[FORM OF TRANSFER AND SERVICING AGREEMENT]
TRANSFER AND SERVICING AGREEMENT
among
METLIFE CAPITAL EQUIPMENT LOAN TRUST [SERIES DESIGNATION]
Issuer
METLIFE CAPITAL FUNDING CORP. III
Transferor
and
METLIFE CAPITAL CORPORATION
Servicer
Dated as of [ , 199 ]
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions............................................ 1
SECTION 1.02. Other Definitional Provisions.......................... 22
SECTION 1.03. Calculations........................................... 23
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. Conveyance of Initial Receivables...................... 23
SECTION 2.02. Conveyance of Subsequent Receivables................... 24
SECTION 2.03. Closing................................................ 26
SECTION 2.04. Books and Records...................................... 26
SECTION 2.05. Grant of Security Interest............................. 27
SECTION 2.06. Discounted Receivables................................. 27
ARTICLE III
THE RECEIVABLES
SECTION 3.01. Representations and Warranties of Transferor........... 27
SECTION 3.02. Reacquisition by Transferor or MCC Upon Breach......... 28
SECTION 3.03. Duties of Servicer..................................... 29
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01. Duties of Servicer..................................... 30
SECTION 4.02. Collection of Receivable Payments...................... 31
SECTION 4.03. Realization upon Receivables........................... 31
SECTION 4.04. Physical Damage Insurance.............................. 31
SECTION 4.05. Maintenance of Security Interests in Financed
Equipment.............................................. 31
SECTION 4.06. Covenants of Servicer.................................. 31
SECTION 4.07. Acquisition by Servicer of Receivables upon Breach..... 32
SECTION 4.08. Servicing Fee.......................................... 32
SECTION 4.09. Servicer's Certificate................................. 32
SECTION 4.10. Annual Statement as to Compliance; Notice of Default... 33
i
SECTION 4.11. Annual Independent Public Accountants'
Servicing Report..................................... 33
SECTION 4.12. Servicer Expenses...................................... 33
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS
SECTION 5.01. Establishment of Trust Accounts........................ 34
SECTION 5.02. Collections............................................ 36
SECTION 5.03. Additional Deposits.................................... 36
SECTION 5.04. Distributions.......................................... 36
SECTION 5.05. Reserve Account........................................ 39
SECTION 5.06. Statements to Noteholders.............................. 39
SECTION 5.07. Net Deposits........................................... 41
ARTICLE VI
THE TRANSFEROR
SECTION 6.01. Representations of Transferor.......................... 41
SECTION 6.02. Liability of Transferor; Indemnities................... 43
SECTION 6.03. Merger or Consolidation of, or Assumption
of the Obligations of, Transferor...................... 43
SECTION 6.04. Limitation on Liability of Transferor and Others....... 44
SECTION 6.05. Transferor May Own Notes............................... 44
SECTION 6.06. Tax Treatment.......................................... 44
ARTICLE VII
THE SERVICER
SECTION 7.01. Representations of Servicer............................ 45
SECTION 7.02. Indemnities of Servicer................................ 46
SECTION 7.03. Merger or Consolidation of, or Assumption
of the Obligations of, Servicer........................ 47
SECTION 7.04. Limitation on Liability of Servicer and
Others................................................. 48
SECTION 7.05. MCC Not To Resign as Servicer.......................... 49
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Default....................................... 49
SECTION 8.02. Appointment of Successor............................... 50
ii
SECTION 8.03. Notification to Noteholders............................ 51
SECTION 8.04. Waiver of Past Defaults................................ 51
ARTICLE IX
EARLY AMORTIZATION EVENTS; OPTIONAL ACQUISITION
SECTION 9.01. Early Amortization Events.............................. 52
SECTION 9.02. Optional Acquisition of All Receivables................ 53
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.............................................. 53
SECTION 10.02. Protection of Title to Trust........................... 54
SECTION 10.03. Notices................................................ 56
SECTION 10.04. Assignment............................................. 57
SECTION 10.05. Limitations on Rights of Others........................ 57
SECTION 10.06. Severability........................................... 57
SECTION 10.07. Separate Counterparts.................................. 57
SECTION 10.08. Headings............................................... 57
SECTION 10.09. Governing Law.......................................... 57
SECTION 10.10. Assignment to Indenture Trustee........................ 57
SECTION 10.11. Nonpetition Covenants.................................. 58
SECTION 10.12. Limitation of Liability of Owner Trustee
and Indenture Trustee.................................. 58
SCHEDULE A - Schedule of Receivables [Deemed Incorporated].......... A-1
SCHEDULE B - Location of Receivable Files........................... B-1
SCHEDULE C - Servicer's Certificate................................. C-1
SCHEDULE D - Officers' Certificate.................................. D-1
SCHEDULE E - Subsequent Transfer Assignment......................... E-1
iii
TRANSFER AND SERVICING AGREEMENT dated as of [__________ __, 199__], among
METLIFE CAPITAL EQUIPMENT LOAN TRUST [SERIES DESIGNATION], a Delaware business
trust (the "Issuer"), METLIFE CAPITAL FUNDING CORP. III, a Delaware corporation
(the "Transferor"), and METLIFE CAPITAL CORPORATION, a Delaware corporation (the
"Servicer").
WHEREAS the Issuer desires to acquire a portfolio of receivables arising in
connection with commercial loan contracts and equipment finance lease contracts
secured by commercial and industrial equipment acquired or originated by MetLife
Capital Corporation in the ordinary course of its business;
WHEREAS the Transferor has acquired such portfolio of receivables from
MetLife Capital Corporation and desires to transfer such portfolio of
receivables to the Issuer; and
WHEREAS MetLife Capital Corporation desires to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall
have the following meanings:
"Acquired Receivable" means a Receivable acquired as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 or reacquired as of such time by the Transferor pursuant to Section
3.02.
"Acquisition Amount" means the amount, as of the close of business on the
last day of a Collection Period, required to prepay in full the respective
Receivable under the terms thereof (including interest at the related APR to the
end of the month of acquisition).
"Administration Agreement" means the Administration Agreement dated as of
[__________ __, 199__] among the Trust, the Transferor, MCC, as Administrator,
and the Indenture Trustee, as the same may be amended and supplemented from time
to time.
"Administration Fee" means the fee payable to the Administrator pursuant to
Section 3 of the Administration Agreement.
"Administrator" means the administrator under the Administration Agreement.
"Affiliate" has the meaning assigned thereto in Section 1.01 of the
Indenture.
"Agreement" means this Transfer and Servicing Agreement, as the same may be
amended and supplemented from time to time.
"Amortization Period" means the period commencing on the earlier to occur
of (a) the Scheduled Revolving Period Termination Date and (b) the day on which
an Early Amortization Event is deemed to occur and ending on the date that the
outstanding principal balance of the Notes is paid in full.
"APR" or "Annual Percentage Rate" of a Receivable means the annual
percentage rate of interest of such Receivable set forth on the Schedule of
Receivables.
"Available Interest Amount" means, with respect to any Distribution Date,
the sum of the following amounts, without duplication, with respect to the
preceding Collection Period: (i) the portion of all Collections received
during such Collection Period (including any such amounts constituting
Prepayment Proceeds and the discounted portion of any Discounted Receivable)
allocable to interest, (ii) all Investment Earnings with respect to such
Distribution Date, (iii) all Liquidation Proceeds and Recoveries received
during such Collection Period and (iv) the portion of all Acquisition Amounts
received during such Collection Period allocable to interest, but excluding
in all cases (x) all payments and proceeds (including Liquidation Proceeds)
of any Acquired Receivables the principal portion of which has been included
in the Principal Distribution Amount in a prior Collection Period and (y) any
Excluded Amounts.
"Available Principal Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication, with respect to
the preceding Collection Period: (i) that portion of all Collections received
during such Collection Period (including any such amounts constituting
Prepayment Proceeds but excluding the discounted portion of any Discounted
Receivable) allocable to principal, (ii) the portion of all Acquisition
Amounts received during such Collection Period allocable to principal and
(iii) the portion of the Available Interest Amount deposited in the Principal
Funding Account pursuant to Section 5.04(b)(i)(E), but excluding in all cases
(x) all payments and proceeds of any Acquired Receivables the principal
portion of which has been included in the Principal Distribution Amount in a
prior Collection Period and (y) any Excluded Amounts.
"Base Rate" means, with respect to any Collection Period, the annualized
percentage equivalent of a fraction, the numerator of which is equal to the
sum of (a) the Noteholders' Class A Interest Distributable Amount and the
Noteholders' Class B Interest Distributable Amount, each for the related
Distribution Date and (b) the Servicing Fee with respect to such Collection
Period and the denominator of which is the Pool Balance as of the close of
business on the last day of such Collection Period.
2
"Basic Documents" has the meaning assigned to such term in the Indenture.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in New York, New York, Seattle,
Washington, or Wilmington, Delaware are authorized or obligated by law,
regulation or executive order to remain closed.
"Certificated Securities" has the meaning specified in Section
8-102(1)(a) of the UCC.
"Class" means the Class A Notes or the Class B Notes, as applicable.
"Class A Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date with respect to the Amortization Period, the
lesser of (a) the Class A Noteholders' Percentage of the Principal
Distribution Amount and (b) the outstanding principal balance of the Class A
Notes.
"Class A Noteholders' Percentage" means (i) as long as the Pool
Balance is greater than $[_______] and the Cumulative Net Loss Ratio is less
than [__]%, the percentage equivalent of a fraction, the numerator of which
is the principal balance of the Class A Notes and the denominator of which is
the Pool Balance, in each case as of the close of business on the last day of
the Revolving Period, and (ii) from and after the first to occur of (x) the
date on which the Pool Balance is less than or equal to $[_______] or (y) the
date on which the Cumulative Net Loss Ratio is equal to or greater than [__]
%, 100%.
"Class A Noteholders' Principal Carryover Shortfall" means, as of the close
of any Distribution Date with respect to the Amortization Period, the excess of
(a) the sum of (i) the Class A Noteholders' Monthly Principal Distributable
Amount for such Distribution Date and (ii) any outstanding Class A Noteholders'
Principal Carryover Shortfall as of the preceding Distribution Date over (b) the
amount in respect of principal that is actually deposited in the Note
Distribution Account and allocated to the Class A Notes for such Distribution
Date.
"Class A Noteholders' Principal Distributable Amount" means, with respect
to any Distribution Date with respect to the Amortization Period, the sum of
(a) the Class A Noteholders' Monthly Principal Distributable Amount for such
Distribution Date and (b) the Class A Noteholders' Principal Carryover
Shortfall as of the close of the preceding Distribution Date; provided,
however, that the sum of (a) and (b) shall not exceed the outstanding
principal amount of the Class A Notes, and on the Final Scheduled
Distribution Date, the Class A Noteholders' Principal Distributable Amount
will include the amount necessary (after giving effect to the other amounts
to be deposited in the Note Distribution Account on such Distribution Date
and allocable to principal) to reduce the outstanding principal amount of the
Class A Notes to zero.
3
"Class A Note Interest Rate" has the meaning assigned to such term in the
Indenture.
"Class A Note Pool Factor" means 1.0000000 as of the Closing Date, and as
of the close of business on the last day of a Collection Period thereafter means
a seven-digit decimal figure equal to the outstanding principal amount of the
Class A Notes as of such date (after giving effect to payments in reduction of
the principal amount of the Class A Notes on the immediately following
Distribution Date) divided by the original outstanding principal amount of the
Class A Notes.
"Class B Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date with respect to the Amortization Period, the
Class B Noteholders' Percentage of the Principal Distribution Amount.
"Class B Noteholders' Percentage" means (i) as long as the Pool Balance
is greater than $[_______] and the Cumulative Net Loss Ratio equals or exceeds
[__]%, 100% minus the Class A Noteholders' Percentage (if any Class A Notes are
outstanding), and (ii) from and after the first to occur of (x) the date on
which the Pool Balance is less than or equal to $[________] or (y) the date on
which the Cumulative Net Loss Ratio equals or exceeds [__]%, 0%; provided, that
after the Distribution Date on which the Class A Notes are paid in full, the
Class B Noteholders' Percentage shall equal 100%.
"Class B Noteholders' Principal Carryover Shortfall" means, as of the close
of any Distribution Date with respect to the Amortization Period, the excess of
(a) the sum of (i) the Class B Noteholders' Monthly Principal Distributable
Amount for such Distribution Date and (ii) any outstanding Class B Noteholders'
Principal Carryover Shortfall as of the close of business on the preceding
Distribution Date over (b) the amount in respect of principal that is actually
deposited in the Principal Funding Account and allocated to the Class B Notes.
"Class B Noteholders' Principal Distributable Amount" means, with respect
to any Distribution Date with respect to the Amortization Period, the sum of (a)
the Class B Noteholders' Monthly Principal Distributable Amount for such
Distribution Date and (b) the Class B Noteholders' Principal Carryover Shortfall
as of the close of the preceding Distribution Date.
"Class B Note Interest Rate" has the meaning assigned to such term in the
Indenture.
"Closing Date" means [__________ __, 199__].
"Collection Account" means the account designated as such, established and
maintained pursuant to Section 5.01.
4
"Collection Period" means, with respect to the first Distribution Date, the
one calendar month period ending on and including [__________ ___, 199__] and,
with respect to each subsequent Distribution Date, the immediately preceding one
calendar month period. Any amount stated "as of the close of business on the
last day of a Collection Period" shall give effect to the following calculations
as determined as of the end of the day on such last day: (1) all applications of
collections and (2) all distributions to be made on the following Distribution
Date.
"Collections" means all payments received by the Servicer in respect of any
Receivable, other than Excluded Amounts.
"Commission" means the Securities and Exchange Commission.
"Component Lien" means any Lien, to the extent that it secures the payment
or performance of any Component Receivable (including the ownership or security
interest of the lessor pursuant to any lease transaction that is a Component
Receivable).
"Component Receivable" has the meaning specified in the definition of the
term "Master Receivable Agreement" in this Section 1.01.
"Contract" means, with respect to any Receivable, a commercial loan
contract or an equipment finance lease contract, secured by commercial and/or
industrial equipment, and shall include any amendment or modification of such
Contract and, with respect to Included Component Receivables, shall include only
those schedules and promissory notes that constitute the Included Component
Receivable, and the Master Receivable Agreement solely to the extent
incorporated in the Included Component Receivable.
"Contribution and Sale Agreement" means the Contribution and Sale Agreement
dated as of [__________ __, 199__] between the Transferor and MCC, as the same
may be amended 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 at the date of the execution of this Agreement is
located at [Address of Indenture Trustee], except that for purposes of
Section 3.02 of the Indenture, such term shall mean the office or agency of the
Indenture Trustee in the Borough of Manhattan, the City of New York which office
at the date
5
hereof is located at [Manhattan address]; or at such other address as the
Indenture Trustee may designate from time to time by notice to the
Noteholders, the Owner Trustee and the Transferor, or the principal corporate
trust office of any successor Indenture Trustee (the address of which the
successor Indenture Trustee will notify the Noteholders, the Owner Trustee
and the Transferor); provided, that for purposes of Section 3.02 of the
Indenture, the address of any such office shall be in the Borough of
Manhattan in the City of New York.
"Cumulative Net Loss Ratio" means the percentage equivalent of a
fraction, the numerator of which is the excess, if any, of the cumulative
aggregate Realized Loss for each Collection Period from the Closing Date
over the sum of (a) the cumulative aggregate Liquidation Proceeds for each
Collection Period from the Closing Date and (b) the cumulative aggregate
Recoveries for each Collection Period from the Closing Date, and the
denominator for which is the Initial Pool Balance.
"Cut-off Date" means, as applicable, the Initial Cut-off Date and each
Subsequent Cut-off Date.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments, readjustment of debt, marshalling of assets or similar debtor
relief laws of the United States or any state from time to time in effect,
affecting the rights of creditors generally.
