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EXHIBIT 10.1
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TRUST AND SECURITY AGREEMENT
among
GF FUNDING CORP. IV
(the "Transferor")
GRANITE FINANCIAL, INC.
(the "Servicer")
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
(the "Trustee")
and
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
(the "Back-up Servicer")
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Dated as of December 1, 1997
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TABLE OF CONTENTS
Page
ARTICLE ONE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE TWO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
THE CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.01 Form Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.02 Series; Denomination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.03 Formation, Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . . 26
Section 2.04 Temporary Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.05 Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.06 Limitation on Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.07 Mutilated, Destroyed, Lost or Stolen Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.08 Payment of Principal and Interest; Principal and Interest Rights Preserved . . . . . . . . . . . . . 29
Section 2.09 Persons Deemed Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.10 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.11 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE THREE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
FUNDINGS; CONVERSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 3.01 Fundings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 3.02 Funding Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 3.03 Procedure for Fundings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 3.04 Verification of Funding Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 3.05 Fundings by Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 3.06 Calculation of Rates; Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 3.07 Appointment of Certificate Funding Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE FOUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ISSUANCE OF CERTIFICATES; SUBSTITUTIONS OF COLLATERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.01 Conditions to Initial Issuance of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.02 Issuances of Additional Series of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 4.03 Perfection of Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.04 Substitution, Removal and Purchase of Lease Assets . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.05 Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 4.06 Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.07 Notice of Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.08 Nature of Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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ARTICLE FIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 5.01 Satisfaction and Discharge of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 5.02 Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE SIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 6.02 Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 6.03 Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . . . . . . 51
Section 6.04 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 6.05 Optional Preservation of Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.06 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.07 Trustee May Enforce Claims Without Possession of Certificates . . . . . . . . . . . . . . . . . . . 53
Section 6.08 Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 6.09 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 6.10 Unconditional Right of Certificateholders to Receive Principal and Interest . . . . . . . . . . . . 55
Section 6.11 Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 6.12 Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.13 Delay or Omission; Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.14 Control by MBIA or Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.15 Waiver of Certain Events by MBIA or Certificateholders . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.16 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.17 Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.18 Sale of Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.19 Action on Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE SEVEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 7.01 Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 7.02 Notice of Default and Other Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 7.03 Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 7.04 Not Responsible for Recitals or Issuance of Certificates . . . . . . . . . . . . . . . . . . . . . . 61
Section 7.05 May Hold Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 7.06 Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 7.07 Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.08 Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.09 Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.10 Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.11 Merger, Conversion, Consolidation or Succession to Business of Trustee . . . . . . . . . . . . . . . 65
Section 7.12 Co-Trustees and Separate Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.13 Rights with Respect to the Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 7.14 Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.15 Trustee to Hold Lease Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 7.16 Money for Certificate Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE EIGHT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
THE CERTIFICATE INSURANCE POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.01 Payments under the Certificate Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . 70
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ARTICLE NINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 9.01 Amendments without Consent of Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 9.02 Amendments and Modifications to Agreement with Consent of Certificateholders . . . . . . . . . . . . 72
Section 9.03 Execution of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 9.04 Effect of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 9.05 Reference in Certificates to Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE TEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
REDEMPTION OF CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 10.01 Redemption at the Option of the Transferor; Election to Redeem . . . . . . . . . . . . . . . . . . . 75
Section 10.02 Notice to Trustee; Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 10.03 Notice of Redemption by the Transferor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 10.04 Certificates Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 10.05 Release of Series Lease Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE ELEVEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
REPRESENTATIONS, WARRANTIES AND COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 11.01 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 11.02 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 11.03 Other Matters as to the Transferor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
ARTICLE TWELVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
ACCOUNTS AND ACCOUNTINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 12.01 Collection of Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 12.02 Collection Account; Redemption Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 12.03 Cash Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 12.04 Reports by Trustee to MBIA and Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . 90
ARTICLE THIRTEEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
PROVISIONS OF GENERAL APPLICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 13.01 General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 13.02 Acts of Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 13.03 Notices, etc., to Trustee, MBIA, Transferor and Servicer . . . . . . . . . . . . . . . . . . . . . . 91
Section 13.04 Notices to Certificateholders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Section 13.05 Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Section 13.06 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Section 13.07 Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 13.08 Benefits of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 13.09 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 13.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 13.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 13.12 Corporate Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 13.13 Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
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Section 13.14 MBIA Default or Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
EXHIBITS
A-1 Form of Class A Certificate
A-2 Form of Class B Certificate
B Form of Supplement to Trust and Security Agreement
C Form of Investment and Assumption Letter
D Form of GFIV Certificate
E Form of Funding Report
F Form of Funding Interval Report
G Form of Rate Event Report
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This TRUST AND SECURITY AGREEMENT (this "Agreement"), dated as of
December 1, 1997, is by and among GF Funding Corp. IV (the "Transferor"),
Granite Financial, Inc., as servicer (the "Servicer"), Norwest Bank Minnesota,
National Association, a national banking association, as back-up servicer (the
"Back-up Servicer"), and Norwest Bank Minnesota, National Association, a
national banking association, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Transferor has duly authorized the execution and delivery of this
Agreement to provide for the issuance of the Certificates issuable as provided
in this Agreement. All covenants and agreements made by the Transferor, the
Servicer, the Trustee and the Back-up Servicer herein are for the benefit and
security of the Holders of the Certificates and MBIA. The Transferor, the
Servicer, the Trustee and the Back-up Servicer are entering into this
Agreement, and the Trustee is accepting the trusts created hereby, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
All things necessary to make this Agreement a valid agreement of the
Transferor, the Servicer, the Trustee and the Back-up Servicer in accordance
with its terms have been done.
CONVEYANCE CLAUSE
The Transferor hereby transfers, assigns, sets over, and otherwise
conveys to the Trustee, for the ratable benefit of the Holders of the
Certificates and MBIA, all of the Transferor's rights, title and interest in
and to the following and any and all benefits accruing to the Transferor from
(but none of the obligations under): (a) the Lease Receivables and Lease
Contracts and all payments received on or with respect to the Lease Contracts
and Lease Receivables and due after the applicable Cut-Off Dates or Acquisition
Dates; (b) the Transferor's rights and interests in the Equipment and any
security interest in the Equipment not owned by the Transferor; (c) any rights
of the Transferor under each Insurance Policy related to the Lease Contracts or
the Equipment and Insurance Proceeds; (d) the Lease Acquisition Agreement, the
Broker Assignment Agreements and any other Transaction Documents to which the
Transferor is a party; (e) the Servicing Agreement; (f) all amounts from time
to time on deposit in the Collection Account, the Lockbox Account, the Cash
Collateral Account, the Redemption Account and the ACH Account (including any
Eligible Investments and other property in such accounts); (g) the Lease
Contract Files; (h) the Certificate Insurance Policies, except that the Holders
of the Class B Certificates shall have no right, title or interest in or to the
Certificate Insurance Policies; and (i) proceeds of the foregoing (including,
but not by way of limitation, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind, and
other forms of obligations and receivables which at any time constitute all or
part or are included in the proceeds of any of the foregoing), in each case
whether now owned or hereafter acquired, except that the Holders of the Class B
Certificates shall have no right, title or interest in proceeds of the
Certificate Insurance Policies (all of the foregoing being hereinafter referred
to as the "Trust Estate"). The foregoing transfer, assignment, set over and
conveyance does not constitute and is not intended to result in a creation or
an assumption by the Trustee, the Back-up Servicer, any Certificateholder or
MBIA of any obligation of the Transferor, the Company, the Servicer or any
other Person in connection with the Trust Estate or under any agreement or
instrument relating thereto. The trust created by the foregoing assignment
shall be known as the "GF Funding Corp. IV Master Trust."
The Trustee acknowledges its acceptance on behalf of the
Certificateholders and MBIA of all right, title and interest previously held by
the Transferor in and to the Trust Estate, and declares that it shall maintain
such right, title and interest in accordance with the provisions hereof and
agrees to perform
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the duties herein required to the best of its ability to the end that the
interests of the Certificateholders and MBIA may be adequately and effectively
protected.
ARTICLE ONE
DEFINITIONS
SECTION 1.01 DEFINITIONS.
Except as otherwise expressly provided herein or in the applicable
Supplement, or unless the context otherwise requires, the following terms have
the respective meanings set forth below for all purposes of this Agreement, and
the definitions of such terms are equally applicable both to the singular and
plural forms of such terms. Capitalized terms used herein but not otherwise
defined shall have the respective meanings assigned to such terms in the
Servicing Agreement or the Lease Acquisition Agreement.
"Accrual Date": With respect to any Series of Certificates, the date
upon which interest begins accruing on such Certificates, as specified in such
Certificates and the applicable Supplement.
"Accrual Period": With respect to any Series of Certificates, the
period beginning on the twenty sixth day of each month and ending on the twenty
fifth day of the immediately following month (but, in the case of the Accrual
Period that is applicable to (A) an Initial Payment Date, beginning on the
Accrual Date for such Series or (B) a Funding Amount, beginning on the Funding
Date for such Funding Amount).
"ACH": The National Automated Clearinghouse System.
"ACH Account": The account, if any, established by the Transferor for
the sole benefit of the Certificateholders and MBIA pursuant to Section
12.02(f) hereof and in compliance with Section 3.03(d) of the Servicing
Agreement, into which account shall be deposited payments related to the Lease
Receivables and as to which account the Trustee shall have the sole ability to
withdraw funds.
"ACH Bank": The bank, if any, specified in the Servicing Agreement so
long as such bank meets the requirements of a Trustee as set forth in Section
7.08 hereof.
"Acquisition Date": Any Delivery Date, Funding Date or date of
substitution of a Substitute Lease Contract, as applicable.
