Conditions Precedent to the Substitution of Contract Assets. Each acquisition of a Substitute Contract from the Partnership on any Acquisition Date is subject to the conditions specified in Section 3.04 of the Servicing Agreement, including satisfaction of the following conditions precedent on the relevant date specified below: (a) By 10:00 a.m. (New York time) on the third Business Day prior to any proposed Acquisition Date, the Partnership shall have delivered the following items: (i) The Partnership shall have delivered to the Issuer, the Trustee, the Custodian, the Back-up Servicer and the Note Insurer, a draft Substitution Certificate substantially in the form set forth on Exhibit J attached hereto (the “Substitution Certificate”) and Amendment to Contract Schedule containing the information required to be provided with respect to the Substitute Contracts and related Contract Assets to be acquired on such Acquisition Date, as specified in the definition of Contract Schedule, and a draft of the Release Agreement relating to any Existing Indebtedness and the Issuer shall have delivered or shall have caused to be delivered to the Custodian, the original Contracts described in the proposed Amendment to Contract Schedule and the related Contract Files; and (ii) The Partnership shall have delivered to the Trustee and the Note Insurer a draft Assignment Agreement with respect to each Substitute Contract to be acquired by the Issuer on such Acquisition Date and to the satisfaction of the conditions precedent set forth in this Section 3.01 and Section 3.04(b) of the Servicing Agreement. (b) By 1:00 p.m. (New York time) one (1) Business Day prior to the proposed Acquisition Date, the Custodian shall deliver to the Issuer, the Note Insurer and the Trustee an executed Custodian Certificate with respect to the Substitute Contracts to be so acquired, which certificate shall contain the final Amendment to Contract Schedule and no exceptions (other than those exceptions that shall have been approved in an Exception Report signed, or confirmed by e-mail, by the Control Party); (c) By 11:00 a.m. (New York time) on the proposed Acquisition Date, the Partnership shall cause to be delivered the final executed Assignment Agreement, Amendment to Contract Schedule and Release Agreement along with a final executed Substitution Certificate, in each case, such document or certificate containing changes from the draft certificates, draft Assignment Agreement or draft Amendment to Contract Schedule, as applicable, delivered pursuant to Section 3.01(a)(ii) above, if any, reflecting corrections or deletions of unapproved exceptions noted in the Exception Report to the draft Assignment Agreement and/or the draft Amendment to Contract Schedule resulting from the Custodian’s review of the Contracts to be substituted and the Contract Files related thereto pursuant to Section 4.03(b). The Substitution Certificate shall confirm that (A) each Substitute Contract is a Contract that satisfies each of the representations and warranties set forth in Clause (C) or (D) of the related Assignment Agreement, (B) all applicable filings required under Sections 4.01(a)(v) and 4.02 have been made or are in effect, (C) no Default, Event of Default, Event of Servicing Termination or event which, with the passage of time or the giving of notice or both, would cause a Default, Event of Default or Event of Servicing Termination to occur, shall exist prior to or after giving effect to the substitution of such Contracts and (D) all other conditions to the acquisition of Substitute Contracts applicable to it and specified in this Section 3.01 and Section 3.04(b) of the Servicing Agreement have been satisfied. A document or certificate described in clause (a) or (b) above shall be regarded as timely delivered if it is delivered by telecopy (with written confirmation of transmission) as of the applicable time described above; provided that, the originally executed copy shall be delivered by the applicable party promptly thereafter. If the Custodian, upon examination of the Contract Files in accordance with Section 4.03(b), determines that such Contract Files do not satisfy the requirements of Section 4.03(b) or is unable to confirm that such requirements have been met by 