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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 26, 1996
TL LEASE FUNDING CORP. IV
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
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DELAWARE 33-95108 51-0366091
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NUMBER)
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
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Registrant's telephone number, including area code: (302) 658-7851
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Item 2. Acquisition or Disposition of Assets
Description of the Notes and the Leases
TL Lease Funding Corp. IV ("TLFC IV") has registered pursuant
to a Registration Statement on Form S-3 (Registration File No. 33-95108) the
issuance of, on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended, up to $300,000,000 in aggregate principal
amount of lease backed securities to be issued by TLFC IV or a trust to be
formed by TLFC IV.
On November 26, 1996 (the "Closing Date"), TLFC IV formed TLFC
IV Equipment Lease Trust 1996-1, a Delaware business trust (the "Trust"),
pursuant to a Trust Agreement, dated as of the Closing Date, between TLFC IV
and Bankers Trust (Delaware), as owner trustee. On the Closing Date, the Trust
issued $127,848,986 aggregate principal amount of its Class A 5.98% Equipment
Lease Backed Notes (the "Class A Notes") and $13,536,951 aggregate principal
amount of its Class B 6.64% Equipment Lease Backed Notes (the "Class B Notes"
and, together with the Class A Notes, the "Notes") pursuant to an Indenture,
dated as of the Closing Date, between the Trust and Manufacturers and Traders
Trust Company, as indenture trustee. Only the Class A Notes were issued
pursuant to the Registration Statement.
The Notes represent non-recourse indebtedness of the Trust
secured by all of the Trust's right, title and interest in, to and under
certain leases (the "Leases") and all monies due thereon after October 31,
1996, the Trust's interest in the related equipment (the "Equipment"), certain
other property relating to the Leases and the Equipment, and all proceeds of
the foregoing. The Trust acquired the Leases, the Equipment and the related
property from TLFC IV pursuant to a Pooling and Servicing Agreement, dated as
of the Closing Date, among the Trust, TLFC IV and Trans Leasing International,
Inc. ("Trans Leasing"). TLFC IV, in turn, acquired the Leases, the Equipment
and the related property from Trans Leasing on and prior to the Closing Date
pursuant to an Amended and Restated Contribution and Sale Agreement, dated as
of the Closing Date, between TLFC IV and Trans Leasing.
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Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Exhibits:
1.1 Underwriting Agreement, dated November 20, 1996, among TL
Lease Funding Corp. IV, Trans Leasing International, Inc. and First Union
Capital Markets Corp.
4.1 Indenture, dated as of November 26, 1996, between TLFC
Equipment Lease Trust 1996-1 and Manufacturers and Traders Trust Company, as
indenture trustee.
4.2 Pooling and Servicing Agreement, dated as of November 26,
1996, among TL Lease Funding Corp. IV, TLFC IV Equipment Lease Trust 1996-1
and Trans Leasing International, Inc., as servicer.
4.3 Trust Agreement, dated as of November 26, 1996, between TL
Lease Funding Corp. IV and Bankers Trust (Delaware), as owner trustee.
4.4 Certificate of Trust, dated November 22, 1996, of TLFC IV
Equipment Lease Trust 1996-1.
10.1 Amended and Restated Contribution and Sale Agreement, dated as
of November 26, 1996, between Trans Leasing International, Inc. and TL Lease
Funding Corp. IV.
10.2 Administration Agreement, dated as of November 26, 1996,
between TLFC IV Equipment Lease Trust 1996-1 and Trans Leasing International,
Inc.
25.1 Form T-1, Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of a Corporation designated to act as Trustee,
filed by Manufacturers and Traders Trust Company, as trustee to TLFC IV
Equipment Lease Trust 1996-1.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TL LEASE FUNDING CORP. IV
By: /s/ Norman Smagley
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Name: Norman Smagley
Title: Vice President, Finance and
Chief Financial Officer
Dated: December 4, 1996
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EXHIBIT INDEX
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Exhibit No. Description Page No.
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1.1 Underwriting Agreement, dated November 20, 1996, among TL Lease Funding Corp. IV,
Trans Leasing International, Inc. and First Union Capital Markets Corp.
4.1 Indenture, dated as of November 26, 1996, between TLFC Equipment Lease Trust 1996-1
and Manufacturers and Traders Trust Company, as indenture trustee.
4.2 Pooling and Servicing Agreement, dated as of November 26, 1996, among TL Lease Funding
Corp. IV, TLFC IV Equipment Lease Trust 1996-1 and Trans Leasing International, Inc.,
as servicer.
4.3 Trust Agreement, dated as of November 26, 1996, between TL Lease Funding Corp. IV and
Bankers Trust (Delaware), as owner trustee.
4.4 Certificate of Trust, dated November 22, 1996, of TLFC IV Equipment Lease Trust 1996-
1.
10.1 Amended and Restated Contribution and Sale Agreement, dated as of November 26, 1996,
between Trans Leasing International, Inc. and TL Lease Funding Corp. IV.
10.2 Administration Agreement, dated as of November 26, 1996, between TLFC IV Equipment
Lease Trust 1996-1 and Trans Leasing International, Inc.
25.1 Form T-1, Statement of Eligibility and Qualification under the Trust Indenture Act
of 1939 of a Corporation designated to act as Trustee, filed by Manufacturers and Traders
Trust Company, as trustee to TLFC IV Equipment Lease Trust 1996-1.
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EXHIBIT 1.1
TLFC IV EQUIPMENT LEASE TRUST 1996-1
$127,848,986 CLASS A 5.98% LEASE BACKED NOTES
TL LEASE FUNDING CORP. IV
(SELLER)
TRANS LEASING INTERNATIONAL, INC.
(SERVICER)
UNDERWRITING AGREEMENT
November 20, 1996
FIRST UNION CAPITAL MARKETS CORP.
One First Union Center
Charlotte, North Carolina 28288-0735
Dear Sirs:
TL Lease Funding Corp. IV, a Delaware corporation (the
"Seller"), proposes to form an owner trust, TLFC IV Equipment Lease Trust
1996-1 (the "Trust"), pursuant to a Trust Agreement (the "Trust Agreement") to
be dated as of November 26, 1996 between the Seller and Bankers Trust
(Delaware), as owner trustee (the "Owner Trustee"), which will issue (i)
$127,848,986 aggregate principal amount of its Class A 5.98% Lease Backed Notes
(the "Class A Notes") and (ii) $13,536,951 aggregate principal amount of its
Class B 6.64% Lease Backed Notes (the "Class B Notes"; and together with the
Class A Notes, the "Notes") pursuant to an Indenture to be dated as of November
26, 1996 (the "Indenture") between the Trust and Manufacturers & Traders Trust
Company, as trustee (the "Indenture Trustee"). The Class B Notes are
subordinate to the Class A Notes and are not being sold hereunder. The assets
of the Trust (the "Trust Fund") will include leases which cover a variety of
new and used "small-ticket" medical and office equipment and automobiles and
light-duty trucks or interests therein (the "Leases"), collections thereunder
due after October 31, 1996 (the "Cutoff Date"), interests in the underlying
equipment (the "Equipment"; and together with the Leases, the "Receivables"),
the lease files with respect to the Leases and certain physical damage
insurance policies with respect to the Equipment, together with the proceeds
thereof. The Seller will acquire the Leases, the Equipment and related assets
from Trans Leasing International, Inc. who will service such Leases, Equipment
and related assets for the Trust ("Trans Leasing"; and in its capacity as
Servicer, the "Servicer"). The Notes will be secured by the Trust Fund
pursuant to the Indenture. The beneficial interest in the Trust will be
represented by a certificate (the "Trust Certificate") which will initially be
issued to the Seller in partial consideration for the Leases, the Equipment and
related assets transferred to the
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Trust by the Seller under the Pooling and Servicing Agreement to be dated as of
November 26, 1996 among the Seller, the Servicer and the Trust (the "Pooling
and Servicing Agreement"). Capitalized terms used and not otherwise defined
herein shall have the meanings given them in the Pooling and Servicing
Agreement.
This is to confirm the agreement concerning your purchase of
the Class A Notes from the Seller.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF TRANS
LEASING AND THE SELLER. Trans Leasing and the Seller jointly and severally
represent and warrant to and agree with you that:
(a) A registration statement on Form S-3 (No. 33-95108),
together with Amendments Nos. 1 and 2 thereto, has been filed by the
Seller with the Securities and Exchange Commission (the "Commission")
and has become effective under the Securities Act of 1933, as amended
(the "Securities Act"). Such registration statement may have been
amended or supplemented from time to time prior to the date hereof.
Any such amendment or supplement was filed with the Commission in
accordance with the Securities Act and the rules and regulations of
the Commission thereunder (the "Rules and Regulations"). The Seller
proposes to file with the Commission pursuant to Rule 424(b)(4) of the
Rules and Regulations a prospectus supplement (the "Prospectus
Supplement") to the prospectus dated November 20, 1996, relating to
the Class A Notes and the method of distribution thereof. Copies of
such registration statement, any amendment or supplement thereto, such
prospectus and the Prospectus Supplement have been previously
delivered to you. Such registration statement, including exhibits
thereto and such prospectus, as amended or supplemented to the date
hereof, and as further supplemented by the Prospectus Supplement, are
hereinafter referred to as the "Registration Statement" and the
"Prospectus," respectively. The conditions to the use of a
registration statement on Form S-3 under the Securities Act have been
satisfied.
(b) The Registration Statement, at the time it became
effective, any post-effective amendment thereto, at the time it became
effective, and the Prospectus, as of the date of the Prospectus
Supplement, complied in all material respects with the applicable
requirements of the Securities Act and the Rules and Regulations and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations of the Commission thereunder and
did not include any untrue statement of a material fact and, in the
case of the Registration Statement and any post-effective amendment
thereto, did not omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading
and, in the case of the Prospectus, did not omit to state any material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading; on the
Closing Date (as hereinafter defined), the Registration Statement and
the Prospectus, as amended or supplemented as of the Closing Date,
will comply in all material respects with the applicable requirements
of the Securities Act and the Rules
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and Regulations and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and neither the Prospectus
nor any amendment or supplement thereto will include any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
representation and warranty in the preceding sentence does not apply
to (i) that part of the Registration Statement which shall constitute
the Statement of Eligibility and Qualification (Form T-1) of the
Indenture Trustee under the Trust Indenture Act or (ii) that
information contained in or omitted from the Registration Statement or
the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with the Underwriter's Information (as defined
herein). The form of the Indenture has been qualified under the Trust
Indenture Act.
(c) The Seller has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority to own its properties and to
conduct its business as such properties are presently owned and such
business is presently conducted, and had at all relevant times, and
now has, power, authority and legal right to acquire, own and sell the
Receivables.
(d) The representations and warranties of the Seller in
Section 3.02 of the Contribution and Sale Agreement and Section 2.4 of
the Pooling and Servicing Agreement will be true and correct as of the
Closing Date.
(e) The representations and warranties of Trans Leasing in
Sections 3.01 of the Contribution and Sale Agreement and of the
Servicer in Section 3.6 of the Pooling and Servicing Agreement will be
true and correct as of the Closing Date.
(f) Each of the Seller and Trans Leasing has the power and
authority to execute and deliver this Agreement and to carry out the
terms of this Agreement and the execution, delivery and performance by
each of the Seller and Trans Leasing of this Agreement have been duly
authorized by each of the Seller and Trans Leasing by all necessary
corporate action.
(g) This Agreement has been duly executed and delivered by
Trans Leasing and the Seller.
(h) When authenticated by the Indenture Trustee in accordance
with the Indenture and delivered and paid for pursuant to this
Agreement, the Class A Notes will be duly issued and constitute legal,
valid and binding obligations of the Trust enforceable against the
Trust in accordance with their terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights in general
and by general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
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(i) The execution, delivery and performance of this Agreement
and the consummation by each of the Seller and Trans Leasing of the
transactions contemplated hereby shall not conflict with, result in
any breach of any of the terms and provisions of or constitute (with
or without notice or lapse of time) a default under, the certificate
of incorporation or by-laws of such party, or any indenture, agreement
or other instrument to which either such party is a party or by which
it is bound, or violate any law or, to either such party's knowledge,
any order, rule or regulation applicable to such party of any court or
of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over such party
or any of its properties which conflict, breach, default or violation
would reasonably be expected to (x) have a material adverse effect on
the condition (financial or otherwise), results of operations or
business of the Seller or Trans Leasing, as the case may be, or (y)
have a material adverse effect on the ability of the Seller or Trans
Leasing, as the case may be, to perform its obligations under this
Agreement or any of the agreements contemplated hereby; and, except
for the registration of the Class A Notes under the Securities Act,
the qualification of the Indenture under the Trust Indenture Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and applicable state securities
laws in connection with your purchase and distribution of the Class A
Notes no permit, consent, approval of, or declaration to or filing
with, any governmental authority is required in connection with the
execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby.
(j) To either of the Seller's or Trans Leasing's knowledge,
there are no proceedings or investigations pending or threatened
before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction over such
party or its properties against such party or its properties (i)
asserting the invalidity of this Agreement or any of the Class A
Notes, (ii) seeking to prevent the issuance of any of the Class A
Notes or the consummation of any of the transactions contemplated by
this Agreement, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by such party of its
obligations under, or the validity or enforceability of, the Class A
Notes or this Agreement, or (iv) that may adversely affect the federal
or state income, excise, franchise or similar tax attributes of the
Class A Notes.
(k) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations and which have not been so described or filed.
(l) The Seller (i) is not in violation of its certificate of
incorporation or by-laws, (ii) is not in default, in any material
respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
indenture, agreement, mortgage, deed of trust or other instrument to
which the Seller is a party
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or by which the Seller is bound or to which any of the Seller's
property or assets is subject or (iii) is not in violation in any
respect of any law, order, rule or regulation applicable to the Seller
or any of the Seller's property of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over it or any of its property,
except any violation or default that would not reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the
Seller.
(m) The Contribution and Sale Agreement, the Pooling and
Servicing Agreement, the Trust Agreement, the Indenture and the
Administration Agreement conform in all material respects with the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(n) Neither the Trust nor the Seller is required to be
registered under the Investment Company Act of 1940, as amended.
(o) None of Trans Leasing, the Seller or anyone acting on the
Seller's behalf has taken any action that would require qualification
of the Trust Agreement or the Pooling and Servicing Agreement under
the Trust Indenture Act.
2. PURCHASE BY THE UNDERWRITER. On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Seller agrees to issue and sell to
you and you agree to purchase from the Seller, the Class A Notes at a purchase
price equal to 99.685% of the principal amount thereof plus accrued interest
from November 20, 1996 to the Closing Date. In addition the Seller agrees to
pay to you a structuring fee of $127,849 on the Closing Date.
The Seller shall not be obligated to deliver any of the Class
A Notes except upon payment for all the Class A Notes to be purchased as
provided herein. You shall promptly notify the Seller of the completion of the
distribution of the Class A Notes.
3. DELIVERY OF AND PAYMENT FOR THE CLASS A NOTES. Delivery
of and payment for the Class A Notes shall be made at the office of Kirkland &
Ellis, or at such other place as shall be agreed upon by you and the Seller, at
10:00 A.M., New York City time, on November 26, 1996, or at such other date or
time, not later than seven full business days thereafter, as shall be agreed
upon by you and the Seller (such date and time being referred to herein as the
"Closing Date"). On the Closing Date, the Seller shall deliver or cause to be
delivered to you the Class A Notes against payment to or upon the order of the
Seller of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of your obligation. Upon
delivery, the Class A Notes shall be represented by one or more global
certificates registered in the name of Cede & Co., as nominee of The Depository
Trust Company ("DTC"). The interest of the beneficial owners of the Class A
Notes will be represented by book-entries on the records of DTC and
participating members thereof. Definitive certificates representing the Class
A Notes will be available only under limited circumstances.
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4. FURTHER AGREEMENTS OF THE SELLER. The Seller agrees with
you:
(a) To file the Prospectus Supplement with the Commission
pursuant to and in accordance with Rule 424(b)(4) of the Rules and
Regulations within the time period prescribed by such rule and provide
evidence satisfactory to First Union of such timely filing.
(b) During any period in which a prospectus relating to the
Class A Notes is required to be delivered under the Securities Act:
advise you promptly of any proposal to amend the Registration
Statement or amend or supplement the Prospectus, furnish a copy
thereof to you and your counsel and not to amend or supplement the
Prospectus unless the form of such amendment or supplement is
reasonably satisfactory to you; to advise you promptly of (i) the
effectiveness of any post-effective amendment to the Registration
Statement, (ii) any request by the Commission for any amendment of the
Registration Statement or the Prospectus or for any additional
information, (iii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation or threatening of any proceedings for that purpose, (iv)
the issuance by the Commission of any order preventing or suspending
the use of any prospectus relating to the Class A Notes or the
initiation or threatening of any proceedings for that purpose and (v)
the receipt by the Seller of any notification with respect to the
suspension of the qualification of the Class A Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and to use best efforts to prevent the issuance of any
such stop order or of any order preventing or suspending the use of
any prospectus relating to the Class A Notes or suspending any such
qualification and, if any such stop order or order of suspension is
issued, to obtain the lifting thereof at the earliest possible time.
(c) If, during any period in which a prospectus relating to
the Class A Notes is required to be delivered under the Securities Act
but in no event after February 18, 1997, any event shall have occurred
as a result of which the Prospectus, as then amended or supplemented,
would include an untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein,
in the light of the circumstances when such Prospectus is delivered to
a purchaser, not misleading, or if for any other reason it shall be
necessary at such time to amend or supplement the Prospectus in order
to comply with the Securities Act, to notify you immediately thereof,
and to promptly prepare and file with the Commission, subject to
paragraph (b) of this Section 4, an amendment or a supplement to the
Prospectus such that the statements in the Prospectus, as so amended
or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading, or such that
the Prospectus will comply with the Securities Act. You hereby agree
that if you receive a notice from the Seller pursuant to this
paragraph (c), you will not deliver the Prospectus in connection with
any sales of the Class A Notes after receipt of such notice until the
Prospectus is so amended or supplemented unless otherwise required by
law (except for any such requirement arising as a result of voluntary
actions taken by you after receipt of such notice).
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(d) During the period described in paragraph (c) of this
Section 4, to deliver promptly without charge to you such number of
the following documents as you may from time to time reasonably
request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement, the
Contribution and Sale Agreement, the Pooling and Servicing Agreement,
the Trust Agreement, the Indenture and the Administration Agreement)
and (ii) any preliminary prospectus supplement with respect to the
Class A Notes, the Prospectus and any amendment or supplement thereto.
(e) During the period described in paragraph (c) of this
Section 4, to file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus requested by the Commission.
(f) For so long as any of the Class A Notes are outstanding,
to furnish to you (i) copies of all materials furnished by the Trust
to its Securityholders and all reports and financial statements
furnished by the Trust to the Commission pursuant to the Exchange Act
or any rule or regulation of the Commission thereunder and (ii) from
time to time, such other information concerning the Seller and the
Trust as you may reasonably request.
(g) Promptly from time to time to take such action as you may
reasonably request to qualify the Class A Notes for offering and sale
under the securities laws of such jurisdictions as you may request and
to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Class A Notes; provided that in
connection therewith the Seller shall not be required to qualify as a
foreign corporation, to file a general consent to service of process
in any jurisdiction or to subject itself to taxation.
(h) For a period of 90 days from the date of the Prospectus,
to not offer for sale, sell, contract to sell or otherwise dispose of,
directly or indirectly, or file a registration statement for, or
announce any offering of, any securities collateralized by, or
evidencing an ownership interest in, a pool of equipment leases (other
than the Notes, the Trust Certificate and notes for borrowed money
under a credit facility) without your prior written consent.
(i) For a period from the date of this Agreement until the
retirement of the Class A Notes, or until such time as you shall no
longer maintain a secondary market in the Class A Notes, whichever
occurs first, to deliver to you the annual statement of compliance and
the annual independent certified public accountants' report furnished
to the Owner Trustee and the Indenture Trustee, pursuant to the
Pooling and Servicing Agreement, as soon as such statements and
reports are furnished to the Owner Trustee and the Indenture Trustee,
respectively.
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(j) To the extent, if any, that the initial rating provided
with respect to the Class A Notes by the Standard & Poor's Ratings
Group ("S&P") and Moody's Investors Service, Inc. ("Moody's) is
conditional upon the furnishing of documents or the taking of any
other actions by Trans Leasing or the Seller, to furnish such
documents and take any such other actions.
5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. Your obligations
hereunder are subject to the accuracy in all material respects, when made and
on the Closing Date, of the representations and warranties of Trans Leasing and
the Seller contained herein, to the accuracy in all material respects of the
statements of Trans Leasing or the Seller made in any certificates pursuant to
the provisions hereof, to the performance in all material respects by the
Seller of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and remain outstanding and no proceeding for that
purpose shall have been initiated and not terminated or threatened by
the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus
or otherwise shall have been complied with to the reasonable
satisfaction of you; and the Seller shall have filed the Prospectus
Supplement with the Commission pursuant to Rule 424(b)(4) of the Rules
and Regulations within the time period prescribed by such rule.
(b) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement,
the Class A Notes, the Trust Certificate, the Contribution and Sale
Agreement, the Pooling and Servicing Agreement, the Trust Agreement,
the Indenture and the Administration Agreement, the Registration
Statement and the Prospectus, and all other legal matters relating to
such agreements and the transactions contemplated hereby and thereby
shall be reasonably satisfactory in all material respects to your
counsel, and the Seller shall have furnished to such counsel all
documents and information that they may reasonably request to enable
them to pass upon such matters.
(c) Kirkland & Ellis shall have furnished to you their
written opinion, as counsel to the Seller, addressed to you and dated
the Closing Date, in substantially the form of Exhibit A hereto.
(d) Kirkland & Ellis shall have furnished to you their
written opinion, as counsel to the Seller, addressed to you and dated
the Closing Date, in form and substance reasonably satisfactory to
you, with respect to the characterization of the transfer of the
Receivables by Trans Leasing to the Seller pursuant to the
Contribution and Sale Agreement as a sale and the non-consolidation of
Trans Leasing and the Seller.
(e) You shall have received from Simpson Thacher & Bartlett,
your counsel, such opinion or opinions, dated the Closing Date, with
respect to such matters as you
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may require, and the Seller shall have furnished to such counsel such
documents as they reasonably request for enabling them to pass upon
such matters.
(f) Richards, Layton & Finger shall have furnished to you
their written opinion, as counsel to the Owner Trustee, addressed to
you and dated the Closing Date, in substantially the form of Exhibit B
hereto.
(g) Hodgson, Russ, Andrews, Woods & Goodyear shall have
furnished to you their written opinion, as counsel to the Indenture
Trustee, addressed to you and dated the Closing Date, in substantially
the form of Exhibit C hereto.
(h) You shall have received a letter dated the date hereof
(the "Procedures Letter") from Deloitte & Touche LLP verifying the
accuracy of such financial and statistical data contained in the
Prospectus as you shall deem advisable, other than the statistical
data appearing in the Prepayment Table in the Prospectus Supplement.
In addition, if any amendment or supplement to the Prospectus made
after the date hereof contains financial or statistical data, you
shall have received a letter dated the Closing Date confirming the
Procedures Letter and providing additional comfort on such new data on
substantially the same basis as provided in the Procedures Letter.
(i) You shall have received certificates, dated the Closing
Date, of any of the Chairman of the Board, the President, any Vice
President and the chief financial officer of each of Trans Leasing and
the Seller stating that (A) the representations and warranties of
Trans Leasing or the Seller, as the case may be, contained in this
Agreement, the Contribution and Sale Agreement, the Pooling and
Servicing Agreement, the Trust Agreement, the Indenture and the
Administration Agreement are true and correct in all material respects
on and as of the Closing Date, (B) Trans Leasing or the Seller, as the
case may be, has complied in all material respects with all agreements
and satisfied in all material respects all conditions on its part to
be performed or satisfied hereunder and under such agreements at or
prior to the Closing Date, (C) no stop order suspending the
effectiveness of the Registration Statement has been issued and is
outstanding and no proceedings for that purpose have been instituted
and not terminated or, to the best of his or her knowledge, are
contemplated by the Commission, and (D) since September 30, 1996,
there has been no material adverse change in the financial position or
results of operations of Trans Leasing, the Seller or the Trust or any
change, or any development including a prospective change, in or
affecting the condition (financial or otherwise), results of
operations or business of Trans Leasing, the Seller or the Trust
except as set forth in or contemplated by the Registration Statement
and the Prospectus. Any officer making such certification may rely
upon his or her knowledge as to the proceedings pending or threatened.
(j) The Class A Notes shall have been given a rating by both
S&P and Moody's that is equal to or better than the rating required
for the Class A Notes as set forth in the Prospectus Supplement.
<PAGE> 10
10
(k) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following:
(i) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the over-the-counter
market shall have been suspended or limited, or minimum prices
shall have been established on either of such exchanges or
such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having
jurisdiction, or trading in securities of Trans Leasing on any
exchange or in the over-the-counter market shall have been
suspended or (ii) a general moratorium on commercial banking
activities shall have been declared by Federal or New York
State authorities or (iii) an outbreak or escalation of
hostilities or a declaration by the United States of a
national emergency or war or such a material adverse change in
general economic, political or financial conditions (or the
effect of international conditions on the financial markets in
the United States shall be such) as to make it, in your
judgment impracticable or inadvisable to proceed with the
public offering or the delivery of the Class A Notes on the
terms and in the manner contemplated in the Prospectus.
(l) The Trust Certificate shall have been duly authenticated
by the Owner Trustee in accordance with the Trust
Agreement and delivered and paid for in accordance with the
Pooling & Servicing Agreement.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to your counsel.
6. TERMINATION. Your obligations hereunder may be terminated
by you, in your absolute discretion, by notice given to and received by the
Seller prior to delivery of and payment for the Class A Notes if, prior to that
time, any of the events described in Section 5(k) shall have occurred.
7. INDEMNIFICATION. (a) Trans Leasing and the Seller shall,
jointly and severally, indemnify and hold harmless you and each person, if any,
who controls you within the meaning of Section 15 of the Securities Act
(collectively referred to for the purposes of this Section 7 and Section 8 as
you) against any loss, claim, damage or liability, joint or several, to which
you may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage or liability (or any action in respect thereof) arises out
of or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus supplement related to the
Class A Notes, the Registration Statement or the Prospectus or in any amendment
or supplement thereto or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made,
not misleading, and shall reimburse you for any legal or other out-of-pocket
expenses reasonably incurred by you directly in connection with investigating
or preparing to defend or defending against or appearing as a third party
witness in connection with any such loss, claim, damage or liability (or any
action in respect thereof) as such expenses are incurred; provided, however,
that neither Trans Leasing nor the Seller shall be liable in any such case to
the extent that any such loss, claim, damage or liability (or any action in
respect thereof) arises out of or is based upon an
<PAGE> 11
11
untrue statement or alleged untrue statement in or omission or alleged omission
from (A) any preliminary prospectus supplement, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with the Underwriter's Information or (B) the Current Report on Form
8-K dated November 18, 1996 (the "Current Report") which the Seller proposes to
file with the Commission pursuant to Section 15(d) of the Securities Exchange
Act of 1934, as amended; provided further that as to any preliminary prospectus
or preliminary prospectus supplement related to the Class A Notes this
indemnity agreement shall not inure to the benefit of you, your officers or
employees or any person controlling you on account of any loss, claim, damage,
liability or action arising from the sale of Class A Notes to any person by you
if you failed to send or give a copy of the Prospectus, as the same may be
amended or supplemented, to that person within the time required by the
Securities Act, and the untrue statement or alleged untrue statement of any
material fact or omission or alleged omission to state a material fact in such
preliminary prospectus or preliminary prospectus supplement was corrected in
the Prospectus, unless such failure resulted from non- compliance by the Seller
with Section 4(c); and provided further that as to any amended or supplemented
Prospectus this indemnity agreement shall not inure to the benefit of you, your
officers or employees or any person controlling you on account of any loss,
claim, damage, liability or action arising from the sale of Class A Notes to
any person by you if, at the time that you are required by the Securities Act
to send or give a copy of the Prospectus to such person, an amended or
supplemented Prospectus has been made available to you and you failed to send
or give a copy of such amended or supplemented Prospectus to that person within
the time required by the Securities Act, and the untrue statement or alleged
untrue statement of any material fact or omission or alleged omission to state
a material fact in the Prospectus was corrected in such amended or supplemented
Prospectus, unless such failure resulted from non-compliance by the Seller with
Section 4(c).
(b) You shall indemnify and hold harmless Trans Leasing,
the Seller, each of the Seller's directors, each officer of the Seller who
signed the Registration Statement and each person, if any, who controls the
Seller within the meaning of Section 15 of the Securities Act (collectively
referred to for the purposes of this Section 7 and Section 8 as the Seller),
against any loss, claim, damage or liability, joint or several, to which the
Seller may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage or liability (or any action in respect thereof) arises
out of or is based upon (i) (A) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus
supplement, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (B) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with the written information furnished to the Seller by
you or on your behalf specifically for use therein or (ii) the failure to
deliver to any person the information contained in the Current Report prior to
the date of the filing of the Current Report, and shall reimburse the Seller
for any legal or other expenses reasonably incurred by the Seller in connection
with investigating or preparing to defend or defending against or appearing as
third party witness in connection with any such loss, claim, damage or
liability (or any action in respect thereof) as such expenses are incurred.
The parties acknowledge and
<PAGE> 12
12
agree that the written information furnished to the Seller by you or on your
behalf (the "Underwriter's Information") consists solely of the paragraph below
the footnotes on the cover page of the Prospectus Supplement concerning the
terms of the offering and the third paragraph of text and the last sentence of
the seventh paragraph of text under the caption "Underwriting" in the
Prospectus Supplement.
(c) Promptly after receipt by an indemnified party under
this Section 7 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 7, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent it has
been materially prejudiced by such failure; and, provided, further, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 7. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of
its election to assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this Section 7 for any
legal or other out-of-pocket expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Seller and Trans Leasing, on the one
hand, and you, on the other hand, shall have the right to employ one counsel to
represent jointly the Seller and Trans Leasing, on the one hand, and you, on
the other hand (and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought under this
Section 7) if, in the reasonable judgment of such party, it is advisable for
such party (and such controlling persons) to be jointly represented by separate
counsel (reasonably acceptable to the indemnifying party) because there may be
one or more legal defenses available to such parties which are different from
or additional to those available to the indemnifying party and the
representation of both the indemnified party and the indemnifying would be
inappropriate, and in that event the fees and expenses of such separate counsel
shall be paid by the indemnifying party. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 7(a) and 7(b),
shall use all reasonable efforts to cooperate with the indemnifying party in
the defense of any such action or claim. No indemnifying party shall be liable
for any settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with its
prior written consent or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment (to the extent provided herein).