"Act": With respect to any Certificateholder, the meaning specified
in Section 13.02.
"Additional Lease Contract": Each Lease Contract acquired by the
Transferor on an Acquisition Date.
"Additional Principal Amount": The meaning specified in Section
12.02(d)(x) hereof.
"Additional Servicer Fee": The amount, if any, of the fee payable in
accordance with Section 6.02 of the Servicing Agreement to a successor Servicer
appointed pursuant to Section 6.02 of the Servicing Agreement that is in excess
of the Servicer Fee.
"Advance Rate": With respect to each Class of Certificates within each
Series, as defined in the
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related Supplement.
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control," when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Aggregate Initial Series IPB": The sum of the Initial Series IPBs for
all Series then Outstanding.
"Aggregate IPB": The sum of the Series IPB for all Series then
Outstanding.
"Agreement": This Agreement, as supplemented by Supplements, in the
form when originally executed and, if from time to time further supplemented or
amended by one or more amendments hereto pursuant to the applicable provisions
hereof, as so supplemented or amended. All references in this Agreement
designated "Articles," "Sections," "Subsections" and other subdivisions are to
the designated Articles, Sections, Subsections and other subdivisions of this
Agreement as originally executed, or if amended or supplemented, as so amended
and supplemented, and all references in a Supplement to the designated
"Articles," "Sections," "Subsections" and other subdivisions are to the
designated Articles, Sections, Subsections and other subdivisions of such
Supplement. The words "herein," "hereof," "hereunder" and other words of
similar import when not related to a specific subdivision of this Agreement,
refer to this Agreement as a whole and not to any particular Article, Section,
Subsection or other subdivision of this Agreement or any Supplement.
"Amended Lease Schedule": With respect to any Series Lease Schedule,
the list of Lease Contracts amending such Series Lease Schedule pursuant to any
substitution, repurchase, modification or Funding of Lease Contracts in
accordance with the terms hereof and the Lease Acquisition Agreement, and
accompanied by a Company Certificate or a GFIV Certificate, as applicable.
"Annualized Gross Default Rate": For any Due Period, twelve times the
ratio of (i) the sum of the Implicit Principal Balances as of the Calculation
Date occurring in such Due Period of all Lease Contracts that have become
Defaulted Lease Contracts (including any such Lease Contracts that have been
removed, repurchased or substituted) during such Due Period, to (ii) the
Aggregate IPB on the Calculation Date immediately preceding such Due Period.
"Authenticating Agent": Initially, the Trustee, and thereafter any
entity appointed by the Trustee pursuant to Section 7.14 hereof.
"Back-up Servicer": Norwest Bank Minnesota, National Association, and
all successors thereto.
"Back-up Servicer Fee": The fee payable on each Payment Date to the
Back-up Servicer in consideration for the Back-up Servicer's performance of its
duties pursuant to this Agreement and the Servicing Agreement as Back-up
Servicer, in an amount equal to the sum of the products of one-twelfth of the
applicable Back-up Servicer Fee Rate and the Outstanding Principal Amount for
each Series of Class A Certificates immediately following the preceding Payment
Date, provided, however, with respect to the Initial Payment Date for each
Series, the Back-up Servicer Fee shall equal the amount set forth in the
related Supplement.
"Back-up Servicer Fee Rate": With respect to each Series of
Certificates, the rate per annum specified in the applicable Supplement.
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"Benefit Plan Investor": The meaning set forth in 29 C.F.R. '
2510.3-101.
"Board of Directors": Either the board of directors of the Transferor
or of the Servicer, as the context requires, or any duly authorized committee
of such board.
"Board Resolution": A copy of a resolution certified by the Secretary
or an Assistant Secretary of the Transferor or of the Servicer to have been
duly adopted by its Board of Directors and to be in full force and effect on
the date of such certification and delivered to the Trustee.
"Broker Assignment Agreements": The assignments by which the Company
obtains an assignment of lease contracts and the related equipment from the
originating broker.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which member banks in the Federal reserve system, banking institutions in New
York City or in the city in which the principal place of business of the
Transferor or the Servicer or the corporate trust office of the Trustee is
located are authorized or obligated by law or executive order to close. In
addition, for purposes of draws on any Certificate Insurance Policy, a Business
Day also excludes any day on which MBIA is authorized or obligated by law or
executive order to close.
"Calculation Date": The last day of a Due Period, except that (a)
with respect to any calculations made regarding any Funding for any Series of
Certificates, the Calculation Date shall mean the Calculation Date that was the
basis for the most recent Monthly Servicer's Report; and (b) with respect to
any calculations made regarding the Initial Funding Amount for the first Series
or any Fundings that occur prior to delivery of the initial Monthly Servicer's
Report, the Calculation Date shall mean the Cut-Off Date for the Initial
Delivery Date.
"Cash Collateral Account": The trust account or accounts created and
maintained pursuant to Section 12.03 hereof.
"Certificate" or "Certificates": Any one of or collectively, all
Outstanding Series of Class A Certificates and Class B Certificates or all
Outstanding Certificates of any one Series or any one Class, as is consistent
with the context in which such term is used.
"Certificate Funding Administration Agreement": Unless otherwise
specified in the related Supplement, with respect to any Series of
Certificates, the administration agreement executed in connection therewith
among the Certificate Funding Administrator, the Servicer and the Transferor.
"Certificate Funding Administrator": Rothschild Inc., or any
successor Certificate Funding Administrator approved in writing by MBIA.
"Certificate Insurance Policy": Any certificate guaranty insurance
policy issued by MBIA and insuring a Series of Class A Certificates in
accordance with the terms thereof.
"Certificate Interest Rate": With respect to any Series of Class A
Certificates and each Floating Rate Tranche and Fixed Rate Tranche, the
applicable Floating Rate and Fixed Rate, respectively, and with respect to any
Series of Class B Certificates, the annual rate at which interest accrues on
Certificates of such Class and Series, as specified in the applicable
Supplement.
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"Certificate Purchase Agreement": Each Certificate Purchase Agreement
between the Transferor and one or more purchasers of Certificates.
"Certificate Register" and "Certificate Registrar": The respective
meanings specified in Section 2.05 hereof.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register.
"Class": With respect to each Series of Certificates, a separate
senior and, if elected by the Transferor, subordinated Class of Certificates
issued pursuant to this Agreement, designated as Class A Certificates and Class
B Certificates, respectively, with the specific terms identified in this
Agreement and in the applicable Supplements for such Series.
"Class A Advance Rate": With respect to each Series of Class A
Certificates, as specified in the related Supplement.
"Class A Certificates": Any Certificate within a Series denominated as
a Class A Certificate and which is Outstanding as of any date.
"Class A Funding Amount" : For any Series of Certificates, the product
of the Funding Amount and the Class A Percentage for such Series.
"Class A Percentage": With respect to each Series of Class A
Certificates, the percentage specified in the applicable Supplement.
"Class A Principal Distribution Amount": As to each Series of Class A
Certificates and
(a) as of each Payment Date prior to the Stated Maturity for such
Series, as specified in the related Supplement for such
Series, and
(b) as of the Stated Maturity of such Series of Class A
Certificates, an amount equal to the Outstanding Principal
Amount of such Class A Certificates as of such date.
"Class B Advance Rate": With respect to each Series of Class B
Certificates, as specified in the related Supplement.
"Class B Certificates": Any Certificate within a Series denominated
as a Class B Certificate and which is Outstanding as of any date.
"Class B Deposit": The amount, if any, required to be deposited by
the Transferor into the Cash Collateral Account in connection with the issuance
of any Series of Class B Certificates, as specified in the applicable
Supplement.
"Class B Funding Amount": For any Series of Certificates, the product
of the Funding Amount and the Class B Percentage for such Series.
"Class B Interest Rate": The annual rate at which interest accrues on
the Class B Certificates of any Series, as specified in such Certificates and
in the applicable Supplement for such Series.
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"Class B Percentage": With respect to each Series of Class B
Certificates, the percentage, if any, set forth in the related Supplement.
"Class B Principal Distribution Amount": Unless otherwise specified
in the related Supplement, as to each Series of Class B Certificates and as of
each Payment Date, an amount equal to all funds then available to be
distributed in accordance with the priorities set forth in Section 12.02(d)
hereof (in an amount not to exceed the Outstanding Principal Amount of such
Series of Class B Certificates, provided, however, that if more than one Series
of Class B Certificates are Outstanding, the Pro Rata Share of such amounts).
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The trust account or accounts created and
maintained pursuant to Section 12.02 hereof.
"Company": Granite Financial, Inc., and all successors thereto in
accordance with the Lease Acquisition Agreement.
"Company Certificate": An Officer's Certificate delivered by the
Company substantially in the form of Exhibit A to the Lease Acquisition
Agreement.
"Concentration Limits": The meaning specified in the Lease
Acquisition Agreement, provided, however, that with the prior written consent
of MBIA and notice to the Rating Agencies and Certificateholders, such
Concentration Limits may be increased or decreased.
"Controlling Holders": If any Class A Certificates are then
Outstanding, the Holders of not less than 51% of the Outstanding Principal
Amount of all Series of Class A Certificates; otherwise the Holders of not less
than 51% of the Outstanding Principal Amount of all Series of Class B
Certificates.
"Conversion Amount": With respect to each Conversion Date and any
Series of Class A Certificates in its Funding Period, the sum of (i) the
Outstanding Floating Tranche Balance for such Series and (ii) the amount of any
Funding made on such Conversion Date.
"Conversion Date": Unless otherwise specified in the related
Supplement, the close of business on the last day of each Funding Interval
(whether or not a Business Day), provided, however, that if a Funding
Termination Event occurs during a Funding Interval, the Conversion Date with
respect to such Funding Interval shall be the close of business on the last day
of the Accrual Period in which such Funding Termination Event has occurred.