"Defaulted Receivable" means any Receivable as to which all or any portion
of any unpaid Scheduled Payment has been charged off as uncollectible on the
Receivable Management System in accordance with the Servicer's customary and
normal collection and servicing procedures or as to which the Servicer has
repossessed the related Financed Equipment; provided, that the Servicer shall
charge off a Receivable as uncollectible on the Receivable Management System no
later than the date on which such Receivable becomes 180 days delinquent. A
Receivable shall become a Defaulted Receivable on the earlier to occur of (a)
the date on which such Receivable is recorded as charged off as uncollectible on
the Receivable Management System or (b) the date that the Servicer has
repossessed the related Financed Equipment.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to items of the Trust Account Property that
constitute "instruments" within the meaning of Section 9-105(a)(i) of the UCC
(other than Certificated Securities), transfer thereof to the Indenture Trustee
by physical delivery to the Indenture
6
Trustee, endorsed to, or registered in the name of, the Indenture Trustee or
its nominee or endorsed in blank (with any intervening endorsements necessary
to provide a complete chain of endorsement); and such additional or
alternative procedures as may hereafter become appropriate to effect the
complete transfer of ownership of any such item of the Trust Account Property
to the Indenture Trustee free and clear of any adverse claims, consistent
with changes in applicable law or regulations or the interpretation thereof,
and the Issuer agrees to do or take all actions (or omit from taking actions)
in order to make all transfers contemplated hereby valid under applicable
law, including, without limitation, deliver to the Indenture Trustee any
endorsements, documents or instruments which may be necessary or appropriate
to transfer any such item of the Trust Account Property to the Indenture
Trustee;
(b) with respect to an item of the Trust Account Property that is a
Certificated Security, transfer thereof:
(i) by physical delivery of such Certificated Security to the
Indenture Trustee, provided that if the Certificated Security is in
registered form, it shall be endorsed to, or registered in the name of, the
Indenture Trustee or endorsed in blank (with any intervening endorsements
necessary to provide a complete chain of endorsement);
(ii) by physical delivery of such Certificated Security to a
"financial intermediary" (as defined in Section 8-313(4) of the UCC) of the
Indenture Trustee specially endorsed to or issued in the name of the
Indenture Trustee (with any intervening endorsements necessary to provide a
complete chain of endorsement);
(iii) by the sending by a financial intermediary, not a
"clearing corporation" (as defined in Section 8-102(3) of the UCC), of a
confirmation of the purchase by such financial intermediary of and the
making by such financial intermediary of entries on its books and records
identifying as belonging to the Indenture Trustee of (A) a specific
Certificated Security in the financial intermediary's possession, (B) a
quantity of securities that constitute or are part of a fungible bulk of
Certificated Securities in the financial intermediary's possession, or (C)
a quantity of securities that constitute or are part of a fungible bulk of
securities shown on the account of the financial intermediary on the books
of another financial intermediary; or
(iv) by the making by a clearing corporation of appropriate
entries on its books reducing the appropriate securities account of the
transferor and increasing the appropriate securities account of the
Indenture Trustee, or a financial intermediary acting on its behalf, by the
amount of such Certificated Security, provided that in each case: (A) the
clearing corporation identifies such Certificated Security on its books and
records for the sole and exclusive account of the Indenture Trustee or such
financial intermediary, (B) such Certificated Security shall be subject to
the clearing corporation's exclusive control, (C) such Certificated
Security is endorsed in blank or registered in the name of the clearing
corporation or a custodian bank or a
7
nominee of either of them, (D) custody of such Certificated Security
shall be maintained by such clearing corporation or any other "custodian"
(as defined in Section 8-102(4) of the UCC) or the nominee of either
subject to the control of the clearing corporation, (E) such Certificated
Security is shown on the account of the transferor thereof on the books of
the clearing corporation prior to the making of such entries, and (F) if
such security is reflected in the account of a financial intermediary for
the Indenture Trustee, the confirmation described in paragraph (b)(iii)
hereinabove shall be provided to the Indenture Trustee;
and such additional or alternative procedures as may be or may hereafter become
appropriate to effect the complete transfer of ownership of any such item of the
Trust Account Property to the Indenture Trustee free and clear of any adverse
claims, consistent with applicable law or regulations or changes therein or the
interpretation thereof, and the Issuer agrees to do or take all actions (or omit
from taking actions) in order to make all transfers contemplated hereby valid
under applicable law, including, without limitation, deliver to the Indenture
Trustee any endorsements, documents or instruments which may be necessary or
appropriate to transfer any such item of the Trust Account Property to the
Indenture Trustee;
(c) with respect to any United States Securities Entitlement held
through the Federal Reserve System pursuant to Federal book-entry regulations,
compliance with the following procedures, all in accordance with applicable law,
including applicable federal regulations and Articles 8 and 9 of the UCC:
(i) book-entry registration of such property to an appropriate
book-entry account maintained with a Federal Reserve Bank by a securities
intermediary which is also a "depositary" pursuant to applicable federal
regulations and issuance by such depositary of a deposit advice or other
written confirmation of such book-entry registration to the Indenture
Trustee, or to a financial intermediary for the Indenture Trustee, of the
purchase by the financial intermediary on behalf of the Indenture Trustee
(or a financial intermediary for the Indenture Trustee) of such United
States Securities Entitlement;
(ii) the making by such depositary of entries in its books and
records identifying such United States Securities Entitlement held through
the Federal Reserve System as belonging to the Indenture Trustee and
indicating that such depositary holds such United States Securities
Entitlement solely as agent for the Indenture Trustee (or a financial
intermediary for the Indenture Trustee);
(iii) the sending by such depositary to the Indenture Trustee
of the confirmation described in paragraph (b)(iii) of this definition (or
to a financial intermediary for the Indenture Trustee and the sending of
such confirmation to the Indenture Trustee by such financial intermediary);
and
8
(iv) such additional or alternative procedures as may be or may
hereafter become appropriate to effect complete transfer of ownership of
any such item of the Trust Account Property to the Indenture Trustee free
of any adverse claims, consistent with applicable law or regulations or
changes therein or the interpretation thereof, and the Issuer agrees to do
or take all actions (or omit from taking actions) in order to make all
transfers contemplated hereby valid under applicable law, including,
without limitation, deliver to the Indenture Trustee any endorsements,
documents or instruments which may be necessary or appropriate to transfer
any such item of the Trust Account Property to the Indenture Trustee;
(d) with respect to any item of the Trust Account Property that is an
"uncertificated security" (as defined in Section 8-102(1)(b) of the UCC) and
that is not governed by clause (c) above, transfer thereof:
(i) by delivery to the Indenture Trustee of a written statement
from the issuer thereof describing such security, identifying the amount
thereof transferred and the date of transfer, and confirming the
registration of the transfer thereof to the Indenture Trustee or its
nominee, on the books and records of the issuer thereof;
(ii) by the sending of a confirmation by a financial intermediary
of the purchase by such financial intermediary, and the making by such
financial intermediary of entries on its books and records identifying as
belonging to the Indenture Trustee, of (A) a quantity of securities which
constitute or are part of a fungible bulk of uncertificated securities
registered in the name of the financial intermediary or (B) a quantity of
securities which constitute or are part of a fungible bulk of securities
shown on the account of the financial intermediary on the books of another
financial intermediary; or
(iii) by the making by a clearing corporation of appropriate
entries on its books reducing the appropriate account of the transferor and
increasing the account of the Indenture Trustee (or a financial
intermediary for the Indenture Trustee) by the amount of such
uncertificated security, provided that in each case: (A) the clearing
corporation identifies on its books and records such uncertificated
security for the sole and exclusive use of the Indenture Trustee (or such
financial intermediary designated by the Indenture Trustee), (B) such
uncertificated security is registered in the name of the clearing
corporation or a custodian bank or a nominee of either, (C) such
uncertificated security is shown on the account of the transferor on the
books of the clearing corporation prior to the making of such entries, and
(D) if such security is shown on the books of such clearing corporation for
the account of a financial intermediary for the Indenture Trustee, a
confirmation described in paragraph (b)(iii) hereinabove shall be sent to
the Indenture Trustee;
and such additional or alternative procedures as may be or may hereafter become
appropriate to effect the complete transfer of ownership of any such item of the
Trust Account Property to
9
the Indenture Trustee free and clear of any adverse claims, consistent with
applicable law or regulations or changes therein or the interpretation
thereof, and the Issuer agrees to do or take all actions (or omit from taking
actions) in order to make all transfers contemplated hereby valid under
applicable law, including, without limitation, deliver to the Indenture
Trustee any endorsements, documents or instruments which may be necessary or
appropriate to transfer any such item of the Trust Account Property to the
Indenture Trustee; and
(e) in each case of Delivery contemplated herein, the Indenture
Trustee shall make appropriate notations on its records, and shall cause
same to be made on the records of its nominees, if any, indicating that
such securities are held in trust pursuant to and as provided in this
Indenture.
"Determination Date" means, with respect to any Distribution Date, the
second Business Day prior to such Distribution Date.
"Discounted Receivable" means a Subsequent Receivable that the Transferor
discounts pursuant to Section 2.06.
"Distribution Date" means the 20th day of each calendar month or, if such
day is not a Business Day, the immediately following Business Day, commencing on
[__________ __, 199__].
"Early Amortization Event" has the meaning assigned thereto in Section
9.01.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) 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 shall have a credit rating from each
Rating Agency in one of its generic rating categories which signifies investment
grade.
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee or the Owner Trustee, so long as it is a paying agent under
the Indenture, or (b) a depository institution (excluding the Servicer or any of
its Affiliates) 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) (i)(A) which has either (1) a long-term unsecured debt rating of
AAA or better by Standard & Poor's and Aaa or better by Moody's or (2) a
short-term unsecured debt rating or a certificate of deposit rating of A-1+ by
Standard & Poor's and P-1 or better by Moody's, or any other long-term,
short-term or certificate of deposit rating acceptable to the Rating
10
Agencies and (B) whose deposits are insured by the FDIC or (ii)(A) the parent
of which has a long-term or short-term unsecured debt rating acceptable to
the Rating Agencies and (B) whose deposits are insured by the FDIC. If so
qualified, the Indenture Trustee or the Owner Trustee may be considered an
Eligible Institution for the purposes of clause (b) of this definition.
"Eligible Investments" mean book-entry securities, negotiable instruments
or securities (other than any such instrument or security issued by MCC or any
of its Affiliates) represented by instruments in bearer or registered form or
United States Securities Entitlements which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or State
banking or depository institution authorities; provided, however, that at the
time of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person other than
such depository institution or trust company) thereof shall have a credit rating
from each Rating Agency in the highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each Rating Agency in
the highest investment category granted thereby;
(d) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(e) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with (i) a depository institution or trust company (acting as principal)
described in clause (b) or (ii) a depository institution or trust company the
deposits of which are insured by FDIC; or
(f) any other investment permitted by each of the Rating Agencies.
"Excluded Amounts" means (i) any payments received from an Obligor in
connection with any insurance premiums or fees, or Taxes or other charges
imposed by any Governmental Authority, (ii) any indemnity payments made by an
Obligor pursuant to any Receivable, (iii) any Make-Whole Amount and (iv) all
Late Fees, extension fees, and other incidental charges (from whatever source)
collected with respect to any Receivable.
11
"Excluded Component Receivable" means any Component Receivable that is not
a Receivable.
"Farm Credit Entitlement" means a "Security Entitlement" as defined in 12
C.F.R. Section 615.5450.
"Farm Credit Intermediary" means a "Securities Intermediary" as defined in
12 C.F.R. Section 615.5450 whose jurisdiction for purposes of 12 C.F.R. Section
615.5453 with respect to the related Farm Credit Entitlement is the State of New
York.
"FHL Bank Entitlement" means a "Security Entitlement" as defined in 12
C.F.R. Section 912.1.
"FHL Bank Intermediary" means a "Securities Intermediary" as defined in 12
C.F.R. Section 912.1 whose jurisdiction for purposes of 12 C.F.R. Section 912.3
with respect to the related FHL Bank Entitlement is the State of New York.
"Final Scheduled Distribution Date" means the _________ Distribution Date.
"Financed Equipment" means all goods, equipment or other property which
secure the payment or performance of a Receivable which were directly or
indirectly acquired with the proceeds of such Receivable, or in the case of a
lease transaction, are leased by the Obligor in connection with such Receivable.
"Funding Corporation Entitlement" means a "Security Entitlement" as defined
in 12 C.F.R. Section 1511.1.
"Funding Corporation Intermediary" means a "Securities Intermediary" as
defined in 12 C.F.R. Section 1511.1 whose jurisdiction for purposes of 12 C.F.R.
Section 1511.3 with respect to the related Funding Corporation Entitlement is
the State of New York.
"Governmental Authority" means the United States of America, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Holder" or "Noteholder" has the meaning assigned to such term in Section
1.01 of the Indenture.
"HUD Entitlement" means a "Security Entitlement" as defined in 24 C.F.R.
Section 81.2.
"HUD Intermediary" means a "Securities Intermediary" as defined in 24
C.F.R. Section 81.2 whose jurisdiction for purposes of 12 C.F.R. Section 81.92
with respect to the related HUD Entitlement is the State of New York.
"Included Component Receivable" means any Component Receivable that is a
Receivable.
12
"Indenture" means the Indenture dated as of [__________ __, 199__] between
the Issuer and the Indenture Trustee, as the same may be amended and
supplemented from time to time.
"Indenture Trustee" means [indenture trustee], in its capacity as trustee
under the Indenture, its successors in interest and any successor trustee under
the Indenture.
"Initial Cut-off Date" means, with respect to the Initial Receivables,
[__________ __, 199__.]
"Initial Pool Balance" means the Pool Balance as of the Initial Cut-off
Date, which is [$_________].
"Initial Receivable" means each loan or lease Contract, including any
Included Component Receivable, which is identified in the initial Schedule of
Receivables delivered to the Owner Trustee and the Indenture Trustee on or prior
to the Closing Date pursuant to Section 2.01.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property 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
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 90 consecutive days; or (b)
the commencement by such Person 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 such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Insurance Policy" means any insurance policy maintained by an Obligor (or
on an Obligor's behalf by the Servicer) covering physical damage to the Financed
Equipment relating to any Receivable or the related Obligor's ability to make
Scheduled Payments pursuant to such Receivable.
"Insurance Proceeds" means all payments made to the Servicer under an
Insurance Policy in respect of or in lieu of any amount that has or may become
due pursuant to any Receivable, including any such amount received in respect of
any Scheduled Payment.
13
"Interest Payment Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Investment Earnings" means, with respect to any Distribution Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the Collection Account on
such Distribution Date pursuant to Section 5.01(b).
"Issuer" means MetLife Capital Equipment Loan Trust [Series Designation].
"Late Fees" means any interest or other amounts assessed by MCC and paid by
an Obligor in excess of the Scheduled Payment due to the delinquency of such
Scheduled Payment.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind with respect to any Receivable other than mechanics'
liens and any liens which attach to such Receivable by operation of law as a
result of any act or omission by the related Obligor.
"Liquidation Proceeds" means, with respect to any Defaulted Receivable, the
moneys collected in respect thereof, from whatever source (including any
Insurance Proceeds) during the Collection Period in which such Receivable became
a Defaulted Receivable, net of the sum of any amounts expended by the Servicer
in connection with such liquidation and any amounts required by law to be
remitted to the Obligor on such Defaulted Receivable.
"Make-Whole Amount" means, with respect to any prepayment, the amount, if
any, by which the amount required (by the Contract evidencing such Receivable,
as in effect on the applicable Cut-off Date) to be paid by the Obligor in
connection with a prepayment exceeds the sum of (i) the Scheduled Principal
Payments that are the subject of such prepayment and (ii) any accrued and unpaid
interest on such Receivable.