The obligations of Trans Leasing and, the Seller and your
obligations in this Section 7 and in Section 8 are in addition to any other
liability which Trans Leasing, the Seller or you, as the case may be, may
otherwise have.
<PAGE> 13
13
8. CONTRIBUTION. If the indemnification provided for in
Section 7 is unavailable or insufficient to hold harmless an indemnified party
under Section 7(a) or (b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified party as a result of such loss, claim, damage or liability
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by Trans Leasing and the Seller on the one hand and you on the other
from the offering of the Class A Notes or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of Trans Leasing and the Seller on the one
hand and your fault on the other with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, as well as any other
relevant equitable considerations. The relative benefits received by Trans
Leasing and the Seller on the one hand and you on the other with respect to
such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Class A Notes purchased under this Agreement
(before deducting expenses) received by the Seller bear to the total
underwriting discounts and commissions received by you with respect to the
Class A Notes purchased under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus Supplement. The relative fault shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by Trans Leasing or
the Seller on the one hand or you on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission.
Trans Leasing, the Seller and you agree that it would not be
just and equitable if contributions pursuant to this Section 8 were to be
determined by pro rata allocation (even if you were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability referred to above in this Section 8 shall be deemed to include,
subject to the limitations on the fees and expenses of separate counsel set
forth in Section 7, for purposes of this Section 8, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such claim or any action in respect thereof. The amount paid
or payable by an indemnified party as a result of the loss, claim, damage or
liability referred to above in this Section 8 shall be subject to the
limitations on amounts payable with respect to settlements made without the
consent of the indemnifying party set forth in Section 7. Notwithstanding the
provisions of this Section 8, you shall not be required to contribute any
amount in excess of the amount by which the total price at which the Class A
Notes underwritten by you and distributed to the public were offered to the
public less the amount of any damages which you have otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
<PAGE> 14
14
9. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon you, Trans Leasing, the
Seller, and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than you, Trans Leasing and the Seller and your and their
respective successors and the controlling persons and officers and directors
referred to in Sections 7 and 8 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
10. EXPENSES. Seller agrees with you to pay (a) the costs
incident to the authorization, issuance, sale, preparation and delivery of the
Class A Notes and any taxes payable in that connection; (b) the costs incident
to the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs
of distributing the Registration Statement as originally filed and each
amendment thereto and any post-effective amendments thereof (including, in each
case, exhibits), any preliminary prospectus supplement, the Prospectus and any
amendment or supplement to the Prospectus, including, without limitation, the
Prospectus Supplement, all as provided in this Agreement; (d) the costs of
reproducing and distributing this Agreement and any other underwriting and
selling group documents by mail, telex or other means of communications; (e)
the fees and expenses of qualifying the Class A Notes under the securities laws
of the several jurisdictions as provided in Section 4(g) and of preparing,
printing and distributing Blue Sky Memoranda and Legal Investment Surveys
(including related the reasonable and documented fees and expenses of your
counsel); (f) any fees charged by S&P or Moody's for rating the Class A Notes;
(g) all fees and expenses of the Owner Trustee and the Indenture Trustee and
their respective counsel; (h) any transfer taxes payable in connection with its
sale of the Class A Notes pursuant to this Agreement; and (i) all other costs
and expenses incident to the performance of the obligations of Trans Leasing
and the Seller under this Agreement; provided that, except as otherwise
provided in this Section 10, you shall pay your own costs and expenses,
including the costs and expenses of your counsel and the expenses of
advertising any offering of the Class A Notes.
11. SURVIVAL. The respective indemnities, rights of
contribution, representations, warranties and agreements of Trans Leasing and,
the Seller and your indemnities, rights of contribution, and agreements
contained in this Agreement or made by you or them or on behalf of you or them
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Class A Notes and shall remain in full force and effect,
regardless of any (i) termination or cancellation of this Agreement, (ii) any
investigation made by you or them or on behalf of you or them or any person
controlling any of them or (iii) acceptance of and payment for the Class A
Notes.
12. NOTICES, ETC. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to you, shall be delivered or sent by mail or facsimile
transmission and confirmed to First Union Capital Markets Corp., One
First Union Center TW-10,
<PAGE> 15
15
Charlotte, North Carolina 28288-0610, Attention: Chris Snyder,
Telecopy Number: 704-374-3254;
(b) if to the Seller, shall be delivered or sent by mail or
facsimile transmission and confirmed to the address of the Seller set
forth in the Registration Statement, Attention: Chief Financial
Officer, with a copy to Trans Leasing at the address of the Servicer
set forth in the Registration Statement, Attention: Chief Financial
Officer;
(c) if to Trans Leasing, shall be delivered or sent by mail or
facsimile transmission and confirmed to the address of Trans Leasing
set forth in the Registration Statement, Attention: Chief Financial
Officer;
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
13. DEFINITIONS OF CERTAIN TERMS. For purposes of this
Agreement, "business day" means any day on which the New York Stock Exchange,
Inc. is open for trading.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same instrument.
16. HEADINGS. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
17. NO PETITION. You shall not, prior to the date which is
one year and one day after the final payment with respect to the Notes,
acquiesce, petition or otherwise invoke or cause the Seller to invoke the
process of any court or government 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, sequestrator 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.
<PAGE> 16
16
If the foregoing is in accordance with your understanding of
the agreement between the Seller and Trans Leasing and you, kindly indicate
your acceptance in the space provided for that purpose below.
Very truly yours,
TL LEASE FUNDING CORP. IV
By
---------------------------
Name:
Title:
TRANS LEASING INTERNATIONAL, INC.
By
---------------------------
Name:
Title:
Accepted:
FIRST UNION CAPITAL MARKETS CORP.
By
--------------------------
Authorized Signatory
<PAGE> 1
EXHIBIT 4.1
_________________________________________________________________
TLFC IV EQUIPMENT LEASE TRUST 1996-1
Class A 5.98% Lease Backed Notes
Class B 6.64% Lease Backed Notes
______________________________
INDENTURE
Dated as of November 26, 1996
_______________________________
Manufacturers and Traders Trust Company
Indenture Trustee
_________________________________________________________________
<PAGE> 2
TABLE OF CONTENTS
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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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.1 Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.2 Execution, Authentication and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.3 Temporary Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.4 Registration; Registration of Transfer or Exchange . . . . . . . . . . . . . . . . . . . 12
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.8 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.13 Certain Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.14 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.15 Special Terms Applicable to Class B Notes . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE III
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.1 Payment of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.2 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.3 Money for Payments To Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.4 Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.5 Protection of Indenture Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.6 Opinions as to Indenture Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.7 Performance of Obligations; Servicing of Leases . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.8 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.9 Annual Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
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SECTION 3.10 Consolidation, Merger, etc. of Issuer; Disposition of Trust Assets . . . . . . . . . . . 28
SECTION 3.11 Successor or Transferee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.12 No Other Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.13 No Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.14 Servicer's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.16 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.17 Removal of Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.18 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.19 Notice of Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.20 Further Instruments and Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.21 Trustee's Assignment of Interest in Certain Receivables . . . . . . . . . . . . . . . . . 32
SECTION 3.22 Representations and Warranties by the Issuer to the Indenture Trustee . . . . . . . . . . 33
ARTICLE IV
Satisfaction and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.1 Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.2 Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 4.3 Repayment of Monies Held by Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE V
Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . 37
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee . . . . . . . . 38
SECTION 5.4 Remedies; Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.5 Optional Preservation of the Indenture . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.6 Limitation of Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal and Interest . . . . . . . . . . 43
SECTION 5.8 Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.9 Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.10 Delay or Omission Not a Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.11 Control by Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.12 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.13 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.14 Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.15 Action on Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.16 Performance and Enforcement of Certain Obligations . . . . . . . . . . . . . . . . . . . 46
</TABLE>
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<TABLE>
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ARTICLE VI
Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.1 Duties of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.2 Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.3 Individual Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.4 Indenture Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.5 Notice of Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.6 Reports by Indenture Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.7 Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.8 Replacement of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.9 Successor Indenture Trustee by Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee 53
SECTION 6.11 Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.12 Preferential Collection of Claims Against Issuer . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.13 Representations and Warranties of Indenture Trustee . . . . . . . . . . . . . . . . . . . 55
SECTION 6.14 Indenture Trustee May Enforce Claims Without Possession of Notes . . . . . . . . . . . . 56
ARTICLE VII
Noteholders' Lists and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.1 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders. . . . . . . . . . 56
SECTION 7.2 Preservation of Information; Communications to Noteholders . . . . . . . . . . . . . . . 56
SECTION 7.3 Reports by Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.4 Reports by Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE VIII
Accounts, Disbursements and Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.1 Collection of Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.2 Trust Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.3 General Provisions Regarding Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.4 Release of Indenture Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.5 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE IX
Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders . . . . . . . . . . . . . . . . . .61
</TABLE>
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<TABLE>
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<S> <C> <C> <C>
SECTION 9.2 Supplemental Indentures with Consent of Noteholders . . . . . . . . . . . . . . . . . . . 62
SECTION 9.3 Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.4 Effect of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.5 Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 9.6 Reference in Notes to Supplemental Indentures 65
ARTICLE X
Redemption of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.1 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.2 Form of Redemption Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.3 Notes Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE XI
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 11.1 Compliance Certificates and Opinions, etc. . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 11.2 Form of Documents Delivered to Indenture Trustee . . . . . . . . . . . . . . . . . . . . 69
SECTION 11.3 Acts of Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies . . . . . . . . . . . . . 71
SECTION 11.5 Notices to Noteholders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.6 Alternate Payment and Notice Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.7 Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 11.8 Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 11.9 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 11.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 11.11 Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 11.12 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 11.13 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 11.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 11.15 Recording of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 11.16 No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 11.17 No Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 11.18 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
</TABLE>
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
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<TABLE>
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Exhibit D Form of Certificate
Exhibit E Form of Undertaking Letter
</TABLE>
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<PAGE> 7
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
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<S> <C>
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)
2.2, 2.9, 4.1, 8.4, 11.1(a)
(c)(2) 2.9, 4.1, 8.4, 11.1(a)
2.9, 8.4, 11.1(b)
(c)(3) 11.1(a)
(d) 11.1(a)
(e) 6.1(b)
(f) 6.5
315(a) 6.1(a)
(b) 6.2, 6.1(c)
(c) 5.13
(d)
(e) 1.1
316(a)last 5.11
sentence 5.12
(a)(1)(A) Omitted
(a)(1)(B) 5.7
(a)(2) 5.3(b)
316(b), (c) 5.3(d)
317(a)(1) 3.3
(a)(2) 11.7
(b)
318(a)
</TABLE>
N.A. means Not Applicable.
Note: This cross reference table shall not, for any purpose, be deemed to be
part of this Indenture
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<PAGE> 8
This INDENTURE is made and entered into as of November 26,
1996, between TLFC IV EQUIPMENT LEASE TRUST 1996-1, 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, a security interest in 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 or, with respect to a Substitute Lease, after
the applicable Substitution 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 chooses 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.
<PAGE> 9
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 pursuant to its organizational documents or a power of attorney
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 the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), that is subject
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<PAGE> 10
to the provisions of Title I of ERISA, (b) a plan or arrangement (including an
individual retirement account or Keogh Plan) within the meaning of or subject
to Section 4975 of the Code or (c) any entity whose underlying assets include
"plan assets" under U.S. Department of Labor Regulations certified at 29
C.F.R. Section 2510.3-101 or otherwise.
"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.
"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 5.98% 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 6.64% 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
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<PAGE> 11
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
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<PAGE> 12
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 1996-1 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
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<PAGE> 13
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 canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money
in the necessary amount has been theretofore deposited with the 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
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<PAGE> 14
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
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<PAGE> 15
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 Certificate" has the meaning assigned to it in the Trust
Agreement.
"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
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<PAGE> 16
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.
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ARTICLE II
The Notes
SECTION 2.1 Form. The Class A Notes and Class B Notes,
in each case together with the Indenture Trustee'scertificate 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 $127,848,986 and Class B Notes for an original issue in an
aggregate principal amount of $13,536,951.
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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: _________, ___ _________________________________, 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
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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
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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
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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.
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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 December 1996 Payment
Date, from November 20, 1996) 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 or on behalf of 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.
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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 canceled 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
canceled by the Indenture Trustee. No Notes shall be authenticated in lieu of
or in exchange for any Notes canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Notes may be held or
disposed of by the 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 canceled 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 and 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
Section Section 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 Class A 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
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"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
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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 and ERISA Considerations.
(a) 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.
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(b) The Class A Noteholders and the Class A Note Owners,
by acquiring any Class A Note or interest therein, shall be deemed to have
represented and warranted that either (i) the Class A Noteholder is not
acquiring (or considered to be acquiring) the Class A Note with the assets of a
Benefit Plan or (ii) one or more of the following is true as to all of the
funds used to purchase such Class A Note: (a) the funds constitute the assets
of a bank collective investment fund within the meaning of DOL Prohibited
Transaction Class Exemption ("PTCE") 91-38, 56 F.R. 31,966, and the acquisition
and holding of such Class A Note satisfies the requirements of such exemption
and is entitled to full relief thereunder; (b) the funds constitute the assets
of an insurance company pooled separate account within the meaning of PTCE
90-1, 55 FR 2,891, and the acquisition and holding of such Class A Note
satisfies the requirements of such exemption and is entitled to full relief
thereunder; (c) the funds are invested in an investment fund which is managed
by an investment adviser registered under the Investment Advisers Act of 1940,
a bank, an insurance company or a savings and loan association, which meets
specified financial standards, which has acknowledged in a written agreement
that it is an ERISA fiduciary with respect to investments made on behalf of the
Benefit Plan from which it acquired such funds, and which is otherwise a
"qualified professional asset manager" as such term is defined in PTCE 84-14,
49 FR 9,494, as amended on October 10, 1985, 50 FR 41,430, and the acquisition
and holding of such Class A Note satisfies the requirements of such exemption
and is exempt to the fullest extent provided therein; (d) the funds constitute
the assets of an insurance company general account, and the acquisition and
holding of such Class A Note by such account satisfies the requirements of PTCE
95-60, 60 FR 35,925, and is entitled to full relief thereunder; or (e) the
funds constitute the assets of a "governmental plan" as defined in Section
3(32) of ERISA or Section 4975 of the Code, and neither the purchase nor
holding of such Class A Note will result in or involve a transaction that is
prohibited under applicable state law.
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
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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 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 Indenture Trustee and the
Seller, 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) Unless the acquisition and holding of Class B Notes
shall have been approved in writing by the Seller, in which case such Holder
shall have executed and delivered to the Indenture Trustee and the Seller an
agreement containing such representations and covenants as the Seller shall
request, the Class B Notes may not be acquired by or for the account of a
Benefit Plan and, unless the Holder shall have received such approval, 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 in the form
of Exhibit E, 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,
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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
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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
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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;
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(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 1997, 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,
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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
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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
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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 Leases and/or the underlying Equipment
(including Defaulted Leases, 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
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fiscal year 1997), an Officer's Certificate stating, as to the Authorized
Officer signing such Officer's Certificate, that
(i) a review of the activities of the Issuer
during the 12-month period ending at the end of such fiscal
year (or in the case of the initial Transaction Year, the
period from the Closing Date to June 30, 1997) and of
performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's
knowledge, based on such review, the Issuer has complied 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
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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;
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(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.
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SECTION 3.12 No Other Business. The Issuer shall not
engage in any business other than financing, purchasing, owning, selling and
managing the Leases and the related Equipment in the manner contemplated by
this Indenture and the Basic Documents, issuing the Notes and the Trust
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
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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 or to be assigned by the Issuer to the Servicer, the Seller or
the Originator 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.
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(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 or the Seller as contemplated by
Section 2.6 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 five (5) Business Days after the date
hereof.
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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
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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
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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
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(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
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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, if any, and collect in the manner provided by law out of the Indenture
Trust Estate or the property of any other obligor upon such Notes, if any,
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
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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
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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,
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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
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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;
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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
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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
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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,
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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
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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
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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.
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(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
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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.
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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;
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(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
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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 Agencies 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
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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.
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SECTION 6.11 Eligibility; Disqualification. The Indenture
Trustee shall at all times satisfy the requirements of TIA Section 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
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities of the Issuer are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against
Issuer. The Indenture Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). An indenture trustee
who has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
SECTION 6.13 Representations and Warranties of Indenture
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
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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.
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SECTION 7.2 Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses of the Holders of
Notes contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.1 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 Section
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 Section 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 Section 313(c)) such summaries of any
information, documents and reports required to be filed by the
Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a)
as may be required by rules and regulations prescribed from
time to time by the Commission.
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(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 Section 313(a), within 60 days
after each February 1 beginning with February 1, 1997, the Indenture Trustee
shall mail to each Noteholder as required by TIA Section 313(c) a brief report
dated as of such date that complies with TIA Section 313(a). The Indenture
Trustee also shall comply with TIA Section 313(b). A copy of each report at
the time of its mailing to Noteholders shall be filed by the Indenture Trustee
with the Commission and each stock exchange, if any, on which the Notes are
listed. The Issuer shall notify the Indenture Trustee if and when the Notes
are listed on any stock exchange.
(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.
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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
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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 Sections 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
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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 Agencies, the Issuer and the Indenture Trustee,
when authorized by an Issuer Order, at any time and from time to time, may
enter into one or more indentures supplemental hereto (which shall conform to
the provisions of the 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;
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(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 Agencies, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
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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 Agencies and with
the consent of the Holders of not less than a majority of the Outstanding
Amount of the Notes, by Act of such Holders delivered to the Issuer and the
Indenture Trustee, enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the 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
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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.
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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.
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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 Agencies 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
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(iii) the place where such Notes are to be
surrendered for payment of the Redemption Price (which shall
be the office or agency of the Issuer to be maintained as
provided in Section 3.2).
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 anyperiod 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.
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Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such
certificate or opinion has read or has caused to be read such
covenant or condition and the definitions herein relating
thereto;
(ii) a brief statement as to the nature and scope
of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or
investigation as is necessary to enable such signatory to
express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether, in the opinion of
each such signatory, such condition or covenant has been
complied with.
(b) (i) Prior to the deposit of any
Collateral or other property or securities with the Indenture
Trustee that is to be made the basis for the release of any
property or securities subject to the lien of this Indenture,
the Issuer shall, in addition to any obligation imposed in
Section 11.1(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
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Amount of the Notes, but such a certificate need not be
furnished with respect to any securities so deposited, if the
fair value thereof to the Issuer as set forth in the related
Officer's Certificate is less than $25,000 or less than one
percent of the Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any
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 $25,000 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.
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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.
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(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given
or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by agents duly appointed in writing; and except as herein otherwise
expressly provided such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee, and, where it is hereby
expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Noteholders signing 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 Agencies. Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other documents provided or permitted
by this Indenture to be made upon, given or furnished to or filed with:
(a) The Indenture Trustee by any Noteholder or by the
Issuer shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee and
received at its Corporate Trust Office, or
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(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, 1996-1, 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 Agencies 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 addresses: Standard & Poor's Ratings Services, 26 Broadway (15th
Floor), New York, New York 10004, Attention of Asset Backed Surveillance
Department; Moody's Investor Services, Inc., 99 Church Street, New York, New
York 10007, Attention of ABS Monitoring Dept. and 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
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of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving
of such notice.
Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute
a Default or Event of Default.
SECTION 11.6 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 conflicts with another provision hereof
that is required to be included in this Indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that
impose duties on any person (including the provisions automatically deemed
included herein unless expressly excluded by this Indenture) are a part of and
govern this Indenture, whether or not physically contained herein.
SECTION 11.8 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 and 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
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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
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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.
Each Noteholder or Note Owner understands that all recourse under its Note is
limited to and payable only out of the Indenture Trust Estate, and each
Noteholder or Note Owner, by acceptance of a Note or an interest therein,
agrees that (i) it will look solely to the Indenture Trust Estate for the
payment of all principal and accrued interest due and to become due on the Note
and (ii) except as expressly provided in the Basic Documents, it shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom.
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, 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 Indenture Trust Estate for any and
all
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<PAGE> 83
liabilities, obligations and undertakings contained in this Indenture or in
the Notes.
SECTION 11.17 No Petition. Notwithstanding any prior
termination of this Agreement, 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, prior to the date which is one year and one day after the
final distribution with respect to (i) the Class A Notes and the Class B Notes,
(ii) the 1995-1 Notes, and (iii) any other indebtedness of the Issuer, the
Seller or any other trust formed by the Seller permitted under Section 2.7(1)
of the Pooling and Servicing Agreement, acquiesce, petition or otherwise invoke
or cause the Seller or the Issuer to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Seller or 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 Seller or the Issuer or any
substantial part of its property or ordering the winding up or liquidation of
the affairs of the Seller or the Issuer.
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.
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<PAGE> 84
* * * * *
- 77 -
<PAGE> 85
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 1996-1
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> 86
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 1996-1, 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 26th day of
November, 1996.
_________________________
Notary Public
My commission expires:
__________________________
<PAGE> 87
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 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 26th day of
November, 1996.
_________________________
Notary Public
My commission expires:
__________________________
<PAGE> 88
EXHIBIT A
REGISTERED
$___________
No. R-A__
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 872554AC4
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 1996-1
CLASS A 5.98% LEASE BACKED NOTE
TLFC IV Equipment Lease Trust 1996-1, 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 $___________, 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 November 2002 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
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<PAGE> 89
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: November 26, 1996 TLFC IV EQUIPMENT LEASE TRUST
1996-1,
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: November 26, 1996 Manufacturers and Traders Trust
Company, not in its individual
capacity but solely as
Indenture Trustee,
By: ______________________________
Authorized Signatory
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<PAGE> 90
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A 5.98% Lease Backed Notes (herein called the
"Class A Notes"), all issued under an Indenture dated as of November 26, 1996
(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 20th day of each calendar month or, if any such date is not a Business Day,
the next succeeding Business Day, commencing December 20, 1996.
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the Payment Date in November
2002 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.),
<PAGE> 91
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. Each Noteholder or Note Owner
understands that all recourse under its Note is limited to and payable only out
of the Indenture Trust Estate, and each Noteholder or Note Owner, by acceptance
of a Note or an interest therein, agrees that (i) it will look solely to the
Indenture Trust Estate for the payment of all principal and accrued interest
due and to become due on the Note and (ii) except as expressly provided in the
Basic Documents, it shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom.
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<PAGE> 92
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.
The Class A Noteholders and the Class A Note Owners, by
acquiring any Class A Note or interest therein, shall be deemed to have
represented and warranted that either (i) the Class A Noteholder is not
acquiring (or considered to be acquiring) the Class A Note with the assets of a
Benefit Plan or (ii) one or more of the following is true as to all of the
funds used to purchase such Class A Note: (a) the funds constitute the assets
of a bank collective investment fund within the meaning of DOL Prohibited
Transaction Class Exemption ("PTCE") 91-38, 56 FR 31,966, and the acquisition
and holding of such Class A Note satisfies the requirements of such exemption
and is entitled to full relief thereunder; (b) the funds constitute the assets
of an insurance company pooled separate account within the meaning of PTCE
90-1, 55 FR 2,891, and the acquisition and holding of such Class A Note
satisfies the requirements of such exemption and is entitled to full relief
thereunder; (c) the funds are invested in an investment fund which is managed
by an investment adviser registered under the Investment Advisers Act of 1940,
a bank, an insurance company or a saving and loan association, which meets
specified financial standards, which has acknowledged in a written agreement
that it is an ERISA fiduciary with respect to investments made on behalf of the
Benefit Plan from which it acquired such funds, and which is otherwise a
"qualified professional asset manager" as such term is defined in PTCE 84-14,
49 FR 9,494, as amended on October 10, 1985, 50 FR 41,430, and the acquisition
and holding of such Class A Note satisfies the requirements of such exemption
and is exempt to the fullest extent provided therein; (d) the funds constitute
the assets of an insurance company general account, and the acquisition and
holding of such Class A Note by such account satisfies the requirements of PTCE
95-60, 60 FR 35,925, and is entitled to full relief thereunder; or (e) the
funds constitute the assets of a "governmental plan" as defined in Section
3(32) of ERISA or Section 4975 of the Code, and neither the purchase nor
holding of such Class A Note will result in or involve a transaction that is
prohibited under applicable state law.
Notwithstanding any prior termination of rights pursuant to
the Indenture or this Note, each Noteholder or Note Owner, by
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<PAGE> 93
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, prior to the date which is one
year and one day after the final distribution with respect to (i) the Class A
Notes and the Class B Notes, (ii) the 1995-1 Notes, and (iii) any other
indebtedness of, the Issuer, the Seller or any other trust formed by the Seller
permitted under Section 2.7(1) of the Pooling and Servicing Agreement,
acquiesce, petition or otherwise invoke or cause the Seller or the Issuer to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Seller or 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 Seller or the Issuer or any substantial part of its
property or ordering the winding up or liquidation of the affairs of the Seller
or the Issuer.
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
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<PAGE> 94
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, 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 Indenture Trust
Estate for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note to the extent provided therein and herein.
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<PAGE> 95
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 Act of 1934, as amended.
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<PAGE> 96
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
<PAGE> 97
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 5.98% LEASE
BACKED NOTES ISSUED UNDER THE INDENTURE TO THE EXTENT DESCRIBED HEREIN.
TLFC IV EQUIPMENT LEASE TRUST 1996-1
CLASS B 6.64% LEASE BACKED NOTE
TLFC IV Equipment Lease Trust 1996-1, 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 November 2002 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
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<PAGE> 98
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: _________________ TLFC IV EQUIPMENT LEASE TRUST
1996-1,
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: _________________ Manufacturers and Traders Trust
Company, not in its individual
capacity but solely as
Indenture Trustee,
By: ______________________________
Authorized Signatory
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<PAGE> 99
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class B 6.64% Lease Backed Notes (herein called the
"Class B Notes"), all issued under an Indenture dated as of November 26, 1996
(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 20th day of each calendar month or, if any such date is not a Business Day,
the next succeeding Business Day, commencing December 20, 1996.
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the Payment Date in November
2002 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
<PAGE> 100
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. Each Noteholder or Note Owner
understands that all recourse under its Note is limited to and payable only out
of the Indenture Trust Estate, and each Noteholder or Note Owner, by acceptance
of a note or an interest therein, agrees that (i) it will look solely to the
Indenture Trust Estate for the payment of all principal and accrued interest
due and to become due on the Note and (ii) except as expressly provided in the
- 2 -
<PAGE> 101
Basic Documents, it shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom.
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.
Notwithstanding any prior termination of rights pursuant to
the Indenture or this Note, 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, prior to the date which is one year and
one day after the final distribution with respect to (i) the Class A Notes and
the Class B Notes, (ii) the 1995-1 Notes, and (iii) any other indebtedness of
the Issuer, the Seller or any other trust formed by the Seller permitted under
Section 2.7(1) of the Pooling and Servicing Agreement, acquiesce, petition or
otherwise invoke or cause the Seller or the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a
case against the Seller or 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 Seller or the
Issuer or any substantial part of its property or ordering the winding up or
liquidation of the affairs of the Seller or the Issuer.
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
- 3 -
<PAGE> 102
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
- 4 -
<PAGE> 103
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, 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
Indenture Trust Estate for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note to the extent provided
therein and herein.
- 5 -
<PAGE> 104
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.
- 6 -
<PAGE> 105
EXHIBIT C
Form of Depository Agreement
See Attached.
<PAGE> 106
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 1996-1
Ladies and Gentlemen:
In connection with the purchase of a Class B 6.64% Lease
Backed Note subject to Section 2.15 of the Indenture dated as of November 26,
1996 between TLFC IV Equipment Lease Trust 1996-1 ("TLFC") and Manufacturers
and Traders Trust Company, as Indenture Trustee (the "Indenture"), of TLFC (the
"Unregistered Note"), the undersigned buyer ("Buyer") hereby acknowledges,
represents and agrees that:
(a) The Buyer has received the Confidential Private
Placement Memorandum, dated November 26, 1996 (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
<PAGE> 107
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 Corp. 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 institutional
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
- 2 -
<PAGE> 108
(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 for 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")),(ii) a plan or arrangement (including an individual
retirement account or Keogh Plan) within the meaning of or subject to Section
4975 of the Internal Revenue Code of 1986, as amended, or (iii) any entity
whose underlying assets include "plan assets" under U.S. Department of Labor
Regulations codified at 29 C.F.R. Section 2510.3-101 or otherwise (each a
"Benefit Plan").
(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.
Each capitalized term that is used and not otherwise defined
in this letter has the meaning that the Indenture assigns to such term.
______________________________
Print Name of Buyer
By: __________________________
Name:
Title:
Date: ________________________
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<PAGE> 109
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 1996-1
Ladies and Gentlemen:
In connection with our purchase of record of beneficial
ownership of a Class B 6.64% Lease Backed Note subject to the provisions of
Section 2.15 of the Indenture dated as of November 26, 1996 between TLFC IV
Equipment Lease Trust 1996-1 ("TLFC") and Manufacturers and Traders Trust
Company, as Indenture Trustee (the "Indenture"), of TLFC (the "Unregistered
Note") 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 for 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")),(ii)
a plan or arrangement (including an individual retirement account or Keogh
Plan) withing the meaning of or subject to Section 4975 of the Internal Revenue
Code of 1986, as amended, or (iii) any entity whose underlying assets include
"plan assets" under U.S. Department of Labor Regulations codified at 29 C.F.R.
Section 2510.3-101 or otherwise (each a "Benefit Plan"); 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 acknowledgements, representations or
warranties herein cease to be accurate and complete.
<PAGE> 110
Each capitalized term that is used and not otherwise defined
in this letter has the meaning that the Indenture assigns to such term.