1:00 p.m. (New York time) on the Business Day prior to the proposed Acquisition Date, the Custodian shall notify the Trustee and the Note Insurer and shall not deliver an executed Custodian Certificate pursuant to clause (b) without the prior written consent of the Control Party. (d) With respect to any Contract substituted for an Early Termination Contract, the Issuer shall be allowed to use the Collections received in respect thereof to purchase a new Substitute Contract in lieu of distributing such Collections in accordance with Section 13.03, provided that, such purchase of a Substitute Contract shall occur simultaneously with the Issuer’s receipt of such Collections or such Collections shall be held not later than the Payment Date (or the then current Collection Period) on deposit in the Collection Account until such Substitute Contract is so purchased; provided, further, that if such Substitute Contract is not purchased on or before the immediately following Payment Date such Collections shall be disbursed in accordance with Section 13.03. Any Substitute Contract so substituted for such Early Termination Contract, and related Contract Assets, must meet the same requirements as those specified in the form of Assignment Agreement attached to the related Purchase and Sale Agreement. (e) If a Contract is to be removed and replaced with another lease or equipment finance contract transferred to the Issuer by the Partnership pursuant to the Servicing Agreement, such “substitute” lease or equipment finance contract shall become a Contract for all purposes of the Transaction Documents and may be referred to as a Substitute Contract. Acquisition of any Substitute Contract shall be subject to the satisfaction of the conditions described in Article III of this Indenture. (f) Upon satisfaction of the conditions specified in Section 4.04 and this Section 4.05, and any conditions to the repurchase of Contracts under the applicable Purchase and Sale Agreement or the Servicing Agreement (as the case may be), the Trustee shall, upon receipt of the Contract Repurchase Price and the Request for Release, release the Contract and related Contract Assets being repurchased by the related Transferor or purchased by the Servicer from the Lien of this Indenture. (g) In addition to the conditions specified above, at no time may the aggregate Discounted Contract Balances of Substitute Contracts (as measured on their respective Cut-Off Dates) exceed 5.4% of the aggregate Discounted Pool Balance as of the Closing Date.
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Sources: Indenture (Lease Equity Appreciation Fund II, L.P.)
Conditions Precedent to the Substitution of Contract Assets. Each acquisition of a Substitute Contract from the Partnership on any Acquisition Date is subject to the conditions specified in Section 3.04 of the Servicing Agreement, including satisfaction of the following conditions precedent on the relevant date specified below:
(a) By 10:00 a.m. am (New York time) on the third Business Day prior to any proposed Acquisition Date, the Partnership shall have delivered the following items:
(i) The Partnership shall have delivered to the Issuer, the Trustee, the Custodian, Custodian and the Back-up Servicer and the Note Insurer, a draft Substitution Certificate substantially in the form set forth on Exhibit J attached hereto (the “Substitution Certificate”) and Amendment to Contract Schedule containing the information required to be provided with respect to the Substitute Contracts and related Contract Assets to be acquired on such Acquisition Date, as specified in the definition of Contract Schedule, and a draft of the Release Agreement relating to any Existing Indebtedness Indebtedness, and the Issuer shall have delivered or shall have caused to be delivered to the Custodian, the original Contracts described in the proposed Amendment to Contract Schedule and the related Contract Files; and
(ii) The Partnership shall have delivered to the Trustee and the Note Insurer a draft Assignment Agreement with respect to each Substitute Contract to be acquired by the Issuer on such Acquisition Date and to the satisfaction of the conditions precedent set forth in this Section 3.01 and Section 3.04(b) of the Servicing Agreement.