"Master Receivable Agreement" means any agreement or series of agreements
(including an agreement as to which an Obligor has entered into multiple
schedules or promissory notes) pursuant to which MCC has entered or has the
right to enter into more than one loan and/or lease transaction (as lender or
lessor) with a single Obligor (each of which transactions is referred to as a
"Component Receivable"), at any time when
(a) at least one Component Receivable is a Receivable which is part of the
Trust Estate,
(b) at least one Component Receivable is not a Receivable that is part of
the Trust Estate, and
(c) (i) such Obligor's obligations pursuant to at least one Component
Receivable that is described in clause (a) above are secured by assets directly
or indirectly acquired with the proceeds of, or leased by such Obligor as the
lessee pursuant to, at least one Component Receivable that is described in
clause (b) above, or
14
(ii) such Obligor's obligations pursuant to at least one
Component Receivable that is described in clause (b) above are secured by assets
directly or indirectly acquired with the proceeds of, or leased by such Obligor
as the lessee pursuant to, at least one Component Receivable that is described
in clause (a) above.
"Master Receivable Collateral" means any asset that secures the payment or
performance of one or more Component Receivables or any asset leased to the
Obligor pursuant to any lease transaction that is a Component Receivable.
"MCC" means MetLife Capital Corporation, a Delaware corporation.
"Monthly Class A Note Interest" means, with respect to any Distribution
Date, an amount equal to one-twelfth of the product of (a) the Class A Note
Interest Rate and (b) the outstanding principal balance of the Class A Notes as
of the close of business on the preceding Distribution Date after giving effect
to all payments of principal made to the Class A Noteholders on such preceding
Distribution Date provided, however, that with respect
to the first Distribution Date, interest on the outstanding principal balance of
the Class A Notes will accrue from and including the Closing Date to but
excluding the [__________ __, 199__] Distribution Date and will be calculated on
the basis of a 360-day year of twelve 30-day months.
"Monthly Class B Note Interest" means, with respect to any Distribution
Date, an amount equal to one-twelfth of the product of (a) the Class B Note
Interest Rate and (b) the outstanding principal balance of the Class B Notes as
of the close of business on the preceding Distribution Date after giving effect
to all payments of principal made to the Class B Noteholders on such preceding
Distribution Date; provided, however, that with respect to the first
Distribution Date, interest on the outstanding principal balance of the Class B
Notes will accrue from and including the Closing Date to but excluding the
[__________ __, 199__] Distribution Date and will be calculated on the basis of
a 360-day year of twelve 30-day months.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or its successor.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Note Register" and "Note Registrar" have the meanings specified in Section
2.04 of the Indenture.
15
"Noteholders' Class A Interest Carryover Shortfall" means, with respect to
any Distribution Date, the sum of (a) the excess of (i) the sum of (A) the
Monthly Class A Note Interest for the preceding Distribution Date and (B) any
outstanding Noteholders' Class A Interest Carryover Shortfall on such preceding
Distribution Date, over (ii) the amount in respect of interest that is actually
deposited in the Note Distribution Account on such preceding Distribution Date,
plus (b) interest on the amount of interest due but not paid to the Class A
Noteholders on the preceding Distribution Date, to the extent permitted by law,
at the Class A Note Interest Rate from and including such preceding Distribution
Date to but excluding the current Distribution Date.
"Noteholders' Class A Interest Distributable Amount" means, with respect to
any Distribution Date, the sum of (a) the Monthly Class A Note Interest for such
Distribution Date and (b) the Noteholders' Class A Interest Carryover Shortfall
for such Distribution Date.
"Noteholders' Class B Interest Carryover Shortfall" means, with respect to
any Distribution Date, the sum of (a) the excess of (i) the sum of (A) the
Monthly Class B Note Interest for the preceding Distribution Date and (B) any
outstanding Noteholders' Class B Interest Carryover Shortfall on such preceding
Distribution Date, over (ii) the amount in respect of interest that is actually
deposited in the Note Distribution Account on such preceding Distribution Date,
plus (b) interest on the amount of interest due but not paid to the Class B
Noteholders on the preceding Distribution Date, to the extent permitted by law,
at the Class B Note Interest Rate from and including such preceding Distribution
Date to but excluding the current Distribution Date.
"Noteholders' Class B Interest Distributable Amount" means, with respect to
any Distribution Date, the sum of (a) the Monthly Class B Note Interest for such
Distribution Date and (b) the Noteholders' Class B Interest Carryover Shortfall
for such Distribution Date.
"Notes" means the Class A Notes and the Class B Notes, collectively.
"Notes of a Class" or "Class of Notes" means all Notes included in Class A
Notes or all Notes included in Class B Notes, whichever is appropriate.
"Obligor" with respect to any Receivable means any Person which is an
obligor, lessee or guarantor thereof; provided, that in no event shall MCC or
the Transferor be construed to be the Obligor with respect to any Receivable due
to the application of Section 3.02 or Section 4.07, as applicable.
"Obligor Over-concentration Amount" means, with respect to any Obligor as
of any date of determination, an amount equal to the product of (a) the positive
difference, if any, of (i) the percentage equivalent of a fraction, the
numerator of which is the aggregate of the Principal Balance of each Receivable
relating to such Obligor as of such date of determination and the denominator of
which is the Pool Balance as of such date of determination over (ii) 1.5% and
(b) the Pool Balance as of such date of determination.
16
"Officers' Certificate" of any Person means a certificate on behalf of such
Person that is signed by any Vice President or more senior officer of such
Person and states that the certifications set forth in such certificate are
based upon the results of a due inquiry into the matters in question conducted
by or under the supervision of the signing officer and that the facts stated in
such certifications are true and correct to the best of the signing officer's
knowledge.
"Opinion of Counsel" means one or more written opinions of counsel who may
be an employee of or counsel to the Transferor or the Servicer, which counsel
shall be acceptable to the Indenture Trustee, the Owner Trustee and/or the
Rating Agencies, as applicable.
"Outstanding" has the meaning assigned to such term in Section 1.01 of the
Indenture.
"Outstanding Amount" means the aggregate principal amount of all Notes, or
a Class of Notes, as applicable, Outstanding at the date of determination.
"Owner" means ____________, as holder of the certificate of beneficial
ownership issued by the Trust. MetLife Capital Equipment Loan Trust
[Series Designation], a Delaware statutory business trust.
"Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.
"Owner Trustee" means [owner trustee] in its capacity as Owner Trustee
under the Trust Agreement, its successors in interest and any successor owner
trustee under the Trust Agreement.
"Permitted Lien" means (i) any Component Lien, to the extent it secures an
Excluded Component Receivable, and (ii) any Lien for municipal or other local
Taxes and other governmental charges, so long as either (x) such Taxes or
governmental charges are not at the time due and payable or (y) the Transferor
or MCC 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 that is required under generally accepted accounting
principles with respect to such Taxes or charges.
"Pool Balance" means, at any time, the sum of (a) the aggregate of the
Principal Balances of the Receivables at the end of the preceding Collection
Period, after giving effect to (i) all payments received from or for the
credit of Obligors and Acquisition Amounts remitted by the Transferor or the
Servicer, as the case may be, for such Collection Period, and (ii) all
Realized Losses on Defaulted Receivables during such Collection Period and
(b) with respect to any date of determination during the Revolving Period,
the sum of the Principal Funding Account Balance at such time and, if such
date of determination is prior to the Distribution Date in the current
Collection Period, the Available Principal Amount with respect to such
preceding Collection Period on deposit in the Collection Account.
"Prepayment Proceeds" means all Collections that constitute part of any
prepayment.
17
"Principal Balance" of a Receivable, as of the close of business on the
last day of a Collection Period or as of the applicable Cut-off Date, as
applicable, means the aggregate amount of all Scheduled Principal Payments that
have not been received by the Servicer (including all Scheduled Principal
Payments that are then due and payable), calculated as of the related Cut-off
Date or as of the end of the preceding Collection Period, as applicable;
provided, that the Principal Balance of Discounted Receivables will be the
discounted Principal Balance specified on the Schedule of Receivables; and
provided further, that the Principal Balance of each Defaulted Receivable is
zero.
"Principal Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication: (i) that portion
of all Collections on the Receivables allocable to principal; (ii) the amount
of Realized Loss with respect to the preceding Collection Period (except to
the extent included in clause (iii) below), (iii) the Principal Balance of
each Receivable that the Servicer became obligated to acquire or that the
Transferor became obligated to reacquire during the related Collection Period
(except to the extent included in (i) above) and (iv) the aggregate amount of
all Principal Distribution Amounts with respect to prior Distribution Dates
that have not previously been deposited into the Principal Funding Account on
previous Distribution Dates.
"Principal Funding Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Principal Funding Account Balance" means, as of any date of determination,
the principal amount on deposit in the Principal Funding Account.
"Quality Code" means, with respect to each Receivable, the numeric code
assigned to such Receivable by the Servicer in accordance with the Servicer's
customary and usual procedures for measuring credit quality of loan and lease
contracts substantially similar to the Receivables.
"Rating Agencies" means Moody's and Standard & Poor's. If no such
organization or successor is in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization or other comparable Person designated
by the Transferor, notice of which designation shall be given to the Indenture
Trustee, the Owner Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as is
acceptable to each Rating Agency) prior notice thereof and that each Rating
Agency shall have notified the Transferor, the Servicer, the Owner Trustee and
the Indenture Trustee in writing that such action will not result in a reduction
or withdrawal of the then current rating of the Class A Notes.
"Realized Loss" means, with respect to any Collection Period, for any
Defaulted Receivable, the Principal Balance of such Defaulted Receivable.
"Receivable" means each Initial Receivable and each Subsequent Receivable;
provided, that from and after the date on which a Receivable becomes an Acquired
Receivable, such Acquired Receivable will no longer be a Receivable.
18
"Receivable Files" means the written agreements (including, as applicable,
schedules, subschedules, supplements, amendments, modifications and renewals
thereof or thereto), note(s), security agreement(s) and other instruments and
documents relating to the Receivables.
"Receivable Management System" means the computerized electronic Receivable
Management System maintained by MCC for all Receivables and other assets similar
to the Receivables.
"Recoveries" means, with respect to any Defaulted Receivable, (a) monies
collected in respect thereof, from whatever source, (including Insurance
Proceeds) during any Collection Period following the Collection Period in which
such Receivable became a Defaulted Receivable, net of (b) the sum of any
out-of-pocket costs and expenses of collection (including attorneys fees and
expenses deducted therefrom) expended by the Servicer in connection with such
Defaulted Receivable and any amounts required by law to be remitted to the
Obligor.
"Related Property" means all right, title and interest of the
Transferor in, to and under (a) the Financed Equipment, (b) any proceeds with
respect to the Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Equipment or Obligors with
respect to Financed Equipment, as the case may be, (c) the Contribution and Sale
Agreement and (d) the proceeds of any of the foregoing.
"Remaining Available Principal Amounts" has the meaning assigned thereto in
Section 5.04(b)(iii).
"Remaining Residual Amount" means, with respect to any non-tax oriented
operating lease as of any date of determination, that portion of the aggregate
amount initially financed with respect to such Lease the repayment of which is
not guaranteed by the terms of the Contract, as such amount is reduced from time
to time in accordance with the terms of the related Contract.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.01(a).
"Reserve Account Initial Deposit" means the initial deposit by the
Transferor on the Closing Date of [$___________.]
"Revolving Period" means the period commencing on the Initial Cut-off Date
and ending on the day immediately preceding the commencement of the Amortization
Period.
"▇▇▇▇▇▇ Mae Entitlement" means a "Security Entitlement" as defined in 24
C.F.R. Section 354.1.
"▇▇▇▇▇▇ ▇▇▇ Intermediary" means a "Securities Intermediary" as defined in
24 C.F.R. Section 81.2 whose jurisdiction for purposes of 12 C.F.R. Section
81.92 with respect to the related ▇▇▇▇▇▇ Mae Entitlement is the State of New
York.
19
"Schedule of Receivables" means each schedule of Receivables delivered to
the Owner Trustee and the Indenture Trustee (as supplemented from time to time
to reflect Subsequent Receivables and Acquired Receivables) marked as Schedule A
to this Agreement and incorporated into and made a part of this Agreement.
"Scheduled Interest Payment" means, with respect to any Receivable, that
portion of the regularly scheduled payment required to be paid in accordance
with the terms and conditions of such Receivable as in effect on the applicable
Cut-off Date that is allocable to interest.
"Scheduled Payment" on a Receivable means the Scheduled Principal Payment
or Scheduled Interest Payment for such Receivable.
"Scheduled Principal Payment" means, with respect to any Receivable, that
portion of the regularly scheduled payment required to be paid in accordance
with the terms and conditions of such Receivable as in effect on the applicable
Cut-off Date (other than by reason of acceleration of such Scheduled Principal
Payment in connection with a default under such Receivable or any other event
that causes a payment to become due prior to its scheduled payment date pursuant
to the terms of such Receivable as in effect on the applicable Cut-off Date)
that is allocable to principal; provided, that the Scheduled Principal Payments
of Discounted Receivables shall be reduced by the amount specified by the
Transferor on the Schedule of Receivables delivered to the Owner Trustee and the
Indenture Trustee on the related Transfer Date.
"Scheduled Revolving Period Termination Date" means [__________ __, ____].
"Servicer" means MCC, as the servicer of the Receivables, and each
successor to MCC (in the same capacity) pursuant to Section 7.03 or 8.02.
"Servicer Default" means an event specified as such in Section 8.01.
"Servicer's Certificate" means an Officers' Certificate of the Servicer
delivered pursuant to Section 4.09, substantially in the form of Schedule C or
in such other form that is acceptable to the Indenture Trustee, the Owner
Trustee and the Servicer.
"Servicer Termination Event" means an event specified as such in Section
8.01.
"Servicer's Yield" means, with respect to any Receivable, (i) any indemnity
payments made by an Obligor pursuant to a Receivable (ii) any Make-Whole Amount
and (iii) all Late Fees, extension fees and other incidental charges (from
whatever source) collected with respect to any Receivable.
"Servicing Fee" means the fee payable to the Servicer for services rendered
during the respective Collection Period, determined pursuant to Section 4.08.
20
"Servicing Fee Rate" means 0.5% per annum.
"Specified Reserve Account Balance" with respect to any Distribution Date
means the sum of (a) [1]% of the Initial Pool Balance and (b) the sum of (i)
the aggregate of all Remaining Residual Amounts as of the close of business
on the last day of the preceding Collection Period and (ii) the aggregate of
all Obligor Over-concentration Amounts as of the close of business on the
last day of the preceding Collection Period; provided, that the Specified
Reserve Account Balance shall not exceed the Outstanding Amount of the Class
A Notes.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor.
"Subsequent Cut-off Date" means, with respect to any Transfer Date for any
Subsequent Receivables, the last day of the immediately preceding Collection
Period.
"Subsequent Receivable" means each loan or lease Contract, including any
Included Component Receivable, which is identified in a Schedule of Receivables
to the related Subsequent Transfer Assignment delivered to the Owner Trustee and
the Indenture Trustee pursuant to Section 2.02.
"Subsequent Transfer Assignment" has the meaning assigned thereto in
Section 2.02.
"Tax" with respect to any Person means each tax, assessment or other
governmental charge or levy imposed upon such Person, its income, any
transaction in which it engages, or any of its properties, franchises or assets.
21
"Transfer Date" has the meaning assigned thereto in Section 2.02.
"Transferor" means MetLife Capital Funding Corp. III, a Delaware
corporation, and its successors in interest to the extent permitted hereunder.
"Treasury Entitlement" means a "Security Entitlement" as defined in 31
C.F.R. Section 357.2.
"Treasury Intermediary" means a "Securities Intermediary" as defined in 31
C.F.R. Section 357.2 whose jurisdiction for purposes of 31 C.F.R. Section 357.11
with respect to the related Treasury Entitlement is the State of New York.
"Trust" means the Issuer.
"Trust Accounts" has the meaning assigned thereto in Section 5.01(b).
"Trust Account Property" means the Trust Accounts, all monies, instruments,
securities, documents and other property held in or credited to any Trust
Account from time to time (whether in the form of deposit accounts, Physical
Property, book-entry securities, uncertificated securities, United States
Securities Entitlements or otherwise), including the Reserve Account Initial
Deposit, and all proceeds of the foregoing.