___________________________________
Name of Note Owner
By: _______________________________
Name:
Title:
Date: _____________________________
- 5 -
<PAGE> 1
EXHIBIT 4.2
_________________________________________________________________
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 1996-1
_____________________________________
Dated as of
November 26, 1996
_________________________________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE II
CONVEYANCE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.1 Conveyance of the Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.2 Marking of Lease Management System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.3 Acceptance by Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.4 Representations and Warranties of the Seller. . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.5 Notice of Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.6 Mandatory Purchase of Leases and Indemnification Upon Breach of Warranty . . . . . . . . . . . . 25
2.7 Covenants of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.8 Release of Lien on Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE III
ADMINISTRATION AND SERVICING OF LEASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.1 Appointment and Acceptance; Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.2 Collection of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.3 Servicer Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.4 Realization Upon Defaulted Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.5 Maintenance of Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.6 Representations and Warranties of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.7 Covenants of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.8 Servicer Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.9 Payment of Certain Expenses by Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.10 Monthly Statement; Annual Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.11 Annual Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.12 Annual Independent Public Accountants' Servicing Statements . . . . . . . . . . . . . . . . . . 41
ARTICLE IV
RIGHTS OF HOLDERS; ACCOUNTS; ALLOCATION
AND APPLICATION OF THE TRUST ESTATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.1 Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.2 Establishment of the Collection Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.3 Establishment of Note Distribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.4 Investment of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>
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<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
4.5 Control; Replacement of Trust Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.6 Identification of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.7 Deposit of Collections and Other Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.8 Payments on Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE V
OTHER MATTERS RELATING TO THE SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.1 Substitution of Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.2 Merger or Consolidation of the Seller; Assumption of the Seller's Obligations . . . . . . . . . 48
5.3 Compliance with Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.4 Limitation of Liability of Seller and Others . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VI
OTHER MATTERS RELATING TO THE SERVICER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.1 Liability of the Servicer and Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.2 Indemnification by the Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.3 Merger or Consolidation of Servicer; Assumption of Servicer's Obligations . . . . . . . . . . . 52
6.4 The Servicer Not to Resign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE VII
SERVICER DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.1 Servicer Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.2 Indenture Trustee to Act; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . 56
7.3 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.4 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.5 Lease Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE VIII
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.2 Notice of Final Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.3 Optional Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE IX
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.2 Evidence of Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
</TABLE>
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<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
9.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.5 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.6 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.7 Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.8 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.10 Binding Effect; Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.11 Merger and Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.13 Certificates and Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.14 Assignment to Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.15 No Petition Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.16 Limitation of Liability of Indenture Trustee and Owner Trustee . . . . . . . . . . . . . . . . . 67
9.17 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.18 Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
LIST OF EXHIBITS
Exhibit A List of Leases
Exhibit B Form of Monthly Statement
Exhibit C Identification of Accounts
Exhibit D Substitution Transfer Agreement
</TABLE>
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<PAGE> 5
POOLING AND SERVICING AGREEMENT
THIS POOLING AND SERVICING AGREEMENT, is made and entered
into as of November 26, 1996 (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 1996-1, 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 and acquires 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 in exchange for the Notes and the Trust
Certificates;
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.
<PAGE> 6
"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 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, Wilmington,
Delaware 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-
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<PAGE> 7
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 5.98% per annum.
"Class A Notes" means the Class A 5.98% Lease Backed Notes
in the aggregate principal amount of $127,848,986 issued by the Issuer pursuant
to the Indenture.
"Class A Percentage" means 90.43%.
"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, Early Termination Leases, Partial 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-
- 3 -
<PAGE> 8
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 6.64% per annum.
"Class B Notes" means the Class B 6.64% Lease Backed Notes
in the aggregate principal amount of $13,536,951 issued by the Issuer pursuant
to the Indenture.
"Class B Percentage" means 9.57%.
"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, Early Termination Leases, Partial 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 November 26, 1996.
"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.
- 4 -
<PAGE> 9
"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, Partial 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 November 28, 1995, as amended, together with all
amendments, restatements, supplements and modifications thereof or thereto.
"Cut-Off Date" means, with respect to each Original Lease,
the Initial Cut-Off Date, 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 7.043191% per annum.
"Discounted Equipment Residual Value" means, with respect
to any Equipment, at any time of determination, the present value of the
Equipment Residual Value of such Equipment, calculated monthly at the Discount
Rate in the manner described below.
In connection with all calculations required to be made
with respect to the determination of Discounted Equipment Residual
- 5 -
<PAGE> 10
Values, for any date of determination, the "Discounted Equipment Residual
Value" for such Equipment shall be calculated assuming:
(i) the Equipment Residual Value is received on
the last day of the Collection Period
following the Collection Period in which
the related Lease expires in accordance
with its terms;
(ii) amounts are discounted on a monthly basis
using a 30-day month and a 360-day year;
(iii) amounts are discounted to the last day of
the Collection Period in which the date of
determination falls.
"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 Discounted Equipment Residual Value for all related
Equipment; provided, however, that the Discounted Lease and Residual Balance of
any Defaulted Lease, Early Termination Lease, Expired Lease or Lease purchased
by the Originator or the Seller, or replaced with a Substitute Lease, 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, calculated
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 (other than Scheduled Lease Payments to the extent there has been a
Servicer Advance with respect thereto); provided, however, that the Discounted
Lease Balance of any Defaulted Lease, Early Termination Lease, Expired Lease or
Lease purchased by the Originator or the Seller, or replaced with a Substitute
Lease, 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:
- 6 -
<PAGE> 11
(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 in full 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 each of the Rating Agencies in a rating category which
signifies investment grade or is otherwise acceptable to each of the Rating
Agencies.
"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 (i) has either (A)(1) a long-term unsecured debt rating
acceptable to the Rating Agencies or (2) a short-term unsecured debt rating or
certificate of deposit rating acceptable to the Rating Agencies, (B) the parent
corporation of which has either (1) a long-term unsecured debt rating
acceptable to the Rating Agencies or (2) a short-term unsecured debt rating or
certificate of deposit rating acceptable to the Rating Agencies or (C) is
otherwise acceptable to the Rating Agencies (it being understood that this
clause (i) shall be satisfied as long as one such rating or corporate trust
department is acceptable to each Rating Agency and no single sub-clause need
be satisfied with respect to all Rating Agencies) and
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<PAGE> 12
(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 each
of the Rating Agencies;
(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+ by S&P and P-1 by Moody's
(or, in each case, a comparable rating) by the Rating Agencies, 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 by S&P and Aaa by Moody's (or, in each case, a
comparable rating) by the Rating Agencies; and
(e) investments in money market funds registered under
the Investment Company Act of 1940 (as amended), whose shares are registered
under the Securities Act of 1933 (as amended), and having a rating of AAAm-G or
AAA-m by S&P and Aaa by Moody's (or, in each case, comparable ratings) and any
other investment with respect to which the Rating Agency Condition has been
satisfied which, in either case, as a result of the ownership thereof, would
not cause the Trust to be required 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 for any Equipment the
anticipated residual value of such Equipment upon the expiration of
- 8 -
<PAGE> 13
the related 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
originated or acquired by Trans Leasing in accordance with its normal valuation
procedures and not including any administrative costs incurred in the
realization of such residual value), but not in excess of any purchase option
price with respect thereto.
"Excluded Amounts" means any payments received from or on
behalf of 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 Arizona, California,
Delaware, Florida, Georgia, Illinois, Maryland, Michigan, 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.
- 9 -
<PAGE> 14
"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 $127,848,986.
"Initial Class B Principal Balance" means $13,536,951.
"Initial Cut-Off Date" means October 31, 1996.
"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 the investment earnings net of
losses and investment expenses on amounts in the Collection Account.
"Late Fees" means any amounts assessed by the Servicer and
paid by, or on behalf of, a Lessee in excess of the Scheduled Lease Payment due
to the delinquency of a Lease payment on a Lease.
"Lease" means each agreement, including, as applicable,
schedules, subschedules, summary schedules, supplements and amendments to a
master lease, pursuant to which (immediately prior to the acquisition thereof
by the Seller) 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
- 10 -
<PAGE> 15
Agreement, a Lease is repurchased by the Seller pursuant to Section 2.6 hereof,
a Lease is replaced with a Substitute Lease pursuant to Section 5.1 hereof or
all Liquidation Proceeds or other proceeds from the disposition of the related
Equipment upon the expiration or termination of a Lease have been deposited in
the Collection Account, 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 and
the related Equipment, 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 such Equipment upon or after the expiration
or other termination of such Lease (or a portion thereof) 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.
- 11 -
<PAGE> 16
"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,
repurchased by the Seller under Section 2.6 hereof 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 $5,640,396.
"Monthly Statement" has the meaning set forth in Section
3.10(a).
"Moody's" means Moody's Investors Service, a division of
Dun & Bradstreet Corporation, 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.
- 12 -
<PAGE> 17
"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.
"Partial Early Termination Lease" means any Lease a portion
of which relating to particular Equipment has been terminated (including
because of a Casualty Loss) prior to its scheduled expiration date.
"Partial Early Termination Lease Proceeds" means any and
all cash proceeds or rents realized from the sale or re-Lease of Equipment
related to the terminated portion of a Partial Early Termination Lease (net of
Liquidation Expenses).
"Parties" means the signatories hereto.
"Payment Date" means the 20th day of each calendar month
(or, if such day is not a Business Day, the next succeeding Business Day),
commencing with December 20, 1996.
"Permitted Liens" means:
(a) Liens granted in favor of the Issuer hereunder or in
favor of the Indenture Trustee under the Indenture;
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(b) Liens 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 each of S&P, Moody's and each such
other nationally recognized statistical rating organization or other comparable
Person requested by the Seller to rate the Notes (notice of any such request
shall be given by the Seller to the Indenture Trustee, the Owner Trustee and
the Servicer) that, in any such case, is then rating the Notes at the request
of the Seller. Any reference herein to a specific rating of a Rating Agency
shall apply to (i) if S&P or Moody's (or its successor) alters its rating
system, the rating designated as the equivalent thereof by S&P or Moody's (or
such successor), respectively, or (ii) if a Rating Agency (including S&P and
Moody's) is no longer a Rating Agency, the equivalent rating of each Person who
is then a Rating Agency.
"Rating Agency Condition" means, with respect to any action
and so long as the Class A Notes are outstanding, that each 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 each Rating Agency (if then rating the Class B Notes at the request
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<PAGE> 19
of the Seller) 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 The McGraw-Hill Companies, 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 Cut-Off Date or, with respect to any
Substitute Lease, after the applicable Substitution Cut-Off Date, in each case
after giving effect to any adjustments as a result of a portion of such Lease
being terminated
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<PAGE> 20
prior to its scheduled expiration 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 Section
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 related Determination 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
November 2002.
"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)
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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).
"Substitution 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
November 2002 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, 1997.
"Trust Accounts" means the Collection Account and the Note
Distribution Account.
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"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 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 the Trust or the Indenture
Trustee in and to the Trust Estate 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.
"Underwriting Agreement" means that certain Underwriting
Agreement, dated as of November 20, 1996, among the Seller, Trans Leasing and
First Union Capital Markets Corp.
"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, plus the amount of any unreimbursed Servicer
Advances with respect to such Lease 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.
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<PAGE> 23
"1995-1 Notes" means all notes issued by the TLFC IV
Equipment Lease Trust 1995-1 pursuant to the Indenture between TLFC IV
Equipment Lease Trust 1995-1 and Manufacturers and Traders Trust Company, as
Indenture Trustee, dated October 6, 1995, together with all amendments,
supplements and modifications thereof and thereto.
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
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<PAGE> 24
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 Initial 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.
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<PAGE> 25
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
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<PAGE> 26
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 pursuant hereto), 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:
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(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
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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,
authorization, 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 enforceability 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
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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 Agencies; 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
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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
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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
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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 Agencies.
(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,
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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 and the 1995-1
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 Agencies 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
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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 to, prior to the date which
is one year and one day after the final distribution with respect to (i) the
Notes, (ii) the 1995-1 Notes, and (iii) any other indebtedness of the Issuer,
the Seller or of any other trust formed by the Seller permitted under this
Section 2.7(l), 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 or otherwise disposed of, (ii) any Lease becomes an Early Termination
Lease and the Equipment related to such Early Termination Lease is sold or
otherwise disposed of, (iii) any Lease becomes a Partial Early Termination
Lease and the Equipment related to the portion of such Lease that was
terminated is sold or otherwise disposed of, (iv) the Servicer substitutes or
replaces any unit of Equipment as contemplated in Section 3.1(c) or (v) 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, the
Equipment relating to the terminated portion of such Partial 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 or other disposition (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
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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 as provided in Section 3.3 in its
discretion, enforcing the rights of the Issuer under 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
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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, subject to the limitations in Section 5.1(e),
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 (or a portion thereof) the Servicer will
use commercially reasonable efforts to dispose of any related Equipment.
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.
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(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. The Servicer may not grant
extensions, rebates, or adjustments on a Lease which will, for purposes of this
Agreement, extend the original due dates of any Scheduled Lease Payment, reduce
the number of Scheduled Lease Payments, or reduce the amount of any Scheduled
Lease Payment; provided, however, that the Servicer may permit Leases to become
Partial Early Termination Leases as described in (b) below, and provided,
further, that to the extent consistent with the Servicer's past practices, the
Servicer may, on only one occasion with respect to any Lease, permit a
deferment of not more than three consecutive Scheduled Lease Payments
(collectively, a "Skipped Payment") under such Lease to the end of the term of
such Lease so long as (i) the sum of the Discounted Lease Balances of all
Leases with respect to which there has been a Skipped Payment since the Initial
Cut-Off Date as of a Determination Date does not exceed 5% of the Aggregate
Discounted Lease Balance as of the Initial Cut-Off Date and (ii) 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
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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 and Partial Early
Termination Leases. The Servicer may, in its sole discretion, permit a Lease
to become an Early Termination Lease or a Partial Early Termination Lease
(which shall not include a Lease that becomes an Early Termination Lease or a
Partial Early Termination Lease due to a Casualty Loss), so long as, unless
another Lease is substituted for such Lease or the terminated portion thereof
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) (1) in the case of an Early Termination Lease, the
Discounted Lease Balance of such Lease as of the Determination Date related to
the Collection Period in which such Lease became an Early Termination Lease or
(2) in the case of a Partial Early Termination Lease, the reduction in the
Discounted Lease Balance of such Lease as of the Determination Date related to
the Collection Period in which such Lease became a Partial Early Termination
Lease, (B) one month's interest on the amount described in clause (A) at the
Discount Rate and (C) the amount of any unreimbursed Servicer Advances with
respect to such Lease and (ii) at the time the Servicer permits a Lease to
become an Early Termination Lease or a Partial Early Termination Lease, the sum
of (x) the aggregate of the Discounted Lease Balance of each Early Termination
Lease (other than any Early Termination Lease that became an Early Termination
Lease due to a Casualty Loss or for which a substitution has been made pursuant
to Section 5.1) as of the Determination Date related to the Collection Period
in which such Lease became an Early Termination Lease plus (y) the aggregate of
the reduction in the Discounted Lease Balance of each Partial Early Termination
Lease (other than any Partial Early Termination Lease that became a Partial
Early Terminated Lease due to a Casualty Loss or for which a substitution has
been made pursuant to Section 5.1) as of the Determination Date related to the
Collection Period in which such Lease became a Partial Early Termination Lease
does not exceed 3% of the Aggregate Discounted Lease and Residual Balance as of
the Initial 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
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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)
and 4.8(a).
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
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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
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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
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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
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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. Notwithstanding any prior
termination of this Agreement, the Servicer shall not, prior to the date which
is one year and one day after the final distribution with respect to (i) the
Class A Notes and the Class B Notes, (ii) the 1995-1 Notes, and (iii) any other
indebtedness of the Issuer, the Seller or of any other trust formed by the
Seller permitted under Section 2.7(l) of this Agreement, acquiesce, petition or
otherwise invoke or cause the Issuer or the Seller to invoke the process of any
court or government authority for the purpose of commencing or sustaining a
case against the Issuer or the Seller under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or the
Seller or any substantial part of its property or ordering the winding up or
liquidation of the affairs of the Issuer or the Seller.
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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. 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 Agencies and
each Noteholder, 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
Agencies and each Noteholder, on or prior to October 31 of each year,
commencing October 31, 1997, 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, 1997, 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
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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 a Class B Note, the Owner Trustee and
the Indenture Trustee on or prior to October 31 of each year, commencing
October 31, 1997, 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 exceptions 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. The Noteholders' recourse under the Indenture and the Notes and the
Certificateholders' recourse under this Agreement and the Trust Agreement for
amounts payable on or with respect to the Notes and the Trust Certificates
shall be limited to and payable only out of the Trust Estate.
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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. Investment
Earnings available to be withdrawn from the Collection Account on each Payment
Date will be included in the Available Amount for such Payment Date. 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 instru-
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ments 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 Initial
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:
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(i) Collections (including the portion of the
Warranty Purchase Price attributable to unreimbursed Servicer
Advances) 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 (other than the Repurchase Price)
on 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) 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;
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(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 Shortfall"), 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).
Payments to the Noteholders will be made from the Note Distribution Account as
provided in the Indenture. 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
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5.1 of the Indenture) unless funds are available in the Collection Account for
the payment therefor and are not paid as provided above.
ARTICLE V
OTHER MATTERS RELATING
TO THE SELLER
5.1 Substitution of Leases and Equipment.
(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 (i) a Lease (and the related
Equipment) that has become a Defaulted Lease or an Early Termination Lease,
(ii) that portion of a Partial Early Termination Lease (and the related
Equipment) that has been terminated prior to the scheduled expiration date of
such Lease or (iii) a Lease (and the related Equipment) that 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. The substitutions pursuant
to Section 5.1(a) hereof, made as of any Substitution Date, considered as a
whole, shall not cause any of the Specified Portfolio Characteristics to be
untrue as of the related 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 Substitution 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
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Defaulted Leases would exceed six percent (6%) of the Aggregate
Discounted Lease Balance as of the Cut-off 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 Cut-off 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
(or portions thereof) would exceed ten percent (10%) of the Aggregate
Discounted Lease Balance as of the Cut-off Date;
(iv) as of the related Substitution Cut-Off
Date, the Substitute Leases and the related Equipment being
substituted on such date have an Aggregate Discounted Lease Balance
and Aggregate Discounted Lease and Residual Balance less than the
Aggregate Discounted Lease Balance and Aggregate Discounted Lease and
Residual Balance of all the Leases (or portions thereof),
respectively, being replaced;10
(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 August 2000
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) unless such substitution is with respect to a
Lease that has become a Defaulted Lease, 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) 15% of the
Aggregate Discounted Lease Balance on the Determination
Date immediately preceding such Substitution Date.
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(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 timing of the Scheduled Lease Payments with
respect to such Lease and as of the related date of substitution the Discounted
Equipment Residual Value of the substitute Equipment is not less than the
Discounted Equipment Residual Value of the original Equipment and provided
that, with respect to the substitute Equipment, the representations and
warranties set forth in subsections (i), (vii) and (ix) of Section 3.01(a) of
the Contribution and Sale Agreement and Section 2.4(a)(i) of this Agreement are
true as of the date of such substitution and the Seller shall have sold and
transferred to the Issuer all of the Seller's rights, title and interest in, to
and under such Equipment pursuant to a Substitution Transfer Agreement.
(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 any rating then in effect of the Class A
Notes or of the Class B Notes from a Rating Agency, so long as in each case
such class of Notes is outstanding (as confirmed by the Rating Agencies 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
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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
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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
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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 (in its individual capacity
and as trustee of the Issuer) 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, tangible personal property, privilege or
license taxes (but not including any taxes asserted with respect to any fees or
other compensation payable to any such Person or payments on the Notes and,
with respect to the Issuer, 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, and costs and expenses in defending against the same.
(b) The Servicer shall indemnify, defend and hold
harmless the Indenture Trustee, the Owner Trustee (in its individual capacity
and as trustee of the Issuer) 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, actions, suits, damages and
liabilities to the extent that such cost, expense, loss, claim, action, suit,
damage or liability arose out of, or was imposed upon the Indenture Trustee,
the Owner Trustee(in its individual capacity and as trustee of the Issuer), 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 (in its individual
capacity and as trustee of the Issuer), and their respective directors,
officers, stockholders, agents and servants, from and against all costs,
expenses, losses, claims, actions, suits, 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
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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
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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
responsibilities 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
payment, 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 agree-
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ment 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 insolvency,
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.
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(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
responsibilities 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.
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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
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and such Successor Servicer agree; provided that no such compensation will be
in excess of the compensation permitted to be paid to the Servicer pursuant to
Section 3.8 of 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 Agencies 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
Agencies.
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
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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 sufficient 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
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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 Noteholders) 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
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(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
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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 Agencies.
(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
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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 performance 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):
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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
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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 S&P:
Standard & Poor's Ratings Services
26 Broadway
15th Floor
New York, NY 10004
Attention: Asset Backed Surveillance
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If to Moody's:
Moody's Investors Service
99 Church Street
New York, NY 10007
Attn: ABS Monitoring Dept.
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
- 65 -
<PAGE> 70
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. The Owner
Trustee is a third party beneficiary of this Agreement with respect to its
rights to indemnification under Section 6.2. 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
- 66 -
<PAGE> 71
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, assignment and grant of a
security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and interest
of the Issuer in, to and under the Receivables and/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, the Seller and the Owner Trustee
shall not, prior to the date which is one year and one day after the final
distribution with respect to (i) the Notes, (ii) the 1995-1 Notes, and (iii)
any other indebtedness of the Issuer, the Seller or any other Trust formed by
the Seller permitted under Section 2.7(l) of this Agreement, acquiesce,
petition or otherwise invoke or cause the Issuer or the Seller 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 the
Seller or any substantial part of its Property, or ordering the winding up or
liquidation of the affairs of the Issuer or the Seller.
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
- 67 -
<PAGE> 72
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.
* * * *
- 68 -
<PAGE> 73
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: Norman Smagley
Title: Vice President, Finance
and Chief Financial Officer
TL LEASE FUNDING CORP. IV
By:________________________________
Name: Norman Smagley
Title: Vice President, Finance
and Secretary
TLFC IV EQUIPMENT LEASE TRUST 1996-1
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:
BANKERS TRUST (DELAWARE),
not in its individual capacity but solely
as Owner Trustee
By:________________________________
Name:
Title:
<PAGE> 74
Exhibit A
LIST OF LEASES
See Attached
<PAGE> 75
Exhibit B
FORM OF MONTHLY STATEMENT
See Attached
<PAGE> 76
Exhibit C
COLLECTION ACCOUNT
------------------
No. 185258191
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. 185258100
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> 77
Exhibit D
SUBSTITUTION TRANSFER AGREEMENT
See Attached
<PAGE> 1
EXHIBIT 4.3
================================================================================
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 November 26, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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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
SECTION 2.12 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.13 Signature on Returns; Tax Matters Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
THE TRUST CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.1 The Trust Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.2 Execution and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.3 Mutilated, Destroyed, Lost or Stolen Trust Certificate . . . . . . . . . . . . . . . . . . . 10
SECTION 3.4 Limitation on Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.5 Acts of the Certificateholders and Noteholders . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.6 Distributions to the
Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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 . . . . . . . . . . . . . . 13
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Page
SECTION 4.3 Action by the Certificateholders with Respect to Bankruptcy . . . . . . . . . . . . . . . . . 13
SECTION 4.4 Rights of the Certificateholders to Direct Owner Trustee . . . . . . . . . . . . . . . . . . 14
SECTION 4.5 Suits for Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.6 Owner Trustee May Enforce Claims without Possession of the Trust Certificate . . . . . . . . 14
SECTION 4.7 Limitation on Rights of the Certificateholders . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V
AUTHORITY AND DUTIES OF THE OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.1 General Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.2 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.3 Action upon Instruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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 . . . . . . . . . . . . . . . . . 18
SECTION 5.6 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VI
CONCERNING THE OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.1 Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.2 Furnishing of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.3 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.4 Reliance; Advice of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 6.5 Owner Trustee Not Liable for Trust Certificates or Leases . . . . . . . . . . . . . . . . . . 22
SECTION 6.6 Not Acting in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VII
COMPENSATION OF OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 7.1 Owner Trustee's Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VIII
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 8.1 Eligibility Requirements for Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 8.2 Resignation or Removal of Owner
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8.3 Successor Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
ii
<PAGE> 4
<TABLE>
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Page
SECTION 8.4 Merger or Consolidation of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.5 Appointment of Co-Owner Trustee or Separate Owner Trustee . . . . . . . . . . . . . . . . . . 25
ARTICLE IX
TERMINATION OF TRUST AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 9.2 Dissolution upon Bankruptcy of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE X
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 10.1 Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 10.3 Merger and Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 10.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 10.5 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 10.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 10.7 No Legal Title to Trust Estate in Certificateholders . . . . . . . . . . . . . . . . . . . . 33
SECTION 10.8 Limitation on Rights of Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 10.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 10.10 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 10.11 No Implied Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 10.12 No Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 10.13 No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 10.14 Indemnification by and Reimbursement of the Servicer . . . . . . . . . . . . . . . . . . . . 35
SECTION 10.15 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Exhibit A Form of Trust Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B Certificate of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
</TABLE>
iii
<PAGE> 5
THIS TRUST AGREEMENT, dated as of November 26, 1996,
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
1996-1 (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 between 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.
<PAGE> 6
"Certificate of Trust" has the meaning set forth in
Section 2.6.
"Certificateholder" means the Person in whose name a
Trust 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 Amended and
Restated 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.
2
<PAGE> 7
"Trust 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.
"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.
3
<PAGE> 8
ARTICLE II
ORGANIZATION
SECTION 2.1 Name. The Trust created hereby shall be
known as "TLFC IV Equipment Lease Trust 1996-1," 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 Trust Certificates pursuant to this Agreement and to deliver
the Notes and the Trust Certificates to or upon the order of the
Seller as described in the Pooling and Servicing Agreement;
(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) 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;
(v) to enter into and perform its obligations
under the Basic Documents to which it is to be a party;
(vi) to engage in those activities, including
entering into agreements, that are necessary, suitable or convenient
to accomplish the foregoing or are incidental thereto or connected
therewith; and
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(vii) 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 Trust
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
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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 Section 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 Trust Certificate issued in
the name of the Seller pursuant to Section 3.2. The Trust Certificate issued
to the Seller shall be deemed to be a separate class of Trust Certificates from
all other Trust 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 Trust Certificates shall be
identical.
(b) The Certificateholders (other than, in the case of
the Seller, to the extent set forth in paragraph (a) above)
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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
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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 shall (a)
maintain (or cause to be maintained) the books of the Trust on a fiscal year
ending June 30 basis on the accrual method of accounting, (b) deliver to each
Certificateholder, as may be required by the Code and applicable regulations
promulgated under the Code or otherwise, such information as may be required to
enable each Certificateholder to prepare its federal income tax return, (c)
file such tax returns relating to the Trust and make such elections as may from
time to time be required or appropriate under any applicable state or federal
statute or rule or regulation
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thereunder so as to maintain the Trust's characterization as a partnership for
federal income tax purposes, (d) cause such tax returns to be signed in the
manner required by law and (e) collect or cause to be collected any applicable
withholding tax. In preparing and filing tax returns for the Trust, the Owner
Trustee shall allocate each item of income, gain, deduction, loss or credit of
the Trust for each Collection Period among the Certificateholders in proportion
to the amount of capital contributions made by each Certificateholder.
SECTION 2.12 Tax Matters. (a) The Trust shall
maintain a separate account (a "Capital Account") for each Certificateholder
according to the rules of U.S. Department of Treasury Regulation Section 1.704-
1(b)(2)(iv). For this purpose, the Trust may, upon the occurrence of the
events specified in U.S. Department of Treasury Regulation Section
1.704-1(b)(2)(iv)(f), increase or decrease the Capital Accounts in accordance
with the rules of such regulation and U.S. Department of Treasury Regulation
Section 1.704(b)(2)(iv)(g)to reflect a revaluation of any of the Trust Estate.
(b) The income, gains, losses, deductions and
credits of the Trust will be allocated, for federal, state and local income tax
purposes, among the Certificateholders in accordance with the allocation of
book profit and loss among the Certificateholders for computing their Capital
Accounts, except that, if any such allocation is not permitted by the Code or
other applicable law, the Trust's subsequent income, gains, losses, deductions
and credits will be allocated among the Certificateholders so as to reflect as
nearly as possible the allocations set forth herein in computing their Capital
Accounts. If there is a net decrease in "partnership minimum gain" or "partner
nonrecourse minimum gain," allocations of income will be made to chargeback the
minimum gain to the Certificateholders in accordance with U.S. Department of
Treasury Regulation Section 1-704-2(f) and U.S. Department of Treasury
Regulation Section 1.704-2(i)(4).
SECTION 2.13 Signature on Returns; Tax Matters
Partner. The Owner Trustee shall sign on behalf of the Trust any and all tax
returns of the Trust, unless applicable law requires a Certificateholder to
sign such documents, in which case such documents shall be signed by the
Originator. The Originator shall be the "tax matters partner" of the Trust
pursuant to the Code. It is the express intent of the parties hereto and the
Certificateholders that the Trust be treated as a partnership for federal
income tax purposes, and none of the parties hereto or the Certificateholders
will take any actions inconsistent therewith.
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ARTICLE III
THE TRUST CERTIFICATES
SECTION 3.1 The Trust Certificates. The Trust
Certificates shall be substantially in the form of Exhibit A. The Trust
Certificates shall represent the entire beneficial interest in the Trust. By
accepting a Trust 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 Trust
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 Trust Certificate or Trust Certificates to be executed on behalf of the Trust
and delivered to or upon the written order of the Seller. Each such Trust
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 Trust Certificate who were at the time the proper
officers or authorized signatories of the Owner Trustee shall bind the Trust,
notwithstanding that such individuals or any of them have ceased to hold such
offices or positions prior to the delivery of such Trust Certificate or did not
hold such offices or positions at the date of such Trust Certificate. Each
Trust Certificate shall be dated the date of its execution.
SECTION 3.3 Mutilated, Destroyed, Lost or Stolen Trust
Certificate.
(a) If (i) a Trust 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 Trust 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 Trust Certificate, a replacement Trust Certificate.
(b) In connection with the issuance of a
replacement Trust Certificate under this Section 3.3, the Owner
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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 Trust Certificate issued pursuant
to this Section 3.3 in replacement of a mutilated, destroyed, lost or stolen
Trust 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 Trust Certificate was entitled, whether or not such
Trust Certificate shall be found at any time thereafter. If the original Trust
Certificate is found subsequent to the issuance of a duplicate Trust
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 Trust Certificate.
SECTION 3.4 Limitation on Transfer. Following the
transfer of a portion of the original Trust Certificate from the Seller to the
Originator as contemplated by the Contribution and Sale Agreement, Trust
Certificates shall not be transferable, and each of the Seller and the
Originator, by accepting a Trust Certificate, agrees that it shall not assign
any of its interest in a Trust Certificate to any Person; provided, that the
Seller and the Originator may pledge their rights to distributions with respect
to a Trust Certificate. Any transfer of a Trust 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.
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(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
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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 Certificateholders; 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
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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 Trust Certificate. All rights of action and claims under
this Agreement or the Trust Certificate may be prosecuted and enforced by the
Owner Trustee without the possession of the Trust 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
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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
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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, as trustee of the Trust, such
duties as are specifically set forth for the Trust in 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, including Section 5.2(b).
(b) Notwithstanding the foregoing, the Owner
Trustee shall be deemed to have discharged its duties and responsibilities
hereunder and, as trustee of the Trust, the duties and responsibilities of the
Trust 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 of the Trust 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
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(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
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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 in its individual
capacity.