"Conversion Rate": With respect to each Series of Class A
Certificates in a given Funding Interval, unless otherwise specified in the
related Supplement, the lesser of (i) the Treasury Rate in effect on the Reset
Date preceding the Conversion Date for such Funding Interval corresponding most
closely to the Weighted Average Life of the related Interval Pool, plus the
Fixed Rate Spread, converted to a monthly interest rate and (ii) the Maximum
Interest Rate.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at ▇▇▇ ▇▇▇▇▇▇ and Marquette Avenue, Minneapolis, Minnesota 55479-0070,
or at such other address as the Trustee may designate from time to time by
notice to MBIA, the Certificateholders and the Transferor, or the principal
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corporate trust office of any successor Trustee.
"Cumulative Gross Default Rate": For any Due Period, the sum of the
Implicit Principal Balances of all Defaulted Lease Contracts (such IPB
determined in the Due Period during which the Lease Contract became a Defaulted
Lease Contract), including any Lease Contracts that have been removed,
repurchased or substituted during such Due Period, divided by the Aggregate
Initial Series IPB.
"Customer": The lessee or obligor under any Lease Contract, including
any guarantor of such person and their respective successors and assigns.
"Cut-Off Date": With respect to any Series of Certificates, the
meaning specified in the applicable Supplement.
"Default": Any occurrence or circumstance which with notice or the
lapse of time or both would become an Event of Default.
"Defaulted Lease Contract": A Lease Contract shall become a Defaulted
Lease Contract at the earlier of (a) the Calculation Date on which such Lease
Contract becomes delinquent for a period of 151 or more days, or (b) the day on
which the Servicer determines in accordance with its customary practices that
it shall not make a Servicer Advance with respect to such Lease Contract, that
a prior Servicer Advance with respect to such Lease Contract is unrecoverable,
or that the remaining Scheduled Payments under the related Lease Contract are
uncollectible.
"Delinquent Lease Contract": For any Due Period, any Lease Contract
(a) as to which a full Scheduled Payment was not received when due by the
Servicer and remains unpaid as of the Calculation Date at the end of such Due
Period and (b) which is not a Defaulted Lease Contract.
"Delinquency Rate": For any Due Period, the ratio of (i) the sum of
the Implicit Principal Balances as of the Calculation Date occurring in such
Due Period of all Lease Contracts that are more than 60 days and less than 151
days delinquent, as of such Calculation Date (including any such Lease
Contracts that have been repurchased, removed or substituted during such Due
Period), to (ii) the Aggregate IPB on such Calculation Date (including any
such Lease Contracts that have been repurchased, removed or substituted during
such Due Period).
"Delivery Date": The date on which the Certificates of a Series are
first executed, authenticated and delivered, as specified in the applicable
Supplement.
"Determination Date": The third Business Day preceding each Payment
Date.
"Discount Rate": With respect to any Series of Certificates, the
meaning specified in the applicable Supplement.
"Dollar(s)": Lawful money of the United States of America.
"Due Date": With respect to each Lease Contract, each date on which
payment is due thereunder.
"Due Period": As to any Determination Date or Payment Date, the
period beginning on the first day and ending on the last day of the calendar
month preceding the month in which such Determination Date or Payment Date
occurs.
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"Electronic Ledgers": The electronic master records of all lease
contracts of the Company or the Servicer similar to and including the Lease
Contracts.
"Eligible Investments": Any and all of the following:
(a) direct obligations of, and obligations fully guaranteed by,
the United States of America, the Federal Home Loan Mortgage
Corporation, the Federal National Mortgage Association, the
Federal Home Loan Banks or any agency or instrumentality of
the United States of America the obligations of which are
backed by the full faith and credit of the United States of
America;
(b) (i) demand and time deposits in, certificates of deposit of,
banker's acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee
or its agent acting in their respective commercial capacities)
incorporated under the laws of the United States of America or
any State thereof and subject to supervision and examination
by federal and/or state authorities, so long as at the time of
such investment or contractual commitment providing for such
investment, such depository institution or trust company has a
short term unsecured debt rating in the highest available
rating category of S&P and Moody's and provided that each such
investment has an original maturity of no more than 365 days;
and provided that any such certificates of deposit must be
secured at all times by collateral described in clause (a)
above, such collateral must be held by a third party and the
Trustee must have a perfected first priority security interest
in such collateral, and (ii) any other demand or time deposit
or deposit which is fully insured by the Federal Deposit
Insurance Corporation;
(c) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (a) above and
entered into with a depository institution or trust company
(acting as a principal) rated in the highest available rating
category of S&P and Moody's provided, however, that collateral
transferred pursuant to such repurchase obligation must be of
the type described in clause (a) above and must (i) be valued
weekly at current market price plus accrued interest, (ii)
pursuant to such valuation, equal, at all times, 105% of the
cash transferred by the Trustee in exchange for such
collateral and (iii) be delivered to the Trustee or, if the
Trustee is supplying the collateral, an agent for the Trustee,
in such a manner as to accomplish perfection of a security
interest in the collateral by possession of certificated
securities.
(d) commercial paper having an original maturity of less than 365
days and issued by an institution having a short term
unsecured debt rating in the highest available rating category
of each of the Rating Agencies at the time of such investment;
(e) a guaranteed investment contract approved in writing by each
of the Rating Agencies and MBIA and issued by an insurance
company or other corporation having a long term unsecured debt
rating in the highest available rating category of each of the
Rating Agencies at the time of such investment;
(f) money market funds registered under the Investment Company Act
of 1940, as amended, whose shares are registered under the
Securities Act of 1933, and having ratings in the highest
available rating categories of S&P and Moody's at the time of
such investment
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which invest only in other Eligible Investments; any such
money market funds which provide for demand withdrawals being
conclusively deemed to satisfy any maturity requirement for
Eligible Investments set forth in this Agreement; and
(g) any investment approved in writing by each of the Rating
Agencies and MBIA.
The Trustee may purchase from or sell to itself or an affiliate, as principal
or agent, the Eligible Investments listed above. All Eligible Investments
shall be made in the name of the Trustee for the benefit of the
Certificateholders and MBIA.
"Eligible Lease Contract": A Lease Contract that satisfies the
selection criteria set forth in Section 3.01(a) of the Lease Acquisition
Agreement as of the applicable Acquisition Date.
"Equipment": The equipment leased to or pledged by the Customers
pursuant to the Lease Contracts, together with any replacement parts, additions
and repairs thereof, and any accessories incorporated therein and/or affixed
thereto.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended or any successor statute thereto.
"Event of Default": The meaning specified in Section 6.01 hereof.
"Existing Indebtedness": The meaning specified in the Lease
Acquisition Agreement.
"Expected Funding Termination Date": For each Series of Class A
Certificates and the Related Series of Class B Certificates, the date
specified in the related Supplements.
"Expected Maturity": With respect to any Series of Class B
Certificates, the meaning specified in the applicable Supplement.
"Final Due Date": With respect to each Lease Contract, the final Due
Date thereunder.
"Final Payment Date": With respect to any Certificate of a Series,
the date on which the final principal payment on such Certificate is made as
therein or herein provided, whether at the Stated Maturity or Expected
Maturity, as applicable, or by acceleration or redemption.
"First Period Interest": With respect to any Funding, the amounts, if
any, of interest that will accrue on the related Funding Amount for each Class,
at the applicable interest rate which will be the Floating Rate if the Funding
is under the Floating Rate Tranche, the Conversion Rate if under the Fixed Rate
Tranche and the Class B Interest Rate if under the Class B Certificates,
commencing on the Funding Date related to such Funding and ending on the last
day of the Accrual Period in which such Funding occurs.
"Fixed Rate": With respect to each Series of Class A Certificates, a
per annum rate equal to the lesser of (A) the weighted average of the Initial
Fixed Rate and each of the Conversion Rates established for the Interval Pools
relating to such Series, where such rates are weighted, respectively, by the
related Net Interval Pool IPB and (B) the Maximum Interest Rate.
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"Fixed Rate Spread": With respect to each Series of Class A
Certificates, as defined in the related Supplement.
"Fixed Rate Tranche": With respect to each Series of Class A
Certificates, the tranche under such Series of Certificates in a principal
amount which is equal to the Outstanding Fixed Tranche Balance for such Series.
"Floating Rate": With respect to each Series of Class A Certificates,
the lesser of (i) a per annum rate equal to the LIBOR Rate plus the applicable
Floating Rate Spread and (ii) the Maximum Interest Rate.
"Floating Rate Spread": With respect to each Series of Class A
Certificates, as defined in the related Supplement.
"Floating Rate Tranche": For a Series of Class A Certificates in its
Funding Period, the tranche under such Series of Certificates which is equal to
the Outstanding Floating Tranche Balance for such Series.
"Floor Percentage": With respect to each Series, the meaning specified
in the related Supplement for such Series.
"Funded Lease Contract": A Lease Contract acquired by the Transferor
on a Funding Date other than a Delivery Date.
"Funding": An extension of credit by a Class of Certificateholders to
the Transferor on a Funding Date with respect to such Series of Certificates.
"Funding Amount": As of any Funding Date for any Series of
Certificates, the amount, if any, by which the sum of (i) the Series IPB as of
such date (without taking into account the Funding IPB for such Funding Date)
and (ii) the Funding IPB for such Funding Date, exceeds the sum of (A) the
Series Required Collateralization Amount and (B) the Outstanding Principal
Amount of the Class A Certificates and Class B Certificates, if any, of such
Series.