"Trust Agreement" means the Trust Agreement dated as of [__________ ___,
19__], between the Transferor and the Owner Trustee, as the same may be amended
and supplemented from time to time.
"Trust Estate" means all money, instruments, documents, securities, general
intangibles and other property that are subject or intended to be subject to the
lien and security interest of the Indenture for the benefit of the Noteholders
(including, without limitation, all property and interests Granted (as defined
in the Indenture) to the Indenture Trustee), including all proceeds thereof.
"Trust Officer" means, (a) in the case of the Indenture Trustee, any
Officer within the Corporate Trust Office of the Indenture Trustee assigned to
administer the Indenture Trustee's duties under the Basic Documents, and (b)
with respect to the Owner Trustee, any officer in the Corporate Trustee
Administration Department of the Owner Trustee with direct responsibility for
the administration of the Trust Agreement and the Basic Documents on behalf of
the Owner Trustee.
"Trust Yield" means, with respect to any Collection Period, the
annualized percentage equivalent of a fraction, the numerator of which is equal
to the Available Interest Amount for the related Distribution Date and the
denominator of which is equal to the Pool Balance as of the close of business on
the last day of such Collection Period.
"UCC" has the meaning assigned thereto in Section 1.01 of the Indenture.
22
"United States Securities Entitlement" means a Treasury Entitlement, a
HUD Entitlement, a FHL Bank Entitlement, a Funding Corporation Entitlement, a
Farm Credit Entitlement, or a ▇▇▇▇▇▇ ▇▇▇ Entitlement.
SECTION 1.02. Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined herein have the meanings assigned to them 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. 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 document 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, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules 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.
SECTION 1.03. Calculations. For all purposes of this Agreement,
interest shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. Conveyance of Initial Receivables. In consideration of
the Issuer's delivery to or upon the order of the Transferor of (i)
[$______________], and (ii) Class B Notes in the principal amount of
[$________], the Transferor does hereby transfer, assign, set over and
otherwise convey to the Issuer, without recourse (subject to the obligations
herein) all right,
23
title and interest of the Transferor in and to the following, whether now
owned or hereafter acquired:
(a) all right, title and interest of the Transferor, in and to the
Initial Receivables, and all moneys (including accrued interest) due or
to become due, or received thereunder on or after the Initial Cut-off Date;
(b) the interest of the Transferor in the Trust Accounts and all
monies, instruments, documents, securities and other property held in or
credited thereto;
(c) the interest of the Transferor in the Financed Equipment granted
by Obligors pursuant to the Initial Receivables;
(d) the interest of the Transferor in any proceeds with respect to
the Initial Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Equipment or Obligors with
respect to Financed Equipment;
(e) all right, title and interest of the Transferor in and to the
Contribution and Sale Agreement, including the right of the Transferor to cause
MCC to reacquire Receivables from the Transferor under certain circumstances,
the rights of the Transferor to enforce the Contribution and Sale Agreement and
to give or withhold any and all consents, requests, notices, directions,
approvals, extensions or waivers under or with respect to the Contribution and
Sale Agreement to the same extent as the Transferor could but for the assignment
and security interest granted to the Indenture Trustee for the benefit of the
Noteholders; and
(f) the proceeds of any and all of the foregoing.
SECTION 2.02. Conveyance of Subsequent Receivables.
(a) On or prior to the Distribution Date (x) in each month (beginning
with the _____ _____ Distribution Date) during the Revolving Period and (y) if
no Early Amortization Event has occurred, in the first month with respect to the
Amortization Period, on one or more days selected by the Servicer (each, a
"Transfer Date"), the Servicer shall direct the Indenture Trustee to reinvest
Available Principal Amounts on deposit in the Principal Funding Account in
additional loan or lease Contracts originated or acquired and selected by MCC
from its portfolio of loan and lease Contracts. Subject to the conditions set
forth in paragraph (b) below on each Transfer Date, upon transfer of the
applicable Subsequent Receivables from MCC to the Transferor pursuant to the
Contribution and Sale Agreement and payment to the Transferor from amounts on
deposit in the Principal Funding Account in an amount equal to the Principal
Balance of the Subsequent Receivables being transferred on such date as of the
related Subsequent Cut-off Date, the Transferor hereby transfers, assigns, sets
over and otherwise conveys to the Issuer, without recourse (subject to the
obligations herein) all right, title and interest of the Transferor in and to
the following, whether then owned or thereafter acquired:
24
(i) all right, title and interest of the Transferor, in and to
the Subsequent Receivables listed on the related Schedule of Receivables
and all moneys (including accrued interest) due or to become due, or
received thereunder on or after the related Subsequent Cut-off Date;
(ii) the interest of the Transferor in the Financed Equipment
granted by Obligors pursuant to such Subsequent Receivables;
(iii) the interest of the Transferor in any proceeds with
respect to such Subsequent Receivables from claims on any physical damage,
credit life or disability insurance policies covering Financed Equipment or
Obligors with respect to Financed Equipment; and
(iv) the proceeds of any and all of the foregoing.
(b) The Transferor shall transfer to the Issuer the Subsequent
Receivables and the other property and rights related thereto described in
paragraph (a) above only upon the satisfaction of each of the following
conditions precedent on or prior to the related Transfer Date:
(i) the Transferor shall have delivered to the Owner Trustee and
the Indenture Trustee a duly executed written assignment in substantially
the form of Exhibit E (the "Subsequent Transfer Assignment"), which shall
include supplements to the Schedule of Receivables listing the Subsequent
Receivables;
(ii) the Transferor shall, to the extent required by Section
5.02, have deposited in the Collection Account all Collections in respect
of the Subsequent Receivables;
(iii) as of such Transfer Date, (A) the Transferor was not
insolvent and will not become insolvent as a result of the transfer of
Subsequent Receivables on such Transfer Date, (B) the Transferor did not
intend to incur or believe that it would incur debts that would be beyond
the Transferor's ability to pay as such debts matured, (C) such transfer
was not made with actual intent to hinder, delay or defraud any Person and
(D) the assets of the Transferor did not constitute unreasonably small
capital to carry out its business as conducted;
(iv) the Receivables then in the Trust, including the Subsequent
Receivables to be conveyed to the Trust on such Transfer Date, shall meet
the criteria (based on the characteristics of the Initial Receivables on
the Initial Cut-off Date and the Subsequent Receivables on the respective
Subsequent Cut-off Dates) specified in Section 3.01.
(v) each of the representations and warranties made by the
Transferor pursuant to Section 3.01 with respect to the Subsequent
Receivables shall be true and
25
correct as of such Transfer Date, and the Transferor shall have performed
all obligations to be performed by it hereunder on or prior to such
Transfer Date;
(vi) the Transferor shall, at its own expense, on or prior to
such Transfer Date, indicate in its computer files that the Subsequent
Receivables identified in the Subsequent Transfer Assignment have been
transferred to the Issuer pursuant to this Agreement and the Subsequent
Transfer Assignments;
(vii) the Transferor shall have taken any action (other than
delivery of the original Contracts) required to maintain the first
perfected ownership or security interest of the Issuer in the Trust Estate;
(viii) no selection procedures believed by the Transferor to be
adverse or beneficial to the interests of the Class A Noteholders shall
have been utilized in selecting the Subsequent Receivables; and
(ix) the Transferor shall have delivered to the Indenture Trustee
and the Owner Trustee an Officer's Certificate confirming the satisfaction
of each condition specified in this paragraph (b).
SECTION 2.03. Closing. The conveyance of the Initial Receivables shall
take place at the offices of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Closing Date, simultaneously with
the closing of the transactions contemplated by the Contribution and Sale
Agreement, the underwriting agreement related to the Class A Notes and the
other Basic Documents. Upon the acceptance by the Transferor of the Class B
Note and the proceeds of the sale of the Class A Notes on the Closing Date,
and upon the release of funds from the Principal Funding Account to the
Transferor on each Transfer Date in an amount equal to the aggregate
Principal Balance of the Subsequent Receivables being transferred on such
Transfer Date, the ownership of each Receivable transferred on such date and
the contents of the related Receivable File is vested in the Issuer, subject
only to the lien of the Indenture. Notwithstanding the foregoing, the
assignment, transfer and conveyance set forth in Section 2.01 or Section 2.02
shall not constitute and is not intended to result in the creation, or an
assumption by the Issuer of any obligation of the Transferor or any other
Person in connection with the Receivables or any Contract or under any
agreement or instrument relating thereto, including any obligation to any
Obligors or any Affiliate of or other Person to whom the Transferor may
delegate servicing duties or to insurers.
SECTION 2.04. Books and Records.
(a) In connection with the transfer, assignment, set-over and
conveyance set forth in Section 2.01 or Section 2.02, the Transferor agrees to
record and file, at its own expense, any financing statements (and continuation
statements with respect to such financing statements when applicable) required
to be filed with respect to the Receivables sold or to be sold by the
26
Transferor hereunder, meeting the requirements of applicable state law in
such manner and in such jurisdictions as are necessary under the applicable
UCC to perfect the transfer and assignment of the Receivables to the Issuer,
and to deliver a file-stamped copy of such financing statements or other
evidence of such filings to the Issuer on or prior to the Initial Closing
Date (excluding such continuation and similar statements, which shall be
delivered promptly after filing).
(b) In connection with the sales and conveyances hereunder, the
Transferor further agrees, at its own expense, on or prior to the Closing
Date with respect to the Initial Receivables and on or prior to the relevant
Transfer Date with respect to the Subsequent Receivables to indicate on its
books and records (including any computer files) that all of the Receivables
have been sold to the Issuer pursuant to this Agreement. The Transferor
further agrees not to alter the computer file designation referenced in this
paragraph with respect to any Receivable during the term of this Agreement
unless and until such Receivable becomes an Acquired Receivable. The
transfer of each Receivable shall be reflected on the Transferor's balance
sheets and other financial statements prepared in accordance with generally
accepted accounting principles as a transfer of assets by the Transferor to
the Issuer. The Transferor shall be responsible for maintaining, and shall
maintain, a complete and accurate set of books and records and computer files
for each Receivable which shall be clearly marked to reflect the ownership of
each Receivable by the Issuer.
SECTION 2.05. Grant of Security Interest. In the event that the
Receivables are held to continue to be property of the Transferor, then (i)
this Agreement also shall be deemed to be and hereby is a security agreement
within the meaning of the UCC, and (ii) the conveyance by the Transferor
provided for in the Agreement shall be deemed to be and hereby is a grant by
the Transferor to the Issuer of a security interest in and to all of the
Transferor's right, title and interest in, to and under all accounts,
contract rights, general intangibles, chattel paper, instruments, documents,
money, deposit accounts, certificates of deposit, goods, letters of credit,
advices of credit, certificated securities and uncertificated securities
consisting of, arising from, or relating to the Receivables and the Related
Property, to secure the rights of the Issuer under this Agreement and the
obligations of the Transferor hereunder. The Transferor and the Issuer
shall, to the extent consistent with this Agreement, take such actions (other
than delivery of the original contracts) as may be necessary to ensure that,
if the conveyance of the Receivables and the Related Property by the
Transferor to the Issuer pursuant to this Agreement is not deemed to be a
sale, the security interest in the Receivables and the Related Property
created hereunder will be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of
this Agreement.
SECTION 2.06. Discounted Receivables. The Transferor shall have the
option, on any Transfer Date, to discount any Subsequent Receivables being
transferred to the Trust on such Transfer Date (any such Subsequent Receivable,
a "Discounted Receivable")
27
by indicating on the Schedule of Receivables the discounted Principal Balance
and the discounted Scheduled Principal Payments of such Discounted
Receivables and the APR of such Discounted Receivables after giving effect to
such discount.
ARTICLE III
THE RECEIVABLES
SECTION 3.01. Representations and Warranties of Transferor. The
Transferor makes the following representations and warranties as to the
Receivables on which the Issuer is deemed to have relied in acquiring the
Receivables. Such representations and warranties speak as of the execution
and delivery of this agreement and as of each Transfer Date, but shall
survive the transfer and assignment of the Receivables to the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Title. It is the intention of the Transferor that the transfer
and assignment herein contemplated constitute either (i) a sale of the
Receivables or (ii) a grant of a perfected security interest therein from the
Transferor to the Issuer and that the beneficial interest in and title to such
Receivables not be part of the debtor's estate in the event of the filing of a
bankruptcy petition by or against the Transferor under any bankruptcy law. No
Receivable has been sold, transferred, assigned or pledged by the Transferor to
any Person other than the Issuer. Immediately prior to the transfer and
assignment herein contemplated, the Transferor had good and marketable title to
each Receivable, free and clear of all Liens and rights of others and,
immediately upon the transfer thereof, the Issuer shall have good and marketable
title to each such Receivable, free and clear of all Liens and rights of others
or a first priority perfected security interest therein; and the transfer has
been perfected, by the filing of appropriate financing statements pursuant to
the UCC, under the UCC.
(b) All Actions Taken. All actions (other than delivering the
original Contract) necessary under the applicable UCC in any jurisdiction to be
taken (i) to give the Issuer a first priority perfected security interest or
ownership interest in the Receivables, and (ii) to give the Indenture Trustee a
first priority perfected security interest therein (including, without
limitation, UCC filings with the Delaware and Washington Secretaries of State)
have been taken.
(c) Location of Receivable Files. The Receivable Files are kept at
the location specified in Schedule B hereto.
(d) No Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any Governmental Authority required
in connection with the execution and delivery by the Transferor of this
Agreement or any other Basic Document, the performance by the Transferor of the
transactions contemplated by this Agreement or any other Basic Document and the
fulfillment by the Transferor of the terms hereof or thereof, have been obtained
or have been completed and are in full force and effect (other than approvals,
authorizations, consents, orders or other actions which if not obtained or
completed or in full force and effect would not have a material adverse effect
on the Transferor or the Issuer or upon
28
the collectibility of any Receivable or upon the ability of the Transferor to
perform its obligations under this Agreement).
(e) Financed Equipment. The Financed Equipment does not, and with
respect to Subsequent Receivables will not, consist of land, buildings,
structural components thereof or other inherently permanent structures within
the meaning of Treasury Regulation Section 1.856-3(d).
SECTION 3.02. Reacquisition by Transferor or MCC Upon Breach.
(a) The Transferor, the Servicer, MCC or the Owner Trustee, as the
case may be, shall inform the other parties to the Agreement, MCC and the
Indenture Trustee promptly, in writing, upon the discovery of any breach of the
Transferor's representations and warranties made pursuant to Section 3.01 or any
breach of MCC's representations and warranties made pursuant to Section 3.02(b)
of the Contribution and Sale Agreement. Unless any such breach shall have been
cured by the last day of the second month following the month of the discovery
thereof by the Owner Trustee or receipt by the Owner Trustee of written notice
from the Transferor or the Servicer of such breach, the Transferor shall be
obligated, and, if necessary, the Transferor or the Owner Trustee shall enforce,
the obligation of MCC, if any, under Section 6.02(a) of the Contribution and
Sale Agreement to reacquire any Receivable materially and adversely affected by
any such breach as of such last day (or, at the Transferor's option, as of the
last day of the first month following the month of the discovery).
(b) In consideration of the reacquisition of the Receivable, the
Transferor shall remit the Acquisition Amount in the manner specified in Section
5.03; provided, however, that the obligation of the Transferor to reacquire any
Receivable arising solely as a result of a breach of MCC's representations and
warranties pursuant to Section 3.02(b) of the Contribution and Sale Agreement is
subject to the receipt by the Transferor of the Acquisition Amount from MCC.
Subject to the provisions of Section 6.02, the sole remedy of each of the
Issuer, the Owner Trustee, the Indenture Trustee and the Noteholders with
respect to a breach of representations and warranties pursuant to Section 3.01
and the agreement contained in this Section shall be to require the Transferor
to reacquire Receivables pursuant to this Section, subject to the conditions
contained herein, or to enforce MCC's obligation, if any, to the Transferor to
reacquire such Receivables pursuant to the Contribution and Sale Agreement. The
Owner Trustee shall have no duty to conduct any affirmative investigation as to
the occurrence of any condition requiring the reacquisition of any Receivable
pursuant to this Section.