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 in its individual capacity 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. In
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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 Trust Certificate;
(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the 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 Trust 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, the Administrator or the
Servicer or any other Person under any of the Basic Documents or otherwise;
(g) the Owner Trustee shall not be liable for, and shall
have no obligation or responsibility for, advising any Certificateholder of
changes under the Business Trust Statute; and
(h) 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
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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 the
Trust 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 the Trust 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 the Trust 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 or violate its charter or bylaws or 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.
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(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 other than the filing of the
Certificate of Trust.
(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
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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 Trust
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 Trust 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 Administrator, 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 or filing of financing statements, or the payment of any
amounts with respect to liens, in connection with this Agreement, the Leases or
any of the transactions contemplated hereby. No recourse shall be had for any
claim based on any provision of this Agreement, the Basic Documents, the Trust
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
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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 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.
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.
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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 Agencies.
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(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 all or substantially all of 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
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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
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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
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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 termination, 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, give prompt written notice to the Indenture Trustee and
the other Certificateholders (other than the Seller) of the occurrence of such
event; and (iii) the Indenture Trustee shall, upon receipt of written notice of
such Insolvency Event, 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
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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
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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 or the Certificateholders 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 or the Certificateholders 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 Trust 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:
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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: (847) 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: (847) 272-2174
If to the Administrator:
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, IL 60062
Attention: Chief Financial Officer
Telecopy Number: (847) 272-2174
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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, 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
32
<PAGE> 37
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.
33
<PAGE> 38
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. Notwithstanding any prior
termination of this Agreement, the Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, and the
Certificateholders, by accepting the Trust Certificates, shall not, prior to
the date which is one year and one day after the final distribution with
respect to (i) the Notes, (ii) the 1995-1 Notes (as defined in the Pooling and
Servicing Agreement) and (iii) any other indebtedness of the Trust, the Seller
or any other trust formed by the Seller permitted under Section 2.7(l) of the
Pooling and Servicing Agreement, acquiesce, petition or otherwise invoke or
cause the Seller or the Trust to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Seller
or the Trust 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 Seller or the Trust or any
substantial part of its property or ordering the winding up or liquidation of
the affairs of the Seller or the Trust.
SECTION 10.13 No Recourse. Each of the Certificateholders,
by accepting a Trust Certificate, acknowledges that such Trust 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 Trust 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 Trust Certificates or this Agreement, it
being expressly understood that said
34
<PAGE> 39
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 Trust Certificate (or beneficial interest therein), understand that
recourse for amounts payable with respect to such Trust Certificate is limited
to and payable only out of the Trust Estate, and the Certificateholders agrees
that, except as expressly provided in the Basic Documents, in the case of
nonpayment of any amounts with respect to a Trust 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.
* * * * *
35
<PAGE> 40
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
this 26th day of November, 1996.
TL LEASE FUNDING CORP. IV
By:
--------------------------------
Name: Norman Smagley
Title: Vice President, Finance
and Secretary
Bankers Trust (Delaware),
not in its individual capacity
but solely as Owner Trustee of
TLFC IV EQUIPMENT LEASE TRUST 1996-1
By:
--------------------------------
Name:
Title:
<PAGE> 41
EXHIBIT A
FORM OF TRUST CERTIFICATE
Form of Face of Trust Certificate
TLFC IV EQUIPMENT LEASE TRUST 1996-1
THIS TRUST 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 TRUST CERTIFICATE IS NON-TRANSFERABLE.
No. RC-__
This certifies that ___________________________ is the
registered owner of a _____________ (_____%) beneficial interest in the TLFC IV
Equipment Lease Trust 1996-1 (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 November 26, 1996
(the "Trust Agreement") 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 Trust Certificate is a Trust Certificate described in the
Trust Agreement and is issued pursuant and subject to the Trust Agreement. By
acceptance of this Trust 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 Trust Certificate will be made in
accordance with the terms of the Pooling and Servicing Agreement and the Trust
Agreement by wire transfer to a bank account previously identified by the
Certificateholder, without the presentation or surrender of this Trust
Certificate or the making of any notation hereon.
Reference is hereby made to the further provisions of the
Trust Certificate set forth on the reverse hereof, which further provisions
shall have the same effect as if set forth at this place.
<PAGE> 42
The holder hereof, by its acceptance of this Trust
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 Trust 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 Trust 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 Trust
Certificate to be duly executed by an Authorized Officer of the Owner Trustee.
Date: _________ __, ____ TLFC IV EQUIPMENT LEASE TRUST
1996-1
By: Bankers Trust (Delaware), not
in its individual capacity but
solely as Owner Trustee
By:___________________________
Authorized Officer
2
<PAGE> 43
Form of Reverse of Trust Certificate
This Trust Certificate represents a ________________ (___%)
beneficial interest in the Trust. This Trust 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 Trust 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 Noteholders 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 Trust Certificate from the Seller to the
Originator as contemplated by the Contribution and Sale Agreement, Trust
Certificates shall not be transferable and each Certificateholder, by accepting
a Trust Certificate, agrees that it shall not assign any of its interest in a
Trust Certificate to any Person.
The holder hereof, by its acceptance of this Trust
Certificate, covenants that, notwithstanding any prior termination of rights
pursuant to the Trust Agreement or this Certificate, they will not, prior to
the date which is one year and one day after the final distribution with
respect to (i) the Notes, (ii) the 1995-1 Notes (as defined in the Pooling and
Servicing Agreement), and (iii) any other indebtedness of the Trust, the Seller
or any other trust formed by the Seller as permitted under Section 2.7(l) of
the Pooling and Servicing Agreement, acquiesce, petition or otherwise invoke or
cause the Seller or the Trust to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Seller
or the Trust 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 Seller or the Trust or any
substantial part of its property or ordering the winding up or liquidation of
the affairs of the Seller or the Trust.
As provided in the Trust Agreement, the Owner Trustee shall
establish reasonable procedures to replace the Trust
<PAGE> 44
Certificate in the event the Trust 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 Trust 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> 45
EXHIBIT B
FORM OF CERTIFICATE OF TRUST
CERTIFICATE OF TRUST OF
TLFC IV EQUIPMENT LEASE TRUST 1996-1
THIS Certificate of Trust of TLFC IV Equipment Lease Trust 1996-1 (the
"Trust"), dated as of November 26, 1996, 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 Section 3801 et
seq.).
1. Name. The name of the business trust form hereby is TLFC IV
Equipment Lease Trust 1996-1.
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, Suite 550, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective on
November 26, 1996.
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 November 26,
1996
By:_______________________________
Name:
Title:
<PAGE> 1
EXHIBIT 4.4
CERTIFICATE OF TRUST
OF
TLFC IV EQUIPMENT LEASE TRUST 1996-1
THIS Certificate of Trust of TLFC IV Equipment Lease Trust 1996-1 (the
"Trust"), dated as of November 22, 1996, 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 Section 3801 et
seq.).
1. Name. The name of the business trust form hereby is TLFC IV
Equipment Lease Trust 1996-1.
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, Suite 550, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective
on November 26, 1996.
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 November 26,
1996
By: /s/ M. Lisa Wilkins
Name: M. Lisa Wilkins
Title: Assistant Secretary
<PAGE> 1
EXHIBIT 10.1
_________________________________________________________________
AMENDED AND RESTATED CONTRIBUTION AND SALE AGREEMENT
______________________
between
TRANS LEASING INTERNATIONAL, INC.
and
TL LEASE FUNDING CORP. IV
_______________________
Dated as of
November 26, 1996
_________________________________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II
CONTRIBUTION OF CONTRIBUTED ASSETS;
SALE OF PURCHASED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.01 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.02 Contributions and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.03 Contribution and Sale of Additional Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.04 Custody of Lease Files . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III
REPRESENTATIONS 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 IV
COVENANTS OF TRANS LEASING AND TLFC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.01 Trans Leasing Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.02 TLFC Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.03 Assignment; Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE V
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.01 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.02 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VI
MISCELLANEOUS 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
</TABLE>
- i -
<PAGE> 3
<TABLE>
<S> <C>
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
Contributed Lease Schedule
Purchased Lease Schedule
Closing Date Lease Schedule
Excluded Lease Schedule
Lease Criteria Schedule
Specified Portfolio Characteristics Schedule
</TABLE>
- ii -
<PAGE> 4
AMENDED AND RESTATED CONTRIBUTION AND SALE AGREEMENT
THIS AMENDED AND RESTATED CONTRIBUTION AND SALE AGREEMENT,
dated as of November 26, 1996 (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 and acquires equipment and other leases in the United States.
Trans Leasing and TLFC entered into a Contribution and Sale
Agreement dated as of November 28, 1995 (the "Original Agreement"), 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.
<PAGE> 5
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
1.1 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 other than a Saturday, a Sunday
or a day on which banking institutions in Chicago, Illinois, Wilmington,
Delaware or New York, New York are authorized or obligated by any law or
regulation to be closed.
"Closing Date" means November 26, 1996.
"Closing Date Assets" means all right, title and interest of
Trans Leasing in, to and under (i) the Closing Date Leases (including all of
Trans Leasing's obligations under the Closing
- 2 -
<PAGE> 6
Date Leases) and all monies due or to become due under the Closing Date Leases
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 November 28,
1995, as amended, together with all amendments, restatements, supplements and
modifications thereof or thereto.
"Cut-Off Date" means October 31, 1996.
"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.
- 3 -
<PAGE> 7
"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 Arizona, California,
Delaware, Florida, Georgia, Illinois, Maryland, Michigan, 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 November 28, 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.
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"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 (immediately prior to the acquisition thereof
by TLFC) 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 of this Agreement or a Lease is otherwise purchased by
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 five Business Days after the Closing Date, financing statements filed in
connection with the
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<PAGE> 9
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.
"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, with respect to
any Additional Lease, after the applicable Addition Cut-Off Date, in each case
after giving effect
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<PAGE> 10
to any adjustments as a result of a portion of such Lease being terminated
prior to its scheduled expiration date (it being understood that Scheduled
Lease Payments do not include any Excluded Amounts).
"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 1996-1, 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.
1.2 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.
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<PAGE> 11
(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,"
"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
CONTRIBUTION OF CONTRIBUTED ASSETS;
SALE OF PURCHASED ASSETS;
SALE OF ADDITIONAL ASSETS
2.1 [Reserved]
2.2 Contributions and Sales.
(a) Initial Contribution and Sale. On the
Initial Closing Date, Trans Leasing made a capital contribution to TLFC of
certain of the Contributed Assets, and Trans Leasing delivered to TLFC an
executed assignment with respect thereto. Such 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 $16,035,208 in cash, on the
Initial Closing Date,
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<PAGE> 12
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 December 28, 1995, April 1, 1996, June 10, 1996, August 1, 1996
and October 1, 1996 (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 $18,001,338,
$30,033,803, $18,195,640, $30,290,594 and $15,615,668, respectively (the
"Subsequent Purchase Prices"), 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 $32,379,241.97 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 as described in (c) above.
(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
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<PAGE> 13
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 Agreement, 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.
2.3 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, which price shall represent reasonably equivalent value
therefor, shall be no less than the fair market value of such Additional Assets
as then determined, including consideration of then current interest rates, and
shall be 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
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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.
2.4 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.
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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 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;
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<PAGE> 16
(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;
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(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 and
any purchase option at Lease termination may be contained in a
separate side letter; provided that any 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).
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(b) Representations and Warranties with respect 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
Obligations. 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,
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<PAGE> 19
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,
authorization, 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
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<PAGE> 20
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 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,
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<PAGE> 21
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
constitutes 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 enforceability of, this Agreement;
- 18 -
<PAGE> 22
(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.
- 19 -
<PAGE> 23
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.
- 20 -
<PAGE> 24
(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
- 21 -
<PAGE> 25
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.
4.2 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
- 22 -
<PAGE> 26
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.
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<PAGE> 27
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
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<PAGE> 28
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
- 25 -
<PAGE> 29
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 shall not, prior to the date which
is one year and one day after the final distribution with respect to (i) the
Notes(as defined in the Pooling and Servicing Agreement), (ii) the 1995-1 Notes
(as defined in the Pooling and Servicing Agreement), and (iii) any other
indebtness of the Trust, TLFC or any other trust formed by TLFC permitted under
Section 2.7(l) of the Pooling and Servicing Agreement, acquiesce, petition or
otherwise invoke or cause TLFC to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against TLFC under
any federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of TLFC or any substantial part of its property, or ordering
the winding up or liquidation of the affairs of TLFC.
6.13 Confidential Information. TLFC agrees that it shall
neither use nor disclose to any Person the names and
- 26 -
<PAGE> 30
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.
* * * * *
- 27 -
<PAGE> 31
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: Norman Smagley
Title: Vice President, Finance
and Chief Financial
Officer
TL LEASE FUNDING CORP. IV
By: ____________________________
Name: Norman Smagley
Title: Vice President, Finance
and Secretary
<PAGE> 32
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 November 26, 1996 (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, all of its right, title and
interest in, to and under (i) the Closing Date Leases listed on the Closing
Date Lease Schedule attached hereto (including all of Trans Leasing's
obligations under the Closing Date Leases) and all monies due or to become due
under such Closing Date Leases after October 31, 1996, (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.
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 November 26, 1996.
TRANS LEASING INTERNATIONAL, INC.
By: _____________________________
Name:
Title:
<PAGE> 33
EXHIBIT B
FORM OF ASSIGNMENT FOR ADDITIONAL ASSETS
For value received, in accordance with the Amended Restated
Contribution and Sale Agreement dated as of November 26, 1996 (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, all of its right, title and interest in, to and
under (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 _______ __, ____.
TRANS LEASING INTERNATIONAL, INC.
By: _____________________________
Name:
Title:
<PAGE> 34
EXHIBIT C
FORMS OF LEASE
See Attached.
<PAGE> 35
LEASE SCHEDULE
See List of Leases
attached to the
Pooling and Servicing Agreement.
<PAGE> 36
CONTRIBUTED LEASE SCHEDULE
See portion of List of Leases
attached to the Pooling and Servicing
Agreement marked "Contributed Leases"
<PAGE> 37
PURCHASED LEASE SCHEDULE
See portion of List of Leases
attached to the Pooling and Servicing
Agreement marked "Purchased Leases"
<PAGE> 38
CLOSING DATE LEASE SCHEDULE
See portion of List of Leases
attached to the Pooling and Servicing
Agreement marked "Closing Date Leases"
<PAGE> 39
EXCLUDED LEASE SCHEDULE
See Attached.
<PAGE> 40
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 2 months
and 60 months; provided that there is no Lease with a term that extends beyond
October 31, 2001 or, with respect to Additional Leases, October 31, 2002.
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 other than a
Skipped Payment (as defined in the Pooling and Servicing Agreement) 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).
4. Each Lease is a finance lease for financial accounting
purposes.
<PAGE> 41
SPECIFIED PORTFOLIO CHARACTERISTICS SCHEDULE
1. The sum of 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 40% 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> 1
EXHIBIT 10.2
================================================================================
ADMINISTRATION AGREEMENT
Between
TLFC IV EQUIPMENT LEASE TRUST 1996-1
Issuer
and
TRANS LEASING INTERNATIONAL, INC.
Administrator
Dated as of November 26, 1996
================================================================================
<PAGE> 2
THIS ADMINISTRATION AGREEMENT, is made and entered into as of
November 26, 1996, between TLFC IV EQUIPMENT LEASE TRUST 1996-1, 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 Trust
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 Trust
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
<PAGE> 3
"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);
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<PAGE> 4
(vii) the maintenance of an office in the Borough of
Manhattan, the City of New York, for registration of transfer 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 Indenture, 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);
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<PAGE> 5
(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
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<PAGE> 6
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 Agencies 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
Certificates 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 Agencies, 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
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<PAGE> 7
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 and the
Trust set forth in Sections 2.11 and 2.12 of the Trust Agreement with
respect to, among other things, the keeping of all appropriate books
and records of the Trust and with respect to tax matters.
(iv) The Administrator may satisfy any obligations it may have
with respect to clause (iii) 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 Administrator 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
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<PAGE> 8
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 Administrator shall have notified the Owner
Trustee of the proposed action and the Owner Trustee shall not have
withheld consent or provided an alternative direction. For the
purpose of the preceding sentence, "non-ministerial matters" shall
include, without limitation:
(A) the amendment of or any supplement to the
Indenture;
(B) the initiation of any claim or lawsuit by the
Issuer and the compromise of any action, claim or lawsuit brought by
or against the Issuer;
(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
- 7 -
<PAGE> 9
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
appropriate books of account and records relating to services performed
hereunder, which books of account and records shall be accessible for
inspection by the Issuer 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.
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<PAGE> 10
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.
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<PAGE> 11
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. No Petition. Notwithstanding any prior termination
of this Agreement, the Administrator, by entering into this Agreement, hereby
agrees that it will not, prior to the date which is one year and one day after
the final distribution with respect to (i) the Class A Notes and the Class B
Notes, (ii) the 1995-1 Notes, and (iii) any other indebtedness of the Issuer,
the Seller or any other trust formed by the Seller permitted under Section
2.7(1) of the Pooling and Servicing Agreement, acquiesce, petition or otherwise
invoke or cause the Seller or the Issuer to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Seller or 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 Seller or the Issuer or any
substantial part of its property or ordering the winding up or liquidation of
the affairs of the Seller or the Issuer.
13. Notices. Except as otherwise provided in this
Agreement, any notice or other communication herein required or
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<PAGE> 12
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
- 11 -
<PAGE> 13
shall in no way adversely affect the effectiveness of such notice, demand,
request, consent, approval, declaration or other communication.
14. Amendments.
(a) This Agreement may be amended from time to time with
prior notice to the Rating Agencies 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 Agencies 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
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<PAGE> 14
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 Trust 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.
15. 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.
16. 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.
17. 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.
18. 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.
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<PAGE> 15
19. 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 Trust
Certificate or the rights of the holder thereof.
20. Not Applicable to Trans Leasing International, Inc.
in Other Capacities. Nothing in this Agreement shall affect any obligation
Trans Leasing International, Inc. may have under the Basic Documents in any
other capacity.
21. Limitation of Liability of Owner Trustee.
Notwithstanding 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
limited to and payable only out of the Trust Estate. 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.
22. 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.
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<PAGE> 16
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 1996-1
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: Norman Smagley
Title: Vice President, Finance
and Chief Financial Officer
Acknowledged and Accepted:
MANUFACTURERS AND TRADERS TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By: __________________________________
Name:
Title:
BANKERS TRUST (DELAWARE),
not in its individual capacity but
solely as Owner Trustee
By: __________________________________
Name:
Title:
<PAGE> 1
EXHIBIT 25.1
Registration Statement No. 33-95108
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM T-1
Statement of Eligibility and Qualification
under the Trust Indenture Act of 1939 of a
Corporation designated to act as Trustee
---------------------
MANUFACTURERS AND TRADERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 16-0538020
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
One M&T Plaza
Buffalo, New York 14203
(Address of principal executive offices) (Zip Code)
---------------------
TLFC IV EQUIPMENT LEASE TRUST 1996-1
(Exact name of obligor as specified in its charter)
DELAWARE 51-6506826
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1001 Jefferson Street
Suite 550
Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
---------------------
Lease Backed Notes
(Title of indenture securities)
<PAGE> 2
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Item 1. General Information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Superintendent of Banks of the State of New York, 2 World Trade
Center, New York, NY 10047 and Albany, NY 12203.
Federal Reserve Bank of New York, 33 Liberty Street, New York, NY
10045.
Federal Deposit Insurance Corporation, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor and Underwriters. If the obligor or any
underwriter for the obligor is an affiliate of the trustee, describe
each such affiliation.
None.
Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting
securities of the trustee:
As of November 19, 1996
- ------------------------------------------------------------------------
Col. A. Col. B.
- ------------------------------------------------------------------------
Title of Class Amount Outstanding
- ------------------------------------------------------------------------
Capital Stock ($40 par value) 3,015,885
Item 4. Trusteeships under Other Indentures.
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other indenture.
NONE
-1-
<PAGE> 3
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)
(1) of the Act arises as a result of the trusteeship under any such
other indenture, including a statement as to how the indenture
securities will rank as compared with the securities issued under such
other indenture.
N/A
Item 5. Interlocking Directorates and Similar Relationships with the Obligor
or Underwriters.
If the trustee or any of the directors or executive officers of the
trustee is a director, officer, partner, employee, appointee, or representative
of the obligor or of any underwriter for the obligor, identify each such person
having any such connection and state the nature of each such connection.
None.
Item 6. Voting Securities of the Trustee Owned by the Obligor or its
Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner and
executive officer of the obligor:
As of November 19, 1996
None.
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials.
As of November 19, 1996
None.
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for obligations in default by the
trustee:
As of November 19, 1996
None.
-2-
<PAGE> 4
Item 9. Securities of Underwriters Owned or Held by the Trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the Trustee.
As of November 19, 1996
None.
Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain
Affiliates or Security Holders of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the obligor,
or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person.
As of November 19, 1996
None.
Item 11. Ownership or Holdings by the Trustee or any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the trustee.
As of November 19, 1996
None.
Item 12. List of Exhibits.
Exhibit 1. Organization Certificate of the Trustee as
Now in Effect Incorporated by reference
herein to Exhibit 1, Form T-1, Registration
Statement No. 33-7309.
Exhibit 2. Certificate of Authority of the Trustee to Commence
Business. Incorporated by reference herein to
Exhibit 2, Form T-1, Registration Statement No. 33
-7309.
Exhibit 3. Authorization of the Trustee to Exercise Corporate
Trust Powers. Incorporated by reference herein to
Exhibit 3, Form T-1, Registration Statement
No. 33-7309.
-3-
<PAGE> 5
Exhibit 4. Existing By-Laws of the Trustee. Incorporated by reference herein
to Exhibit 4, Form T-1, Registration Statement No. 33-7309.
Exhibit 5. Consent of the Trustee. Incorporated by reference herein to
Exhibit 6, Form T-1, Registration Statement No. 33-7309.
Exhibit 6. Report of Condition of the Trustee as of
September 30, 1996.
-4-
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Manufacturers and Traders Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this
statement of eligibility and qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Buffalo, and State
of New York,on the 19th day of November,1996.
MANUFACTURERS AND TRADERS TRUST COMPANY
By Neil B. Witoff
-----------------------------------
Neil B. Witoff
Assistant Vice President
-5-
<PAGE> 7
EXHIBIT 6
Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
Expires March 31, 1999
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL
- --------------------------------------------------------------------------------
Please refer to page i, /1/
[LOGO] Table of Contents, for
the required disclosure
of estimated burden.
- --------------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES -- FFIEC 031
(960930)
----------
REPORT AT THE CLOSE OF BUSINESS SEPTEMBER 30, 1996 (RCRI 9999)
<TABLE>
<S> <C>
This report is required by law: 12 This report form is to be filed by
U.S.C. Section 324 (State member banks with branches and consolidated
banks); 12 U.S.C. Section 1817 subsidiaries in U.S. territories and
(State nonmember banks); and 12 possessions, Edge or Agreement
U.S.C. Section 161 (National banks). subsidiaries, foreign branches,
consolidated foreign subsidiaries, or
International Banking Facilities.
- ----------------------------------------------------------------------------------------------
Note: The Reports of Condition and The Reports of Condition and Income
Income must be signed by an are to be prepared in accordance with
authorized officer and the Report of Federal regulatory authority
Condition must be attested to by not instructions. NOTE: These
less than two directors (trustees) instructions may in some cases differ
for State nonmember banks and three from generally accepted accounting
directors for State member and principles.
National banks.
We, the undersigned directors
I, Clifford P. Johnson, Vice President (trustees), attest to the correctness
------------------------------------------- of this Report of Condition
Name and Title of Officer Authorized (including the supporting schedules)
to Sign Report and declare that it has been examined
by us and to the best of our
of the named bank do hereby declare knowledge and belief has been
that these Reports of Condition and prepared in conformance with the
Income (including the supporting instructions issued by the
schedules) have been prepared in appropriate Federal regulatory
conformance with the instructions authority and is true and correct.
issued by the appropriate Federal /s/ Robert G. Wilmers
regulatory authority and are true to --------------------------------------
the best of my knowledge and belief. Director (Trustee)
/s/ Clifford P. Johnson /s/ Robert Sadler
- ------------------------------------------------ --------------------------------------
Signature of Officer Authorized to Sign Report Director (Trustee)
/s/ Brent Baird
October 29, 1996 --------------------------------------
- ------------------------------------------------ Director (Trustee)
Date of Signature
- ----------------------------------------------------------------------------------------------
FOR BANKS SUBMITTING HARD COPY REPORT FORMS:
STATE MEMBER BANKS: Return the NATIONAL BANKS: Return the original
original and one copy to the only in the special return address
appropriate Federal Reserve District envelope provided. If express mail
Bank. is used in lieu of the special return
address envelope, return the original
STATE NONMEMBER BANKS: Return the only to the FDIC, c/o Quality Data
original only in the special return Systems, 2127 Espey Court, Suite 204,
address envelope provided. If Crofton, MD 21114.
express mail is used in lieu of the
special return address envelope,
return the original only to the
FDIC, c/o Quality Data Systems, 2127
Espey Court, Suite 204, Crofton, MD
21114.
- ----------------------------------------------------------------------------------------------
FDIC Certificate Number / / / / / / MANUFACTURERS & TRADERS T/C
------------------------------ ONE M&T PLAZA, 5TH FLOOR
(RCRI 9050) BUFFALO, NY 14203-4203
B36 1300000 002361300000 00588 31
</TABLE>
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, FEDERAL DEPOSIT INSURANCE
CORPORATION, OFFICE OF THE COMPTROLLER OF THE CURRENCY
<PAGE> 8
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-1
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC -- BALANCE SHEET
<TABLE>
<CAPTION>
C400 <-
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS / / / / / / / / / / / / / / / /
1. Cash and balances due from depository
institutions (from Schedule RC-A): / / / / / / / / / / / / / / / /
a. Noninterest-bearing balances and
currency and coin (1) 0081 413,147 1.a.
b. Interest-bearing balances (2) 0071 55,542 1.b.
2. Securities: / / / / / / / / / / / / / / / /
a. Held-to-maturity securities (from Schedule RC-B,
column A) 1754 86,338 2.a.
b. Available-for-sale securities (from Schedule RC-B,
column D) 1773 1,466,521 2.b.
3. Federal funds sold and securities purchased under
agreements to resell in domestic offices / / / / / / / / / / / / / / / /
of the bank and of its Edge and Agreement subsidiaries,
and in IBFs: / / / / / / / / / / / / / / / /
a. Federal funds sold 0276 0 3.a.
b. Securities purchased under agreements to resell 0277 11,106 3.b.
4. Loans and lease financing receivables: / / / / / / / / / / / / / / / /
a. Loans and leases, net of unearned
income (from Schedule RC-C) RCFD 2122 / 8,696,687 / / / / / / / / / / / / / / / / 4.a.
b. LESS: Allowance for loan and
lease losses RCFD 3123 / 239,157 / / / / / / / / / / / / / / / / 4.b.
c. LESS: Allocated transfer risk
reserve RCFD 3128 / 0 / / / / / / / / / / / / / / / / 4.c.
------------------------
d. Loans and leases, net of unearned
income, allowance, and reserve / / / / / / / / / / / / / / / /
(item 4.a. minus 4.b. and 4.c) 2125 8,457,530 4.d.
5. Trading assets (from Schedule RC-D) 3545 20,520 5.
6. Premises and fixed assets (including
capitalized leases) 2145 120,824 6.
7. Other real estate owned (from Schedule RC-M) 2150 6,956 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M) 2130 0 8.
9. Customers' liability to this bank on acceptance
outstanding 2155 1,581 9.
10. Intangible assets (from Schedule RC-M) 2143 59,067 10.
11. Other assets (from Schedule RC-F) 2160 154,632 11.
12. Total assets (sum of items 1 through 11) 2170 10,853,764 12.
--------------------------------------------------------------
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
3
<PAGE> 9
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Tile of Bank: Manufacturers and Traders Trust Company Call Date: 9/30/96 ST-BK 36-1300
Address: One M&T Plaza FFIEC03
City, State, Zip: Buffalo, NY 14203-2399
FDIC Certificate No.: |0|0|5|8|8|
Page RC-2
SCHEDULE RC -- CONTINUED
<S><C>
Dollar Amounts in Thousands / / / / / Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES / / / / / / / / / / / / / / / /
13. Deposits: / / / / / / / / / / / / / / / /
a. In domestic offices (sum of totals of columns A and C RCON 2200 8,105,310 13.a.
from Schedule RC-E, part I)
(1) Noninterest-bearing (1) RCON 6631 1,334,411 / / / / / / / / / / / / / / / / 13.a.(1)
(2) Interest-bearing RCON 6636 6,770,899 / / / / / / / / / / / / / / / / 13.a.(2)
---------------------
b. In foreign offices, Edge and Agreement subsidiaries, / / / / / / / / / / / / / / / /
and IBFs (from Schedule RC-E, Part II)
RCFN 2200 241,780 13.b.
(1) Noninterest-bearing RCFN 6631 0 / / / / / / / / / / / / / / / / 13.b.(1)
(2) Interest-bearing RCFN 6636 241,780 / / / / / / / / / / / / / / / / 13.b.(2)
---------------------
14. Federal funds purchased and securities sold under / / / / / / / / / / / / / / / /
agreements to repurchase in domestic offices of the / / / / / / / / / / / / / / / /
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
a. Federal funds purchased RCFD 0278 1,071,279 14.a.
b. Securities sold under agreements to repurchase RCFD 0279 280,643 14.b.
15. a. Demand notes issued to the U.S. Treasury RCON 2840 134,978 15.a.
b. Trading liabilities (from Schedule RC-D) RCFD 3548 24,496 15.b.
16. Other borrowed money: / / / / / / / / / / / / / / / /
a. WITH A REMAINING MATURITY OF ONE YEAR OR LESS RCFD 2332 10,161 16.a.
b. WITH A REMAINING MATURITY OF MORE THAN ONE YEAR RCFD 2333 2,369 16.b.
17. Mortgage indebtedness and obligations under RCFD 2910 675 17.
capitalized leases
18. Bank's liability on acceptances executed and outstanding RCFD 2920 1,581 18.
19. Subordinated notes and debentures RCFD 3200 175,000 19.
20. Other liabilities (from Schedule RC-G) RCFD 2930 158,888 20.
21. Total liabilities (sum of items 13 through 20) RCFD 2948 10,207,160 21.
/ / / / / / / / / / / / / / / /
22. Limited-life preferred stock and related surplus RCFD 3282 0 22.
EQUITY CAPITAL / / / / / / / / / / / / / / / /
23. Perpetual preferred stock and related surplus RCFD 3838 0 23.
24. Common stock RCFD 3230 120,635 24.
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 87,524 25.