(b) By 1:00 p.m. (New York time) one (1) Business Day prior to the proposed Acquisition Date, the Custodian shall deliver to the Issuer, the Note Insurer Issuer and the Trustee an executed Custodian Certificate with respect to the Substitute Contracts to be so acquired, which certificate shall contain the final Amendment to Contract Schedule and no exceptions (other than those exceptions that shall have been approved in an Exception Report signed, or confirmed by e-mail, by the Control Party)exceptions;
(c) By 11:00 a.m. am (New York time) on the proposed Acquisition Date, the Partnership shall cause to be delivered the final executed Assignment Agreement, Amendment to Contract Schedule and Release Agreement along with a final executed Substitution Certificate, in each case, such document or certificate containing changes from the draft certificates, draft Assignment Agreement or draft Amendment to Contract Schedule, as applicable, delivered pursuant to Section 3.01(a)(ii) above, if any, reflecting corrections or deletions of unapproved exceptions noted in the Exception Report to the draft Assignment Agreement and/or the draft Amendment to Contract Schedule resulting from the Custodian’s review of the Contracts to be substituted and the Contract Files related thereto pursuant to Section 4.03(b). The Substitution Certificate shall confirm that (A) each Substitute Contract is a Contract that satisfies each of the representations and warranties set forth in Clause (C) or (D) of the related Assignment Agreement, (B) all applicable filings required under Sections 4.01(a)(v) and 4.02 have been made or are in effect, (C) no Default, Event of Default, Event of Servicing Termination or event which, with the passage of time or the giving of notice or both, would cause a Default, Event of Default or Event of Servicing Termination to occur, shall exist prior to or after giving effect to the substitution of such Contracts and (D) all other conditions to the acquisition of Substitute Contracts applicable to it and specified in this Section 3.01 and Section 3.04(b) of the Servicing Agreement have been satisfied. A document or certificate described in clause (a) or (b) above shall be regarded as timely delivered if it is delivered by telecopy (with written confirmation of transmission) as of the applicable time described above; provided that, the originally executed copy shall be delivered by the applicable party promptly thereafter. If the Custodian, upon examination of the Contract Files in accordance with Section 4.03(b), determines that such Contract Files do not satisfy the requirements of Section 4.03(b) or is unable to confirm that such requirements have been met by 1:00 p.m. (New York time) on the Business Day prior to the proposed Acquisition Date, the Custodian shall notify the Trustee and the Note Insurer and shall not deliver an executed Custodian Certificate pursuant to clause (b) without the prior written consent of the Control Partyabove.
(d) With respect to any Contract substituted for an Early Termination Contract, the Issuer shall be allowed to use the Collections received in respect thereof to purchase a new Substitute Contract in lieu of distributing such Collections in accordance with Section 13.03, provided that, such purchase of a Substitute Contract shall occur simultaneously with the Issuer’s receipt of such Collections or such Collections shall be held not later than the Payment Date (or the then current Collection Period) on deposit in the Collection Account until such Substitute Contract is so purchased; provided, further, that if such Substitute Contract is not purchased on or before the immediately following Payment Date such Collections shall be disbursed in accordance with Section 13.03. Any Substitute Contract so substituted for such Early Termination Contract, and related Contract Assets, must meet the same requirements as those specified in the form of Assignment Agreement attached to the related Purchase and Sale Contribution Agreement.
(e) If a Contract is to be removed and replaced with another lease or equipment finance contract transferred to the Issuer by the Partnership pursuant to the Servicing Agreement, such “substitute” lease or equipment finance contract shall become a Contract for all purposes of the Transaction Documents and may be referred to as a Substitute Contract. Acquisition of any Substitute Contract shall be subject to the satisfaction of the conditions described in Article III of this Indenture.
(f) Upon satisfaction of the conditions specified in Section 4.04 and the Transaction Documents, including this Section 4.053.01, and any conditions to the repurchase of Contracts under the applicable Purchase and Sale Contribution Agreement or substitution of Contracts under the Servicing Agreement (as the case may be), the Trustee shall, upon receipt of the Contract Repurchase Price Price, or the Substitute Contract, and the Request for Release, release the Contract and related Contract Assets being repurchased by the related Transferor or purchased substituted for by the Servicer Partnership from the Lien of this Indenture.
(g) In addition to the conditions specified above, at no time may the sum of (1) the aggregate Discounted Contract Balances of Substitute Contracts (as measured on their respective Cut-Off Dates) and (2) the aggregate Discounted Contract Balances of Contracts (as measured on their respective Cut-Off Dates) repurchased by the Transferor or Partnership, but excluding Contracts repurchased or substituted pursuant to Warranty Events, exceed 5.48.00% of the aggregate Discounted Pool Balance as of the Closing Date. The Trustee and Custodian shall have no duty to monitor the limit set forth in this Section 3.01(g).
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