(c) The Issuer shall execute such documents and instruments of
transfer or assignment and take other actions as shall reasonably be requested
by the Servicer to evidence the conveyance of such Receivable pursuant to this
Section 3.02.
SECTION 3.03. Duties of Servicer.
29
(a) Receivable Files. The Servicer shall maintain such accurate and
complete accounts, records and computer systems pertaining to each Receivable
File as shall enable itself and the Issuer to comply with this Agreement. In
performing its duties, the Servicer shall act with reasonable care, using that
degree of skill and attention that the Servicer exercises with respect to the
receivable files relating to all comparable receivables that the Servicer
services for itself or others. The Servicer shall conduct, or cause to be
conducted, periodic audits of the related accounts, records and computer
systems, in such a manner as shall enable the Issuer or the Indenture Trustee to
verify the accuracy of the Servicer's record keeping. The Servicer shall
promptly report to the Issuer and the Indenture Trustee any failure on its part
to maintain its accounts, records and computer systems as herein provided and
promptly take appropriate action to remedy any such failure. Nothing herein
shall be deemed to require an initial review or any periodic review by the
Issuer, the Owner Trustee or the Indenture Trustee.
(b) Access to Records. The Servicer shall notify the Owner Trustee
and the Indenture Trustee of any change in the location of its principal place
of business in writing not later than 90 days after any such change. The
Servicer shall make available to the Owner Trustee and the Indenture Trustee, or
their respective duly authorized representatives, attorneys or auditors, a list
of locations of the related accounts, records and computer systems maintained by
the Servicer at such times as the Owner Trustee or the Indenture Trustee shall
instruct. The Indenture Trustee shall have access to such accounts, records and
computer systems, after reasonable notice and during normal business hours.
(c) Safekeeping. The Servicer shall hold on behalf of the Issuer
(i) all file stamped copies of UCC financing statements evidencing the
security interest of MCC in Financed Equipment, and (ii) any and all
documents, that MCC or the Transferor shall keep on file, in accordance with
its customary procedures, relating to a Receivable, an Obligor or Financed
Equipment, and shall maintain such accurate and complete records pertaining
to each Receivable as shall enable the Issuer to comply with this Agreement.
Upon instruction from the Indenture Trustee, the Servicer shall release any
such UCC filing or other document to the Indenture Trustee, the Indenture
Trustee's agent, or the Indenture Trustee's designee, as the case may be, at
such place or places as the Indenture Trustee may designate, as soon as
practicable.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01. Duties of Servicer. The Servicer, as agent for the
Issuer (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Acquired Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable receivables that it services for itself
or others. The Servicer's duties shall include calculating, billing, collection
and posting of all payments, responding to inquiries of Obligors on such
Receivables, investigating delinquencies, reporting tax information to Obligors
(to the extent required under the related
30
Contracts), accounting for collections, and furnishing monthly and annual
statements to the Owner Trustee and the Indenture Trustee with respect to
distributions. Subject to the provisions of Section 4.02, the Servicer shall
follow its customary standards, policies and procedures in performing its
duties as Servicer. Without limiting the generality of the foregoing, the
Servicer is authorized and empowered to execute and deliver, on behalf of
itself, the Issuer, the Owner Trustee, the Indenture Trustee and the
Noteholders or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other
comparable instruments, with respect to such Receivables or to the Financed
Equipment securing such Receivables. If the Servicer shall commence a legal
proceeding to enforce a Receivable, the Issuer (in the case of a Receivable
other than an Acquired Receivable) shall thereupon be deemed to have
automatically assigned, solely for the purpose of collection, such Receivable
to the Servicer. If in any enforcement suit or legal proceeding it shall be
held that the Servicer may not enforce a Receivable on the ground that it
shall not be a real party in interest or a holder entitled to enforce such
Receivable, the Issuer shall, at the Servicer's expense and direction, take
steps to enforce such Receivable, including bringing suit in its name or the
name of the Owner Trustee, the Indenture Trustee or the Noteholders. The
Issuer shall upon the written request of the Servicer furnish the Servicer
with any powers of attorney and other documents reasonably necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
SECTION 4.02. Collection of Receivable Payments. The Servicer shall
make reasonable efforts to collect all payments called for under the terms
and provisions of the Receivables as and when the same shall become due and
shall follow such collection procedures as it follows with respect to all
comparable receivables that it services for itself or others. In connection
therewith, the Servicer may grant extensions, rebates or adjustments on a
Receivable; provided, however, that if the Servicer extends the date for
final payment by the Obligor of any Receivable beyond the date one month
prior to the Final Scheduled Distribution Date, it shall promptly
acquire the Receivable from the Issuer in accordance with the terms of
Section 4.07. The Servicer may in its discretion waive any other amounts of
Servicer's Yield that may be collected in the ordinary course of servicing a
Receivable. The Servicer shall not agree to any reduction of the underlying
interest rate on any Receivable or, subject to the foregoing, of the amount
of any Scheduled Payment on a Receivable. Notwithstanding anything in this
Agreement to the contrary, any Recoveries shall be paid to the Transferor,
and any Defaulted Receivables shall be assigned by the Trust to the
Transferor, to the extent the Principal Balance thereof has been distributed
as part of the Principal Distribution Amount.
SECTION 4.03. Realization upon Receivables. On behalf of the Issuer,
the Servicer shall use its customary servicing procedures, to repossess or
otherwise realize upon the Financed Equipment securing any Receivable as to
which the Servicer shall have determined eventual payment in full is unlikely.
The Servicer shall follow such customary and usual practices and procedures as
it shall deem necessary or advisable in its servicing of comparable receivables,
which may include selling the Financed Equipment at public or private sale. The
foregoing shall be subject to the provision that, in any case in which any item
of Financed Equipment shall have suffered damage, the Servicer shall not expend
funds in connection with the repair or the repossession of such Financed
Equipment unless it shall determine in its
31
discretion that such repair and/or repossession will increase the Liquidation
Proceeds by an amount greater than the amount of such expenses.
SECTION 4.04. Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Financed Equipment
as of the execution of the Receivable.
SECTION 4.05. Maintenance of Security Interests in Financed Equipment.
The Servicer shall, in accordance with its customary servicing procedures,
take such steps as are necessary to maintain perfection of the security
interest created by each Receivable in the related Financed Equipment. The
Servicer is hereby authorized to take such steps as are necessary to
re-perfect such security interest or to maintain such perfected security
interest on behalf of the Issuer and the Indenture Trustee in the event of
the relocation of Financed Equipment, or for any other reason.
SECTION 4.06. Covenants of Servicer. The Servicer shall not: (i)
release the Financed Equipment securing any Receivable from the security
interest granted by such Receivable in whole or in part except (A) in
accordance with Section 4.03 above or (B) in the event of payment in full by
the Obligor thereunder; (ii) impair the rights of the Issuer, the Indenture
Trustee or the Noteholders in any Receivable; or (iii) increase the number of
Scheduled Payments due under a Receivable except in accordance with the terms
thereof or the terms of Section 4.02.
SECTION 4.07. Acquisition by Servicer of Receivables upon Breach.
(a) The Servicer or the Owner Trustee shall inform the other party and the
Indenture Trustee, the Transferor and MCC promptly, in writing, upon the
discovery of any breach pursuant to Section 4.02, 4.05 or 4.06. Unless the
breach shall have been cured by the last day of the second month following such
discovery (or, at the Transferor's election, the last day of the first following
month), the Servicer shall acquire any Receivable materially and adversely
affected by such breach. If the Servicer takes any action pursuant to Section
4.02 that impairs the rights of the Issuer, the Indenture Trustee or the
Noteholders in any Receivable or as otherwise provided in Section 4.02, the
Servicer shall acquire such Receivable. In consideration of the acquisition of
any such Receivable pursuant to either of the two preceding sentences, the
Servicer shall remit the Acquisition Amount in the manner specified in Section
5.03. Subject to Section 7.02, the sole remedy of any of the Issuer, the Owner
Trustee, the Indenture Trustee and the Noteholders with respect to a breach
pursuant to Section 4.02, 4.05 or 4.06 shall be to require the Servicer to
acquire Receivables pursuant to this Section. The Owner Trustee shall have no
duty to conduct any affirmative investigation as to the occurrence of any
condition requiring the acquisition of any Receivable pursuant to this Section.
The parties hereto intend that the Servicer will not intentionally breach or
cause a breach pursuant to Section 4.02, 4.05 or 4.06 in order to provide direct
or indirect assurance to the Transferor, the Indenture Trustee, the Owner
Trustee or the Noteholders, as applicable, against loss by reason of the
bankruptcy or insolvency (or other credit condition) of, or default by, the
Obligor on, or the uncollectibility of, any Receivable.
32
(b) The Issuer shall execute such documents and instruments of transfer or
assignment and take other actions as shall reasonably be requested by the
Servicer to evidence the conveyance of such Receivable pursuant to this Section
4.07.
SECTION 4.08. Servicing Fee. On each Determination Date, the Servicer
shall be entitled to receive the Servicing Fee in respect of the immediately
preceding Collection Period equal to the product of (a) one-twelfth of the
Servicing Fee Rate and (b) the Pool Balance as of the first day of such
preceding Collection Period. The Servicer shall also be entitled to any
Servicer's Yield with respect to Receivables, collected (from whatever
source) on the Receivables, which Servicer's Yield shall be paid to the
Servicer pursuant to Section 5.07.
SECTION 4.09. Servicer's Certificate. On each Determination Date, the
Servicer shall deliver to the Owner Trustee, the Indenture Trustee and the
Transferor, with a copy to the Rating Agencies, a Servicer's Certificate
containing all information necessary to make the distributions pursuant to
Sections 5.04 and 5.05 for the Collection Period immediately preceding the
date of such Servicer's Certificate. Neither the Owner Trustee nor the
Indenture Trustee shall be required to determine, confirm or recalculate the
information contained in the Servicer's Certificate. Receivables to be
acquired by the Servicer or to be reacquired by the Transferor shall be
identified by the Servicer by account number with respect to such Receivable
as specified in Schedule A.
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee and the Rating Agencies, on or before April 30 of each year beginning
April 30, [____], an Officers' Certificate stating that (i) a review of the
activities of the Servicer during the preceding 12-month period ending on
December 31 (or, in the case of April 30, [____], the period from the Closing
Date to December 31, [____]) and of its performance under this Agreement has
been made under such officers' supervision and (ii) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled in all
material respects all its obligations under this Agreement throughout such
period or, if there has been a default in the fulfillment of any such obligation
in any material respect, specifying each such default known to such officers and
the nature and status thereof. The Indenture Trustee shall send a copy of such
certificate and the report referred to in Section 4.11 to the Rating Agencies.
A copy of such certificate and the report referred to in Section 4.11 may be
obtained by any Noteholder by a request in writing to the Owner Trustee at its
address in Section 10.03.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee
and the Rating Agencies, promptly after having obtained knowledge thereof, but
in no event later than five (5) Business Days thereafter, written notice in an
Officers' Certificate of any event which with the giving of notice or lapse of
time, or both, would become a Servicer Default under Section 8.01(a) or (b).
SECTION 4.11. Annual Independent Public Accountants' Servicing Report.
The Servicer will cause a firm of nationally recognized independent public
accountants
33
(who may also render other services to the Servicer) to furnish to the
Transferor, each Rating Agency and each Holder, on or prior to April 30 of
each year, commencing April 30, [____], a report relating to the previous
calendar year to the effect that management's assertion that it has
maintained an effective internal control system for the servicing of the
Receivables is fairly stated, in all material respects, based upon criteria
established by the Committee of Sponsoring Organizations of the ▇▇▇▇▇▇▇▇
Commission as described in Internal Control--Integrated Framework, and meets
the standards applicable to accountants' reports intended for general
distribution.
SECTION 4.12. Servicer Expenses. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities under this
Article, including fees and disbursements of independent accountants, taxes
imposed on the Servicer and expenses incurred in connection with
distributions and reports to the Owner Trustee, the Indenture Trustee and the
Noteholders; provided, that nothing in this Section 4.12 shall preclude the
Servicer from retaining certain amounts with respect to reimbursement for
certain other expenses as expressly provided for by the terms of this
Agreement.
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS
SECTION 5.01. Establishment of Trust Accounts.
(a)(i) The Servicer, for the benefit of the Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Collection Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Noteholders.
(ii) The Servicer, for the benefit of the Noteholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
(the "Interest Payment Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Noteholders.
(iii) The Servicer, for the benefit of the Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Principal Funding Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Noteholders.
(iv) The Servicer, for the benefit of the Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Note Distribution Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Noteholders.
34
(v) The Servicer, for the benefit of the Class A Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Reserve Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Class A Noteholders.
(b) Funds on deposit in the Collection Account, the Interest Payment
Account, the Principal Funding Account, the Note Distribution Account and the
Reserve Account (collectively the "Trust Accounts") shall be invested by the
Indenture Trustee in Eligible Investments selected by the Servicer; provided,
however, it is understood and agreed that the Indenture Trustee shall not be
liable for any loss arising from such investment in Eligible Investments. All
such Eligible Investments shall be held by the Indenture Trustee for the benefit
of the Noteholders; provided, however, that on each Distribution Date all
investment earnings (net of losses and investment expenses) on funds on deposit
therein shall be deposited into the Collection Account and shall be deemed to
constitute a portion of the Available Interest Amount. Other than as permitted
by the Rating Agencies, funds on deposit in the Trust Accounts shall be invested
in Eligible Investments that will mature so that such funds will be available at
the close of business on the Business Day preceding the immediately following
Distribution Date; provided, however, that funds on deposit in Trust Accounts
may be invested in Eligible Investments of the Indenture Trustee which may
mature so that such funds will be available on the Distribution Date. Funds
deposited in a Trust Account on a Business Day which immediately precedes a
Distribution Date upon the maturity of any Eligible Investments are not required
to be invested overnight, but if so invested, such investments must meet the
conditions of the immediately preceding sentence.
(c) (i) The Indenture Trustee shall possess all right, title and
interest in all monies, securities, instruments and other property on deposit
from time to time in or credited to the Trust Accounts and in all proceeds
thereof (including all income thereon) and all such monies, securities,
instruments and other property (together with all earnings, dividends,
distributions, income, issues, and profits relating thereto) shall be part of
the Trust Estate. The Trust Accounts shall be under the sole dominion and
control of the Indenture Trustee for the benefit of the Noteholders. If, at any
time, any of the Trust Accounts ceases to be an Eligible Deposit Account, the
Indenture Trustee (or the Servicer on its behalf) shall within 10 Business Days
(or such longer period, not to exceed 30 calendar days, as to which each Rating
Agency may consent) establish a new Trust Account as an Eligible Deposit Account
and shall transfer any cash and/or any investments to such new Trust Account.
So long as the Indenture Trustee is an Eligible Institution, any Trust Account
may be maintained with it in an Eligible Deposit Account.
(ii) With respect to the Trust Account Property, the Indenture Trustee
agrees, by its acceptance hereof, that:
(A) any Trust Account Property held in deposit accounts shall be
held solely in the Eligible Deposit Accounts; and each such Eligible
Deposit Account shall be subject to the exclusive custody and control of
the Indenture Trustee, and the Indenture Trustee shall have sole signature
authority with respect thereto;
35
(B) any Trust Account Property that constitutes an instrument or
Certificated Security shall be delivered to the Indenture Trustee in
accordance with the definition of "Delivery" and shall be held, pending
maturity or disposition, solely by the Indenture Trustee or a financial
intermediary (as such term is defined in Section 8-313(4) of the UCC)
acting solely for the Indenture Trustee;
(C) any Trust Account Property that is a United States
Securities Entitlement held through the Federal Reserve System pursuant to
Federal book-entry regulations shall be delivered in accordance with
paragraph (c) of the definition of "Delivery" and shall be maintained by
the Indenture Trustee, pending maturity or disposition, through continued
book-entry registration of such Trust Account Property as described in such
paragraph; and
(D) any Trust Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause (C)
above shall be delivered to the Indenture Trustee in accordance with
paragraph (d) of the definition of "Delivery" and shall be maintained by
the Indenture Trustee, pending maturity or disposition, through continued
registration of the Indenture Trustee's (or its nominee's) ownership of
such security.