"Funding Continuation Notice": With respect to a Series, the meaning,
if any, specified in the applicable Supplement.
"Funding Date": With respect to any Series of Certificates, any
Business Day on which the Transferor obtains a Funding hereunder, provided,
however, that unless otherwise specified in the applicable Supplement, Fundings
shall not occur more than once per month (exclusive of any Funding on the
Delivery Date for a Series).
"Funding Interval": With respect to each Series of Class A
Certificates, unless otherwise provided in the applicable Supplement, a
quarterly period commencing on the first day of an Accrual Period and ending on
the last day of the third consecutive Accrual Period thereafter.
"Funding Interval Report": A report substantially in the form of
Exhibit F hereto.
"Funding IPB": The sum of the Implicit Principal Balances of the
Lease Contracts to be acquired by or on behalf of the Transferor on any Funding
Date.
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"Funding Period": For each Series of Certificates, the period
beginning on the applicable Delivery Date and ending on the applicable Funding
Termination Date.
"Funding Report": A report substantially in the form of Exhibit E
hereto or, if the Funding occurs on a Conversion Date, in the form of the
Funding Interval Report.
"Funding Termination Date": With respect to any Series of
Certificates, the earlier of (a) the Expected Funding Termination Date, and (b)
the day of the occurrence of a Funding Termination Event.
"Funding Termination Event": With respect to any Series of
Certificates, the meaning specified in the applicable Supplement.
"GFIV Certificate": An Officer's Certificate delivered by the
Transferor substantially in the form of Exhibit D hereto.
"Guaranty Amounts": Any and all amounts paid by any guarantor
indicated on the applicable Lease Contract.
"Holder" or "Certificateholder": The person in whose name a
Certificate is registered in the Certificate Register.
"Implicit Principal Balance" or "IPB": As of any date of
determination, with respect to any Lease Contract, the present value of the
remaining stream of Scheduled Payments (reduced by the applicable Servicer Fee
but not reduced by any Additional Servicer Fee) due with respect to such Lease
Contract after the applicable Calculation Date, and calculated by discounting
such Scheduled Payments (assuming such Scheduled Payments are received on the
last day of the related Due Period) to such Calculation Date at an annual rate
equal to the applicable Discount Rate, at the same frequency as the Payment
Dates; except that on the Calculation Date, (a) on or immediately following the
deposit into the Collection Account of any Insurance Proceeds (and the
termination of the related Lease Contract) or the Removal Price, or on or
immediately following the delivery of a Substitute Lease Contract, (b)
immediately on or after the date that a Lease Contract has become a Defaulted
Lease Contract, or (c) immediately preceding the Final Payment Date, the
Implicit Principal Balance of each such related Lease Contract shall be zero.
To the extent that the Final Due Date of any Series Lease Contract is later
than the Stated Maturity of the last maturing Certificates of the related
Series of Class A Certificates, any Scheduled Payments due on such Lease
Contract after the Calculation Date immediately preceding such Stated Maturity
shall not be taken into account in calculating the Implicit Principal Balance
of such Lease Contract.
"Independent": When used with respect to any specified Person means
such a Person, who (a) is in fact independent of the Transferor, (b) does not
have any direct financial interest or any material indirect financial interest
in the Transferor or in any Affiliate of the Transferor and (c) is not
connected with the Transferor as an officer, employee, promoter, underwriter,
trustee, partner, director, or person performing similar functions. Whenever
it is herein provided that any Independent Person's opinion or certificate
shall be furnished to the Trustee, such Person shall be appointed by a
Transferor Order and approved by the Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read this
definition and that the signer is Independent within the meaning hereof.
"Independent Accountants": Ehrhardt, Keefe, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, or any
firm of independent certified public accountants of recognized national
standing and reasonably acceptable to MBIA, or if an MBIA Default or
Termination has occurred and is continuing, the Controlling Holders.
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"Initial Delivery Date": The date on which the first Series of
Certificates are executed, authenticated and delivered.
"Initial Fixed Rate": With respect to each Series of Class A
Certificates, as defined in the related Supplement.
"Initial Funding Amount": With respect to each Series of
Certificates, as defined in the related Supplement.
"Initial Payment Date": With respect to each Series of Certificates,
as defined in the related Supplement.
"Initial Pool": With respect to each Series, all of the Lease
Contracts acquired by the Transferor with Fundings from Holders of Certificates
in that Series on the related Delivery Date.
"Initial Pool Balance": With respect to each Series of Certificates,
the Series IPB as of the related Delivery Date.
"Initial Series IPB": With respect to each Series of Certificates,
(i) during the Funding Period for such Series, the then Series IPB and (ii)
after the close of the Funding Period, the Series IPB as of the last day of the
Funding Period.
"Initial Series Lease Schedule": The listing of Lease Contracts and
related Equipment attached to the Company Certificate executed on the Delivery
Date with respect to each Series.
"Insurance Agreement": With respect to each Series of Class A
Certificates, the applicable Insurance Agreement related to such Series, by and
among MBIA, the Transferor, the Company, the Servicer, the Back-up Servicer,
the Trustee and the Certificate Funding Administrator, as amended or
supplemented in accordance with the terms thereof.
"Insurance Policy": With respect to an item of Equipment and the
related Lease Contract, any insurance policy maintained by the Customer
pursuant to the related Lease Contract that covers physical damage to the
Equipment or general liability (including policies procured by the Company or
the Servicer on behalf of the Customer).
"Insurance Proceeds": With respect to an item of Equipment and the
related Lease Contract, any amount received during the related Due Period
pursuant to an Insurance Policy issued with respect to such Equipment and such
Lease Contract, net of any costs of collecting such amounts not otherwise
reimbursed.
"Insurer": Any insurance company or other insurer providing any
Insurance Policy.
"Interval Pool": With respect to each Series of Certificates (i) the
Lease Contracts set forth in the Initial Series Lease Schedule relating to such
Series and (ii) for each Funding Interval for such Series, all of the Lease
Contracts acquired by the Transferor during such Funding Interval.
"Interval Pool IPB": With respect to each Series of Certificates and
each Interval Pool funded thereunder, as of the last Determination Date in the
related Funding Interval, the then outstanding IPB of
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the Lease Contracts in such Interval Pool.
"Investment and Assumption Letter": The letter required to be
delivered by each transferee of a Certificate, as provided in Section 2.06
hereof, substantially in the form of Exhibit C hereto.
"Lease Acquisition Agreement": The Lease Acquisition Agreement dated
as of December 1, 1997, by and between the Transferor and the Company, as
amended or supplemented from time to time in accordance with the terms thereof.
"Lease Assets": The meaning specified in the Lease Acquisition
Agreement.
"Lease Contract File": The meaning specified in the Lease Acquisition
Agreement.
"Lease Contracts": The lease contracts including all Loan Contracts
(and all rights with respect thereto, including all guaranties and other
agreements or arrangements of whatever character from time to time supporting
or securing payment of any Lease Contract and all rights with respect to any
agreements or arrangements with the vendors, dealers or manufacturers of the
Equipment to the extent specifically related to any Lease Contract) which are
identified either (i) on the Initial Series Lease Schedule delivered to the
Trustee and MBIA on a Delivery Date, or (ii) on an Amended Lease Schedule
delivered to the Trustee and MBIA on an Acquisition Date or on the date on
which Substitute Lease Contracts are delivered to the Trustee; provided that,
from and after the date on which a Lease Contract is repurchased, removed or
substituted by the Company or the Transferor in accordance with Section 4.04
hereof, such repurchased, removed or replaced Lease Contract shall no longer
constitute a Lease Contract for purposes of the Transaction Documents.
"Lease Receivables": With respect to any Lease Contract, all of, and
the right to receive all of (a) the Scheduled Payments, (b) any prepayments
made with respect of such Lease Contract, (c) any Guaranty Amounts, (d) any
Insurance Proceeds, (e) any Residual Proceeds, (f) any Overdue Payments, and
(g) any Recoveries.
"LIBOR Rate": Unless otherwise specified in the related Supplement,
with respect to each Series of Class A Certificates and each Accrual Period, an
interest rate per annum equal to the rate for London interbank offered
quotations for one-month Eurodollar deposits determined by the Trustee for such
Accrual Period as follows:
(a) On each Reset Date, the Trustee will determine the LIBOR Rate
on the basis of the rate for deposits in U.S. Dollars for a period of
one month that appears on the Telerate Page 3750 or Bloomberg MMR2 as
of 11:00 a.m. (London time) on such Reset Date. If such rate does not
appear on Telerate Page 3750 or Bloomberg MMR2, the rate for such
Reset Date will be determined on the basis of the rates at which
deposits in U.S. Dollars are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in
the London interbank market for a period of one month commencing on
that Reset Date. The Trustee will request the principal London office
of each of the Reference Banks to provide such a quotation.
(b) If, on any Reset Date, at least two Reference Banks provide
quotations when requested, the LIBOR Rate for such Reset Date will be
the arithmetic mean of the quotations so received.
(c) If, on any Reset Date, only one or none of the Reference Banks
provides such a quotation, the LIBOR Rate will be the arithmetic mean
of the offered rates quoted by major banks in New
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York City selected by the Trustee at approximately 11:00 a.m. (New
York City time) on such Reset Date for loans to leading European banks
in U.S. Dollars for a period of one month commencing on that Reset
Date.
(d) If, on any Reset Date, the LIBOR Rate cannot be calculated
pursuant to one of the above methods, the LIBOR Rate for such Reset
Date shall be the Maximum Interest Rate.
"Lien": The meaning specified in the Lease Acquisition Agreement.
"Liquidated Lease Receivable": A Lease Receivable that has been
liquidated pursuant to Section 3.01(b) of the Servicing Agreement.