26. a. Undivided profits and capital reserves RCFD 3632 448,129 26.a.
b. Net unrealized holding gains (losses) on RCFD 8434 (9,684) 26.b.
available-for-sale securities
27. Cumulative foreign currency translation adjustments RCFD 3284 0 27.
28. Total equity capital (sum of items 23 through 27) RCFD 3210 646,604 28.
29. Total liabilities, limited-life preferred stock, RCFD 3300 10,853,764 29.
and equity capital (sum of items 21, 22, and 28)
Memorandum
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the
statement below that best describes the most Number
comprehensive level of auditing work performed for
the bank by independent external auditors as of any
date during 1995 RCFD 6724 N/A M.1.
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE> 10
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-3
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-A -- CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS
Exclude assets held for trading.
<TABLE>
<S><C>
(Column A)
Consolidated
Bank
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------- -----------------------------------------------------
1. Cash items in process of collection, unposted debits, and / / / / / / / / / / / / / / / /
currency and coin 0022 372,369
a. Cash items in process of collection and unposted / / / / / / / / / / / / / / / /
debits / / / / / / / / / / / / / / / /
b. Currency and coin / / / / / / / / / / / / / / / /
2. Balances due from depository institutions in the U.S. / / / / / / / / / / / / / / / /
a. U.S. branches and agencies of foreign banks / / / / / / / / / / / / / / / /
(including their IBFs) 0083 35,000
b. Other commercial banks in the U.S. and other / / / / / / / / / / / / / / / /
depository institutions in the U.S. (including 0085 17,693
their IFBs)
3. Balances due from banks in foreign countries and foreign / / / / / / / / / / / / / / / /
central banks / / / / / / / / / / / / / / / /
a. Foreign branches of other U.S. banks 0073 0
b. Other banks in foreign countries and foreign / / / / / / / / / / / / / / / /
central banks 0074 25,624
4. Balances due from Federal Reserve Banks 0090 18,003
5. Total (sum of items 1 through 4) (total of column A must / / / / / / / / / / / / / / / /
equal Schedule RC, sum of items 1.a and 1.b) 0010 468,689
</TABLE>
<TABLE>
<S><C>
C405 <-
(Column B)
Domestic
Offices
Dollar Amounts in Thousands RCON Bil Mil Thou
- ----------------------------------------------------------- --------------------------------------------------
1. Cash items in process of collection, unposted debits, and / / / / / / / / / / / / / / / /
currency and coin / / / / / / / / / / / / / / / / 1.
a. Cash items in process of collection and unposted / / / / / / / / / / / / / / / /
debits 0020 256,551 1.a.
b. Currency and coin 0080 115,818 1.b.
2. Balances due from depository institutions in the U.S. 0082 17,693 2.
a. U.S. branches and agencies of foreign banks / / / / / / / / / / / / / / / /
(including their IBFs) / / / / / / / / / / / / / / / / 2.a.
b. Other commercial banks in the U.S. and other / / / / / / / / / / / / / / / /
depository institutions in the U.S. (including / / / / / / / / / / / / / / / / 2.b.
their IFBs)
3. Balances due from banks in foreign countries and foreign / / / / / / / / / / / / / / / /
central banks 0070 5,624 3.
a. Foreign branches of other U.S. banks / / / / / / / / / / / / / / / / 3.a.
b. Other banks in foreign countries and foreign / / / / / / / / / / / / / / / /
central banks / / / / / / / / / / / / / / / / 3.b.
4. Balances due from Federal Reserve Banks 0090 18,003 4.
5. Total (sum of items 1 through 4) (total of column A must / / / / / / / / / / / / / / / /
equal Schedule RC, sum of items 1.a and 1.b) 0010 413,689 5.
Memorandum Dollar Amounts in Thousands RCON Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
1. Noninterest-bearing balances due from commercial banks / / / / / / / / / / / / / / / /
in the U.S. (included in item 2, column B above) 0050 17,151 M.1.
</TABLE>
SCHEDULE RC-B -- SECURITIES
Exclude assets held for trading.
<TABLE>
<CAPTION>
Held-to-maturity
----------------------------------------------------
(Column A) (Column B)
Amortized Cost Fair Value
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
- ---------------------------------------------------- ------------------------- -------------------------
<S> <C> <C>
1. U.S. Treasury securities 0211 0 0213 0
2. U.S. Government agency and corporation
obligations (exclude mortgage-backed / / / / / / / / / / / / / / / / / /
securities): / / / / / / / / / / / / / / / / / /
a. Issued by U.S. Government agencies (2) 1289 0 1290 0
b. Issued by U.S. Government-sponsored / / / / / / / / / / / / / / / / / /
agencies (3) 1294 42,130 1295 42,387
<CAPTION>
C410 <-
Available-for-sale
----------------------------------------------------
(Column C) (Column D)
Amortized Cost Fair Value(1)
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
- ---------------------------------------------------- ------------------------- -------------------------
<S> <C> <C>
1. U.S. Treasury securities 1286 559,071 1287 555,726 1.
2. U.S. Government agency and corporation
obligations (exclude mortgage-backed / / / / / / / / / / / / / / / / / /
securities): / / / / / / / / / / / / / / / / / /
a. Issued by U.S. Government agencies (2) 1291 0 1293 0 2.a.
b. Issued by U.S. Government-sponsored / / / / / / / / / / / / / / / / / /
agencies (3) 1297 0 1298 0 2.b.
</TABLE>
- ---------------------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.c, column D.
(2) Includes Small Business Administration "Guaranteed Loan Pool
Certificates," U.S. Maritime Administration obligations, and Export-Import
Bank participation certificates.
(3) Includes obligations (other than mortgage-backed securities) issued by
the Farm Credit System, the Federal Home Loan Bank System, the Federal
Home Loan Mortgage Corporation, the Federal National Mortgage Association,
the Financing Corporation, Resolution Funding Corporation, the Student
Loan Marketing Association, and the Tennessee Valley Authority.
5
<PAGE> 11
<TABLE>
<CAPTION>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-4
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
SCHEDULE RC-B -- CONTINUED
Held-to-maturity
----------------------------------------------------
(Column A) (Column B)
Amortized Cost Fair Value
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------- ------------------------- -------------------------
<S> <C> <C> <C>
3. Securities issued by states and political subdivisions / / / / / / / / / / / / / / / / / /
in the U.S.: / / / / / / / / / / / / / / / / / /
a. General obligations 1676 44,208 1677 44,473 3.a.
b. Revenue obligations 1681 0 1686 0 3.b.
c. Industrial development and similar obligations 1694 0 1695 0 3.c.
------ ------
4. Mortgage-backed securities (MBS): / / / / / / / / / / / / / / / / / /
------------------------- -------------------------
a. Pass-through securities: / / / / / / / / / / / / / / / / / /
------------------------- -------------------------
(1) Guaranteed by GNMA 1698 0 1699 0 4.a.(1)
------ ------
(2) Issued by FNMA and FHLMC 1703 0 1705 0 4.a.(2)
------ ------
(3) Other pass-through securities 1709 0 1710 0 4.a.(3)
------ ------
b. Other mortgage-backed securities (include CMOs, / / / / / / / / / / / / / / / / / /
REMICs, and stripped MBS): / / / / / / / / / / / / / / / / / /
/ / / / / / / / / / / / / / / / / /
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA 1714 0 1715 0 4.b.(1)
/ / / / / / / / / / / / / / / / / /
(2) Collateralized by MBS issued or guaranteed by / / / / / / / / / / / / / / / / / /
FNMA, FHLMC, or GNMA 1718 0 1719 0 4.b.(2)
(3) All other mortgage-backed securities 1733 0 1734 0 4.b.(3)
------ ------
5. Other debt securities: / / / / / / / / / / / / / / / / / /
------------------------- -------------------------
a. Other domestic debt securities 1737 0 1738 0 5.a.
------ ------
b. Foreign debt securities 1742 0 1743 0 5.b.
------ ------
6. Equity securities: / / / / / / / / / / / / / / / / / /
------------------------- -------------------------
a. Investments in mutual funds / / / / / / / / / / / / / / / / / / 6.a.
------------------------- -------------------------
b. Other equity securities with readily determinable / / / / / / / / / / / / / / / / / /
fair values / / / / / / / / / / / / / / / / / / 6.b.
c. All other equity securities (1) / / / / / / / / / / / / / / / / / / 6.c.
------------------------- -------------------------
7. Total (sum of items 1 through 6) (total of column A / / / / / / / / / / / / / / / / / /
must equal Schedule RC, item 2.a) (total of column D / / / / / / / / / / / / / / / / / /
must equal Schedule RC, item 2.b) 1754 86,338 1771 86,860 7.
<CAPTION>
Available-for-sale
----------------------------------------------------
(Column C) (Column D)
Amortized Cost Fair Value(1)
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------- ------------------------- -------------------------
<S> <C> <C> <C>
3. Securities issued by states and political subdivisions / / / / / / / / / / / / / / / / / /
in the U.S.: / / / / / / / / / / / / / / / / / /
a. General obligations 1678 0 1679 0 3.a.
b. Revenue obligations 1690 0 1691 0 3.b.
c. Industrial development and similar obligations 1696 0 1697 0 3.c.
------ ------
4. Mortgage-backed securities (MBS): / / / / / / / / / / / / / / / / / /
------------------------- -------------------------
a. Pass-through securities: / / / / / / / / / / / / / / / / / /
------------------------- -------------------------
(1) Guaranteed by GNMA 1701 0 1702 0 4.a.(1)
------ ------
(2) Issued by FNMA and FHLMC 1706 315,910 1707 315,500 4.a.(2)
------------ ------------
(3) Other pass-through securities 1711 99,849 1713 99,272 4.a.(3)
----------- -----------
b. Other mortgage-backed securities (include CMOs, / / / / / / / / / / / / / / / / / /
REMICs, and stripped MBS): / / / / / / / / / / / / / / / / / /
/ / / / / / / / / / / / / / / / / /
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA 1716 120,683 1717 111,244 4.b.(1)
/ / / / / / / / / / / / / / / / / /
(2) Collateralized by MBS issued or guaranteed by / / / / / / / / / / / / / / / / / /
FNMA, FHLMC, or GNMA 1731 0 1732 0 4.b.(2)
(3) All other mortgage-backed securities 1735 312,431 1736 308,242 4.b.(3)
------------ ------------
5. Other debt securities: / / / / / / / / / / / / / / / / / /
------------------------- -------------------------
a. Other domestic debt securities 1739 31,744 1741 31,765 5.a.
----------- -----------
b. Foreign debt securities 1744 0 1746 0 5.b.
------ ------
6. Equity securities: / / / / / / / / / / / / / / / / / /
------------------------- -------------------------
a. Investments in mutual funds 1747 3,149 1748 3,149 6.a.
---------- ----------
b. Other equity securities with readily determinable / / / / / / / / / / / / / / / / / /
fair values 1749 1,596 1751 2,950 6.b.
c. All other equity securities (1) 1752 38,673 1753 38,673 6.c.
----------- -----------
7. Total (sum of items 1 through 6) (total of column A / / / / / / / / / / / / / / / / / /
must equal Schedule RC, item 2.a) (total of column D / / / / / / / / / / / / / / / / / /
must equal Schedule RC, item 2.b) 1772 1,483,106 1773 1,466,521 7.
</TABLE>
(1) Includes equity securities without readily determinable fair values at
historical cost in the item 6.c, column D.
6
<PAGE> 12
<TABLE>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-5
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-B -- CONTINUED
Memoranda
<TABLE>
<CAPTION>
<S> <C> <C> <C>
C412 <-
-------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------- ----------------------
1. Pledged securities (2) 0416 1,211,993 M.1.
2. Maturity and repricing data for debt securities (2), (3), (4)
(excluding those in nonaccrual status): / / / / / /
a. Fixed rate debt securities with a remaining maturity of: / / / / / /
------------------
(1) Three months or less 0343 23,252 M.2.a.(1)
------------------
(2) Over three months through 12 months 0344 43,274 M.2.a.(2)
------------------
(3) Over one year through five years 0345 769,659 M.2.a.(3)
------------------
(4) Over five years 0346 265,789 M.2.a.(4)
------------------
(5) Total fixed rate debt securities
(sum of Memorandum items 2.a.(1) through 2.a.(4) 0347 1,101,974 M.2.a.(5)
------------------
b. Floating rate debt securities with a repricing
frequency of: / / / / / /
------------------
(1) Quarterly or more frequently 4544 90,630 M.2.b.(1)
------------------
(2) Annually or more frequently, but less frequently
than quarterly 4545 283,138 M.2.b.(2)
------------------
(3) Every five years or more frequently,
but less frequently than annually 4551 32,345 M.2.b.(3)
------------------
(4) Less frequently than every five years 4552 0 M.2.b.(4)
------------------
(5) Total floating rate debt securities
(sum of Memorandum items 2.b.(1) through 2.b.(4)) 4553 406,113 M.2.b.(5)
------------------
c. Total DEBT securities (sum of Memorandum items 2.a.(5) and 2.b.(5))
(must equal total debt securities from Schedule RC-B, / / / / / / /
sum of items 1 through 5, columns A and D, minus nonaccrual / / / / / / /
debt securities included in Schedule RC-N, item 9, column C) 0393 1,508,087 M.2.c.
------------------
3. Not applicable / / / / / / /
------------------
4. Held-to-maturity debt securities restructured and in compliance
with modified terms (included in Schedule RC-B, items 3 / / / / / / /
through 5, column A, above) 5365 0 M.4.
------------------
5. Not applicable / / / / / / /
------------------
6. Floating rate debt securities with a remaining maturity
of one year or less (2), (4) (INCLUDED IN MEMORANDUM ITEMS 2.B.(1) / / / / / / /
THROUGH 2.B.(4) ABOVE) 5519 9,813 M.6.
------------------
7. Amortized cost of held-to-maturity securities sold or
transferred to available-for-sale or trading securities during the / / / / / / /
calendar year-to-date (report the amortized cost at date of sale or
transfer) 1778 0 M.7.
------------------
8. High-risk mortgage securities (included in the held-to-maturity
and available-for-sale accounts in Schedule RC-B, item / / / / / / /
4.b): ------------------
a. Amortized cost 8780 14,508 M.8.a.
------------------
b. Fair value 8781 6,203 M.8.b.
------------------
9. Structured notes (included in the held-to-maturity and / / / / / / /
available-for-sale accounts in Schedule RC-B, items 2, 3, and 5): / / / / / / /
------------------
a. Amortized cost 8782 42,130 M.9.a.
------------------
b. Fair value 8783 42,387 M.9.b.
------------------
</TABLE>
- -----------------
(2) Includes held-to-maturity securities at amortized cost and
available-for-sale securities at fair value.
(3) Exclude equity securities, e.g., investments in mutual funds, Federal
Reserve stock, common stock, and preferred stock.
(4) Memorandum items 2 and 6 are not applicable to savings banks that must
complete supplemental Schedule RC-J.
7
<PAGE> 13
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-6
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-C--LOANS AND LEASE FINANCING RECEIVABLES
PART I. LOANS AND LEASES
Do not deduct the allowances for loan and lease losses
from amounts reported in this schedule. Report total
loans and leases, net of unearned income. Exclude assets held
for trading.
<TABLE>
<CAPTION>
C415 <-
(Column A) (Column B)
Consolidated Domestic
Bank Offices
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Loans secured by real estate 1410 4,674,442 / / / / / / / / / / / / 1.
a. Construction and land development / / / / / / / / / / / / / 1415 151,003 1.a.
b. Secured by farmland (including farm / / / / / / / / / / / / / / / / / / / / / / / / /
residential and other improvements) / / / / / / / / / / / / / 1420 6,280 1.b.
c. Secured by 1-4 family residential properties: / / / / / / / / / / / / / / / / / / / / / / / / /
(1) Revolving, open-end loans secured by 1-4 family / / / / / / / / / / / / / / / / / / / / / / / / /
residential properties and extended under
lines of credit / / / / / / / / / / / / / 1799 0 1.c.(1)
(2) All other loans secured by 1-4 family residential
properties: / / / / / / / / / / / / / / / / / / / / / / / / /
(a) Secured by first liens / / / / / / / / / / / / / 5367 890,501 1.c.(2)(a)
(b) Secured by junior liens / / / / / / / / / / / / / 5368 249,108 1.c.(2)(b)
d. Secured by multifamily (5 or more)
residential properties / / / / / / / / / / / / / 1460 1,543,713 1.d.
e. Secured by nonfarm nonresidential properties / / / / / / / / / / / / / 1480 1,833,837 1.e.
2. Loans to depository institutions: / / / / / / / / / / / / / / / / / / / / / / / / /
a. to commercial banks in the U.S. / / / / / / / / / / / / / 1505 0 2.a.
(1) To U.S. branches and agencies of foreign banks 1506 0 / / / / / / / / / / / / 2.a.(1)
(2) To other commercial banks in the U.S. 1507 0 / / / / / / / / / / / / 2.a.(2)
b. To other depository institutions in the U.S. 1517 0 1517 0 2.b.
c. To banks in foreign countries / / / / / / / / / / / / / 1510 0 2.c.
(1) To foreign branches of other U.S. banks 1513 0 / / / / / / / / / / / / 2.c.(1)
(2) To other banks in foreign countries 1516 0 / / / / / / / / / / / / 2.c.(2)
3. Loans to finance agricultural production 1590 7,089 1590 7,089 3.
and other loans to farmers
4. Commercial and industrial loans: / / / / / / / / / / / / / / / / / / / / / / / / /
a. To U.S. addressees (domicile) 1763 1,717,249 1763 1,717,249 4.a.
b. To non-U.S. addressees (domicile) 1764 942 1764 942 4.b.
5. Acceptances of other banks: / / / / / / / / / / / / / / / / / / / / / / / / /
a. Of U.S. banks 1756 0 1756 0 5.a.
b. Of foreign banks 1757 0 1757 0 5.b.
6. Loans to individuals for household, family, / / / / / / / / / / / / / / / / / / / / / / / / /
and other personal expenditures (i.e.,
consumer loans) (includes purchased paper) / / / / / / / / / / / / / 1975 1,577,990 6.
a. Credit cards and related plans / / / / / / / / / / / / / / / / / / / / / / / / /
(includes check credit and other
revolving credit plans) 2008 281,544 / / / / / / / / / / / / 6.a.
b. Other (includes single payment, installment, 2011 1,296,446 / / / / / / / / / / / / 6.b.
and all student loans)
7. Loans to foreign governments and official / / / / / / / / / / / / / / / / / / / / / / / / /
institutions (including foreign central banks)
2081 0 2081 0 7.
8. Obligations (other than securities and leases)
of states and political subdivisions in / / / / / / / / / / / / / / / / / / / / / / / / /
the U.S. (includes nonrated
industrial development obligations) / / / / / / / / / / / / / / / / / / / / / / / / /
2107 268,744 2107 268,744 8.
9. Other loans 1563 248,083 / / / / / / / / / / / / 9.
a. Loans for purchasing or carrying securities / / / / / / / / / / / / / 1545 16,433 9.a.
(secured and unsecured)
b. All other loans (exclude consumer loans) / / / / / / / / / / / / / 1564 231,650 9.b.
10. Lease financing receivables
(net of unearned income) / / / / / / / / / / / / / 2165 202,148 10.
a. Of U.S. addressees (domicile) 2182 202,148 / / / / / / / / / / / / / 10.a.
b. Of non-U.S. addressees (domicile) 2183 0 / / / / / / / / / / / / / 10.b.
11. LESS: Any unearned income on loans reflected 2123 0 2123 0 11.
in items 1-9 above
12. Total loans and leases, net of unearned income / / / / / / / / / / / / / / / / / / / / / / / / / /
(sum of items 1 through 10 minus item
11) (total of column A must equal Schedule RC, item 4.a) 2122 8,696,687 2122 8,696,687 12.
</TABLE>
8
<PAGE> 14
<TABLE>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-7
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-C--CONTINUED
PART I. CONTINUED
<TABLE>
<CAPTION>
Memoranda (Column A) (Column B)
Consolidated Domestic
Bank Offices
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Commercial paper included in Schedule
RC-C, part I, above 1496 0 1496 0 M.1.
2. Loans and leases restructured and in compliance / / / / / / / / / / / / / / / / / / / /
with modified terms (included in Schedule RC-C, / / / / / / / / / / / / / / / / / / / /
part I, above and not reported as past due or / / / / / / / / / / / / / / / / / / / /
nonaccrual in Schedule RC-N, Memorandum item 1): / / / / / / / / / / / / / / / / / / / /
a. Loans secured by real estate: / / / / / / / / / / / / / / / / / / / /
(1) To U.S. addressees (domicile) 1687 0 M.2.a.(1)
(2) To non-U.S. addressees (domicile) 1689 0 M.2.a.(2)
b. All other loans and all lease financing / / / / / / / / / /
receivables (exclude loans to individuals / / / / / / / / / /
for household, family, and other personal / / / / / / / / / /
expenditures) 8691 0 M.2.b.
c. Commercial and industrial loans to and lease / / / / / / / / / /
financing receivables of non-U.S. addressees / / / / / / / / / /
(domicile) included in Memorandum item / / / / / / / / / /
2.b above / / / / / / / / / /
8692 0 M.2.c.
3. Maturity and repricing data for loans and leases / / / / / / / / / /
(1) (excluding those in nonaccrual status): / / / / / / / / / /
a. Fixed rate loans and leases with a remaining maturity of:/ / / / / / / / / /
(1) Three months or less 0348 459,566 M.3.a.(1)
(2) Over three months through 12 months 0349 823,440 M.3.a.(2)
(3) Over one year through five years 0356 3,475,648 M.3.a.(3)
(4) Over five years 0357 905,379 M.3.a.(4)
(5) Total fixed rate loans and leases / / / / / / / / / /
(sum of Memorandum items 3.a.(1) through 3.a.(4)) 0358 5,664,033 M.3.a.(5)
b. Floating rate loans with a repricing frequency of: / / / / / / / / / /
(1) Quarterly or more frequently 4554 2,923,797 M.3.b.(1)
(2) Annually or more frequently, but less
frequently than quarterly 4555 58,305 M.3.b.(2)
(3) Every five years or more frequently, but
less frequently than annually 4561 3,672 M.3.b.(3)
(4) Less frequently than every five years 4564 0 M.3.b.(4)
(5) Total floating rate loans (sum of Memorandum / / / / / / / / / /
items 3.b.(1) through 3.b.(4)) / / / / / / / / / /
4567 2,985,774 M.3.b.(5)
c. Total loans and leases (sum of Memorandum / / / / / / / / / /
items 3.a.(5) and 3.b.(5)) (Must equal / / / / / / / / / /
the sum of total loans and leases, net, from / / / / / / / / / /
Schedule RC-C, part I, item 12, plus / / / / / / / / / /
unearned income from Schedule RC-C, part I, / / / / / / / / / /
item 11, minus total nonaccrual loans and / / / / / / / / / /
leases from Schedule RC-N, sum of items 1 / / / / / / / / / /
through 8, column C)
1479 8,649,807 M.3.c.
d. FLOATING RATE LOANS WITH A REMAINING / / / / / / / / / /
MATURITY OF ONE YEAR OR LESS (INCLUDED / / / / / / / / / /
IN MEMORANDUM ITEMS 3.b.(1) THROUGH / / / / / / / / / /
3.b.(4) ABOVE) A246 115,671 M.3.d.
4. Loans to finance commercial real estate, construction,
and land development activities (NOT SECURED / / / / / / / / / /
BY REAL ESTATE) included in / / / / / / / / / /
Schedule RC-C, part I, items 4 / / / / / / / / / /
and 9, column A, page RC-6(2) 2746 186,840 M.4.
5. Loans and leases held for sale (included / / / / / / / / / /
in Schedule RC-C, part I, above) 5369 201,419 M.5.
6. Adjustable rate closed-end loans secured by first / / / / / / / / / /
liens on 1-4 family residential properties / / / / / / / / / /
(included in Schedule RC-C, part I, item / / / / / / / / / / RCON Bil Mil Thou
1.c.(2)(a), column b, page RC-6) / / / / / / / / / /
/ / / / / / / / / / 5370 100,650 M.6.
</TABLE>
- ---------------
(1) Memorandum item 3 is not applicable to savings banks that must complete
supplemental Schedule RC-J.
(2) Exclude loans secured by real estate that are included in Schedule RC-C,
part I, item 1, column A.
9
<PAGE> 15
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-8
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-D--TRADING ASSETS AND LIABILITIES
Schedule RC-D is to be completed only by banks with $1 billion or more in total
assets or with $2 billion or more in par/notional amount of off-balance sheet
derivative contracts (as reported in Schedule RC-L, items 14.a through 14.e,
columns A through D).
<TABLE>
<S><C>
C420 <-
Dollar Amounts in Thousands / / / / / / / / / Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
ASSETS / / / / / / / / / / / / / / / / / / /
1. U.S. Treasury securities in domestic offices RCON 3531 176 1.
2. U.S. Government agency and corporation obligations / / / / / / / / / / / / / / / / / / /
in domestic offices (exclude mortgage-backed / / / / / / / / / / / / / / / / / / / RCON
securities) RCON 3532 30 2.
3. Securities issued by states and political RCON 3533 4,760 3.
subdivisions in the U.S. in domestic offices / / / / / / / / / / / / / / / / / / /
4. Mortgage-backed securities (MBS) in domestic offices: / / / / / / / / / / / / / / / / / / /
a. Pass-through securities issued or guaranteed by / / / / / / / / / / / / / / / / / / /
FNMA, FHLMC, or GNMA RCON 3534 0 4.a.
b. Other mortgage-backed securities issued or / / / / / / / / / / / / / / / / / / /
guaranteed by FNMA, FHLMC, or GNMA (include / / / / / / / / / / / / / / / / / / /
CMOs, REMICs, and stripped MBS) RCON 3535 0 4.b.
c. All other mortgage-backed securities RCON 3536 0 4.c.
5. Other debt securities in domestic offices RCON 3537 0 5.
6. Certificates of deposit in domestic offices RCON 3538 0 6.
7. Commercial paper in domestic offices RCON 3539 0 7.
8. Bankers acceptances in domestic offices RCON 3540 0 8.
9. Other trading assets in domestic offices RCON 3541 0 9.
10. Trading assets in foreign offices RCFN 3542 0 10.
11. Revaluation gains on interest rate, foreign / / / / / / / / / / / / / / / / / / /
exchange rate, and other commodity and equity / / / / / / / / / / / / / / / / / / /
contracts: / / / / / / / / / / / / / / / / / / /
a. In domestic offices RCON 3543 15,554 11.a.
b. In foreign offices RCFN 3544 0 11.b.
12. Total trading assets (sum of items 1 through 11) / / / / / / / / / / / / / / / / / / /
must equal Schedule RC, item 5) RCFD 3545 20,520 12.
LIABILITIES / / / / / / / / / Bil Mil Thou
-------------------------------------------------------------
13. Liability for short positions RCFD 3546 11,062 13.
14. Revaluation losses on interest rate, foreign / / / / / / / / / / / / / / / / / / /
contracts exchange rate, and other commodity / / / / / / / / / / / / / / / / / / /
and equity contracts RCFD 3547 13,434 14.
15. Total trading liabilities (sum of items 13 and 14) / / / / / / / / / / / / / / / / / / /
(must equal Schedule RC, item 15.b) RCFD 3548 24,496 15.
</TABLE>
10
<PAGE> 16
<TABLE>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-9
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-E--DEPOSIT LIABILITIES
PART I. DEPOSITS IN DOMESTIC OFFICES
<TABLE>
<CAPTION>
C425 <-
Nontransaction
Transaction Accounts Accounts
--------------------------------------------------------------------
(Column A) (Column B) (Column C)
Total transaction Memo: Total Total
accounts (including demand deposits nontransaction
total demand (included in accounts
deposits) column A) (including MMDAs)
Dollar Amounts in Thousands RCON Bil Mil Thou RCON Bil Mil Thou RCON Bil Mil Thou
- ------------------------------------------------ -------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Deposits of: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
1. Individuals, partnerships, and corporations 2201 1,718,146 2240 1,092,345 2346 5,522,236 1.
2. U.S. Government 2202 7,540 2280 7,540 2520 0 2.
3. States and political subdivisions in the
U.S. 2203 178,927 2290 78,355 2530 516,710 3.
4. Commercial banks in the U.S. 2206 33,675 2310 33,675 2550 506 4.
5. Other depository institutions in the U.S. 2207 11,636 2312 11,636 2349 5,074 5.
6. Banks in foreign countries 2213 2,176 2320 2,176 2236 0 6.
7. Foreign governments and official / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
institutions (including foreign
central banks) 2216 0 2300 0 2377 0 7.
8. Certified and official checks 2330 108,684 2330 108,684 / / / / / / / / / 8.
9. Total (sum of items 1 through 8)
(sum of columns A / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
and C must equal Schedule RC, / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
item 13.a) 2215 2,060,784 2210 1,334.411 2385 6,044,526 9.
<CAPTION>
Memoranda
Dollar Amounts in Thousands RCON Bil Mil Thou
- -------------------------------------------------------------------------------------------
<S> <C> <C>
1. Selected components of total deposits (i.e., sum of
item 9, columns A and C): / / / / / / / / / /
a. Total individual Retirement Accounts (IRAs)
and Keogh Plan accounts 6835 430,520 M.1.a.
b. Total brokered deposits 2365 1,211,331 M.1.b.
c. Fully insured brokered deposits (included
in Memorandum item 1.b above): / / / / / / / / / /
(1) Issued in denominations of less than $100,000 2343 1,089 M.1.c.(1)
(2) Issued EITHER in denominations of $100,000
OR in denominations greater than / / / / / / / / /
($100,000 and participated out by the
broker in shares of $100,000 or less 2344 1,110,254 M.1.c.(2)
d. MATURITY DATA FOR BROKERED DEPOSITS: / / / / / / / / / /
(1) BROKERED DEPOSITS ISSUED IN DENOMINATIONS
OF LESS THAN $100,000 WITH A REMAINING / / / / / / / / / /
MATURITY OF ONE YEAR OR LESS (INCLUDED
IN MEMORANDUM ITEM 1.C.(1) ABOVE A243 1,089 M.1.d.(1)
(2) BROKERED DEPOSITS ISSUED IN DENOMINATIONS
OF $100,000 OR MORE WITH A REMAINING / / / / / / / / / /
MATURITY OF ONE YEAR OR LESS (INCLUDED
IN MEMORANDUM ITEM 1.B ABOVE) A244 686,965 M.1.d.(2)
e. Preferred deposits (uninsured deposits of
states and political subdivisions in the U.S. / / / / / / / / /
reported in item 3 above which are secured or
collateralized as required under state law) 5590 653,031 M.1.e.