(iii) The Servicer shall have the power, revocable by the Indenture
Trustee or by the Owner Trustee with the consent of the Indenture Trustee, to
instruct the Indenture Trustee to make withdrawals and payments from the Trust
Accounts for the purpose of permitting the Servicer or the Owner Trustee to
carry out its respective duties hereunder or permitting the Indenture Trustee to
carry out its duties under the Indenture.
(iv) The Indenture Trustee is hereby authorized to execute purchase and
sales directed by the Servicer through the facilities of its own trading or
capital markets operations. The Indenture Trustee shall send statements to the
Servicer monthly reflecting activity for each amount created hereunder for the
preceding month. Although the Servicer recognizes that it may obtain a broker
confirmation at no additional cost, the Servicer hereby agrees that
confirmations of investments are not required to be issued by the Indenture
Trustee for each month in which a monthly statement is rendered. No statement
need be rendered pursuant to the provision hereof if no activity occurred in the
account for such month.
SECTION 5.02. Collections. Subject to Section 5.03, the Servicer
shall remit to the Collection Account (i) all payments by or on behalf of the
Obligors with respect to the Receivables (including Insurance Proceeds, if any)
and (ii) all Liquidation Proceeds (except to the extent of Recoveries applied in
accordance with Section 4.02), in each case as collected during each Collection
Period within two Business Days of receipt and identification thereof.
Notwithstanding the foregoing, if (i) MCC is the Servicer, (ii) a Servicer
Default shall not have occurred and be continuing and (iii) MCC (or any entity
that guarantees the servicing obligations of MCC) maintains a short-term rating
of at least A-1 by Standard & Poor's and P-1 by Moody's, the Servicer may remit
such collections with respect to each Collection Period to the Collection
Account on or before the second Business Day prior to the following Distribution
36
Date. For purposes of this Article V, the phrase "payments by or on behalf
of Obligors" shall mean payments made with respect to the Receivables by
Persons other than the Servicer or the Transferor.
SECTION 5.03. Additional Deposits. The Servicer and the Transferor
shall deposit or cause to be deposited in the Collection Account the
Acquisition Amounts with respect to Acquired Receivables as set forth in the
immediately following sentence, and the Servicer shall deposit in the
Collection Account all amounts to be paid under Section 9.02 as set forth
therein. The Servicer and the Transferor will deposit the Acquisition Amount
with respect to each Acquired Receivable when such obligations are due,
unless, with respect to Acquisition Amounts to be remitted by the Servicer,
the Servicer shall be permitted to make deposits monthly prior to each
Distribution Date pursuant to Section 5.02, in which case such deposits shall
be made in accordance with such Section. The Servicer shall account for
Acquisition Amounts paid by itself and the Transferor separately.
SECTION 5.04. Distributions.
(a) On or prior to each Determination Date, the Servicer shall calculate
all amounts required to determine the amounts to be deposited in the Interest
Payment Account, the Principal Funding Account and the Note Distribution
Account.
(b) The rights of the Class B Noteholders to receive distributions of
Available Interest Amounts and Available Principal Amounts shall be and hereby
are subordinated to the rights of the Class A Noteholders to the extent provided
in this Section 5.04(b). On the second Business Day prior to each Distribution
Date, the Servicer shall instruct the Indenture Trustee, which instruction shall
be in the form of Exhibit B to Schedule D (or such other form that is acceptable
to the Indenture Trustee and the Servicer), to (i) withdraw from the Reserve
Account the amount, if any, described in Section 5.05(c) for application as
described in Section 5.05(c) and (ii) withdraw from the Collection Account the
Available Interest Amount and the Available Principal Amount for deposit in the
Interest Payment Account and the Principal Funding Account, respectively, and to
make the following deposits and distributions for receipt by the Servicer or the
Administrator or for deposit in the Note Distribution Account by 12:00 Noon (New
York time) on such following Distribution Date to the extent of the Available
Interest Amount and the Available Principal Amount:
(i) from the Available Interest Amount on deposit in the Interest
Payment Account, in the following order of priority:
(A) to the Servicer, the Servicing Fee and all unpaid Servicing
Fees from prior Collection Periods;
(B) to the Administrator under the Administration Agreement, the
Administration Fee and all unpaid Administration Fees from prior Collection
Periods;
37
(C) to the Note Distribution Account, the Noteholders' Class A
Interest Distributable Amount;
(D) to the Reserve Account, the positive difference, if any, of (i)
the Specified Reserve Account Balance for such Distribution Date over (ii)
the amount on deposit in the Reserve Account on such Distribution Date (not
taking into account the amount deposited into the Reserve Account on such
Distribution Date pursuant to this clause (D)).
(E) to the Principal Funding Account, the positive difference, if
any, between the Principal Distribution Amount and the Available Principal
Amount (not taking into account the amount of the Available Principal
Amount derived from clause (iii) of the definition thereof);
(F) to the Note Distribution Account, the Noteholders' Class B
Interest Distributable Amount; and
(G) to the Transferor, the amount remaining on deposit in the
Interest Payment Account after giving effect to the distributions to be
made pursuant to Sections 5.04(b)(i)(A), 5.04(b)(i)(B), 5.04(b)(i)(C),
5.04(b)(i)(D), 5.04(b)(i)(E) and 5.04(b)(i)(F);
(ii) from the Available Principal Amount on deposit in the Principal
Funding Account, in the following order of priority:
(A) each Distribution Date with respect to the Revolving
Period (1) first to the Reserve Account, the positive difference, if any,
of (x) the Specified Reserve Account Balance for such Distribution Date
over (y) the principal amount on deposit in the Reserve Account on such
Distribution Date (after taking into account the amount deposited into
the Reserve Account on such Distribution Date pursuant to Section 5.04(b)
(i)(D) but not taking into account the amount deposited into the Reserve
Account on such Distribution Date pursuant to this clause (A)) and (2)
second, the Available Principal Amount remaining after the application of
clause (1) above will be retained in the Principal Funding Account and
will be paid to the Transferor in connection with transfers of Subsequent
Receivables to the Issuer pursuant to Section 2.02; and
(B) on Distribution Dates with respect to the Amortization Period,
(1) first, to the Note Distribution Account, the Class A Noteholders'
Principal Distributable Amount, (2) second, to the Reserve Account, the
positive difference, if any, of (x) the Specified Reserve Account Balance
for such Distribution Date over (y) the principal amount on the deposit in
the Reserve Account on such Distribution Date (after taking into account
the amount deposited into the Reserve Account on such Distribution Date
pursuant to Section 5.04(b)(i)(D) but not taking into account the amount
deposited into the Reserve Account on such Distribution Date pursuant to
38
this clause (B)) and (3) third, to the Note Distribution Account, the Class
B Noteholders' Principal Distributable Amount;
(iii) on the first Distribution Date with respect to the Amortization
Period, from Available Principal Amounts deposited in the Principal Funding
Account on prior Distribution Dates that were not used to acquire Subsequent
Receivables from the Transferor on or prior to such Distribution Date
("Remaining Available Principal Amounts"), in the following order of priority:
(A) to the Note Distribution Account, the Class A Noteholders'
Percentage of the Remaining Available Principal Amounts; and
(B) to the Note Distribution Account, the Class B Noteholders'
Percentage of the Remaining Available Principal Amounts.
(c) Notwithstanding anything in this Section 5.04 to the contrary, if an
Event of Default under the Indenture occurs and the maturities of the Notes are
accelerated pursuant to Section 5.02 of the Indenture, amounts standing to the
credit of the Collection Account, the Interest Payment Account and the Principal
Funding Account shall be applied by the Indenture Trustee in accordance with
Section 5.04(b) of the Indenture.
SECTION 5.05. Reserve Account.
(a) On the Closing Date, the Transferor shall deposit the Reserve Account
Initial Deposit into the Reserve Account. The Servicer shall determine the
Specified Reserve Account Balance for each Distribution Date.
(b) If the amount on deposit in the Reserve Account on any Distribution
Date (after giving effect to all deposits or withdrawals therefrom on such
Distribution Date) is greater than the Specified Reserve Account Balance for
such Distribution Date, the Servicer shall instruct the Indenture Trustee to
distribute the amount of such excess to the Transferor; provided that if, after
giving effect to all payments made on the Notes on such Distribution Date, the
Pool Balance as of the end of the preceding Collection Period is less than the
outstanding principal amount of the Notes, such excess amount shall not be
distributed to the Transferor and shall be retained in the Reserve Account
available for application in accordance with Sections 5.05(c) and (d). Amounts
properly distributed to the Transferor pursuant to this Section 5.05(b) shall be
deemed released from the Trust and the security interest therein granted to the
Indenture Trustee, and the Transferor shall in no event thereafter be required
to refund any such distributed amounts.
(c) In the event that the sum of the distributions [and deposits] to be
made pursuant to Section 5.04(b)(i)(A), Section 5.04(b)(i)(B), Section
5.04(b)(i)(C) and Section 5.04(b)(i)(E) with respect to any Distribution Date
exceeds the Available Interest Amount distributed in respect thereof on such
Distribution Date, the Indenture Trustee shall withdraw from the Reserve Account
on such Distribution Date, upon receipt of the instruction from the Servicer
39
pursuant to Section 5.04(b), to the extent of funds available therein, an
amount equal to such excess, and the Indenture Trustee shall pay the
applicable portion of such amount to the Servicer and the Administrator, as
applicable, deposit the applicable portion of such amount into the Note
Distribution Account and deposit the applicable portion of such amount into
the Principal Funding Account.
(d) In the event that the Class A Noteholders' Principal Distributable
Amount for a Distribution Date exceeds the amount deposited in the Note
Distribution Account pursuant to Section 5.04(b)(ii)(A) on such Distribution
Date, the Indenture Trustee shall withdraw on such Distribution Date from the
Reserve Account, upon receipt of the instruction of the Servicer pursuant to
Section 5.04(b), to the extent of funds available therein after giving effect to
paragraph (c) above, an amount equal to such excess, and the Indenture Trustee
shall deposit such amount into the Note Distribution Account pursuant to the
terms of the Indenture.
(e) Notwithstanding anything in this Section 5.05 to the contrary, if an
Event of Default under the Indenture occurs and the maturities of the Notes are
accelerated pursuant to Section 5.02 of the Indenture, amounts on deposit in the
Reserve Account shall be applied by the Indenture Trustee in accordance with
Section 5.04(a) of the Indenture.
SECTION 5.06. Statements to Noteholders. On the second Business Day prior
to each Distribution Date, the Servicer shall provide to the Indenture Trustee
(with a copy to the Rating Agencies) for the Indenture Trustee to forward to
each Class A Noteholder of record, and to the Owner Trustee a statement
substantially in the form of Exhibit A to Schedule D (or such other form that is
acceptable to the Indenture Trustee, the Owner Trustee and the Servicer) setting
forth at least the following information as to the Notes (separately stating
such information as to the Class A Notes and the Class B Notes), to the extent
applicable:
(i) the amount of the distribution to be made on such Distribution
Date allocable to principal;
(ii) the amount of the distribution to be made on such Distribution
Date allocable to interest;
(iii) the Pool Balance as of the close of business on the last day
of the preceding Collection Period, the aggregate Principal Balance of the
Receivables and the amount on deposit in the Principal Funding Account;
(iv) the outstanding principal balance of each class of the Notes and
the Class A Note Pool Factor, in each case as of the close of business on
the last day of the preceding Collection Period, after giving effect to
payments allocated to principal reported under (i) above;
40
(v) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period;
(vi) the amount of the Administration Fee paid to the Administrator
with respect to such Collection Period;
(vii) the aggregate amount of the Acquisition Amounts for Acquired
Receivables with respect to the related Collection Period paid by each of
the Transferor and the Servicer (accounted for separately);
(viii) the amount of Realized Losses, if any, for such Collection
Period;
(ix) the balance of the Reserve Account on such Distribution Date,
after giving effect to withdrawals to be made on such Distribution Date;
(x) the Specified Reserve Account Balance for such Distribution Date;
and
(xi) the Noteholders' Class A Interest Distributable Amount, the
Noteholders' Class B Interest Distributable Amount, the Class A
Noteholders' Principal Distributable Amount and the Class B Noteholders'
Principal Distributable Amount, the components of each thereof, and the
amount, if any, to be withdrawn from the Reserve Account and deposited into
the Note Distribution Account pursuant to Section 5.05(c) or (d);
Each amount set forth pursuant to paragraph (i) or (ii) above shall be
expressed as a dollar amount per $1,000 of original principal balance of a Note.
Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of the Indenture, the Indenture
Trustee shall mail to each Person who at any time during such calendar year
shall have been a Class A Noteholder and received any payment thereon, a
statement containing the amounts described in (i) and (ii) above and any other
information required by applicable tax laws, for the purposes of such
Noteholder's preparation of Federal income tax returns.
The Indenture Trustee shall only be required to provide to the Class A
Noteholders the information furnished to it by the Servicer. The Indenture
Trustee shall not be required to determine, confirm or recompute any such
information.
SECTION 5.07. Net Deposits. As an administrative convenience, so long as
MCC is the Servicer and the Administrator, the Servicer will be permitted to
make the deposit of Collections on the Receivables and Acquisition Amounts for
or with respect to any Collection Period net of distributions to be made to the
Servicer and the Administrator with respect to such Collection Period (and the
Servicer shall pay amounts owing to the Administrator directly). The Servicer,
however, will account to the Owner Trustee and the Indenture Trustee and the
Noteholders as if the Servicing Fee and Administration Fee was paid pursuant to
the mechanics provided for pursuant to Section 5.04.
41
ARTICLE VI
THE TRANSFEROR
SECTION 6.01. Representations of Transferor. The Transferor makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of each Transfer Date and shall survive the
transfer of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Transferor is duly
organized and validly existing as a corporation in good standing under the
laws of the State of Delaware with the power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, the power, authority and legal right to acquire and own the
Receivables.
(b) Due Qualification. The Transferor is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the failure
to so qualify or to obtain any such license or approval would render any
Receivable unenforceable that would otherwise be enforceable by the
Transferor or the Owner Trustee.
(c) Power and Authority. The Transferor has the power and authority
to execute and deliver this Agreement and to carry out its terms; the
Transferor has full power and authority to transfer and assign the
Receivables and other property to be transferred and assigned to and
deposited with the Issuer and the Transferor has duly authorized such
transfer and assignment to the Issuer by all necessary corporate action;
and each of the execution, delivery and performance of this Agreement has
been duly authorized by the Transferor by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Transferor enforceable in accordance with its
terms, except to the extent that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and the
remedy of specific performance and injunctive relief may be subject to
certain equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not (i)
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 the Transferor, or any
indenture, agreement or other instrument to which the Transferor is
42
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 or other instrument (other than pursuant to the Basic
Documents); or (iii) violate any law or, to the best of the Transferor's
knowledge, any order, rule or regulation applicable to the Transferor of
any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the
Transferor or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or to the Transferor's best knowledge, threatened, before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Transferor or its properties:
(i) asserting the invalidity of this Agreement, the Indenture, the Notes or
any of the other Basic Documents, (ii) seeking to prevent the issuance of
the Notes or the consummation of any of the transactions contemplated by
this Agreement, the Indenture or any of the other Basic Documents; (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by the Transferor of its obligations under, or the
validity or enforceability of, this Agreement, the Indenture, the Notes or
any other of the Basic Documents or (iv) which might adversely affect the
Federal or state income tax attributes of the Notes.
SECTION 6.02. Liability of Transferor; Indemnities. The Transferor shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Transferor under this Agreement.
(a) The Transferor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee and the Indenture Trustee and their officers,
directors and agents from and against any taxes that may at any time be
asserted against the Issuer, the Owner Trustee or the Indenture Trustee or
their respective officers, directors, and agents with respect to the
transfer of the Receivables to the Issuer or the issuance and original sale
of the Notes, including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes and costs and
expenses in defending against the same.