"Loan Contract": A Lease Contract that evidences (for commercial law
purposes) a sale of the related Equipment to the Customer and the retention by
the lessor of a security interest in such Equipment.
"Lockbox Account": The meaning specified in the Servicing Agreement.
"London Banking Day": Any day on which dealings in deposits in
Dollars are transacted in the London interbank market.
"Material Affiliate": Any entity whose capital stock the Company has
majority ownership.
"Maximum Interest Rate": For each Series of Class A Certificates, as
defined in the related Supplement.
"Maximum Interval Amount": For each Series of Class A Certificates,
the maximum amount, if any that can be funded in any Funding Interval, as
specified in the related Supplement.
"Maximum Series Amount": For each Class and Series, as defined in the
related Supplement.
"MBIA": MBIA Insurance Corporation and any successor thereto.
"MBIA Default or Termination": The occurrence and continuance of any
of the following events:
(a) the failure by MBIA to make a payment under a Certificate
Insurance Policy in accordance with its terms;
(b) the occurrence of an "Insurer Insolvency," as that term is
defined in the Insurance Agreement, with respect to MBIA; or
(c) 124 days have lapsed since all Class A Certificates have been
paid in full, MBIA has been paid all amounts owed to it under
each Insurance Agreement, all Certificate Insurance Policies
have been surrendered to MBIA and the Insurance Agreements
have been terminated.
"MBIA Premium": The sum of all MBIA Premiums specified in each
Insurance Agreement.
"MBIA Premium Rate": With respect to each Series of Certificates, the
meaning specified in the applicable Insurance Agreement.
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"Minimum Funding Amount": With respect to each Series of Class A
Certificates, the minimum amount of the Class A Funding Amount for any Funding
Date, as specified in the applicable Supplement.
"Minimum Interval Amount": With respect to each Series of Class A
Certificates, the meaning specified in the applicable Supplement.
"Monthly Servicer's Report": The report prepared by the Servicer
pursuant to Section 4.01 of the Servicing Agreement.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. and its successors in
interest.
"Net Interval Pool IPB": With respect to each Interval Pool and as of
any date of determination, the then outstanding IPB of such Interval Pool.
"Net Worth Requirement" means either (A) the Servicer's consolidated
Tangible Net Worth shall not be less than (a) during the period from the
Initial Delivery Date through the fiscal year ending June 30, 1998, $20,600,000
plus 75% of the cumulative after tax consolidated net income since September
30, 1997, and (b) during each fiscal year ending thereafter, the sum of (i)
the Net Worth Requirement established as of the last day of the immediately
preceding fiscal year, plus (ii) 75% of the cumulative after tax consolidated
net income for each year thereafter, in each instance, such amount being
calculated without any offset or reduction for net losses incurred during the
fiscal year for which such calculation is being made or (B) if a change of
control occurs with respect to the Servicer, such other net worth requirement
as may be specified by MBIA in a written notice to the Transferor, the
Servicer, the Trustee, the Back-up Servicer, the Certificateholders and the
Rating Agencies.
"Nonrecoverable Advance": The meaning specified in the Servicing
Agreement.
"Officer's Certificate": A certificate signed by the Chairman of the
Board, the President, a Vice President, the Treasurer, the Controller, an
Assistant Controller or the Secretary of the company on whose behalf the
certificate is delivered, and delivered to the Trustee, which certificate shall
comply with the applicable requirements of Section 13.13 hereof. Unless
otherwise specified, any reference in this Agreement to an Officer's
Certificate shall be to an Officer's Certificate of the Transferor.
"Opinion of Counsel": A written opinion of outside counsel who shall
be reasonably satisfactory to the Trustee and MBIA and which opinion shall
comply with the applicable requirements of Section 13.13 hereof.
"Outstanding": With respect to Certificates, as of any date of
determination, all Certificates theretofore authenticated and delivered under
this Agreement except:
(a) Certificates theretofore canceled by the Certificate Registrar
or delivered to the Certificate Registrar for cancellation;
and
(b) Certificates in exchange for or in lieu of which other
Certificates have been authenticated and delivered pursuant to
this Agreement, unless proof satisfactory to the Trustee is
presented that any such Certificates are held by a bona fide
purchaser;
provided, however, that for purposes of disbursing payments from the
Certificate Insurance Policies and in determining whether the Holders of the
requisite Outstanding Principal Amount of Certificates have given
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any request, demand, authorization, direction, notice, consent or waiver
hereunder, Certificates owned by the Transferor or any other obligor upon the
Certificates or any Affiliate of the Transferor or the Servicer or such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, or waiver, only
Certificates which the Trustee knows to be so owned shall be so disregarded.
"Outstanding Fixed Tranche Balance": With respect to any Series of
Class A Certificates as of any date of determination, a principal amount equal
to the positive difference between (i) the sum of (a) the Initial Funding
Amount for such Class and Series and (b) the aggregate of all Conversion
Amounts for such Series and (ii) the sum of (A) the aggregate Class A Principal
Distribution Amounts attributable to Scheduled Payments on Lease Contracts
attributed to such Tranche that were distributed to Certificateholders of such
Series pursuant to Section 12.02(d)(vi) hereof, and (B) the aggregate
Additional Principal Amounts distributed to Certificateholders of such Series
pursuant to Section 12.02(d)(x) hereof.
"Outstanding Floating Tranche Balance": With respect to any Series of
Class A Certificates, as of the applicable Delivery Date, zero and thereafter,
as of any date of determination, an amount equal to the aggregate amount of all
Fundings made with respect to such Series through and including such date of
determination (but exclusive of the Initial Funding Amount for such Series or
any other Funding for such Series that is made directly under the Fixed Rate
Tranche for such Series), minus (A) the aggregate Class A Principal
Distribution Amounts attributable to Scheduled Payments on Lease Contracts
attributed to such Tranche that were distributed to Certificateholders of such
Series pursuant to Section 12.02(d)(vi) hereof, and (B) the aggregate all
amounts converted from the Floating Rate Tranche to the Fixed Rate Tranche for
such Series through and including such date of determination.
"Outstanding Principal Amount": With respect to (i) any Class A
Certificate or Series of Class A Certificates then Outstanding, as of any date
of determination, the sum of the Outstanding Floating Tranche Balance for such
Series and the Outstanding Fixed Tranche Balance for such Series and (ii) any
Class B Certificate or Series of Class B Certificates then Outstanding, the
unpaid principal amount of such Certificate or Class of Certificates.
"Overdue Payment": With respect to a Due Period and a Lease Contract
that is a Delinquent Lease Contract, all payments due in a prior Due Period
that the Servicer receives from or on behalf of a Customer during the related
Due Period on such Delinquent Lease Contract, including any Servicing Charges.
"Paying Agent": The Trustee or any other Person that meets the
eligibility standards for the Trustee specified in Section 7.08 hereof and is
authorized by the Transferor pursuant to Section 7.16 hereof to pay the
principal of, or interest on, any Certificates on behalf of the Transferor.
"Payment Date": For each Series, the twenty-sixth day of each
calendar month (or if such day is not a Business Day, the next succeeding
Business Day) commencing on the Initial Payment Date for such Series.
"Person": Any individual, corporation, partnership, association,
joint-stock company, limited liability company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency
or political subdivision thereof.
"Placement Agent": Rothschild Inc.
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"Pool": A pool of Eligible Lease Contracts funded on a Funding Date
or Delivery Date.
"Preference Claim": The meaning given in Section 8.01 hereof.
"Private Placement Memorandum" or "Final Private Placement
Memorandum": The Private Placement Memorandum, if any, related to any direct
or indirect offering of a Series of Certificates and having the date specified
in the applicable Supplement.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Pro Rata Share": With respect to:
(a) any distribution of the Class A Principal Distribution Amount
or the Additional Principal Amounts on any Series of Class A
Certificates on any Payment Date, a percentage, determined by
dividing:
(i) the decline in the related Series IPB since the
Calculation Date preceding the applicable Payment
Date, by
(ii) the decline in the Aggregate IPB since the
Calculation Date preceding the applicable Payment
Date;
(b) any distribution of interest on any Series of Class A
Certificates on any Payment Date, a percentage, determined by
dividing the amount of interest scheduled to be paid on such
Series of Class A Certificates by the amount of interest
scheduled to be paid on all Series of Class A Certificates on
such Payment Date;
(c) any distribution of the Class B Principal Distribution Amount
on any Series of Class B Certificates on any Payment Date, a
percentage, determined by dividing:
(i) the Outstanding Principal Amount of such Series of
Class B Certificates, by
(ii) the aggregate Outstanding Principal Amount of all
Series of Class B Certificates;
(d) any distribution of interest on any Series of Class B
Certificates on any Payment Date, a percentage, determined by
dividing the amount of interest scheduled to be paid on such
Series of Class B Certificates by the amount of interest
scheduled to be paid on all Series of Class B Certificates on
such Payment Date.
"PUT Payments": A provision in a Lease Contract obligating the lessee
to purchase the related Equipment upon termination.
"Rate Event": For any Series of Certificates, as specified in the
applicable Supplement.
"Rate Event Notice": shall mean notice of the occurrence of a Rate
Event as provided by a Holder of a Certificate to the Transferor, the Trustee,
the Certificate Funding Administrator, and MBIA, such notice to be provided by
facsimile.
"Rate Event Report": shall mean a report substantially in the form
attached hereto as Exhibit G.
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"Rating Agencies": Moody's and S & P.
"Record Date": The close of business on the last day of the month
preceding the applicable Payment Date, whether or not a Business Day, except
with respect to an Initial Payment Date, the Record Date shall be the related
Delivery Date.
