIABILITY-AND-EQUITY> 234555
<SALES> 8584
<TOTAL-REVENUES> 8584
<CGS> 0
<TOTAL-COSTS> 2752
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1246
<INTEREST-EXPENSE> 3677
<INCOME-PRETAX> 909
<INCOME-TAX> 348
<INCOME-CONTINUING> 561
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 561
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