2. Components of total nontransaction accounts (sum
of Memorandum items 2.a through 2.d / / / / / / / / / /
must equal item 9, column C above): / / / / / / / / / /
a. Savings deposits: / / / / / / / / / /
(1) Money market deposit accounts (MMDAs) 6810 1,404,584 M.2.a.(1)
(2) Other savings deposits (excludes MMDAs) 0352 990,691 M.2.a.(2)
b. Total time deposits of less than $100,000 6648 1,816,495 M.2.b.
c. Time certificates of deposit of $100,000 or more 6645 1,827,295 M.2.c.
d. Open-account time deposits of $100,000 or more 6646 5,461 M.2.d.
3. All NOW accounts (included in column A above) 2398 726,373 M.3.
------------------
4. Not applicable
</TABLE>
11
<PAGE> 17
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-10
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-E -- CONTINUED
PART I. CONTINUED
Memoranda (continued)
<TABLE>
<CAPTION>
Dollar Amounts in Thousands RCON Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
5. MATURITY AND REPRICING DATA FOR TIME DEPOSITS OF LESS THAN $100,000
(SUM OF MEMORANDUM ITEMS 5.A.(1) THROUGH 5.B(3) MUST EQUAL MEMORANDUM / / / / / / / / / / /
ITEM 2.B ABOVE): (1) / / / / / / / / / / /
a. FIXED RATE TIME DEPOSITS OF LESS THAN $100,000 WITH A REMAINING
MATURITY OF: / / / / / / / / / / /
(1) THREE MONTHS OR LESS A225 485,605 M.5.a.(1)
(2) OVER THREE MONTHS THROUGH 12 MONTHS A226 864,937 M.5.a.(2)
(3) OVER ONE YEAR A227 465,953 M.5.a.(3)
b. FLOATING RATE TIME DEPOSITS OF LESS THAN $100,000 WITH A REPRICING
FREQUENCY OF: / / / / / / / / / / /
(1) QUARTERLY OR MORE FREQUENTLY A228 0 M.5.b.(1)
(2) ANNUALLY OR MORE FREQUENTLY, BUT LESS FREQUENTLY THAN QUARTERLY A229 0 M.5.b.(2)
(3) LESS FREQUENTLY THAN ANNUALLY A230 0 M.5.b.(3)
c. FLOATING RATE TIME DEPOSITS OF LESS THAN $100,000 WITH A REMAINING
MATURITY OF ONE YEAR OR LESS (INCLUDED IN MEMORANDUM ITEMS 5.B(1) / / / / / / / / / / /
THROUGH 5.B.(3) ABOVE) A231 0 M.5.c.
6. MATURITY AND REPRICING DATA FOR TIME DEPOSITS OF $100,000 OR MORE
(I.E., TIME CERTIFICATES OF DEPOSIT OF $100,000 OR MORE AND OPEN- / / / / / / / / / / /
ACCOUNT TIME DEPOSITS OF $100,000 OR MORE) (SUM OF MEMORANDUM / / / / / / / / / / /
ITEMS 6.A.(1) THROUGH 6.B(4) MUST EQUAL THE SUM OF MEMORANDUM / / / / / / / / / / /
ITEMS 2.C AND 2.D ABOVE):(1) / / / / / / / / / / /
a. FIXED RATE TIME DEPOSITS OF $100,000 OR MORE WITH A REMAINING
MATURITY OF: / / / / / / / / / / /
(1) THREE MONTHS OR LESS A232 718,171 M.6.a.(1)
(2) OVER THREE MONTHS THROUGH 12 MONTHS A233 555,253 M.6.a.(2)
(3) OVER ONE YEAR THROUGH FIVE YEARS A234 557,804 M.6.a.(3)
(4) OVER FIVE YEARS A235 1,528 M.6.a.(4)
b. FLOATING RATE TIME DEPOSITS OF $100,000 OR MORE WITH A
REPRICING FREQUENCY OF: / / / / / / / / / / /
(1) QUARTERLY OR MORE FREQUENTLY A236 0 M.6.b.(1)
(2) ANNUALLY OR MORE RECENTLY, BUT LESS FREQUENTLY THAN
QUARTERLY A237 0 M.6.b.(2)
(3) EVERY FIVE YEARS OR MORE FREQUENTLY, BUT LESS FREQUENTLY
THAN QUARTERLY A238 0 M.6.b.(3)
(4) LESS FREQUENTLY THAN EVERY FIVE YEARS A239 0 M.6.b.(4)
c. FLOATING RATE TIME DEPOSITS OF $100,000 OR MORE WITH A
REMAINING MATURITY OF ONE YEAR OR LESS (INCLUDED IN / / / / / / / / / / /
MEMORANDUM ITEMS 6.B.(1) THROUGH 6.B.(4) ABOVE) A240 0 M.6.c.
-------------------------------
</TABLE>
- ------------
(1) Memorandum items 5 and 6 are not applicable to savings banks that must
complete supplemental Schedule RC-J.
12
<PAGE> 18
<TABLE>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-11
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-E -- CONTINUED
PART II. DEPOSITS IN FOREIGN OFFICES (INCLUDING EDGE AND
AGREEMENT SUBSIDIARIES AND IBFS)
<TABLE>
<CAPTION>
Dollar Amounts in Thousands RCFN Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deposits of: / / / / / / / / / / / /
1. Individuals, partnerships, and corporations 2621 238,979 1.
2. U.S. banks (including IBFs and foreign branches of U.S. banks) 2623 806 2.
3. Foreign banks (including U.S. branches and agencies of foreign
banks, including their IBFs) 2625 1,995 3.
4. Foreign governments and official institutions (including
foreign central banks) 2650 0 4.
5. Certified and official checks 2330 0 5.
6. All other deposits 2668 0 6.
7. Total (sum of items 1 through 6) (must equal Schedule RC, item 13.b) 2200 241,780 7.
------------------------------------------
<S> <C> <C>
Memorandum
Dollar Amounts in Thousands RCFN Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. TIME DEPOSITS WITH A REMAINING MATURITY OF ONE YEAR OR LESS
(INCLUDED IN PART II, ITEM 7 ABOVE) A245 241,780 M.1.
------------------------------------------
SCHEDULE RC-F--OTHER ASSETS
<CAPTION>
C430 <-
Dollar Amounts in Thousands / / / / / Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Income earned, not collected on loans RCFD 2164 52,365 1.
2. Net deferred tax assets(1) RCFD 2148 35,171 2.
3. Excess residential mortgage servicing fees receivable RCFD 5371 6,726 3.
4. Other (itemize and describe amounts that exceed 25% of this item) RCFD 2168 60,370 4.
a. TEXT 3549 ACCRUED INTEREST RECEIVABLE FROM SWAPS RCFD 3549 18,476 / / / / / / / / / / / / 4.a.
b. TEXT 3550 RCFD 3550 / / / / / / / / / / / / 4.b.
c. TEXT 3551 RCFD 3551 / / / / / / / / / / / / 4.c.
--------- ---------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11) RCFD 2160 154,632 5.
--------------------------------------------
<CAPTION>
Memorandum Dollar Amounts in Thousands / / / / / Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Deferred tax assets disallowed for regulatory capital purposes RCFD 5610 0 M.1.
--------------------------------------------
SCHEDULE RC-G--OTHER LIABILITIES
<CAPTION>
C435 <-
Dollar Amounts in Thousands / / / / / Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. a. Interest accrued and unpaid on deposits on domestic offices(2) RCON 3645 68,022 1.a.
b. Other expenses accrued and unpaid (includes accrued income taxes payable) RCFD 3646 69,056 1.b.
2. Net deferred tax liabilities(1) RCFD 3049 0 2.
3. Minority interest in consolidated subsidiaries RCFD 3000 0 3.
4. Other (itemize and describe amounts that exceed 25% of this item) RCFD 2938 21,810 4.
a. TEXT 3552 UNPOSTED CREDITS RCFD 3552 7,580 / / / / / / / / / / / / 4.a.
b. TEXT 3553 RCFD 3553 / / / / / / / / / / / / 4.b.
C. TEXT 3554 RCFD 3554 / / / / / / / / / / / / 4.c.
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20) RCFD 2930 158,888 5.
--------------------------------------------
</TABLE>
(1) See discussion of deferred income taxes in Glossary entry on "income taxes."
(2) For savings banks, include "dividends" accrued and unpaid on deposits.
13
<PAGE> 19
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-12
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-H--SELECTED BALANCE SHEET ITEMS FOR DOMESTIC OFFICES
<TABLE>
<CAPTION>
C440 <-
-----------------------------
Domestic Offices
-----------------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ---------------------------------------------------------------------------------------------- -----------------------------
<S> <C> <C>
1. Customers' liability to this bank on acceptances outstanding 2155 1,581 1.
2. Bank's liability on acceptances executed and outstanding 2920 1,581 2.
3. Federal funds sold and securities purchased under agreements to resell 1350 11,106 3.
4. Federal funds purchased and securities sold under agreements to repurchase 2800 1,351,922 4.
5. Other borrowed money 3190 12,530 5.
EITHER / / / / / / / / / / /
6. Net due from own foreign offices, Edge and Agreement subsidiaries, and IBFs 2163 N/A 6.
OR / / / / / / / / / / /
7. Net due to own foreign offices, Edge and Agreement subsidiaries, and IBF 2941 185,930 7.
8. Total assets (excludes net due from foreign offices, Edge and Agreement / / / / / / / / / / /
subsidiaries, and IBFs) 2192 10,797,596 8.
9. Total liabilities (excludes net due to foreign offices, Edge and / / / / / / / / / / /
Agreement subsidiaries, and IBFs) 3129 9,965,062 9.
-----------------------------
</TABLE>
ITEMS 10-17 INCLUDE HELD-TO-MATURITY AND AVAILABLE-FOR-SALE SECURITIES IN
DOMESTIC OFFICES.
<TABLE>
<CAPTION>
RCON Bil Mil Thou
------------------------------
<S> <C> <C>
10. U.S. Treasury securities 1779 555,726 10.
11. U.S. Government agency and corporation obligations (exclude mortgage-backed / / / / / / / / / / /
securities) 1785 42,130 11.
12. Securities issued by states and political subdivisions in the U.S. 1786 44,208 12.
13. Mortgage-backed securities (MBS): / / / / / / / / / / /
a. Pass-through securities: / / / / / / / / / / /
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA 1787 315,500 13.a.(1)
(2) Other pass-through securities 1869 99,272 13.a.(2)
b. Other mortgage-backed securities
(include CMOs, REMICs, and stripped MBS): / / / / / / / / / / /
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA 1877 111,244 13.b.(1)
(2) All other mortgage-backed securities 2253 308,242 13.b.(2)
14. Other domestic debt securities 3159 31,765 14.
15. Foreign debt securities 3160 0 15.
16. Equity securities: / / / / / / / / / / /
a. Investments in mutual funds 3161 3,149 16.a
b. Other equity securities with readily determinable fair values 3162 2,950 16.b.
C. All other equity securities 3169 38,673 16.c.
17. Total held-to-maturity and available-for-sale securities
(sum of items 10 through 16) 3170 1,552,859 17.
------------------------------
</TABLE>
Memorandum (to be completed only by banks with IBFs and other "foreign" offices)
<TABLE>
<CAPTION>
Dollar Amounts in Thousands RCON Bil Mil Thou
- ---------------------------------------------------------------------------------------------- -----------------------------
<S> <C> <C>
EITHER / / / / / / / / / / /
1. Net due from the IBF of the domestic offices of the reporting bank 3051 35,145 M.1.
OR / / / / / / / / / / /
2. Net due to the IBF of the domestic offices of the reporting bank 3059 N/A M.2.
-----------------------------
</TABLE>
14
<PAGE> 20
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-13
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-I--SELECTED ASSETS AND LIABILITIES OF IBFS
To be completed only by banks with IBFs and other "foreign" offices.
<TABLE>
<CAPTION>
C445 <-
-----------------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- ---------------------------------------------------------------------------------------------- -----------------------------
<S> <C> <C>
1. Total IBF assets of the consolidated bank (component of Schedule RC, item 12) 2133 35,145 1.
2. Total IBF loans and lease financing receivables (component of Schedule RC-C, part I, / / / / / / / / / / /
item 12, column A) 2076 0 2.
3. IBF commercial and industrial loans (component of Schedule RC-C, part I, item 4, / / / / / / / / / / /
column A) 2077 0 3.
4. Total IBF liabilities (component of Schedule RC, item 21) 2898 0 4.
5. IBF deposit liabilities due to banks, including other IBFs (component of Schedule RC-E, / / / / / / / / / / /
part II, items 2 and 3) 2379 0 5.
6. Other IBF deposit liabilities (component of Schedule RC-E, part II, items 1, 4, 5, and 6) 2381 0 6.
------------------------------
</TABLE>
SCHEDULE RC-K--QUARTERLY AVERAGES (1)
<TABLE>
<CAPTION>
C445 <-
---------------------------
Dollar Amounts in Thousands /////// Bil Mil Thou
- ------------------------------------------------------------------------------------------- ---------------------------
<S> <C> <C>
ASSETS / / / / / / / / / /
1. Interest-bearing balances due from depository institutions RCFD 3381 20,825 1.
2. U.S. treasury securities and U.S. Government agency and corporation obligations (2) RCFD 3382 1,055,946 2.
3. Securities issued by states and political subdivisions in the U.S.(2) RCFD 3383 44,008 3.
4. a. Other debt securities (2) RCFD 3647 460,185 4.a.
b. Equity securities(3) (includes investments in mutual funds and Federal Reserve stock) RCFD 3648 43,476 4.b.
5. Federal funds sold and securities purchased under agreements to resell in domestic / / / / / / / / / /
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs RCFD 3365 51,029 5.
6. Loans: / / / / / / / / / /
a. Loans in domestic offices: / / / / / / / / / /
(1) Total Loans RCON 3360 8,298,274 6.a.(1)
(2) Loans secured by real estate RCON 3385 4,592,254 6.a.(2)
(3) Loans to finance agricultural production and other loans to farmers RCON 3386 7,140 6.a.(3)
(4) Commercial and industrial loans RCON 3387 1,663,936 6.a.(4)
(5) Loans to individuals for household, family, and other personal expenditures RCON 3388 1,501,174 6.a.(5)
b. Total loans in foreign offices, Edge and Agreement subsidiaries, and IBFs RCFN 3360 0 6.b.
7. Trading assets RCFD 3401 26,312 7.
8. Lease financing receivables (net of unearned income) RCFD 3484 203,161 8.
9. Total assets(4) RCFD 3368 10,642,137 9.
LIABILITIES / / / / / / / / / /
10. Interest-bearing transaction accounts in domestic offices (NOW accounts, ATS accounts, / / / / / / / / / /
and telephone and preauthorized transfer accounts) (exclude demand deposits) RCON 3485 741,813 10.
11. Nontransaction accounts in domestic offices: / / / / / / / / / /
a. Money market deposit accounts (MMDAs) RCON 3486 1,416,283 11.a.
b. Other savings deposits RCON 3487 1,012,345 11.b.
c. Time certificates of deposit of $100,000 or more RCON 3345 1,783,268 11.c.
d. All other time deposits RCON 3469 1,879,127 11.d.
12. Interest-bearing deposits in foreign offices, Edge and Agreement subsidiaries, and IBFs RCFN 3404 257,084 12.
13. Federal funds purchased and securities sold under agreements to repurchase in domestic / / / / / / / / / /
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs RCFD 3353 1,322,003 13.
14. Other borrowed money RCFD 3355 12,909 14.
---------------------------
</TABLE>
(1) For all items, banks have the option of reporting either (1) an average
of daily figures for the quarter, or (2) an average of weekly figures
(i.e., the Wednesday of each week of the quarter).
(2) Quarterly averages for all debt securities should be based on amortized
cost.
(3) Quarterly averages for all equity securities should be based on
historical cost.
(4) The quarterly average for total assets should reflect all debt securities
(not held for trading) at amortized cost, equity securities with readily
determinable fair values at the lower of cost or fair value, and equity
securities without readily determinable fair values at historical cost.
15
<PAGE> 21
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-14
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-L--OFF-BALANCE SHEET ITEMS
Please read carefully the instructions for the preparation of Schedule RC-L.
Some of the amounts reported in Schedule RC-L are regarded as volume
indicators and not necessarily as measures of risk.
<TABLE>
<CAPTION>
C460 <-
----------------------
Dollar Amounts in Thousands RCFD Bil Mil
Thou
- ---------------------------------------------------------------------------------------------- ----------------------
<S> <C> <C>
1. Unused commitments: / / / / / / / /
a. Revolving, open-end lines secured by 1-4 family residential properties, e.g, / / / / / / / /
home equity lines 3814 0 1.a.
b. Credit card lines 3815 936,329 1.b.
c. Commercial real estate, construction, and land development: / / / / / / / /
(1) Commitments to fund loans secured by real estate 3816 381,148 1.c.(1)
(2) Commitments to fund loans not secured by real estate 6550 0 1.c.(2)
d. Securities underwriting 3817 0 1.d.
e. Other unused commitments 3818 749,437 1e.
2. Financial standby letters of credit and foreign office guarantees 3819 95,616 2.
a. Amount of financial standby letters of credit conveyed to others RCFD 3820 750 / / / / / / / / 2.a.
-----------------
3. Performance standby letters of credit and foreign office guarantees 3821 32,690 3.
a. Amount of performance standby letters of credit conveyed to
others RCFD 3822 0 / / / / / / / / 3.a.
-----------------
4. Commercial and similar letters of credit 3411 54,781 4.
5. Participations in acceptances (as described in the instructions) conveyed to others by the / / / / / / / /
reporting bank 3428 0 5.
6. Participations in acceptances (as described in the instructions) acquired by the reporting / / / / / / / /
(nonaccepting) bank 3429 0 6.
7. Securities borrowed 3432 0 7.
8. Securities lent (including customers' securities lent where the customer is indemnified / / / / / / / /
against loss by the reporting bank) 3433 0 8.
9. Loans transferred (i.e., sold or swapped) with recourse that have been treated as sold for / / / / / / / /
Call Report purposes: / / / / / / / /
a. FNMA and FHLMC residential mortgage loan pools: / / / / / / / /
(1) Outstanding principal balance of mortgages transferred as of the report date 3650 16,187 9.a.(1)
(2) Amount of recourse exposure on these mortgages as of the report date 3651 16,187 9.a.(2)
b. Private (nongovernment-issued or -guaranteed) residential mortgage loan pools: / / / / / / / /
(1) Outstanding principal balance of mortgages transferred as of the report date 3652 1,213 9.b.(1)
(2) Amount of recourse exposure on these mortgages as of the report date 3653 1,213 9.b.(2)
c. Farmer Mac agriculture mortgage loan pools: / / / / / / / /
(1) Outstanding principal balance of mortgages transferred as of the report date 3654 0 9.c.(1)
(2) Amount of recourse exposure on these mortgages as of the report date 3655 0 9.c.(2)
d. SMALL BUSINESS OBLIGATIONS TRANSFERRED WITH RECOURSE UNDER SECTION 208 OF THE / / / / / / / /
RIEGLE COMMUNITY DEVELOPMENT AND REGULATORY IMPROVEMENT ACT OF 1994: / / / / / / / /
(1) OUTSTANDING PRINCIPAL BALANCE OF SMALL BUSINESS OBLIGATIONS TRANSFERRED / / / / / / / /
AS OF THE REPORT DATE A249 0 9.d.(1)
(2) AMOUNT OF RETAINED RECOURSE ON THESE OBLIGATIONS AS OF THE REPORT DATE A250 0 9.d.(2)
10. When-issued securities: / / / / / / / /
a. Gross commitments to purchase 3434 910 10.a.
b. Gross commitments to sell 3435 265 10.b.
11. Spot foreign exchange contracts 8765 230,889 11.
12. All other off-balance sheet liabilities (exclude off-balance sheet derivatives) / / / / / / / /
(itemize and describe each component of this item over 25% of Schedule RC, item 28,
"Total equity capital") 3430 0 12.
/ / / / / / / /
a. TEXT 3555 RCFD 3555 / / / / / / / / 12.a.
b. TEXT 3556 RCFD 3556 / / / / / / / / 12.b.
c. TEXT 3557 RCFD 3557 / / / / / / / / 12.c.
d. TEXT 3558 RCFD 3558 / / / / / / / / 12.d.
--------- --------- -----------------------
</TABLE>
16
<PAGE> 22
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-15
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-L--CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands RCFD Bil Mil
Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
13. All other off-balance sheet assets (exclude off-balance sheet derivatives)
(itemize and describe each component of this item over 25% / / / / / / / / / / /
of Schedule RC, items 28, "Total equity capital") 5591 0 13.
/ / / / / / / / / / /
a. TEXT 5592 RCFD 5592 / / / / / / / / / / / 13.a.
b. TEXT 5593 RCFD 5593 / / / / / / / / / / / 13.b.
c. TEXT 5594 RCFD 5594 / / / / / / / / / / / 13.c.
d. TEXT 5595 RCFD 5595 / / / / / / / / / / / 13.d.
------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Dollar Amounts in Thousands (Column A) (Column B)
Interest Rate Foreign Exchange
Contracts Contracts
- -----------------------------------------------------------------------------------------------------------------------------
Off-balance Sheet Derivatives
Position Indicators Tril Bil Mil Thou Tril Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
14. Gross amounts (e.g., notional / / / / / / / / / / / / / / / / / / / / / /
amounts) (for each column, sum of / / / / / / / / / / / / / / / / / / / / / /
items 14.a through 14.e must equal / / / / / / / / / / / / / / / / / / / / / /
sum of items 15, 15.a, and 16.b): / / / / / / / / / / / / / / / / / / / / / /
a. Futures contracts 1,410 0
RCFD 8693 RCFD 8694
b. Forward contracts 0 1,095,881
RCFD 8697 RCFD 8698
c. Exchange-traded option contracts: / / / / / / / / / / / / / / / / / / / / / /
(1) Written options 0 0
RCFD 8701 RCFD 8702
(2) Purchased options 0 0
RCFD 8705 RCFD 8706
d. Over-the-counter option contracts: / / / / / / / / / / / / / / / / / / / / / /
(1) Written options 6,000 15,644
RCFD 8709 RCFD 8710
(2) Purchased options 6,000 44,728
RCFD 8713 RCFD 8714
e. Swaps 2,867,156 0
RCFD 3450 RCFD 3826
15. Total gross notional amount of / / / / / / / / / / / / / / / / / / / /
derivative contracts held for trading 63,410 1,156,253
RCFD A126 RCFD A127
16. Total gross notional amount of / / / / / / / / / / / / / / / / / / / /
derivative contracts held for / / / / / / / / / / / / / / / / / / / /
purpose other than trading: / / / / / / / / / / / / / / / / / / / /
a. Contracts marked to market 0 0
RCFD 8725 RCFD 8726
b. Contracts not marked to market 2,817,156 0
RCFD 8729 RCFD 8730
<CAPTION>
C461 <-
Dollar Amounts in Thousands (Column C) (Column D)
Equity Derivative Commodity and
Contracts Other Contracts
- -------------------------------------------------------------------------------------------------------------------------
Off-balance Sheet Derivatives
Position Indicators Tril Bil Mil Thou Tril Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
14. Gross amounts (e.g., notional / / / / / / / / / / / / / / / / / / / / /
amounts) (for each column, sum of / / / / / / / / / / / / / / / / / / / / /
items 14.a through 14.e must equal / / / / / / / / / / / / / / / / / / / / /
sum of items 15, 15.a, and 16.b): / / / / / / / / / / /
a. Futures contracts 0 0 14.a.
RCFD 8695 RCFD 8696
b. Forward contracts 0 0 14.b
RCFD 8699 RCFD 8700
c. Exchange-traded option contracts: / / / / / / / / / / / / / / / / / / / / /
(1) Written options 0 0 14.c.(1)
RCFD 8703 RCFD 8704
(2) Purchased options 0 0 14.c.(2)
RCFD 8707 RCFD 8708
d. Over-the-counter option contracts: / / / / / / / / / / / / / / / / / / / / /
(1) Written options 0 0 14.d.(1)
RCFD 8711 RCFD 8712
(2) Purchased options 0 0 14.d.(2)
RCFD 8715 RCFD 8716
e. Swaps 0 0 14.e.
RCFD 8719 RCFD 8720
15. Total gross notional amount of / / / / / / / / / / / / / / / / / / / / /
derivative contracts held for trading 0 0 15.
RCFD 8723 RCFD 8724
16. Total gross notional amount of / / / / / / / / / / / / / / / / / / / / /
derivative contracts held for / / / / / / / / / / / / / / / / / / / / /
purpose other than trading: / / / / / / / / / / / / / / / / / / / / /
a. Contracts marked to market 0 0 16.a.
RCFD 8727 RCFD 8728
b. Contracts not marked to market 0 0 16.b.
RCFD 8731 RCFD 8732
</TABLE>
17
<PAGE> 23
<TABLE>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-16
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-L--CONTINUED
<TABLE>
<CAPTION>
(Column A) (Column B)
Dollar Amounts in Thousands Interest Rate Foreign Exchange
- -----------------------------
Off-balance Sheet Derivatives
Position Indicators Contracts Contracts
--------------------------------- ---------------------------------
RCON Bil Mil Thou RCON Bil Mil Thou
--------------------------------- ---------------------------------
<S> <C> <C> <C>
17. Gross fair value of / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
derivative contracts: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
a. Contracts held for / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
trading: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
(1) Gross positive / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
fair value 8733 102 8734 14,698 17.a.(1)
(2) Gross negative / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
fair value 8737 201 8738 12,682 17.a.(2)
b. Contracts held for / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
purposes other than / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
trading that are marked / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
to market: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
(1) Gross positive / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
fair value 8741 0 8742 0 17.b.(1)
(2) Gross negative / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
fair value 8745 0 8746 0 17.b.(2)
c. Contracts held for / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
purposes other than / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
trading that are not / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
marked to market: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
(1) Gross positive / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
fair value 8749 15,503 8750 0 17.c.(1)
(2) Gross negative / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
fair value 8753 19,745 8754 0 17.c.(2)
<CAPTION>
(Column C) (Column D)
Dollar Amounts in Thousands Equity Derivative Commodity and
- -----------------------------
Off-balance Sheet Derivatives
Position Indicators Contracts Other Contracts
------------------------------ --------------------
RCON Bil Mil Thou RCON Bil Mil Thou
------------------------------ --------------------
<S> <C> <C> <C>
17. Gross fair value of / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
derivative contracts: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
a. Contracts held for / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
trading: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
(1) Gross positive / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
fair value 8735 0 8736 0 17.a.(1)
(2) Gross negative / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
fair value 8739 0 8740 0 17.a.(2)
b. Contracts held for / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
purposes other than / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
trading that are marked / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
to market: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
(1) Gross positive / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
fair value 8743 0 8744 0 17.b.(1)
(2) Gross negative / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
fair value 8747 0 8748 0 17.b.(2)
c. Contracts held for / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
purposes other than / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
trading that are not / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
marked to market: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
(1) Gross positive / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
fair value 8751 0 8752 0 17.c.(1)
(2) Gross negative / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
fair value 8755 0 8756 0 17.c.(2)
</TABLE>
<TABLE>
<CAPTION>
Memoranda Dollar Amounts in Thousands RCFD Bil Mil Thou
<S> <C> <C>
1.-2. Not applicable / / / / / / / / / / / / / / / / /
3. Unused commitments with an original maturity exceeding one year that are reported in / / / / / / / / / / / / / / / / /
Schedule RC-L, items 1.a through 1.e, above (report only the unused portions of / / / / / / / / / / / / / / / / /
commitments that are fee paid or otherwise legally binding) 3833 428,012 M.3.
a. Participations in commitments with an original maturity / / / / / / / / / / / / / / / / /
exceeding one year conveyed to others RCFD 3834 0 / / / / / / / / / / / / / / / / / M.3.a.
--------- ---------------------------------
4. To be completed only by banks with $1 billion or more in total assets: / / / / / / / / / / / / / / / / /
Standby letters of credit and foreign office guarantees (both financial and / / / / / / / / / / / / / / / / /
performance) issued to non-U.S. addresses (domicile) included in Schedule RC-L, 3377 0 M.4.0
items 2 and 3, above
5. Installment loans to individuals for household, family, and other personal / / / / / / / / / / / / / / / / /
expenditures that have been securitized and sold without recourse (with servicing / / / / / / / / / / / / / / / / /
retained), amounts outstandingby type of loan: / / / / / / / / / / / / / / / / /
a. Loans to purchase private passenger automobiles (TO BE COMPLETED FOR THE / / / / / / / / / / / / / / / / /
SEPTEMBER REPORT ONLY) 2741 0 M.5.a.
b. Credit cards and related plans (TO BE COMPLETED QUARTERLY) 2742 0 M.5.b.
c. All other consumer installment credit (including mobile home loans) (TO BE / / / / / / / / / / / / / / / / /
COMPLETED FOR THE SEPTEMBER REPORT ONLY) 2743 0 M.5.c.
------
</TABLE>
18
<PAGE> 24
<TABLE>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-17
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-M--MEMORANDA
<TABLE>
<CAPTION>
C465 <-
--------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Extensions of credit by the reporting bank to its executive officers, directors, / / / / / / / / / / / /
principal shareholders, and their related interests as of the report date: / / / / / / / / / / / /
a. Aggregate amount of all extensions of credit to all executive officers, / / / / / / / / / / / /
directors, principal shareholders, and their related interests 6164 112,005 1.a.
b. Number of executive officers, directors, and principal shareholders to whom / / / / / / / / / / / /
the amount of all extensions of credit by the reporting bank (including / / / / / / / / / / / /
extensions of credit to extensions of credit to related interests) equals / / / / / / / / / / / /
or exceeds the lesser of $500,000 or 5 percent Number / / / / / / / / / / / /
of total capital as defined for this purpose in agency / / / / / / / / / / / /
regualtions RCFD 6165 10 / / / / / / / / / / / / 1.b.
-------------------------------
2. Federal funds sold and securities purchased under agreements to resell with U.S. / / / / / / / / / / / /
branches and agencies of FOREIGN BANKS (1) (included in Schedule RC, items
3.a and 3.b) 3405 0 2.