(b) The Transferor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee and the Indenture Trustee and their officers,
directors, and agents from and against any loss, liability or expense
incurred by reason of (i) the Transferor's willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this
Agreement and (ii) the Transferor's or the Issuer's violation or alleged
violation of Federal or state securities laws in connection with the
offering and sale of the Notes, except that the Transferor shall not
indemnify the Owner Trustee for any such loss, liability or expense as
shall result from the willful misconduct of the Owner Trustee.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination
of this Agreement and shall include reasonable fees and expenses of counsel
and expenses of litigation. If the Transferor shall have made any
indemnity payments pursuant to this Section 6.02 and
43
the Person to or on behalf of whom such payments are made thereafter shall
collect any of such amounts from others, such Person shall promptly repay
such amounts collected from others to the Transferor, without interest.
SECTION 6.03. Merger or Consolidation of, or Assumption of the Obligations
of, Transferor. Any Person (a) into which the Transferor may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Transferor shall be a party or (c) which may succeed to the properties and
assets of the Transferor substantially as a whole, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Transferor under this Agreement, shall be the successor to the Transferor
hereunder without the execution or filing of any document or any further act by
any of the parties to this Agreement; provided, however, that (i) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 3.01 shall have been breached and no Servicer Default, and
no event that, after notice or lapse of time, or both, would become a Servicer
Default shall have occurred and be continuing, (ii) the Transferor shall have
delivered to the Owner Trustee and the Indenture Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, (iii) the Rating Agency
Condition shall have been satisfied with respect to such transaction and (iv)
the Transferor shall have delivered to the Owner Trustee and the Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all actions (other than the delivery of the original Contract)
necessary to perfect the interests of the Owner Trustee and the Indenture
Trustee have been taken, including that all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to preserve and protect the interest of the Owner Trustee
and Indenture Trustee, respectively, in the Receivables and reciting the details
of such filings, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interests.
Notwithstanding anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clauses (i), (ii), (iii) and (iv)
above shall be conditions to the consummation of the transactions referred to in
clause (a), (b) or (c) above. Following the effectiveness of the succession
provided for in this Section 6.03, the predecessor Transferor shall be released
from any obligations and liabilities provided for under the Basic Documents
other than any obligations or liabilities incurred by such predecessor
Transferor prior to the effectiveness of such succession.
SECTION 6.04. Limitation on Liability of Transferor and Others. The
Transferor and any director or officer or employee or agent of the Transferor
may rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Transferor shall not be under any obligation to appear
in, prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.
44
SECTION 6.05. Transferor May Own Notes. The Transferor and any Affiliate
(other than MCC) thereof may in its individual or any other capacity become the
owner or pledgee of Class A Notes with the same rights as it would have if it
were not the Transferor or an Affiliate thereof, except as expressly provided
herein (including, without limitation, the definition of "Outstanding" contained
in the Indenture) or in any Basic Document. The Transferor agrees that it shall
not transfer any interest in Notes (including the Class B Notes) or any rights
hereunder without delivering to the Owner Trustee an Opinion of Counsel that
such transfer will not cause the Trust to be taxable as a corporation for
federal income tax purposes.
SECTION 6.06. Tax Treatment. The Transferor has structured this
Agreement, the Indenture and any related agreement with the intention that the
Class A Notes qualify under applicable federal, state, and local income and
franchise tax law as indebtedness of the Transferor secured by the Receivables
and the Issuer shall be disregarded as a separate entity for such purposes. The
Transferor, the Servicer, and the Issuer agree to treat and to take no action
inconsistent with the treatment of the Class A Notes (or any beneficial interest
therein) as such indebtedness for purposes of federal, state, and local income
and franchise tax law and for purposes of any other tax imposed on or measured
by income.
ARTICLE VII
THE SERVICER
SECTION 7.01. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of the Agreement and as of each Transfer Date (or as of the date a
Person (other than the Indenture Trustee) becomes Servicer pursuant to Sections
7.03 and 8.02, in the case of a successor to the Servicer) and shall survive the
transfer of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has the corporate power and
authority to own its properties and to conduct the business in which it is
currently engaged, and had at all relevant times, and has, the power,
authority and legal right to acquire, own, transfer and service the
Receivables.
(b) Power and Authority. The Servicer has the power and authority to
execute and deliver this Agreement and to carry out its terms; and the
execution, delivery and performance of this Agreement have been duly
authorized by the Servicer by all necessary corporate action.
45
(c) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Servicer enforceable in accordance with its
terms, except that such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and the remedy
of specific performance and injunctive relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(d) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof shall not
conflict with, result in any breach of any of the terms and provisions of,
nor constitute (with or without notice or lapse of time) a default under,
the certificate of incorporation or by-laws of the Servicer, or any
material indenture, agreement or other instrument to which the Servicer is
a party or by which it is bound; nor result in the creation or imposition
of any material Lien upon any of its properties pursuant to the terms of
any such indenture, agreement or other instrument (other than this
Agreement); nor violate any material law or, to the best of the Servicer's
knowledge, any material order, rule or regulation applicable to the
Servicer of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties.
(e) No Proceedings. To the Servicer's best knowledge, there are no
proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its properties:
(i) asserting the invalidity of this Agreement, the Indenture, the Notes or
any of the other Basic Documents; (ii) seeking to prevent the issuance of
the Notes or the consummation of any of the transactions contemplated by
this Agreement, the Indenture or any of the other Basic Documents; (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by the Servicer of its obligations under, or the
validity or enforceability of, this Agreement, the Indenture, the Notes or
any of the other Basic Documents ; or (iv) relating to the Servicer and
which might adversely affect the Federal or state income tax attributes of
the Notes.
(f) No Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any Governmental Authority
required in connection with the execution and delivery by the Servicer of
this Agreement or any other Basic Document, the performance by the Servicer
of the transactions contemplated by this Agreement or any other Basic
Document and the fulfillment by the Servicer of the terms hereof or
thereof, have been obtained or have been completed and are in full force
and effect (other than approvals, authorizations, consents, orders or other
actions which if not obtained or completed or in full force and effect
would not have a material adverse effect on the Servicer or the Issuer or
upon the collectibility of any Receivable or upon the ability of the
Servicer to perform its obligations under this Agreement).
46
SECTION 7.02. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement.
(a) The Servicer shall defend, indemnify and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders and the
Transferor and any of the officers, directors and agents of the Issuer, the
Owner Trustee, the Indenture Trustee, and the Transferor from and against
any and all costs, expenses, losses, damages, claims and liabilities,
arising out of or resulting from the use, ownership or operation by the
Servicer or any Affiliate (other than the Transferor) thereof of any
Financed Equipment.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee and the Transferor and
their respective officers, directors and agents from and against (i) any
taxes that may at any time be asserted against any such Person with respect
to the transactions contemplated herein, including any sales, gross
receipts, general corporation, tangible personal property, privilege or
license taxes (but, in the case of the Issuer or the Transferor, not
including any taxes asserted with respect to, and as of the date of, the
transfer of the Receivables to the Issuer or the issuance and original sale
of the Notes, or Federal or other income taxes arising out of distributions
on the Notes) and (ii) costs and expenses in defending against the same.
(c) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Transferor and the
Noteholders and any of the officers, directors and agents of the Issuer,
the Owner Trustee, the Indenture Trustee and the Transferor from and
against any and all costs, expenses, losses, claims, damages and
liabilities to the extent that any such cost, expense, loss, claim, damage
or liability arose out of, or was imposed upon any such Person through, the
negligence, willful misfeasance or bad faith of the Servicer in the
performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement or on account
of the failure of the Servicer to be qualified to do business as a foreign
corporation or to have obtained a license or approval in any jurisdiction.
(d) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers, directors
and agents from and against all costs, expenses, losses, claims, damages
and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties herein, and in the case
of the Owner Trustee, in the Trust Agreement, and in the case of the
Indenture Trustee, the Indenture, except to the extent that any such cost,
expense, loss, claim, damage or liability: (i) shall be due to the willful
misfeasance, bad faith or negligence of the Owner Trustee or the willful
misfeasance, bad faith or negligence of the Indenture Trustee, as
applicable; or (ii) shall arise from the breach by the Owner Trustee of any
of its representations or warranties set forth in Section 6.03 of the Trust
Agreement.
47
(e) The Servicer shall pay any and all taxes levied or assessed upon
all or any part of the Owner Trust Estate, other than any taxes asserted
with respect to, and as of the date of, the transfer of the Receivables to
the Issuer or the Transferor or the issuance and original sale of the
Notes, or Federal or other income taxes arising out of distributions on the
Notes.
For purposes of this Section, in the event of the termination of the rights
and obligations of MCC (or any successor thereto pursuant to Section 7.03) as
Servicer pursuant to Section 8.01, or a resignation by such Servicer pursuant to
this Agreement, such Servicer shall be deemed to be the Servicer pending
appointment of a successor Servicer (other than the Indenture Trustee) pursuant
to Section 8.02.
Indemnification under this Section shall survive the resignation or removal
of the Owner Trustee or the Indenture Trustee or the termination of this
Agreement and shall include reasonable fees and expenses of counsel and expenses
of litigation if the indemnitee prevails in any action for which indemnification
is sought. If the Servicer shall have made any indemnity payments pursuant to
this Section and the Person to or on behalf of whom such payments are made
thereafter collects any of such amounts from others, such Person shall promptly
repay such amounts to the Servicer, without interest.
SECTION 7.03. Merger or Consolidation of, or Assumption of the Obligations
of, Servicer. Any Person (a) (i) into which the Servicer may be merged or
consolidated, (ii) which may result from any merger or consolidation to which
the Servicer shall be a party, (iii) which may succeed to the properties and
assets of the Servicer substantially as a whole, or (iv) which is a corporation
50% or more of the voting stock of which is owned, directly or indirectly, by
Metropolitan Life Insurance Company, and (b) in the case of any of (i), (ii),
(iii) or (iv), which has executed an agreement of assumption to perform every
obligation of the Servicer hereunder, shall be the successor to the Servicer
under this Agreement without further act on the part of any of the parties to
this Agreement; provided, however, that (w) immediately after giving effect to
such transaction, no Servicer Default, and no event which, after notice or lapse
of time, or both, would become a Servicer Default shall have occurred and be
continuing, (x) the Servicer shall have delivered to the Owner Trustee and the
Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent provided
for in this Agreement relating to such transaction have been complied with, (y)
the Rating Agency Condition shall have been satisfied with respect to such
transaction and (z) the Servicer shall have delivered to the Owner Trustee and
the Indenture Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Owner Trustee and the Indenture
Trustee, respectively, in the Receivables and reciting the details of such
filings or (B) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interests. Notwithstanding
anything herein to the contrary, the execution of the foregoing agreement of
assumption and compliance with clauses (w), (x), (y) and (z) above shall be
conditions to the consummation of the transactions referred to in clause (a)(i),
(a)(ii), (a)(iii), or (a)(iv) above.
48
Following the effectiveness of the succession provided for in this Section
7.03, the predecessor Servicer shall be released from any obligations and
liabilities provided for under the Basic Documents other than any obligations
or liabilities incurred by such predecessor Servicer prior to the
effectiveness of such succession.
SECTION 7.04. Limitation on Liability of Servicer and Others. Neither the
Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Issuer or the Noteholders, except
as provided under this Agreement, for any action taken or for refraining from
the taking of any action pursuant to this Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Servicer or any
such person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties under this Agreement.
The Servicer and any director or officer or employee or agent of the Servicer as
the case may be, may rely in good faith on any document of any kind prima facie
properly executed and submitted by any person respecting any matters arising
under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its duties to service the Receivables 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 other Basic
Documents and the rights and duties of the parties to this Agreement and the
other Basic Documents and the interests of the Noteholders under the Indenture.
SECTION 7.05. MCC Not To Resign as Servicer. Subject to the provisions of
Section 7.03, MCC shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon determination that
the performance of its duties under this Agreement shall no longer be
permissible under applicable law (if it is also determined that such
determination may not be reversed). Notice of any such determination permitting
the resignation of MCC shall be communicated to the Owner Trustee and the
Indenture Trustee at the earliest practicable time (and, if such communication
is not in writing, shall be confirmed in writing at the earliest practicable
time) and any such determination shall be evidenced by an Opinion of Counsel to
such effect delivered to the Owner Trustee and the Indenture Trustee
concurrently with or promptly after such notice. No such resignation shall
become effective until the Indenture Trustee or a successor Servicer shall have
assumed the responsibilities and obligations of MCC in accordance with Section
8.02.
49
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer (i) to deliver to the Indenture Trustee
for deposit in any of the Trust Accounts any required payment or (ii) to direct
the Indenture Trustee to make any required distribution therefrom in either case
that shall continue unremedied for a period of three Business Days after written
notice of such failure is received by the Servicer from the Owner Trustee or the
Indenture Trustee or after discovery of such failure by an officer of the
Servicer; or
(b) failure on the part of the Servicer duly to observe or to perform in
any material respect any other covenants or agreements of the Servicer set forth
in this Agreement or any other Basic Document, which failure shall (i)
materially and adversely affect the rights of Noteholders and (ii) continues
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given (A) to
the Servicer by the Owner Trustee or the Indenture Trustee or (B) to the
Servicer, and to the Owner Trustee and the Indenture Trustee by the Holders of
Class A Notes evidencing not less than 25% of the Outstanding Amount of the
Class A Notes; or
(c) an Insolvency Event occurs with respect to the Servicer;
then, and in each and every case, so long as the Servicer Default shall not have
been remedied, either the Indenture Trustee, or the Holders of Class A Notes
evidencing not less than 25% of the Outstanding Amount of the Class A Notes, by
notice then given in writing to the Servicer (and to the Indenture Trustee and
the Owner Trustee if given by the Class A Noteholders) may terminate all the
rights and obligations (other than the obligations set forth in Section 7.02
hereof) of the Servicer under this Agreement (a "Servicer Termination Event").
On or after the receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement, whether with respect to the
Notes or the Receivables or otherwise, shall, without further action, pass to
and be vested in the Indenture Trustee or such successor Servicer as may be
appointed under Section 8.02; and, without limitation, the Indenture Trustee and
the Owner Trustee are hereby authorized and empowered to execute and deliver, on
behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and related documents, or otherwise. The predecessor Servicer shall cooperate
with the successor Servicer, the Indenture Trustee and the Owner Trustee in
effecting the termination of the responsibilities and rights of the predecessor
Servicer under this Agreement, including the transfer to the successor Servicer
for administration by it of all cash amounts that shall at the time be held by
the predecessor Servicer for deposit, or shall thereafter be received by it with
respect to a Receivable. All reasonable costs and expenses
50
(including reasonable attorneys' fees) incurred in connection (x) with
transferring the computer or other records to the successor Servicer in the
form requested and (y) amending this Agreement to reflect such succession as
Servicer pursuant to this Section shall be paid by the predecessor Servicer
upon presentation of reasonable documentation of such costs and expenses.
Upon receipt of notice of the occurrence of a Servicer Default, the Owner
Trustee shall give notice thereof to the Rating Agencies.
SECTION 8.02. Appointment of Successor.