"Recoveries": For any Due Period occurring after the date on which
any Lease Contract becomes a Defaulted Lease Contract and with respect to such
Defaulted Lease Contract, all payments that the Servicer received from or on
behalf of a Customer during such Due Period in respect of such Defaulted Lease
Contract or from liquidation or re-leasing of the related Equipment, including
but not limited to Scheduled Payments, Overdue Payments, Guaranty Amounts, and
Insurance Proceeds.
"Redemption Account": The trust account or accounts created and
maintained pursuant to Section 12.02(c) hereof.
"Redemption Date": A date fixed pursuant to Section 10.01 hereof.
"Redemption Price": With respect to any Class of Certificates being
redeemed pursuant to Article Ten hereof, and as of the related Redemption Date,
the Outstanding Principal Amount of such Class of Certificates, together with
interest accrued and unpaid thereon to but excluding the related Redemption
Date at the applicable Certificate Interest Rate (exclusive of installments of
interest and principal maturing on or prior to such date, payment of which
shall have been made or duly provided for to the Holder of such Certificate on
the applicable Record Date or as otherwise provided in this Agreement).
"Redemption Record Date": With respect to any redemption of
Certificates, a date fixed pursuant to Section 10.01 hereof.
"Reference Banks": For each Series of Class A Certificates, unless
otherwise specified in the applicable Supplement, four leading banks selected
by the Trustee that are engaged in transactions in eurodollar deposits in the
international Eurocurrency market, each of which shall have an established
place of business in London.
"Registered Holder": The Person whose name appears on the Certificate
Register on the applicable Record Date or Redemption Record Date.
"Reinvestment Income": Any interest or other earnings earned on all
or part of the Trust Estate.
"Related Series": As to each Series of Class B Certificates, the
Series of Class A Certificates which shall be designated in the Supplement for
such Series of Class B Certificates as its "Related Series"; and as to each
Series of Class A Certificates, one or more Series of Class B Certificates
which have been designated as having such Series of Class A Certificates as a
"Related Series."
"Removal Price": With respect to any Lease Contract repurchased by
the Company pursuant to Sections 2.06 or 3.03 of the Lease Acquisition
Agreement or removed by the Transferor pursuant to Section 4.04(d) hereof, the
sum of (a) the excess of the Implicit Principal Balance (computed without
giving effect to clauses (b) and (c) of the definition of "Implicit Principal
Balance") of the related Lease Receivable on the Calculation Date on or
immediately preceding the date when the Lease Contract is removed or
repurchased over the IPB of any Substituted Lease Contracts substituted
therefore, (b) any
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Scheduled Payments with respect to the Lease Contract due on or prior to such
Calculation Date but not received through such Calculation Date, and (c) with
respect to the related Equipment, the amount, if any, recorded in the books and
records of the Transferor as the "unguaranteed residual."
"Required Audits": With respect to each Series of Certificates, the
requirements set forth in the applicable Supplement.
"Reset Date": Unless otherwise specified in the related Supplement,
(i) with respect to First Period Interest, the third Business Day preceding a
Funding Date, (ii) with respect to the LIBOR Rate (other than the calculation
of any LIBOR Rate with respect to First Period Interest), the third Business
Day immediately preceding the commencement of each Accrual Period; provided,
however, that if such date is not both a Business Day and a London Banking Day,
the Reset Date shall be the first preceding day that is both a Business Day and
a London Banking Day and (iii) with respect to the Treasury Rate or the
Conversion Rate, the third business day preceding the Conversion Date or Rate
Event and (iv) with respect to the Fixed Rate, the Determination Date preceding
the related Payment Date.
"Residual Proceeds": With respect to a Lease Contract that is not a
Defaulted Lease Contract and the related Equipment, the net proceeds (including
Insurance Proceeds) of any sale, re-lease (including any lease renewal) or
other disposition of such Equipment or any periodic payment under the Lease
Contract for use of the Equipment after the initial term thereof.
"Responsible Officer": When used with respect to the Trustee, any
officer assigned to the Corporate Trust Department (or any successor thereto),
including any Vice President, Senior Trust Officer, Trust Officer, Assistant
Trust Officer, any Assistant Secretary, any Trust Officer or any other Officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and having direct responsibility for the
administration of this Agreement, and also, with respect to a particular
matter, any other officer, to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"S & P": Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc., and its successors in interest.
"Sale": The meaning specified in Section 6.18 hereof.
"Scheduled Payment": With respect to a Payment Date and a Lease
Contract, the periodic payment (inclusive of any amount in respect of stated
interest and any PUT Payments but exclusive of any amounts in respect of sales,
use property or similar taxes) set forth in such Lease Contract due from the
Customer in the related Due Period, calculated without regard to any
modification granted pursuant to Section 3.01(b)(v) of the Servicing Agreement.
"Series": A separate Series of Certificates issued pursuant to this
Agreement which is related to a specific Series Lease Schedule and which is
comprised of Class A Certificates and, if the Transferor so elects, Class B
Certificates.
"Series IPB": With respect to any Series of Certificates, the sum of
the Implicit Principal Balances of all related Series Lease Contracts.
"Series Lease Contracts": For each Series of Class A Certificates and
the Related Series of Class B Certificates, the Lease Contracts listed on the
related Series Lease Schedule.
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"Series Lease Schedule": For each Series of Certificates, the list of
Lease Contracts and Lease Receivables attached to the applicable Supplement for
such Series of Certificates, together with and as amended by all related
Amended Lease Schedules, each of which shall include with respect to each Lease
Contract: (a) a number identifying the Lease Contract, (b) the Implicit
Principal Balance, (c) the number identifying the Customer, (d) the State of
the Customer's billing address, (e) the original and remaining term, (f) the
Scheduled Payment and the frequency thereof, (g) the Equipment type, (h) the
zip code of the Customer's billing address, (i) the broker of the Lease
Contract, if any (j) whether such Lease Contract is a "true lease" or a Loan
Contract, (k) the amount of any PUT Payment and (l) any additional items
specified in the related Supplement.
"Series Required Collateralization Amount ": With respect to any
Series, (i) as of the Delivery Date for such Series, the amount specified in
the related Supplement; (ii) for purposes of calculating the Funding Amount for
such Series, one minus the sum of the applicable Class A Advance Rate and Class
B Advance Rate for such Series multiplied by the Series IPB (generally computed
by including any Lease Contracts to be acquired and excluding any Lease
Contracts to be released on such date of determination); and (iii) for any
other purpose for such Series, the greater of (A) one minus the Class A Advance
Rate for such Series multiplied by the Series IPB and (B) the Floor Percentage
multiplied by the Initial Series IPB.
"Servicer": Initially, the Company, and thereafter any successor
Servicer appointed pursuant to Section 6.02 of the Servicing Agreement.
"Servicer Advance": The meaning set forth in Section 3.04 of the
Servicing Agreement.
"Servicer Event of Default": The meaning set forth in the Servicing
Agreement.
"Servicer Fee": $6 per Scheduled Payment on each Lease Contract,
payable on each Payment Date. The Servicer Fee shall not include the
Additional Servicer Fee.
"Servicing Agreement": The Servicing Agreement dated as of December
1, 1997 by and among the Servicer, the Transferor, the Back-up Servicer and the
Trustee, as amended or supplemented from time to time in accordance with the
terms thereof.
"Servicing Charges": The sum of (a) all late payment charges paid by
Customers on Lease Contracts that are Delinquent Lease Contracts after payment
in full of any Scheduled Payments due in a prior Due Period and Scheduled
Payments for the related Due Period and (b) any other incidental charges or
fees received from a Customer, including but not limited to, late fees,
collection fees and bounced check charges.
"Servicing Officers": The persons listed on a certificate of the
Servicer from time to time delivered by the Servicer to the Transferor and the
Trustee.
"State": Any state of the United States of America and, in addition,
the District of Columbia and Puerto Rico.
"Stated Maturity": With respect to any Series of Class A
Certificates, the meaning specified in the applicable Supplement.
"Substitute Lease Contract": The meaning specified in the Lease
Acquisition Agreement.
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"Supplement": With respect to any Series, the supplement to this
Agreement in the form attached as Exhibit B hereto for any Series of Class A
Certificates and for any Series of Class B Certificates and pursuant to which
the terms of such Series are specified as provided in Section 2.02 hereof.
"Tangible Net Worth": The excess of (a) the tangible assets of the
Servicer and any subsidiaries calculated in accordance with generally accepted
accounting practices, as reduced by adequate reserves in each case where
reserves are proper, over (b) all indebtedness (including subordinated debt) of
the Servicer and its subsidiaries; provided, however, that (i) in no event
shall there be included in the above calculation any intangible assets such as
patents, trademarks, trade names, copyrights, licenses, goodwill,
organizational costs, advances or loans to, or receivables from, directors,
officers, employees or subsidiaries (other than subsidiaries that are special
purpose entities owned by the Servicer or any subsidiary thereof), prepaid
assets, amounts relating to covenants not to compete, pension assets, deferred
charges or treasury stock or any securities of the Servicer or any other
securities unless the same are readily marketable in the United States of
America or entitled to be used as a credit against federal income tax
liabilities, (ii) securities included as such intangible assets shall be taken
into account at their current market price or cost, whichever is lower, and
(iii) any write-up in the book value of any assets shall not be taken into
account.
"Transaction Documents": This Agreement, the Servicing Agreement, the
Lease Acquisition Agreement, the Certificates, the Insurance Agreements, the
Certificate Insurance Policy and the Certificate Funding Administration
Agreements.
"Transaction Documents Date": With respect to each Series of
Certificates, the meaning specified in the applicable Supplement.