3. Not applicable. / / / / / / / / / / / /
4. Outstanding principal balance of 1-4 family residential mortgage / / / / / / / / / / / /
loans serviced for others (include both retained servicing and purchased servicing): / / / / / / / / / / / /
a. Mortgages serviced under a GNMA contract 5500 1,180,332 4.a.
b. Mortgages serviced under a FHLMC contract: / / / / / / / / / / / /
(1) Serviced with recourse to servicer 5501 2,433 4.b.(1)
(2) Serviced without recourse to servicer 5502 1,298,094 4.b.(2)
c. Mortgages serviced under a FNMA contract / / / / / / / / / / / /
(1) Serviced under a regular option contract 5503 13,754 4.c.(1)
(2) Serviced under a special option contract 5504 2,090,861 4.c.(2)
d. Mortgages serviced under other servicing contracts 5505 2,062,702 4.d.
5. To be completed only by banks with $1 billion or more in total assets: / / / / / / / / / / / /
Customers' liability to this bank on acceptances outstanding (sum of items / / / / / / / / / / / /
5.a and 5.b must equal Schedule RC, item 9): / / / / / / / / / / / /
a. U.S. addresses (domicile) 2103 1,581 5.a.
b. Non-U.S. addressees (domicile) 2104 0 5.b
6. Intangible assets: / / / / / / / / / / / /
a. Mortgage servicing rights 3164 36,943 6.a
b. Other identifiable intangible assets: / / / / / / / / / / / /
(1) Purchased credit card relationships 5506 0 6.b.(1)
(2) All other identifiable intangible assets 5507 0 6.b.(2)
c. Goodwill 3163 22,124 6.c.
d. Total (sum of items 6.a through 6.c) (must equal Schedule RC, item 10) 2143 59,067 6.d.
e. Amount of intangible assets (included in item 6.b.(2) above) that have been / / / / / / / / / / / /
grandfathered or are otherwise qualifying for regulatory capital purposes 6442 0 6.e.
7. Mandatory convertible debt, net of common or perpetual preferred stock dedicated to / / / / / / / / / / / /
redeem the debt 3295 0 7.
</TABLE>
- -----------------------------
(1) Do not report federal funds sold and securities purchased under agreements
to resell with other commercial banks in the U.S. in this item.
19
<PAGE> 25
<TABLE>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-18
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-M--CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
8. a. Other real estate owned: / / / / / / / / / / / / / / / / / / / / / /
(1) Direct and indirect investments in real estate ventures RCFD 5372 0 8.a.(1)
(2) All other real estate owned: / / / / / / / / / / / / / / / / / / / / / /
(a) Construction and land development in domestic offices RCON 5508 0 8.a.(2)(a)
(b) Farmland in domestic offices RCON 5509 0 8.a.(2)(b)
(c) 1-4 family residential properties in domestic offices RCON 5510 2,847 8.a.(2)(c)
(d) Multifamily (5 or more) residential properties in domestic
offices RCON 5511 1,213 8.a.(2)(d)
(e) Nonfarm nonresidential properties in domestic offices RCON 5512 2,896 8.a.(2)(e)
(f) In foreign offices RCFN 5513 0 8.a.(2)(f)
(3) Total (sum of items 8.a.(1) and 8.a.(2)) (must equal
Schedule RC, item 7) RCFD 2150 6,956 8.a.(3)
b. Investments in unconsolidated subsidiaries and associated
companies / / / / / / / / / / / / / / / / / / / / / /
(1) Direct and indirect investments in real estate ventures RCFD 5374 0 8.b.(1)
(2) All other investments in unconsolidated subsidiaries and
associated companies RCFD 5375 0 8.b.(2)
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal
Schedule RC, item 8) RCFD 2130 0 8.b.(3)
c. TOTAL ASSETS of unconsolidated subsidiaries and associated
companies RCFD 5376 0 8.c.
9. Noncumulative perpetual preferred stock and related surplus
included in Schedule RC, item 23, "Perpetual preferred / / / / / / / / / / / / / / / / / / / / / /
stock and related surplus" RCFD 3778 0 9.
10. Mutual fund and annuity sales in domestic offices during the quarter / / / / / / / / / / / / / / / / / / / / / /
(include proprietary, private label, and third party products): / / / / / / / / / / / / / / / / / / / / / /
a. Money market funds RCON 6441 80,789 10.a.
b. Equity securities funds RCON 8427 13,681 10.b.
c. Debt securities funds RCON 8428 5,099 10.c.
d. Other mutual funds RCON 8429 1,231 10.d.
e. Annuities RCON 8430 24,178 10.e.
f. Sales of proprietary mutual funds and annuities (included in / / / / / / / / / / / / / / / / / / / / / /
items 10.a through 10.e above) RCON 8784 86,419 10.f.
</TABLE>
<TABLE>
<CAPTION>
Memorandum Dollar Amounts in Thousands RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Interbank holdings of capital instruments (TO BE COMPLETED
FOR THE DECEMBER REPORT ONLY): / / / / / / / / / / / / / / / / / / / / / /
a. Reciprocal holdings of banking organizations' capital
instruments 3836 N/A M.1.a.
b. Nonreciprocal holdings of banking organizations' capital
instruments 3837 N/A M.1.b.
</TABLE>
20
<PAGE> 26
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-19
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
SCHEDULE RC-N--PAST DUE AND NONACCRUAL LOANS, LEASES,
AND OTHER ASSETS
</TABLE>
<TABLE>
<CAPTION>
The FFIEC regards the information reported in all of
Memorandum item 1, in items 1 through 10, column A, and
in Memorandum items 2 through 4, column A, as
confidential.
(Column A) (Column B)
Past due Past due 90 days
30 through 89 or more and
days and still still accruing
accruing
--------------------------------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Loans secured by real estate: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
a. To U.S. addressees (domicile) 1245 1246 22,348
b. To non-U.S. addressees (domicile) 1248 1249 0
2. Loans to depository institutions and / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
acceptances of other banks: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
a. To U.S. banks and other U.S. depository / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
institutions 5377 5378 0
b. To foreign banks 5380 5381 0
3. Loans to finance agricultural production / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
and other loans to farmers 1594 1597 0
4. Commercial and industrial loans: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
a. To U.S. addressees (domicile) 1251 1252 50
b. To non-U.S. addressees (domicile) 1254 1255 0
5. Loans to individuals for household, family, / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
and other personal expenditures: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
a. Credit cards and related plans 5383 5384 885
b. Other (includes single payment, installment, / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
and all student loans) 53866 5387 10,979
6. Loans to foreign governments and official / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
institutions 5389 5390 0
7. All other loans 5459 5460 0
8. Lease financing receivables: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
a. Of U.S. addressees (domicile) 1257 1258 0
b. Of non-U.S. addressees (domicile) 1271 1272 0
9. Debt securities and other assets (exclude / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
other real estate owned and other / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
repossessed assets) 3505 3506 0
<CAPTION>
The FFIEC regards the information reported in all of
Memorandum item 1, in items 1 through 10, column A, and
in Memorandum items 2 through 4, column A, as
confidential. C470 <-
(Column C)
Nonaccrual
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
1. Loans secured by real estate: / / / / / / / / / / / / / / / / /
a. To U.S. addressees (domicile) 1247 32,736 1.a.
b. To non-U.S. addressees (domicile) 1250 0 1.b.
2. Loans to depository institutions and
acceptances of other banks: / / / / / / / / / / / / / / / / /
/ / / / / / / / / / / / / / / / /
a. To U.S. banks and other U.S. depository / / / / / / / / / / / / / / / / /
institutions 5379 0 2.a.
b. To foreign banks 5382 0 2.b.
3. Loans to finance agricultural production / / / / / / / / / / / / / / / / /
and other loans to farmers 1583 52 3.
4. Commercial and industrial loans: / / / / / / / / / / / / / / / / /
a. To U.S. addressees (domicile) 1253 13,480 4.a.
b. To non-U.S. addressees (domicile) 1256 0 4.b.
5. Loans to individuals for household, family, / / / / / / / / / / / / / / / / /
and other personal expenditures: / / / / / / / / / / / / / / / / /
a. Credit cards and related plans 5385 490 5.a.
b. Other (includes single payment, installment, / / / / / / / / / / / / / / / / /
and all student loans) 5388 7 5.b.
6. Loans to foreign governments and official / / / / / / / / / / / / / / / / /
institutions 5391 0 6.
7. All other loans 5461 115 7.
8. Lease financing receivables: / / / / / / / / / / / / / / / / /
a. Of U.S. addressees (domicile) 1259 0 8.a.
b. Of non-U.S. addressees (domicile) 1791 0 8.b.
9. Debt securities and other assets (exclude / / / / / / / / / / / / / / / / /
other real estate owned and other / / / / / / / / / / / / / / / / /
repossessed assets) 3507 0 9.
</TABLE>
Amounts reported in items 1 through 8 above include guaranteed and unguaranteed
portions of past due and nonaccrual loans and leases. Report in item 10 below
certain guaranteed loans and leases that have already been included in the
amounts reported in items 1 through 8.
<TABLE>
<S> <C> <C> <C> <C>
10. Loans and RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
leases reported in
items 1 through 8
above which are
wholly or partially
guaranteed by the
U.S. Government 5612 5613 23,020 5614 4,576 10.
a. Guaranteed
portion of loans
and leases included / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
in item 10 above 5615 5616 3,020 5617 4,455 10.a.
</TABLE>
21
<PAGE> 27
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-20
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-N--CONTINUED
<TABLE>
<CAPTION>
C473 <-
(Column A) (Column B) (Column C)
Past due Past due 90 days Nonaccrual
30 through 89 or more and
days and still still accruing
accruing
Memoranda
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Restructured loans and leases included in
Schedule RC-N, items 1 through 8, above (and / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
not reported in Schedule RC-C, part I, / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
Memorandum item 2) 1658 1659 1661 M.1.
2. Loans to finance commercial real estate, / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
construction, and land development activities / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
(not secured by real estate) included in / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
Schedule RC-N, items 4 and 7, above 6558 6559 0 6560 0 M.2.
------------------- --------------------- ---------------------
3. Loans secured by real estate in domestic
offices (included in Schedule RC-N, item 1,
above): RCON Bil Mil Thou RCON Bil Mil Thou RCON Bil Mil Thou
------------------- --------------------- ---------------------
/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
a. Construction and land development 2759 2769 0 3492 65 M.3.a.
b. Secured by farmland 3493 3494 12 3495 430 M.3.b.
c. Secured by 1-4 family residential
properties: / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
(1) Revolving, open-end loans secured
by 1-4 family residential / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
properties and extended / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
under lines of credit 5398 5399 0 5400 0 M.3.c.(1)
(2) All other loans secured by 1-4 family / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
residential properties 5401 5402 22,207 5403 10,815 M.3.c.(2)
d. Secured by multifamily (5 or more) / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
residential properties 3499 3500 54 3501 7,465 M.3.d.
e. Secured by nonfarm nonresidential
properties 3502 3503 75 3504 13,961 M.3.e.
------------------ ------------------ -----------------------
(Column A) (Column B)
Past due 30 Past due 90
through 89 days days or more
RCFD Bil Mil Thou RCFD Bil Mil Thou
-------------------- ---------------------
4. Interest rate, foreign exchange rate, and / / / / / / / / / / / / / / / / / / / / / / /
other commodity and equity contracts: / / / / / / / / / / / / / / / / / / / / / / /
a. Book value of amounts carried as assets 3522 3528 0 M.4.a.
--------------------- -----------------------
b. Replacement cost of contracts with a / / / / / / / / / / / / / / / / / / / / / / /
positive replacement cost 3529 3530 0 M.4.b.
</TABLE>
22
<PAGE> 28
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-21
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-O--OTHER DATA FOR DEPOSIT INSURANCE ASSESSMENTS
<TABLE>
<CAPTION>
C475 <-
Dollar Amounts in Thousands RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Unposted debits (see instructions): / / / / / / / / / / / / / / / / / / / / /
a. Actual amount of all unposted debits 0030 0 1.a.
or / / / / / / / / / / / / / / / / / / / / /
b. Separate amount of unposted debits: / / / / / / / / / / / / / / / / / / / / /
(1) Actual amount of unposted debits to demand deposits 0031 N/A 1.b.(1)
(2) Actual amount of unposted debits to time and savings
deposits(1) 0032 N/A 1.b.(2)
2. Unposted credits (see instructions): / / / / / / / / / / / / / / / / / / / / /
a. Actual amount of all unposted credits 3510 41,145 2.a.
OR / / / / / / / / / / / / / / / / / / / / /
b. Separate amount of unposted credits: / / / / / / / / / / / / / / / / / / / / /
(1) Actual amount of unposted credits to demand deposits 3512 N/A 2.b.(1)
(2) Actual amount of unposted credits to time and savings
deposits(1) 3514 N/A 2.b.(2)
3. Uninvested trust funds (cash) held in bank's own trust department / / / / / / / / / / / / / / / / / / / / /
(not included in total deposits in domestic offices) 3520 0 3.
4. Deposits of consolidated subsidiaries in domestic offices and in
insured branches in Puerto Rico and U.S. territories and / / / / / / / / / / / / / / / / / / / / /
possessions (not included in total deposits): / / / / / / / / / / / / / / / / / / / / /
a. Demand deposits of consolidated subsidiaries 2211 29,727 4.a.
b. Time and savings deposits(1) of consolidated subsidiaries 2351 41,988 4.b.
c. Interest accrued and unpaid on deposits of consolidated
subsidiaries 5514 0 4.c.
5. Deposits in insured branches in Puerto Rico and U.S. territories
and possessions: / / / / / / / / / / / / / / / / / / / / /
a. Demand deposits in insured branches (included in Schedule RC-E,
Part II) 2229 0 5.a.
b. Time and savings deposits(1) in insured branches (included in
Schedule RC-E, Part II) 2383 0 5.b.
c. Interest accrued and unpaid on deposits in insured branches / / / / / / / / / / / / / / / / / / / / /
(included in Schedule RC-G, item 1.b) 5515 0 5.c.
Item 6 is not applicable to state nonmember banks that have not been / / / / / / / / / / / / / / / / / / / / /
authorized by the Federal Reserve to act as pass-through correspondents. / / / / / / / / / / / / / / / / / / / / /
6. Reserve balances actually passed through to the Federal Reserve by / / / / / / / / / / / / / / / / / / / / /
the reporting bank on behalf of its respondent depository institutions / / / / / / / / / / / / / / / / / / / / /
that are also reflected as deposit liabilities of the reporting bank: / / / / / / / / / / / / / / / / / / / / /
a. Amount reflected in demand deposits (included in Schedule RC-E, / / / / / / / / / / / / / / / / / / / / /
Part I, item 4 or 5, column B) 2314 0 6.a.
b. Amount reflected in time and savings deposits(1) (included in / / / / / / / / / / / / / / / / / / / / /
Schedule RC-E, Part I, item 4 or 5, column A or C, but not
column B) 2315 0 6.b.
7. Unamortized premiums and discounts on time and savings deposits:(1) / / / / / / / / / / / / / / / / / / / / /
a. Unamortized premiums 5516 0 7.a.
b. Unamortized discounts 5517 222 7.b.
8. TO BE COMPLETED BY BANKS WITH "OAKAR DEPOSITS."
Total "Adjusted Attributable Deposits" of all institutions acquired
under Section 5(d)(3) of the / / / / / / / / / / / / / / / / / / / / /
Federal Deposit Insurance Act (from most recent FDIC Oakar Transaction
Worksheet(s)) 5518 1,352,310 8.
9. Deposits in lifeline accounts 5596 / / / / / / / / / / / / / / / / / / 9.
10. Benefit-responsive "Depository Institution Contracts" (included in / / / / / / / / / / / / / / / / / / / / /
total deposits in domestic offices) 8432 0 10.
</TABLE>
- ----------------------
(1) For FDIC insurance assessment purposes, "time and savings deposits"
consists of nontransaction accounts and all transaction accounts other
than demand deposits.
23
<PAGE> 29
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-22
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-O--CONTINUED
<TABLE>
<S><C>
Dollar Amounts in Thousands RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------
11. Adjustments to demand deposits in domestic offices reported in / / / / / / / / / / / / / / / / / / / / /
Schedule RC-E for certain reciprocal demand balances: / / / / / / / / / / / / / / / / / / / / /
a. Amount by which demand deposits would be reduced / / / / / / / / / / / / / / / / / / / / /
if reciprocal demand balances between the reporting / / / / / / / / / / / / / / / / / / / / /
bank and savings associations were reported on a net basis / / / / / / / / / / / / / / / / / / / / /
rather than a gross basis in Schedule RC-E 8785 0 11.a.
b. Amount by which demand deposits would be increased if / / / / / / / / / / / / / / / / / / / / /
reciprocal demand balances between the reporting bank / / / / / / / / / / / / / / / / / / / / /
and U.S. branches and agencies of foreign banks were / / / / / / / / / / / / / / / / / / / / /
reported on a gross basis rather than a net basis in / / / / / / / / / / / / / / / / / / / / /
Schedule RC-E A181 0 11.b.
c. Amount by which demand deposits would be reduced if / / / / / / / / / / / / / / / / / / / / /
cash items in process of collection were included in the / / / / / / / / / / / / / / / / / / / / /
calculation of net reciprocal demand balances between / / / / / / / / / / / / / / / / / / / / /
the reporting bank and the domestic offices of U.S. banks / / / / / / / / / / / / / / / / / / / / /
and savings associations in Schedule RC-E A182 12,475 11.c.
Memoranda (TO BE COMPLETED EACH QUARTER EXCEPT AS NOTED)
Dollar Amounts in Thousands RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------
1. Total deposits in domestic offices of the bank (sum of / / / / / / / / / / / / / / / / / / / / /
Memorandum items 1.a.(1) and 1.b.(1) must equal / / / / / / / / / / / / / / / / / / / / /
Schedule RC, item 13.a): / / / / / / / / / / / / / / / / / / / / /
a. Deposit accounts of $100,000 or less: / / / / / / / / / / / / / / / / / / / / /
(1) Amount of deposit accounts of $100,000 or less 2702 4,779,607 M.1.a.(1)
(2) Number of deposit accounts of $100,000 or less Number / / / / / / / / / / / / / / / / / / / / /
(TO BE COMPLETED FOR THE JUNE REPORT ONLY) RCON 3779 N/A / / / / / / / / / / / / / / / / / / / / / M.1.a.(2)
/ / / / / / / / / / / / / / / / / / / / /
b. Deposit accounts of more than $100,000: / / / / / / / / / / / / / / / / / / / / /
(1) Amount of deposit accounts of more than $100,000 2710 3,325,703 M.1.b.(1)
Number / / / / / / / / / / / / / / / / / / / / /
(2) Number of deposit accounts of more than $100,000 / / / / / / / / / / / / / / / / / / / / /
RCON 2722 5,871 / / / / / / / / / / / / / / / / / / / / / M.1.b.(2)
2. Estimated amount of uninsured deposits in domestic offices of the bank:
a. An estimate of your bank's uninsured deposits can be determined by multiplying the number of deposit accounts
of more than $100,000 reported in Memorandum item 1.b.(2) above by $100,000 and subtracting the result from the
amount of deposit accounts of more than $100,000 reported in Memorandum item 1.b.(1) above.
Indicate in the appropriate box at the right whether your bank has a method or procedure for
determining a better estimate of uninsured deposits than the estimate described above YES NO
6861 / / / X M.2.a.
b. If the box marked YES has been checked, report the estimate of uninsured deposits
determined by using your bank's method or procedure RCON Bil Mil Thou
5597 N/A M.2.b.
- ------------------------------------------------------------------------------------------------------------------------------------
Person to whom questions about the Reports of Condition and Income should be directed: C477 <-
BRIAN P. KLOCK, BANKING OFFICER (716) 842-5462
- ------------------------------------------------------------------------------------------------------------------------------------
Name and Title (TEXT 8901) Area code/phone number/extension (TEXT 8902)
</TABLE>
24
<PAGE> 30
<TABLE>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZAPage RC-22 Page RC-23
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-R -- REGULATORY CAPITAL
This schedule must be completed by all banks as follows: Banks that reported
total assets of $1 billion or more in Schedule RC, item 12, for June 30,
1995, must complete items 2 through 9 and Memoranda items 1 and 2. BANKS
WITH ASSETS OF LESS THAN $1 BILLION MUST COMPLETE ITEMS 1 THROUGH 3 BELOW OR
SCHEDULE RC-R IN ITS ENTIRETY, DEPENDING ON THEIR RESPONSE TO ITEM 1 BELOW.
<TABLE>
<S><C>
1. TEST FOR DETERMINING THE EXTENT TO WHICH SCHEDULE RC-R MUST BE COMPLETED.
TO BE COMPLETED ONLY BY BANKS WITH TOTAL ASSETS OF LESS THAN $1 BILLION. C480 <-
Indicate in the appropriate box at the right whether the bank has total YES NO
capital greater than or equal to eight percent of adjusted total assets RCFD 6056 / / / / / 1.
</TABLE>
For purposes of this test, adjusted total assets equals total assets less
cash, U.S. Treasuries, U.S. Government agency obligations, and 80 percent
of U.S. Government-sponsored agency obligations plus the allowance for
loan and lease losses and selected off-balance sheet items as reported on
Schedule RC-L (see instructions).
If the box marked YES has been checked, then the bank only has to complete
items 2 and 3 below. If the box marked NO has been checked, the bank must
complete the remainder of this schedule.
A NO response to item 1 does not necessarily mean that the bank's actual
risk-based capital ratio is less than eight percent or that the bank is not
in compliance with the risk-based capital guidelines.
NOTE: ALL BANKS ARE REQUIRED TO COMPLETE ITEMS 2 AND 3 BELOW. SEE
OPTIONAL WORKSHEET FOR ITEMS 3.A. THROUGH 3.F.
<TABLE>
<CAPTION>
(Column A) (Column B)
Subordinated Debt(1) and Other
Intermediate Limited-Life
Term Preferred Stock Capital Instruments
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
2. Subordinated debt(1) and other limited-life capital
instruments (original weighted average maturity of
at least five years) with a remaining maturity of: RCFD Bil Mil Thou RCFD Bil Mil Thou
---------------------- ----------------------
a. One year or less 3780 0 3786 0 2.a.
b. Over one year through two years 3781 0 3787 0 2.b.
c. Over two years through three years 3782 0 3788 0 2.c.
d. Over three years through four years 3783 0 3789 0 2.d.
e. Over four years through five years 3784 0 3790 0 2.e.
f. Over five years 3785 175,000 3791 0 2.f.
-------------- ------
3. AMOUNTS USED IN CALCULATING REGULATORY CAPITAL RATIOS (REPORT AMOUNTS / / / / / / / / / / / / / / /
DETERMINED BY THE BANK FOR ITS OWN INTERNAL REGULATORY CAPITAL ANALYSES / / / / / / / / / / / / / / /
CONSISTENT WITH APPLICABLE CAPITAL STANDARDS): RCFD Bil Mil Thou
a. TIER 1 CAPITAL 8274 634,164 3.a.
b. TIER 2 CAPITAL 8275 289,251 3.b.
c. TOTAL RISK-BASED CAPITAL 3792 923,415 3.c.
d. EXCESS ALLOWANCE FOR LOAN AND LEASE LOSSES A222 124,906 3.d.
e. RISK-WEIGHTED ASSETS (NET OF ALL DEDUCTIONS, INCLUDING EXCESS ALLOWANCE) A223 9,015,213 3.e.
f. "AVERAGE TOTAL ASSETS" (NET OF ALL ASSETS DEDUCTED FROM TIER 1 CAPITAL) (2) A224 10,620,013 3.f.
---------------
ITEMS 4-9 AND MEMORANDA ITEMS 1 AND 2 ARE TO BE COMPLETED BY BANKS THAT
ANSWERED NO TO ITEM 1 ABOVE AND BY BANKS WITH TOTAL ASSETS OF $1 BILLION OR
MORE.
(Column A) (Column B)
Assets Recorded Credit Equivalent
on the Amount of
Balance Sheet Off-Balance
Sheet Items (3)
4. Assets and credit equivalent amounts of off-balance sheet
items assigned
to the Zero percent risk category: RCFD Bil Mil Thou RCFD Bil Mil Thou
---------------------- ----------------------
/ / / / / / / / / / / / / / / / / / / / / /
a. Assets recorded on the balance sheet: / / / / / / / / / / / / / / / / / / / / / /
(1) Securities issued by, other claims on, and claims / / / / / / / / / / / / / / / / / / / / / /
unconditionally guaranteed by, the U.S. Government / / / / / / / / / / / / / / / / / / / / / /
and its agencies and other OECD central / / / / / / / / / / / / / / / / / / / / / /
governments 3794 605,854 / / / / / / / / / / / 4.a.(1)
(2) All other 3795 140,161 / / / / / / / / / / / 4.a.(2)
b. Credit equivalent amount of off-balance sheet items / / / / / / / / / / / 3796 750 4.b.
</TABLE>
(1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7.
(2) Do not deduct excess allowance for loan and lease losses.
(3) Do not report in column B the risk-weighted amount of assets reported in
column A.
25
<PAGE> 31
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-24
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RC-R -- CONTINUED
<TABLE>
<CAPTION>
(Column A) (Column B)
Assets Recorded Credit Equivalent
on the Amount of
Balance Sheet Off-Balance
Sheet Items(1)
--------------------- ---------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------- ---------------------
<S> <C> <C> <C> <C> <C>
5. Assets and credit equivalent / / / / / / / / / / / / / / / / / / / / / /
amounts of off-balance sheet items / / / / / / / / / / / / / / / / / / / / / /
assigned to the 20 percent risk category: / / / / / / / / / / / / / / / / / / / / / /
a. Assets recorded on the balance sheet: / / / / / / / / / / / / / / / / / / / / / /
(1) Claims conditionally guaranteed by the / / / / / / / / / / / / / / / / / / / / / /
U.S. Government and its agencies and other / / / / / / / / / / / / / / / / / / / / / /
OECD central governments 3798 241,087 / / / / / / / / / / / 5.a.(1)
(2) Claims collateralized by securities issued by / / / / / / / / / / / / / / / / / / / / / /
the U.S. Government and its agencies and other / / / / / / / / / / / / / / / / / / / / / /
OECD central governments; by securities issued / / / / / / / / / / / / / / / / / / / / / /
by Government-sponsored agencies; and by cash / / / / / / / / / / / / / / / / / / / / / /
on deposit 3799 0 / / / / / / / / / / / 5.a.(2)
(3) All other 3800 933,954 / / / / / / / / / / / 5.a.(3)
b. Credit equivalent amount of off-balance sheet items / / / / / / / / / / / 3801 40,655 5.b.
6. Assets and credit equivalent amounts of off-balance sheet / / / / / / / / / / / / / / / / / / / / / /
items assigned to the 50 percent risk category: / / / / / / / / / / / / / / / / / / / / / /
a. Assets recorded on the balance sheet 3802 1,200,396 / / / / / / / / / / / 6.a.
b. Credit equivalent amount of off-balance sheet items / / / / / / / / / / / 3803 33,118 6.b.
7. Assets and credit equivalent amounts of off-balance sheet / / / / / / / / / / / / / / / / / / / / / /
items assigned to the 100 percent risk category: / / / / / / / / / / / / / / / / / / / / / /
a. Assets recorded on the balance sheet 3804 7,969,432 / / / / / / / / / / / 7.a.
b. Credit equivalent amount of off-balance sheet items / / / / / / / / / / / 3805 332,909 7.b.
8. On-balance sheet asset values excluded from the calculation / / / / / / / / / / / / / / / / / / / / / /
of the risk-based capital ratio (2) 3806 2,037 / / / / / / / / / / / 8.
9. Total assets recorded on the balance sheet (sum of items / / / / / / / / / / / / / / / / / / / / / /
4.a, 5.a, 6.a, 7.a, and 8, column A) (must equal Schedule RC, / / / / / / / / / / / / / / / / / / / / / /
item 12 plus items 4.b and 4.c) 3807 11,092,921 / / / / / / / / / / / 9.
</TABLE>
<TABLE>
Memoranda ---------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Current credit exposure across all off-balance sheet derivative contracts covered by / / / / / / / / / / /
the risk-based capital standards 8764 30,304 M.1.
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
With a remaining maturity of
-------------------------------------------------------------------------------------
(Column A) (Column B) (Column C)
One year or less Over one year Over five years
2. Notional principal amounts of through five years
off-balance sheet derivative -------------------------------------------------------------------------------------
contracts(3): RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
a. Interest rate contracts 3808 648,690 8766 2,075,441 8767 149,025 M.2.a.
b. Foreign exchange contracts 3812 1,140,608 8769 0 8770 0 M.2.b.
c. Gold contracts 8771 0 8772 0 8773 0 M.2.c.
d. Other precious metals
contracts 8774 0 8775 0 8776 0 M.2.d.
e. Other commodity contracts 8777 0 8778 0 8779 0 M.2.e.
f. Equity derivative contracts A000 0 A001 0 A002 0 M.2.f.
-------------------------------------------------------------------------------------
</TABLE>
- ---------------
(1) Do not report in column B the risk-weighted amount of assets reported in
column A.
(2) Include the difference between the fair value and the amortized cost of
available-for-sale securities in item 8 and report the amortized cost of
these securities in items 4 and 7 above. Item 8 also includes on-balance
sheet asset values (or portions thereof) of off-balance sheet interest
rate, foreign exchange rate, and commodity contracts and those contracts
(e.g., futures contracts) not subject to risk-based capital. Exclude
from time 8 margin accounts and accrued receivables not included in the
calculation of credit equivalent amounts of off-balance sheet derivatives
as well as any portion of the allowance for loan and lease losses in
excess of the amount that may be included in Tier 2 capital.
(3) Exclude foreign exchange contracts with an original maturity of 14 days
or less and all futures contracts.
26
<PAGE> 32
<TABLE>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RC-25
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
OPTIONAL NARRATIVE STATEMENT CONCERNING THE AMOUNTS
REPORTED IN THE REPORTS OF CONDITION AND INCOME
at close of business on SEPTEMBER 30, 1996
MANUFACTURERS AND TRADERS TRUST COMPANY BUFFALO , NEW YORK
Legal Title of Bank City State
The management of the reporting bank may, if it wishes, submit a brief
narrative statement on the amounts reported in the Reports of Condition and
Income. This optional statement will be made available to the public, along
with the publicly available data in the Reports of Condition and Income, in
response to any request for individual bank report data. However, the
information reported in column A and in all of Memorandum item 1 of Schedule
RC-N is regarded as confidential and will not be released to the public. BANKS
CHOOSING TO SUBMIT THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT
DOES NOT CONTAIN THE NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL BANK
CUSTOMERS, REFERENCES TO THE AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS IN
SCHEDULE RC-N, OR ANY OTHER INFORMATION THAT THEY ARE NOT WILLING TO HAVE MADE
PUBLIC OR THAT WOULD COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing
not to make a statement may check the "No comment" box below and should make no
entries of any kind in the space provided for the narrative statement; i.e., DO
NOT enter in this space such phrases as "No statement," "Not applicable,"
"N/A," "No comment," and "None."