(a) Upon the Servicer's receipt of notice of termination, pursuant to
Section 8.01 or the Servicer's resignation in accordance with the terms of this
Agreement, the predecessor Servicer shall continue to perform its functions as
Servicer under this Agreement, in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the earlier of (x) the date 45 days from the delivery to the
Owner Trustee and the Indenture Trustee of written notice of such resignation
(or written confirmation of such notice) in accordance with the terms of this
Agreement and (y) the date upon which the predecessor Servicer shall become
unable to act as Servicer, as specified in the notice of resignation and
accompanying Opinion of Counsel. In the event of the Servicer's termination
hereunder, the Indenture Trustee shall appoint a successor Servicer, and the
successor Servicer shall accept its appointment by a written assumption in form
acceptable to the Owner Trustee and the Indenture Trustee. In the event that a
successor Servicer has not been appointed at the time when the predecessor
Servicer has ceased to act as Servicer in accordance with this Section, pending
the appointment of and acceptance by a successor Servicer, the Indenture Trustee
without further action shall automatically be appointed and serve as the
successor Servicer and the Indenture Trustee shall be entitled to the Servicing
Fee and the Servicer's Yield. Notwithstanding the above, the Indenture Trustee
shall, if it shall be legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint, any established institution who has
demonstrated its capability to service the Receivables to the satisfaction of
the Indenture Trustee, as the successor to the Servicer under this Agreement,
having a net worth of not less than $50,000,000 and whose regular business shall
include the servicing of receivables comparable with the Receivables, as the
successor to the Servicer under this Agreement.
The Indenture Trustee, acting in its capacity as successor Servicer, and
any successor Servicer appointed by it, shall have no responsibility or
obligation (i) for any breach by any predecessor Servicer of any of its
representations and warranties, or (ii) any acts or omissions of MCC or any
other Servicer prior to its termination or resignation.
(b) Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor servicer) shall be the successor in all respects to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer and shall be entitled to the Servicing Fee and the
Servicer's Yield accruing or collected, as the case may be, after the successor
Servicer becomes the Servicer, as set forth above, and all the rights granted to
the predecessor Servicer by the terms and provisions of this Agreement.
51
(c) Subject to the Indenture Trustee's right to appoint a successor
Servicer pursuant to Section 8.02(a) after the Indenture Trustee has become the
Servicer pending the appointment of and acceptance by a successor Servicer, the
Servicer may not resign unless it is prohibited from serving as such by law.
(d) Notwithstanding any other provision of this Agreement, neither the
Indenture Trustee nor any successor Servicer shall be deemed in default, breach
or violation of this Agreement as a result of the failure of MCC or any Servicer
(i) to cooperate with the Indenture Trustee or any successor Servicer pursuant
to Section 8.01, (ii) to deliver funds required to be deposited to any Trust
Account, or (iii) to deliver files or records relative to the Receivables as may
be requested by the Indenture Trustee or successor Servicer.
SECTION 8.03. Notification to Noteholders. Upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article VIII, the
Owner Trustee shall give prompt written notice thereof to the Rating Agencies
and the Indenture Trustee and the Indenture Trustee shall give prompt written
notice thereof to the Noteholders in the manner provided for in the Indenture.
SECTION 8.04. Waiver of Past Defaults. The Holders of Class A Notes
evidencing not less than a majority of the Outstanding Amount of the Class A
Notes may, on behalf of all Noteholders, waive in writing any default by the
Servicer in the performance of its obligations hereunder and its consequences,
except a default in making any required deposits to or payments from any of the
Trust Accounts in accordance with this Agreement. Upon any such waiver of a
past default, such default shall cease to exist, and any Servicer Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto.
ARTICLE IX
EARLY AMORTIZATION EVENTS; OPTIONAL ACQUISITION
SECTION 9.01. Early Amortization Events. If any of the following events
shall occur during the Revolving Period:
(a) failure on the part of the Transferor or the Servicer to make any
payment or deposit under this Agreement or the Contribution and Sale Agreement
on or before the date occurring three Business Days after such payment or
deposit is required to be made;
(b) failure on the part of the Transferor or the Servicer to duly observe
or perform in any material respect any other covenants or agreements of the
Transferor or the Servicer set forth in this Agreement or the Contribution and
Sale Agreement, which failure materially and adversely affects the rights of the
Class A Noteholders and which continues unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given (A) to the Transferor or the Servicer (as the
case may be)
52
by the Owner Trustee or the Indenture Trustee or (B) to the Servicer or the
Transferor (as the case may be) and the Owner Trustee and the Indenture
Trustee by the Holders of Class A Notes evidencing not less than 25% of the
Outstanding Amount of the Class A Notes;
(c) any representation or warranty made by MCC in the Contribution and
Sale Agreement or by the Transferor or the Servicer in this Agreement or any
information in the Receivables Schedule (x) shall prove to be incorrect in any
material respect when made or when delivered, (y) which continues to be
incorrect in any material respect for a period of 60 days after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to (A) MCC, the Transferor or the Servicer (as the case may be)
by the Owner Trustee or the Indenture Trustee or (B) MCC, the Transferor or the
Servicer (as the case may be) and the Owner Trustee and the Indenture Trustee by
Holders of Class A Notes evidencing not less than 25% of the Outstanding Amount
of the Class A Notes and (z) as a result of which the interest of the Class A
Noteholders are materially and adversely affected; provided, that an Early
Amortization Event shall not be deemed to occur pursuant to this subparagraph
(c) if MCC, the Transferor or the Servicer (as the case may be) shall have
acquired the relevant Receivable pursuant to Section 6.02(a)(i) of the
Contribution and Sale Agreement or Section 3.02 or 4.07 (as applicable) by
depositing the related Acquisition Amount in the Collection Account pursuant to
Section 5.03;
(d) an Insolvency Event shall occur with respect to MCC or the Transferor;
(e) the Transferor or the Trust shall become subject to registration as an
"investment company" under the Investment Company Act of 1940, as amended;
(f) the Pool Balance shall be less than the outstanding principal amount
of the Notes for any three consecutive Distribution Dates;
(g) a Servicer Termination Event shall occur;
(h) the amount on deposit in the Reserve Account shall be less than the
Specified Reserve Account Balance for any [three] consecutive Distribution
Dates; or
(i) an Event of Default shall have occurred and be continuing and the
Notes shall be declared immediately due and payable;
(j) the average of the Trust Yields for any three consecutive Collection
Periods is less than the average of the Base Rates for such period; or
(k) the Cumulative Net Loss Ratio shall exceed [__]%.
then (but in the case of any event described in subparagraph (a), (b) or (c)
after any applicable grace period) an early amortization event (an "Early
Amortization Event") shall have occurred.
SECTION 9.02. Optional Acquisition of All Receivables. If on the last day
of any Collection Period the Pool Balance is less than 10% of the Initial Pool
Balance, the
53
Transferor shall have the option to acquire the Owner Trust Estate, other
than the Trust Accounts, which acquisition shall be effective as of such last
day; provided, that the Transferor may not effect any such acquisition so
long as the rating on Transferor's long-term debt obligations is either
non-existent or is less than Baa3 by Moody's, unless the Owner Trustee and
the Indenture Trustee shall have received an Opinion of Counsel to the effect
that such acquisition would not constitute a fraudulent conveyance or
transfer. To exercise such option, (x) the Transferor shall deliver notice
of such intention to the Indenture Trustee at least 15 days prior to the next
succeeding Distribution Date and (y) the Transferor shall deposit in the
Collection Account on or prior to the second Business Day prior to such next
succeeding Distribution Date an amount equal to the aggregate Acquisition
Amount for the Receivables (including Defaulted Receivables) pursuant to
Section 5.03, and shall succeed to all interests in and to the Trust.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment. The Agreement may be amended by the Transferor,
the Servicer and the Trust, with the consent of the Indenture Trustee, but
without the consent of any of the Noteholders, to cure any ambiguity, to correct
or supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions in
this Agreement or of modifying in any manner the rights of the Noteholders;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel delivered to the Owner Trustee and the Indenture Trustee, adversely
affect in any material respect the interests of any Noteholder.
This Agreement may also be amended from time to time by the Transferor, the
Servicer and the Trust, with the consent of the Indenture Trustee, the consent
of the Holders of Class A Notes evidencing not less than a majority of the
Outstanding Amount of the Class A Notes, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Noteholders;
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that shall be required to be made for
the benefit of the Noteholders or (b) reduce the aforesaid portion of the
Outstanding Amount of the Class A Notes, the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all the
outstanding Class A Notes.
Prior to the execution of any such amendment or consent, the Servicer shall
furnish written notification of the substance of such amendment or consent to
each of the Rating Agencies. Promptly after the execution of any such amendment
or consent, the Servicer shall furnish written notification of the substance of
such amendment or consent to the Indenture Trustee.
54
It shall not be necessary for the consent of Noteholders pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and the Opinion of Counsel referred to in Section
10.02(i)(1). The Owner Trustee and the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's or
the Indenture Trustee's, as applicable, own rights, duties or immunities under
this Agreement or otherwise.
SECTION 10.02. Protection of Title to Trust.
(a) The Transferor shall take all actions necessary (other than delivery of
the original Contracts), and the Issuer shall cooperate with the Transferor, if
applicable, to perfect, and maintain perfection of, the interests of the Issuer
and the Indenture Trustee in the Receivables. In the event it is determined
that the Indenture Trustee's or the Issuer's interests are no longer perfected,
such actions shall include but shall not be limited to enforcement of the terms
of Section 6.02 of the Contribution and Sale Agreement. In addition, without
limiting the rights of the Indenture Trustee or the Issuer specified in the
immediately preceding sentence, the Transferor shall execute and file and cause
to be executed and filed such financing statements and continuation statements,
all in such manner and in such places as may be required by law fully to
perfect, maintain, and protect the interest of the Issuer and the interest of
the Indenture Trustee in the Receivables and in the proceeds thereof. The
Transferor shall deliver (or cause to be delivered) to the Owner Trustee and the
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) The Transferor shall not change its name, identity or corporate
structure in any manner that would, could or might make any financing statement
or continuation statement filed in accordance with paragraph (a) above or
otherwise seriously misleading within the meaning of Section 9-402(7) of the UCC
(regardless of whether such a filing was ever made), unless it shall have given
the Owner Trustee and the Indenture Trustee at least five days' prior written
notice thereof and, if applicable, shall have timely filed appropriate
amendments to any and all previously filed financing statements or continuation
statements (so that the interest of the Issuer or the Indenture Trustee is not
adversely affected).
(c) Each of the Transferor and the Servicer shall have an obligation to
give the Owner Trustee and the Indenture Trustee at least 60 days' prior written
notice of any relocation of its principal executive office if, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement or
of any new financing statement (regardless of whether such a filing was ever
made) and shall promptly, if applicable, file any such amendment. The Servicer
shall at all times
55
maintain each office from which it shall service Receivables, and its
principal executive office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Receivable, including payments and Recoveries made
and payments owing (and the nature of each) and (ii) reconciliation between
payments or Recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Collection Account in respect of such
Receivable.
(e) The Servicer shall maintain its Receivable Management System so that,
from and after the time of transfer under this Agreement of the Receivables, the
Servicer's Receivable Management System (including any backup archives) that
refer to a Receivable shall indicate clearly the interest of the Issuer (which
interest has been acquired from the Transferor) and the Indenture Trustee in
such Receivable and that such Receivable is owned by or has been pledged to the
Issuer and has been pledged to the Indenture Trustee. Indication of the
Issuer's interest (which interest has been acquired from the Transferor) and the
Indenture Trustee's interest in a Receivable shall be deleted from or modified
on the Servicer's Receivable Management System when, and only when, the related
Receivable shall have been paid in full or reacquired.
(f) If at any time the Transferor or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in receivables
comparable with the Receivables, to any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender or
other transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been transferred and
is owned by or has been pledged to the Issuer and has been pledged to the
Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and its agents at any
time following reasonable notice and during normal business hours to inspect,
audit and make copies of and abstracts from the Servicer's records regarding any
Receivable.
(h) Upon reasonable request, the Servicer shall furnish to the Owner
Trustee or to the Indenture Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(1) promptly after the execution and delivery of this Agreement and of
each amendment thereto, an Opinion of Counsel either (A) stating that, in
the opinion of such counsel, all actions (other than delivering the
original Contracts) have been taken that are necessary fully to perfect the
interests of the Owner Trustee and the Indenture Trustee in the
Receivables, and reciting the details of such action or referring to prior
56
Opinions of Counsel in which such details are given, or (B) stating that,
in the opinion of such counsel, no such action shall be necessary to
perfect such interest; and
(2) within 90 days after the beginning of each calendar year beginning
with the first calendar year beginning more than three months after the
Initial Cut-off Date, an Opinion of Counsel, dated as of a date during such
90-day period, either (A) stating that, in the opinion of such counsel, all
actions (other than the delivery of the original Contracts) have been
taken, and, if applicable, all financing statements and continuation
statements have been executed and filed, that are necessary fully to
perfect the interests of the Owner Trustee and the Indenture Trustee in the
Receivables and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (B) stating that,
in the opinion of such counsel, no such action shall be necessary to
perfect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to perfect such interest.
(j) The Transferor shall, to the extent required by applicable law, cause
the Class A Notes to be registered with the Commission pursuant to Section 12(b)
or Section 12(g) of the Exchange Act within the time periods specified in such
sections.
SECTION 10.03. Notices. All demands, notices and communications upon or to
the Transferor, the Servicer, the Issuer, the Owner Trustee, the Indenture
Trustee or the Rating Agencies under this Agreement shall be in writing,
personally delivered or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt (a) in the case of the
Transferor, to MetLife Capital Funding Corp. III, 10900 NE 4th Street, Box ___,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, (b) in the case of the Servicer, to MetLife Capital
Corporation, ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, (c) the case
of the Issuer or the Owner Trustee, at the "Corporate Trust Office" (as defined
in the Trust Agreement), (d) in the case of the Indenture Trustee, at the
Corporate Trust Office, (e) in the case of Moody's, to ▇▇▇▇▇'▇ Investors
Service, Inc., ABS Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ and (f) in the case of Standard & Poor's, to Standard & Poor's Ratings
Services, ▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of Asset
Backed Surveillance Department, or, as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
SECTION 10.04. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.04 and 7.03 and as provided
in the provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Transferor or the Servicer.
SECTION 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Transferor, the Servicer, the
Issuer, the Owner Trustee, the Indenture Trustee and the Noteholders, and
nothing in this Agreement, whether express or implied,
57
shall be construed to give to any other Person any legal or equitable right,
remedy or claim in the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION 10.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.07. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.08. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 10.09. 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, REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.10. Assignment to Indenture Trustee. The Transferor 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 the other property constituting
the Owner Trust Estate and/or the assignment of any or all of the Issuer's
rights and obligations hereunder to the Indenture Trustee.
SECTION 10.11. Nonpetition Covenants.
(a) Notwithstanding any prior termination of this Agreement, the Servicer,
the Transferor, the Owner Trustee and the Indenture Trustee (in its capacity as
Indenture Trustee) shall not, prior to the date which is one year and one day
after the termination of this Agreement with respect to the Issuer, acquiesce,
petition or otherwise invoke or cause the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Issuer under any Federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Issuer.
(b) Notwithstanding any prior termination of this Agreement, the Servicer,
the Issuer, the Owner Trustee and the Indenture Trustee shall not, prior to the
date which is one year and
58
one day after the termination of this Agreement with respect to the
Transferor, acquiesce, petition or otherwise invoke or cause the Transferor
to invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Transferor under any Federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Transferor or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Transferor.
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by [owner trustee] not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer, and in no
event shall [owner trustee] in its individual capacity 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
Articles V, VI and VII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been acknowledged and accepted by [indenture trustee] not in its
individual capacity but solely as Indenture Trustee, and in no event shall
[indenture trustee] 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.
[Signature page to follow]
59
IN WITNESS WHEREOF, the parties hereto have caused this Transfer and
Servicing Agreement to be duly executed by their respective officers as of the
day and year first above written.
METLIFE CAPITAL EQUIPMENT LOAN TRUST
[Series Designation]
By: [OWNER TRUSTEE]
not in its individual capacity but solely as Owner
Trustee on behalf of the Trust,
By:
----------------------------------------------
Name:
Title:
METLIFE CAPITAL FUNDING CORP. III,
Transferor,
By:
----------------------------------------------
Name:
Title:
METLIFE CAPITAL CORPORATION,
Servicer,
By:
----------------------------------------------
Name:
Title:
Acknowledged and Accepted:
[INDENTURE TRUSTEE]
not in its individual capacity
but solely as Indenture Trustee
By:
--------------------------------
Name:
Title:
[Signature Page to Transfer and Servicing Agreement]