"Transferor": GF Funding Corp. IV, and all successors thereto in
accordance with the terms hereof.
"Transferor Order" and "Transferor Request": A written order or
request signed in the name of the Transferor by its President or a Vice
President, and delivered to the Trustee.
"Transferor Payment Office": The account indicated in the instructions
provided by the Transferor to each Holder of a Certificate in its Funding
Period, as such instructions may be amended from time to time upon two Business
Days' written notice from the Transferor to each such Holder.
"Transition Cost": Any documented expenses reasonably incurred by a
successor Servicer or the Trustee in connection with a transfer of servicing
from the Servicer to a successor Servicer as successor Servicer pursuant to
Section 6.02 of the Servicing Agreement, but not to exceed $50,000.
"Treasury Rate": means, (i) with respect to each Conversion Rate, as
of the Reset Date preceding each Conversion Date, a per annum rate equal to the
yield on actively traded U.S. government securities with a maturity
corresponding most closely to the Weighted Average Life of the initial pool or
related Interval Pool, as applicable, and (ii) with respect to a Rate Event, a
per annum rate equal to the yield on actively traded U.S. government securities
with a two year maturity, each as set forth on page "USD" of the Bloomberg
Financial Markets Screen (or if not available, any other nationally recognized
trading screen reporting on-line intra-day trading in United States government
securities) at 11:00 a.m. (New York time) on such date of determination, or in
the event no such nationally recognized trading screen is available, the
arithmetic mean of the yields for the two columns under the heading "Week
Ending" published in the Statistical Release under the caption "Treasury
Constant Maturities" for two year maturities.
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"Trigger Event": The occurrence of any one of the following events
and the declaration by MBIA, or if an MBIA Default or Termination has occurred
and is continuing, by the Controlling Holders, that such occurrence shall
constitute a Trigger Event:
(a) commencing with the third Determination Date after the Initial
Delivery Date, the average of the Annualized Gross Default
Rates for the three consecutive prior Due Periods was equal to
or greater than 5.5%;
(b) the Cumulative Gross Default Rate exceeds 7.5%;
(c) commencing with the third Determination Date after the Initial
Delivery Date, the average of the Delinquency Rates for the
three consecutive prior Due Periods was equal to or greater
than 2%;
(d) the Net Worth Requirement is not met;
(e) the Transferor or the Trust Estate becomes an "investment
company" within the meaning of the Investment Company Act of
1940, as amended;
(f) the occurrence of a Servicer Event of Default;
(g) an Event of Default occurs;
(h) any payment by MBIA under a Certificate Insurance Policy;
(i) either ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or both of the following key
employees, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇, terminate their
employment with the Servicer or any of its Affiliates, cease
to be employed in a capacity similar to that on the Initial
Delivery Date, become disabled for a period of three
consecutive months or more, or die and a replacement
satisfactory to MBIA has not been appointed within 60 days
thereof; or
(j) the occurrence of any other event designated as an additional
Trigger Event as set forth in any Supplement.
"Trust": The GF Funding Corp. IV Master Trust created hereunder.
"Trust Estate": The meaning specified in the Conveyance Clause of
this Agreement.
"Trustee": Norwest Bank Minnesota, National Association, until a
successor Person shall have become the Trustee pursuant to the applicable
provisions of this Agreement, and thereafter "Trustee" shall mean such
successor Person.
"Trustee Fee": The fee payable on each Payment Date to the Trustee in
consideration for the Trustee's performance of its duties pursuant to this
Agreement as Trustee, in an amount equal to the sum of the products of one-
twelfth of the applicable Trustee Fee Rate and the Outstanding Principal Amount
for each Series of Class A Certificates immediately following the preceding
Payment Date; provided, however, with respect to the Initial Payment Date for
each Series, the Trustee Fee shall equal the amount
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set forth in the related Supplement.
"Trustee Fee Rate ": With respect to each Series of Certificates, the
rate per annum specified in the applicable Supplement.
"Vice President": With respect to the Transferor or the Trustee, any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president."
"Weighted Average Life": With respect to each Series, the weighted
average life to maturity of the Lease Contracts delivered to the Trustee on the
applicable Delivery Date or in a Funding Interval for such Series assuming no
prepayments and no defaults, provided that if on any date of determination (i)
the per annum rate equal to the yield on actively traded U.S. government
securities with a two year maturity is less than the per annum rate equal to
the yield on actively traded U.S. government securities with a one year
maturity and (ii) the per annum rate equal to the yield on actively traded U.S.
government securities with a three year maturity is less than either of the
rates determined in (i) herein, the Weighted Average Life with respect to each
Series shall mean the weighted average life to maturity of such Lease Contracts
taking into account an expected level of prepayments and defaults based on
actual prepayments and defaults to date on such Lease Contracts.
"Withdrawn Collateral": The meaning set forth in Section 5.01(b)
hereof.
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ARTICLE TWO
THE CERTIFICATES
SECTION 2.01 FORM GENERALLY.
The Class A Certificates and the certificates of authentication shall
be in substantially the form set forth in Exhibit A-1 hereto and the Class B
Certificates shall be in substantially the form set forth in Exhibit A-2
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Agreement, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may, consistently herewith, be determined by
the officers executing such Certificates, as evidenced by their execution of
the Certificates.
The definitive Certificates shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any manner acceptable to the
Trustee and the initial purchasers of the Certificates, all as determined by
the officers executing such Certificates, as evidenced by their execution of
such Certificates.
SECTION 2.02 SERIES; DENOMINATION.
(a) This Agreement provides for the issuance by the Trust from
time to time of one or more Series of Certificates consisting of one or both
Class A Certificates and Class B Certificates, all subject to and in accordance
with the terms of this Agreement and the applicable Supplement and provided
that no Series of Class A Certificates may be issued while another Series of
Class A Certificates is in its Funding Period. Each Certificate in a Series
shall bear upon the face thereof the designation selected for the Series to
which it belongs. All Series of Certificates of a particular Class shall be
identical except for differences among the Series for Certificate Interest
Rates, Stated Maturities, Expected Maturity Dates and the other items
identified below.
Each Series of Class A Certificates issued under this Agreement shall
represent a fractional undivided interest in the Trust Estate, pari passu with
all other Series of Class A Certificates (although the Certificate Insurance
Policies are issued specific to each Series of Class A Certificates), and shall
be entitled to the benefits hereof without preference, priority or distinction
on account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Agreement and the applicable
Supplement.
Each Series of Class B Certificates issued under this Agreement shall
represent a fractional undivided interest in the Trust Estate (although the
Class B Certificates are not secured by and do not have the benefit of any
Certificate Insurance Policies or any proceeds therefrom), pari passu with all
other Series of Class B Certificates and subordinate to all Series of Class A
Certificates and to certain other payments as provided herein, and shall be
entitled to the benefits hereof without preference, priority or distinction on
account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Agreement and the applicable
Supplement. One or more Series of Class B Certificates may be issued with
respect to any Related Series of Class A Certificates with the prior written
consent of MBIA and subject to the other conditions of Section 4.02(d) hereof.
The rights of the Holders of the Class B Certificates to receive
payments of current interest in respect of the Class B Certificates on any
Payment Date shall be subordinated to the rights of the Holders
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of Class A Certificates to receive payments of interest in respect of the Class
A Certificates on such Payment Date. The rights of the Holders of the Class B
Certificates to receive payments of principal and certain prior interest
shortfalls in respect of the Class B Certificates on any Payment Date shall be
subordinated to the rights of the Holders of Class A Certificates to receive
payments of interest and principal in respect of the Class A Certificates on
such Payment Date and certain other payments as set forth in Sections 12.02(d)
and 6.08.
The Supplement with regard to a Series of Certificates shall
establish, without limitation, the following terms and provisions of each Class
of Certificates of such Series, each of which the Transferor shall determine in
authorizing the issuance of any Series:
(i) designation of the Series and Class, and with respect
to any Series of Class B Certificates, the applicable
Related Series of Class A Certificates;
(ii) the applicable Accrual Date, Cut-off Date, Delivery
Date, Expected Funding Termination Date, the Funding
Interval, the Funding Termination Events, the
Initial Payment Date, any Minimum or Maximum Interval
Amounts, the Transaction Documents Date, the date of
the related Private Placement Memorandum, if
applicable, and the Class A Advance Rate, the Class B
Advance Rate, the Class A Percentage, and the Class B
Percentage;
(iii) the maximum aggregate principal amount of
Certificates of each Class of such Series that may be
issued, including, without limitation, the Maximum
Series Amount;
(iv) with respect to a Series of Class B Certificates, the
Class B Certificate Interest Rate, and with respect
to a Series of Class A Certificates, the terms used
in the definition of Fixed Rate and Floating Rate
that require further specification in the applicable
Supplement, including without limitation, the
applicable Initial Fixed Rate, the Fixed Rate Spread,
the Floating Rate Spread and the Maximum Interest
Rate;
(v) any Class B Deposit related to issuance of any Class
B Certificates for such Series;
(vi) the Stated Maturity for such Series of Class A
Certificates and the Expected Maturity of such Series
of Class B Certificates;
(vii) if applicable, the Certificate Insurance Policy
number; and
(viii) any other terms that are permitted or required by the
terms of this Agreement to be specified in the
applicable Supplement.
The applicable Insurance Agreement for each Series of Class A
Certificates shall contain the terms relating to the MBIA Premium and the MBIA
Premium Rate for such Series of Class A Certificates.