The optional statement must be entered on this sheet. The statement should not
exceed 100 words. Further, regardless of the number of words, the statement
must not exceed 750 characters, including punctuation, indentation, and
standard spacing between words and sentences. If any submission should exceed
750 characters, as defined, it will be truncated at 750 characters with no
notice to the submitting bank and the truncated statement will appear as the
bank's statement both on agency computerized records and in computer-file
releases to the public.
All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy. The statement must be
signed, in the space provided below, by a senior officer of the bank who
thereby attests to its accuracy.
If, subsequent to the original submission, material changes are submitted for
the data reported in the Reports of Condition and Income, the existing
narrative statement will be deleted from the files, and from disclosure; the
bank, at its option, may replace it with a statement, under signature,
appropriate to the amended data.
The optional narrative statement will appear in agency records and in release
to the public exactly as submitted (or amended as described in the preceding
paragraph) by the management of the bank (except for the truncation of
statements exceeding the 750-character limit described above). THE STATEMENT
WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES FOR
ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT ANY
FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE
INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE
REPORTING BANK.
No comment /X/ (RCON 6979) / C471 / C472 / <-
BANK MANAGEMENT STATEMENT (please type or print clearly):
(TEXT 6980)
Signature of Executive Officer of Bank Date of Signature
27
<PAGE> 33
<TABLE>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300
Address: ONE M&T PLAZA
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
THIS PAGE IS TO BE COMPLETED BY ALL BANKS
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------------
<S><C>
NAME AND ADDRESS OF BANK OMB No. For OCC: 1557-0081
OMB No. For FDIC: 3064-0052
OMB No. For Federal Reserve: 7100-0036
Expiration Date: 3/31/99
SPECIAL REPORT
(Dollar Amounts in Thousands)
PLACE LABEL HERE
-----------------------------------------------------------------------------
CLOSE OF BUSINESS FDIC Certificate Number C-700 <-
DATE
9/30/96 | 0 | 0 | 5 | 8 | 8 |
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
LOANS TO EXECUTIVE OFFICERS (Complete as of each Call Report Date)
The following information is required by Public Laws 90-44 and 102-242, but
does not constitute a part of the Report of Condition. With each Report of
Condition, these Laws require all banks to furnish a report of all loans or
other extensions of credit to their executive officers made SINCE THE DATE OF
THE PREVIOUS REPORT OF CONDITION. Data regarding individual loans or other
extensions of credit are not required. If no such loans or other extensions of
credit were made during the period, insert "none" against subitem (a).
(Exclude the first $15,000 of indebtedness of each executive officer under bank
credit card plan.) SEE SECTIONS 215.2 AND 215.3 OF TITLE 12 OF THE CODE OF
FEDERAL REGULATIONS (FEDERAL RESERVE BOARD REGULATION O) FOR THE DEFINITIONS OF
"EXECUTIVE OFFICER" AND "EXTENSION OF CREDIT," RESPECTIVELY. EXCLUDE LOANS AND
OTHER EXTENSIONS OF CREDIT TO DIRECTORS AND PRINCIPAL SHAREHOLDERS WHO ARE NOT
EXECUTIVE OFFICERS.
<TABLE>
<S><C>
- ------------------------------------------------------------------------------------------------------------------------------------
--------------------
a. Number of loans made to executive officers since the previous Call Report date RCFD 3561 NONE a.
--------------------
b. Total dollar amount of above loans (in thousands of dollars) RCFD 3562 0 b.
--------------------
c. Range of interest charged on above --------------------------------------------------
loans (example: 9 3/4% = 9.75) RCFD 7701 0.00 % to RCFD 7702 0.00 % c.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
SIGNATURE AND TITLE OF OFFICER AUTHORIZED TO SIGN REPORT DATE (Month, Day, Year)
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND TITLE OF PERSON TO WHOM INQUIRIES MAY BE DIRECTED (TEXT 8903) AREA CODE/PHONE NUMBER/EXTENSION
(TEXT 8904)
BRIAN P. KLOCK, BANKING OFFICER (716) 842-5462
- ------------------------------------------------------------------------------------------------------------------------------------
FDIC 8404/53 (6-95)
</TABLE>
28
<PAGE> 34
<TABLE>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RI-1
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
CONSOLIDATED REPORT OF INCOME
FOR THE PERIOD JANUARY 1, 1996 - SEPTEMBER 30, 1996
All Report of Income schedules are to be reported on a calendar year-to-date
basis in thousands of dollars.
SCHEDULE RI -- INCOME STATEMENT
<TABLE>
<CAPTION>
I480 <-
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Interest income: / / / / / / / / / / / / / / / / / / /
a. Interest and fee income on loans: / / / / / / / / / / / / / / / / / / /
(1) In domestic offices: / / / / / / / / / / / / / / / / / / /
(a) Loans secured by real estate 4011 310,272 1.a.(1)(a)
(b) Loans to depository institutions 4019 0 1.a.(1)(b)
(c) Loans to finance agricultural production and other loans to
farmers 4024 521 1.a.(1)(c)
(d) Commercial and industrial loans 4012 108,360 1.a.(1)(d)
(e) Acceptances of other banks 4026 0 1.a.(1)(e)
(f) Loans to individuals for household, family, and other personal
expenditures: / / / / / / / / / / / / / / / / / / /
(1) Credit cards and related plans 4054 7,436 1.a.(1)(f)(1)
(2) Other 4055 75,187 1.a.(1)(f)(2)
(g) Loans to foreign governments and official institutions 4056 0 1.a.(1)(g)
(h) Obligations (other than securities and leases) of states and / / / / / / / / / / / / / / / / / / /
political subdivisions in the U.S.: / / / / / / / / / / / / / / / / / / /
(1) Taxable obligations 4503 13,579 1.a.(1)(h)(1)
(2) Tax-exempt obligations 4504 2,563 1.a.(1)(h)(2)
(i) All other loans in domestic offices 4058 13,930 1.a.(1)(i)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs 4059 0 1.a.(2)
b. Income from lease financing receivables: / / / / / / / / / / / / / / / / / / /
(1) Taxable leases 4505 7,215 1.b.(1)
(2) Tax-exempt leases 4307 0 1.b.(2)
c. Interest income on balances due from depository institutions: (1) / / / / / / / / / / / / / / / / / / /
(1) In domestic offices 4105 11 1.c.(1)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs 4106 1,567 1.c.(2)
d. Interest and dividend income on securities: / / / / / / / / / / / / / / / / / / /
(1) U.S. Treasury securities and U.S. Government agency and corporation
obligations 4027 47,729 1.d.(1)
(2) Securities issued by states and political subdivisions in the U.S.: / / / / / / / / / / / / / / / / / / /
(a) Taxable securities 4506 1 1.d.(2)(a)
(b) Tax-exempt securities 4507 1,308 1.d.(2)(b)
(3) Other domestic debt securities 3657 22,795 1.d.(3)
(4) Foreign debt securities 3658 0 1.d.(4)
(5) Equity securities (including investments in mutual funds) 3659 1,947 1.d.(5)
e. Interest income from trading assets 4069 721 1.e.
</TABLE>
(1) Includes interest income on time certificates of deposit not held for
trading.
29
<PAGE> 35
<TABLE>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RI-2
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RI -- CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands Year-to-date
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income (continued): RIAD Bil Mil Thou
f. Interest income on federal funds sold and securities
purchased under agreements to resell in domestic / / / / / / / / / / / / / / /
offices of the bank and of its Edge and Agreement / / / / / / / / / / / / / / /
subsidiaries, and in IBFs 4020 3,322 1.f.
g. Total interest income (sum of items 1.a through 1.f) 4107 618,464 1.g.
2. Interest expense: / / / / / / / / / / / / / / /
a. Interest on deposits: / / / / / / / / / / / / / / /
(1) Interest on deposits in domestic offices: / / / / / / / / / / / / / / /
(a) Transaction accounts (NOW accounts, ATS / / / / / / / / / / / / / / /
accounts, and telephone and preauthorized / / / / / / / / / / / / / / /
transfer accounts) 4508 7,458 2.a.(1)(a)
(b) Nontransaction accounts: / / / / / / / / / / / / / / /
(1) Money market deposit accounts (MMDAs) 4509 34,965 2.a.(1)(b)(1)
(2) Other savings deposits 4511 18,859 2.a.(1)(b)(2)
(3) Time certificates of deposit of $100,000 or more 4174 65,856 2.a.(1)(b)(3)
(4) All other time deposits 4512 78,390 2.a.(1)(b)(4)
(2) Interest on deposits in foreign offices, Edge and Agreement / / / / / / / / / / / / / / /
subsidiaries, and IBFs 4172 9,045 2.a.(2)
b. Expense of federal funds purchased and securities sold / / / / / / / / / / / / / / /
under agreements to repurchase in domestic offices of the bank / / / / / / / / / / / / / / /
and of its Edge and Agreement subsidiaries, and in IBFs 4180 55,974 2.b.
c. Interest on demand notes issued to the U.S. Treasury, trading / / / / / / / / / / / / / / /
liabilities, and other borrowed money 4185 4,425 2.c.
d. Interest on mortgage indebtedness and obligations under
capitalized leases 4072 66 2.d.
e. Interest on subordinated notes and debentures 4200 9,820 2.e.
f. Total interest expense (sum of items 2.a through 2.e) 4073 284,858 2.f.
3. Net interest income (item 1.g minus 2.f) / / / / / / / / / / / / / / / RIAD 4074 333,606 3.
4. Provisions: / / / / / / / / / / / / / / /
a. Provision for loan and lease losses / / / / / / / / / / / / / / / RIAD 4230 25,375 4.a.
b. Provision for allocated transfer risk / / / / / / / / / / / / / / / RIAD 4243 0 4.b.
5. Noninterest income: / / / / / / / / / / / / / / /
a. Income from fiduciary activities 4070 19,895 5.a.
b. Service charges on deposit accounts in domestic offices 4080 26,689 5.b.
c. TRADING REVENUE (MUST EQUAL SCHEDULE RI, SUM OF MEMORANDUM / / / / / / / / / / / / / / /
ITEMS 8.A THROUGH 8.D) A220 438 5.c.
d. Other foreign transaction gains (losses) 4076 724 5.d.
e. Not applicable / / / / / / / / / / / / / / /
f. Other noninterest income: / / / / / / / / / / / / / / /
(1) Other fee income 5407 53,815 5.f.(1)
(2) All other noninterest income* 5408 20,097 5.f.(2)
g. Total noninterest income (sum of items 5.a through 5.f) / / / / / / / / / / / / / / / RIAD 4079 121,658 5.g.
6. a. Realized gains (losses) on held-to-maturity securities / / / / / / / / / / / / / / / RIAD 3521 0 6.a.
b. Realized gains (losses) on available-for-sale securities / / / / / / / / / / / / / / / RIAD 3196 122 6.b.
7. Noninterest expense: / / / / / / / / / / / / / / /
a. Salaries and employee benefits 4135 141,708 7.a.
b. Expenses of premises and fixed assets (net of rental / / / / / / / / / / / / / / /
income) (excluding salaries and employee benefits and / / / / / / / / / / / / / / /
mortgage interest) 4217 35,233 7.b.
c. Other noninterest expense* 4092 94,918 7.c.
d. Total noninterest expense (sum of items 7.a through 7.c) / / / / / / / / / / / / / / / RIAD 4093 271,859 7.d.
8. Income (loss) before income taxes and extraordinary / / / / / / / / / / / / / / /
items and other adjustments (item 3 plus or minus items / / / / / / / / / / / / / / /
4.a, 4.b, 5.g, 6.a, 6.b, and 7.d) / / / / / / / / / / / / / / /
RIAD 4301 158,152 8.
9. Applicable income taxes (on item 8) / / / / / / / / / / / / / / / RIAD 4302 60,903 9.
10.Income (loss) before extraordinary items and other / / / / / / / / / / / / / / /
adjustments (item 8 minus 9) / / / / / / / / / / / / / / / RIAD 4300 97,249 10.
</TABLE>
- ---------------
*Describe on Schedule RI-E -- Explanations.
30
<PAGE> 36
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RI-3
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RI -- CONTINUED
<TABLE>
<S><C>
Year-to-date
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------
11. Extraordinary items and other adjustments: / / / / / / / / / / / / / / / /
a. Extraordinary items and other adjustments,
gross of income taxes* 4310 0 11.a.
b. Applicable income taxes (on item 11.a)* 4315 0 11.b.
c. Extraordinary items and other adjustments, / / / / / / / / / / / / / / / /
net of income taxes (item 11.a minus 11.b) / / / / / / / / / / / / / / / / RIAD 4320 0 11.c.
12. Net income (loss) (sum of items 10 and 11.c) / / / / / / / / / / / / / / / / RIAD 4340 97,249 12.
I481 <-
Memoranda Year-to-date
---------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired after / / / / / / / / / / /
August 7, 1986, that is not deductible for federal income tax purposes 4513 103 M.1.
2. Income from the sale and servicing of mutual funds and annuities in domestic offices / / / / / / / / / / /
(included in Schedule RI, item 8) 8431 12,133 M.2.
3.-4. Not applicable / / / / / / / / / / /
5. Number of full-time equivalent employees on payroll at end of current period (round to / / / / / / Number M.5.
nearest whole number) 4150 4,613
6. Not applicable / / / / / / / / / / /
7. If the reporting bank has restated its balance sheet as a result of applying push down / / / / MM DD YY
accounting this calendar year, report the date of the bank's acquisition 9106 00/00/00 M.7.
8. Trading revenue (from cash instruments and off-balance sheet derivative instruments) / / / / / / / / / / /
(SUM OF MEMORANDUM ITEMS 8.a. THROUGH 8.d. MUST EQUAL SCHEDULE RI, ITEM 5.c.): / / / / Bil Mil Thou
a. Interest rate exposures 8757 (1,430) M.8.a.
b. Foreign exchange exposures 8758 1,670 M.8.b.
c. Equity security and index exposures 8759 0 M.8.c.
d. Commodity and other exposures 8760 198 M.8.d.
9. Impact on income of off-balance sheet derivatives held for purposes other than trading: / / / / / / / / / / /
a. Net increase (decrease) to interest income 8761 64 M.9.a.
b. Net (increase) decrease to interest expense 8762 11,205 M.9.b.
c. Other (noninterest) allocations 8763 0 M.9.c.
10. CREDIT LOSSES ON OFF-BALANCE SHEET DERIVATIVES (SEE INSTRUCTIONS) A251 0 M.10.
</TABLE>
- ---------------
*Describe on Schedule RI-E -- Explanations.
31
<PAGE> 37
<TABLE>
<S> <C> <C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RI-4
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RI-A -- CHANGES IN EQUITY CAPITAL
Indicate decreases and losses in parentheses.
<TABLE>
<CAPTION>
---------
I483 <-
-----------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Total equity capital originally reported in the December 31, 1995, Reports of Condition and / / / / / /
Income 3215 669,384 1.
2. Equity capital adjustments from amended Reports of Income, net* 3216 0 2.
3. Amended balance end of previous calendar year (sum of items 1 and 2) 3217 669,384 3.
4. Net income (loss) (must equal Schedule RI, item 12) 4340 97,249 4.
5. Sale, conversion, acquisition, or retirement of capital stock, net 4346 0 5.
6. Changes incident to business combinations, net 4356 0 6.
7. LESS: Cash dividends declared on preferred stock 4470 0 7.
8. LESS: Cash dividends declared on common stock 4460 114,500 8.
9. Cumulative effect of changes in accounting principles from prior years* (see instructions for / / / / / /
this schedule) 4411 0 9.
10. Corrections of material accounting errors from prior years* (see instructions for this
schedule) 4412 0 10.
11. Change in net unrealized holding gains (losses) on available-for-sale securities 8433 (5,529) 11.
12. Foreign currency translation adjustments 4414 0 12.
13. Other transactions with parent holding company* (not included in items 5, 7, or 8 above) 4415 0 13.
14. Total equity capital end of current period (sum of items 3 through 13) (must equal Schedule / / / / / /
RC, item 28) 3210 646,604 14.
-----------------
</TABLE>
- ---------------
*Describe on Schedule RI-E -- Explanations.
SCHEDULE RI-B -- CHARGE-OFFS AND RECOVERIES AND CHANGES
IN ALLOWANCE FOR LOAN AND LEASE LOSSES
PART I. CHARGE-OFFS AND RECOVERIES ON LOANS AND LEASES
PART I EXCLUDES CHARGE-OFFS AND RECOVERIES THROUGH
THE ALLOCATED TRANSFER RISK RESERVE.
<TABLE>
<CAPTION>
-----------
I486 <-
-----------------------------------------
(Column A) (Column B)
Charge-offs Recoveries
-----------------------------------------
Calendar year-to-date
-----------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Loans secured by real estate: / / / / / / / / / / / /
a. To U.S. addresses (domicile) 4651 4,269 4661 1,885 1.a.
b. To non-U.S. addresses (domicile) 4652 0 4662 0 1.b.
2. Loans to depository institutions and acceptances of / / / / / / / / / / / /
other banks: / / / / / / / / / / / /
a. To U.S. banks and other U.S. depository
institutions 4653 0 4663 0 2.a.
b. To foreign banks 4654 0 4664 0 2.b.
3. Loans to finance agricultural production and other / / / / / / / / / / / /
loans to farmers 4655 0 4665 23 3.
4. Commercial and industrial loans: / / / / / / / / / / / /
a. To U.S. addresses (domicile) 4645 4,215 4617 2,202 4.a.
b. To non-U.S. addresses (domicile) 4646 0 4618 0 4.b.
5. Loans to individuals for household, family, and / / / / / / / / / / / /
other personal expenditures: / / / / / / / / / / / /
a. Credit cards and related plans 4656 632 4666 888 5.a.
b. Other (includes single payment, installment, and / / / / / / / / / / /
all student loans) 4657 11,518 4667 3,417 5.b.
6. Loans to foreign governments and official
institutions 4643 0 4627 0 6.
7. All other loans 4644 13 4628 852 7.
8. Lease financing receivables: / / / / / / / / / / / /
a. Of U.S. addresses (domicile) 4658 0 4668 0 8.a.
b. Of non-U.S. addresses (domicile) 4659 0 4669 0 8.b.
9. Total (sum of items 1 through 8) 4635 20,647 4605 9,267 9.
-----------------------------------------
</TABLE>
32
<PAGE> 38
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RI-5
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RI-B -- CONTINUED
PART I. CONTINUED
<TABLE>
<CAPTION>
--------------------------------------------
(Column A) (Column B)
Charge-offs Recoveries
--------------------------------------------
Dollar Amounts in Thousands Calendar year-to-date
- -------------------------------------------------------------------------------------------------------
Memoranda RIAD Bil Mil Thou RIAD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
1-3. Not applicable / / / / / / / / / / / /
4. Loans to finance commercial real estate,
construction, and land development activities / / / / / / / / / / / /
(not secured by real estate) included in / / / / / / / / / / / /
Schedule RI-B, part I, items 4 and 7, above 5409 0 5410 0 M.4.
5. Loans secured by real estate in domestic
offices (included in Schedule RI-B, part I, / / / / / / / / / / / /
item 1, above) / / / / / / / / / / / /
a. Construction and land development 3582 0 3583 50 M.5.a.
b. Secured by farmland 3584 19 3585 2 M.5.b.
c. Secured by 1-4 family residential
properties: / / / / / / / / / / / /
(1) Revolving, open-end loans secured by 1-4 / / / / / / / / / / / /
family residential properties and extended / / / / / / / / / / / /
under lines of credit 5411 0 5412 0 M.5.c.(1)
(2) All other loans secured by 1-4 family / / / / / / / / / / / /
residential properties 5413 1,924 5414 522 M.5.c.(2)
d. Secured by multifamily (5 or more) / / / / / / / / / / / /
residential properties 3588 1,077 3589 174 M.5.d.
e. Secured by nonfarm nonresidential properties 3590 1,249 3,591 1,137 M.5.e.
--------------------------------------------
</TABLE>
PART II. CHANGES IN ALLOWANCE FOR LOAN AND LEASE LOSSES
<TABLE>
<CAPTION>
-----------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Balance originally reported in the December 31, 1995, Reports of Condition and
Income 3124 225,162 1.
2. Recoveries (must equal part I, item 9, column B above) 4605 9,267 2.
3. LESS: Charge-offs (must equal part I, item 9, column A above) 4635 20,647 3.
4. Provision for loan and lease losses (must equal Schedule RI, item 4.a) 4230 25,375 4.
5. Adjustments* (see instructions for this schedule) 4815 0 5.
6. Balance end of current period (sum of items 1 through 5) (must equal Schedule RC, / / / / / /
item 4.b) 3123 239,157 6.
-----------------
</TABLE>
- --------------
*Describe on Schedule RI-E -- Explanations.
SCHEDULE RI-C -- APPLICABLE INCOME TAXES BY TAXING AUTHORITY
SCHEDULE RI-C IS TO BE REPORTED WITH THE DECEMBER REPORT OF INCOME.
<TABLE>
<CAPTION>
---------
I489 <-
-----------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Federal 4780 N/A 1.
2. State and local 4790 N/A 2.
3. Foreign 4795 N/A 3.
4. Total (sum of items 1 through 3) (must equal sum of Schedule RI, items 9 and 11.b) 4770 N/A 4.
--------------------
5. Deferred portion of item 4 RIAD 4772 / N/A / / / / / / 5.
----------------------------------------
</TABLE>
33
<PAGE> 39
<TABLE>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RI-6
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
</TABLE>
SCHEDULE RI-D -- INCOME FROM INTERNATIONAL OPERATIONS
FOR ALL BANKS WITH FOREIGN OFFICES, EDGE OR AGREEMENT SUBSIDIARIES, OR
IBFS WHERE INTERNATIONAL OPERATIONS ACCOUNT FOR MORE THAN 10 PERCENT OF TOTAL
REVENUES, TOTAL ASSETS, OR NET INCOME.
PART I. ESTIMATED INCOME FROM INTERNATIONAL OPERATIONS
<TABLE>
<CAPTION>
I492
Year-to-date
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Interest income and expense booked at foreign offices, / / / / / / / / / / / / / / / /
Edge and Agreement subsidiaries, and IBFs: / / / / / / / / / / / / / / / /
a. Interest income booked 4837 N/A 1.a.
b. Interest expense booked 4833 N/A 1.b.
c. Net interest income booked at foreign offices, Edge / / / / / / / / / / / / / / / /
and Agreement subsidiaries, and IBFs (item 1.a. minus 1.b.) 4838 N/A 1.c.
2. Adjustments for booking location of international operations: / / / / / / / / / / / / / / / /
a. Net interest income attributable to international operations
booked at domestic offices 4840 N/A 2.a.
b. Net interest income attributable to domestic business
booked at foreign offices 4841 N/A 2.b.
c. Net booking location adjustment (item 2.a minus 2.b) 4842 N/A 2.c.
3. Noninterest income and expense attributable to international
operations: / / / / / / / / / / / / / / / /
a. Noninterest income attributable to international operations 4097 N/A 3.a.
b. Provision for loan and lease losses attributable to international
operations 4235 N/A 3.b.
c. Other noninterest expense attributable to international operations 4239 N/A 3.c.
d. Net noninterest income (expense) attributable to international / / / / / / / / / / / / / / / /
operations (item 3.a. minus 3.b and 3.c) 4843 N/A 3.d.
4. Estimate pretax income attributable to international operations / / / / / / / / / / / / / / / /
before capital allocation adjustment (sum of items 1.c, 2.c, and 3.d) 4844 N/A 4.
5. Adjustment to pretax income for internal allocations to international
operations to reflect the effects of equity capital on overall bank / / / / / / / / / / / / / / / /
funding costs 4845 N/A 5.
6. Estimated pretax income attributable to international operations after / / / / / / / / / / / / / / / /
capital allocation adjustment (sum of items 4 and 5) 4846 N/A 6.
7. Income taxes attributable to income from international operations as
estimated in item 6 4797 N/A 7.
8. Estimated net income attributable to international operations
(item 6 minus 7) 4341 N/A 8.
</TABLE>
<TABLE>
<CAPTION>
Memoranda Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Intracompany interest income included in item 1.a. above 4847 N/A M.1.
2. Intracompany interest expense included in item 1.b. above 4848 N/A M.2.
</TABLE>
PART II. SUPPLEMENTARY DETAILS ON INCOME FROM INTERNATIONAL OPERATIONS
REQUIRED BY THE DEPARTMENTS OF COMMERCE AND TREASURY FOR PURPOSES OF THE U.S.
INTERNATIONAL ACCOUNTS AND THE U.S. NATIONAL INCOME AND PRODUCT ACCOUNTS
<TABLE>
<CAPTION>
Year-to-date
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Interest income booked at IBFs 4849 N/A 1.
2. Interest expense booked at IBFs 4850 N/A 2.
3. Noninterest income attributable to
international operations booked at / / / / / / / / / / / / / / / /
domestic offices (excluding IBFs): / / / / / / / / / / / / / / / /
a. Gains (losses) and extraordinary
items 5491 N/A 3.a.
b. Fees and other noninterest income 5492 N/A 3.b.
4. Provision for loan and lease losses
attributable to international operations
booked at domestic offices (excluding / / / / / / / / / / / / / / / /
IBFs) 4852 N/A 4.
5. Other noninterest expense
attributable to international operations
booked at domestic offices (excluding / / / / / / / / / / / / / / / /
IBFs) 4853 N/A 5.
</TABLE>
34
<PAGE> 40
<TABLE>
<CAPTION>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RI-7
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
SCHEDULE RI-E -- EXPLANATIONS
SCHEDULE RI-E IS TO BE COMPLETED EACH QUARTER ON A CALENDAR YEAR-TO-DATE BASIS.
Detail all adjustments in Schedule RI-A and RI-B, all extraordinary items and other adjustments in Schedule RI, and all
significant items of other noninterest income and other noninterest expense in Schedule RI. (See instructions for details.)
I495 <-
Year-to-date
Dollar Amounts in Thousands RIAD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------------
1. All other noninterest income (from Schedule RI, item 5.f.(2)) / / / / / / / / / / / / / / / /
Report amounts that exceed 10% of Schedule RI, item 5.f.(2): / / / / / / / / / / / / / / / /
a. Net gains on other real estate owned 5415 0 1.a.
b. Net gains on sales of loans 5416 15,916 1.b.
c. Net gains on sales of premises and fixed assets 5417 0 1.c.
Itemize and describe the three largest other amounts that exceed
10% of Schedule RI, item 5.f.(2): / / / / / / / / / / / / / / / /
/ / / / / / / / / / / / / / / /
d. TEXT 4461 CHECK SALES 4461 2,548 1.d.
e. TEXT 4462 4462 1.e.
f. TEXT 4463 4463 1.f.
2. Other noninterest expense (from Schedule RI, item 7.c.): / / / / / / / / / / / / / / / /
a. Amortization expense of intangible assets 4531 12,748 2.a.
Report amounts that exceed 10% of Schedule RI, item 7.c.: / / / / / / / / / / / / / / / /
b. Net losses on other real estate owned 5418 0 2.b.
c. Net losses on sales of loans 5419 0 2.c.
d. Net losses on sales of premises and fixed assets 5420 0 2.d.
Itemize and describe the three largest other amounts that
exceed 10% of Schedule RI, item 7.c: / / / / / / / / / / / / / / / /
/ / / / / / / / / / / / / / / /
e. TEXT 4464 PROFESSIONAL AND OUTSIDE SERVICES 4464 17,379 2.e.
f. TEXT 4467 PRINTING, POSTAGE AND SUPPLIES 4467 10,143 2.f.
g. TEXT 4468 4468 2.g.
3. Extraordinary items and other adjustments (from Schedule RI, item 11.a) / / / / / / / / / / / / / / / /
and applicable income tax effect (from Schedule RI, item 11.b) (itemize / / / / / / / / / / / / / / / /
and describe all extraordinary items and other adjustments): / / / / / / / / / / / / / / / /
a. (1) TEXT 4469 4469 3.a.(1)
(2) Applicable income tax effect RIAD 4486 / / / / / / / / / / / / / / / / 3.a.(2)
b. (1) TEXT 4487 4487 3.b.(1)
(2) Applicable income tax effect RIAD 4488 / / / / / / / / / / / / / / / / 3.b.(2)
c. (1) TEXT 4489 4489 3.c.(1)
(2) Applicable income tax effect RIAD 4491 / / / / / / / / / / / / / / / / 3.c.(2)
4. Equity capital adjustments from amended Reports of Income / / / / / / / / / / / / / / / /
(from Schedule RI-A, item 2) (itemize and describe all adjustments): / / / / / / / / / / / / / / / /
a. TEXT 4492 4492 4.a.
b. TEXT 4493 4493 4.b.
5. Cumulative effect of changes in accounting principles from prior years / / / / / / / / / / / / / / / /
(from Schedule RI-A, item 9) (itemize and describe all changes in
accounting principles:) / / / / / / / / / / / / / / / /
a. TEXT 4494 4495 5.a.
b. TEXT 4495 4494 5.b.
6. Corrections of material accounting errors from prior years (from / / / / / / / / / / / / / / / /
Schedule RI-A, item 10) (itemize and describe all corrections): / / / / / / / / / / / / / / / /
a. TEXT 4496 4496 6.a.
b. TEXT 4497 4497 6.b.
</TABLE>
35
<PAGE> 41
<TABLE>
<CAPTION>
<S><C>
Legal Title of Bank: MANUFACTURERS AND TRADERS TRUST COMPANY Call Date: 9/30/96 ST-BK 36-1300 FFIEC 031
Address: ONE M&T PLAZA Page RI-8
City, State, Zip: BUFFALO, NY 14203-2399
FDIC Certificate No.: | 0 | 0 | 5 | 8 | 8 |
SCHEDULE RI-E -- CONTINUED
Year-to-date
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------------
7. Other transactions with parent holding company (from Schedule RI-A, / / / / / / / / / / / / / / / /
item 13) (itemize and describe all such transactions): / / / / / / / / / / / / / / / /
a. TEXT 4498 4498 7.a.
b. TEXT 4499 4499 7.b.
8. Adjustments to allowance for loan and lease losses (from Schedule RI-B, / / / / / / / / / / / / / / / /
part II, item 5) (itemize and describe all adjustments): / / / / / / / / / / / / / / / /
a. TEXT 4521 4521 8.a.
b. TEXT 4522 4522 8.b.
9. Other explanations (the space below is provided for the bank to briefly
describe, at its option, any other significant items affecting the
Report of Income): 1498 1499 <-
No comment / / (RIAD 4769)
Other explanations (please type or print clearly):
(TEXT 4769)
</TABLE>
36