(b) The aggregate principal amount of Certificates of each Class
of any Series which may be authenticated and delivered under this Agreement
shall be the Maximum Series Amount, except for Certificates authenticated and
delivered upon registration of transfer or in exchange for or in lieu of, other
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Certificates pursuant to Sections 2.04, 2.05, 2.07 or 9.05 hereof. The Class A
Certificates shall be issuable only as registered Certificates without coupons
in denominations of at least $5,000,000 and any amount in excess thereof and
the Class B Certificates shall be issuable only as registered Certificates
without coupons in denominations of at least $2,000,000 and any amount in
excess thereof; provided, however, that, the foregoing shall not restrict or
prevent the transfer in accordance with Sections 2.05 and 2.06 hereof of any
Certificate with a remaining Outstanding Principal Amount of less than its
original minimum denomination.
SECTION 2.03 FORMATION, EXECUTION, AUTHENTICATION, DELIVERY AND
DATING.
(a) By its conveyance of the Trust Estate to the Trustee as set
forth in the Conveyance Clause hereof, the Transferor hereby establishes the
Trust in exchange for the rights of the Transferor to receive the payments and
other benefits set forth herein. On the Initial Delivery Date and from time to
time thereafter, Certificates shall be issued in accordance with the terms
hereof by the Trust and authenticated by the Trustee upon the written order of
the Transferor.
(b) The Certificates shall be executed on behalf of the Transferor
by its President or one of its Vice Presidents under its corporate seal
imprinted or otherwise reproduced thereon. The signature of these officers on
the Certificates must be manual.
(c) Certificates bearing the manual signatures of individuals who
were at any time the proper officers of the Transferor shall bind the
Transferor, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication or delivery of such Certificates
or did not hold offices at the date of authentication or delivery of such
Certificates.
(d) Each Certificate shall bear on its face the applicable
Delivery Date and be dated as of the date of its authentication.
(e) No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in the form
provided for herein executed by the Trustee or by any Authenticating Agent by
the manual signature of one of its authorized officers, and such certificate
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered hereunder.
SECTION 2.04 TEMPORARY CERTIFICATES.
Pending the preparation of definitive Certificates, the Transferor may
execute, and upon Transferor Order, the Trustee shall authenticate and deliver,
temporary Certificates which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any denomination, containing the same
terms and representing the same rights as the definitive Certificates in lieu
of which they are issued.
If temporary Certificates are issued, the Transferor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Transferor to be maintained as
provided in Section 11.02(m) hereof, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Certificates, the
Transferor shall execute and the Trustee shall authenticate and deliver in
exchange therefor one or more definitive Certificates of any authorized
denominations and of a like initial aggregate principal amount and Stated
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Maturity or Expected Maturity, as applicable. Until so exchanged, the
temporary Certificates shall in all respects be entitled to the same benefits
under this Agreement as definitive Certificates.
SECTION 2.05 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Transferor shall cause to be kept at an office or agency
to be maintained by the Transferor in accordance with Section 11.02(m) hereof a
register (the "Certificate Register"), in which, subject to such reasonable
regulations as it may prescribe, the Transferor shall provide for the
registration of Certificates and the registration of transfers of Certificates.
Norwest Bank Minnesota, National Association, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, is hereby appointed "Certificate Registrar"
for the purpose of registering Certificates and transfers of Certificates as
herein provided. The Trustee shall have the right to examine the Certificate
Register at all reasonable times and to rely conclusively upon a Certificate of
the Certificate Registrar as to the names and addresses of the Holders of the
Certificates and the principal amounts and numbers of such Certificates as
held.
(b) Upon surrender for registration of transfer of any Certificate
at the office or agency of the Transferor to be maintained as provided in
Section 11.02(m) hereof and subject to the conditions set forth in Section 2.06
hereof, the Transferor shall execute, and the Trustee or its agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denominations, and
of a like aggregate principal amount, Class, Series and Stated Maturity or
Expected Maturity, as applicable.
(c) At the option of the Holder, Certificates of a Series may be
exchanged for other Certificates of such Series of any authorized denominations
and of a like aggregate principal amount, Class and Stated Maturity or Expected
Maturity, as applicable, upon surrender of the Certificates to be exchanged at
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Transferor shall execute, and the Trustee or its agent shall
authenticate and deliver, the Certificates which the Certificateholder making
the exchange is entitled to receive.
(d) All Certificates issued upon any registration of transfer or
exchange of Certificates shall be entitled to the same benefits under this
Agreement as the Certificates surrendered upon such registration of such
transfer or exchange.
Every Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Transferor or the Certificate
Registrar) be duly endorsed or be accompanied by a written instrument of
transfer in form satisfactory to the Transferor and the Certificate Registrar
duly executed, by the Holder thereof or his attorney duly authorized in
writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Certificates, but the Transferor may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Certificates, other than exchanges pursuant to Section 2.04 or 9.05 hereof not
involving any registration of transfer.
SECTION 2.06 LIMITATION ON TRANSFER AND EXCHANGE.
(a) The Certificates have not been registered or qualified under
the Securities Act of 1933, as amended (the "1933 Act") or the securities laws
of any state. No transfer of any Certificate shall be made unless that
transfer is made in a transaction which does not require registration or
qualification under the 1933 Act or under applicable state securities or "Blue
Sky" laws. In the event that a transfer is to be made,
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such Certificateholder's prospective transferee shall (i) deliver to the
Trustee an Investment and Assumption Letter and (ii) if the Trustee deems
necessary, an opinion of counsel that the transfer is exempt from such
registration or qualification (which opinion shall not be at the expense of the
Transferor, the Trustee, the Servicer or the Trust Estate). Neither the
Transferor nor the Trustee is obligated to register or qualify the Certificates
under the 1933 Act or any other securities law. Any such Holder desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee,
MBIA and the Transferor against any liability, cost or expense (including
attorneys' fees) that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws. The Trustee shall
promptly, after receipt of such information as is set forth in the next
succeeding sentence, furnish to any Holder, or any prospective owner designated
by a Holder, the information required to be delivered to Holders and
prospective owners of Certificates in connection with resales of the
Certificates to permit compliance with Rule 144A of the 1933 Act in connection
with such resales. Such information shall be provided to the Trustee by the
Servicer.
(b) No acquisition or transfer of a Certificate or any interest
therein may be made to any "Benefit Plan Investor" (as defined in 29 C.F.R.
'2510.3-101) or to any person who is directly or indirectly purchasing such
Certificates or an interest therein on behalf of, as named fiduciary of, as
trustee of, or with assets of, such a Benefit Plan Investor unless the Trustee
is provided with evidence that establishes to the satisfaction of the Trustee
that (i) either no "prohibited transaction" under ERISA or the Code will occur
in connection with such prospective acquiror's or transferee's acquisition and
holding of the Certificates or that the acquisition and holding of the
Certificates by such prospective acquiror or transferee is subject to a
statutory or administrative exemption, and (ii) that the prospective acquiror's
or transferee's acquisition and holding will not subject the Transferor, the
Servicer, the Trustee or the Certificate Funding Administrator to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those explicitly undertaken in the
Transaction Documents.
(c) In addition, (i) no Certificateholder shall be permitted to
grant a participation in any Certificate held by it and (ii) no transfer of a
Certificate shall be permitted, and no such transfer shall be registered by the
Trustee or the Certificate Registrar on the Certificate Register, or shall be
effective hereunder, if such transfer or the registration of such transfer
would cause the Trust to have more than 98 Certificateholders at any time.
Other than obtaining an Investor Assignment and Assumption Letter from a
prospective transferee, the Trustee shall have no responsibility to confirm
whether any actual or beneficial owner is a partnership, grantor trust or S
corporation. The Servicer hereby agrees to determine at least annually the
number of Certificateholders and promptly notify the Trustee, of the
restriction in this subsection (c) if the number of beneficial owners exceeds
seventy-five. The Trustee further agrees that it shall not participate in the
establishment of an "established securities market" (within the meaning of
section 1.7704-1(b) of the Treasury Regulations) or a "secondary market or the
substantial equivalent thereof" (within the meaning of section 1.7704-1(c) of
the Treasury Regulations), or the inclusion of any of the Certificates in such
a market, nor shall it permit the registration or listing of any Certificate on
any such market.
(d) In addition, no acquisition or transfer of a Certificate or
any interest therein may be made during such Certificate's Funding Period
without the prior written consent of the Transferor, which shall not be
unreasonably withheld.
(e) The Trustee shall have no liability to the Trust Estate or any
Certificateholder arising from a transfer of any such Certificate in reliance
upon a certification described in this Section 2.06.
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SECTION 2.07 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATE.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (ii) there is delivered to
the Trustee and MBIA such security or indemnity as may be required by the
Trustee to save the Transferor, the Trustee and MBIA or any agent of any of
them harmless, then, in the absence of notice to the Transferor or the
Certificate Registrar that such Certificate has been acquired by a bona fide
purchaser, the Transferor shall execute and, upon its request, the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of the same
tenor, Series, initial principal amount and Stated Maturity or Expected
Maturity, as applicable, bearing a number not contemporaneously outstanding.
If after the delivery of such new Certificate, a bona fide purchaser of the
original Certificate in lieu of which such new Certificate was issued presents
for payment such original Certificate, MBIA, the Transferor and the Trustee
shall be entitled to recover such new Certificate from the person to whom it
was delivered or any person taking therefrom, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor
to the extent of any loss, damage, cost or expenses incurred by MBIA, the
Transferor or the Trustee or any agent of any of them in connection therewith.
If any such mutilated, destroyed, lost or stolen Certificate shall have become
or shall be about to become due and payable, or shall have become subject to
redemption in full, instead of issuing a new Certificate, the Transferor may
pay such Certificate without surrender thereof, except that any mutilated
Certificate shall be surrendered.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Certificates, but the Transferor may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Certificates, other than exchanges pursuant to Section 2.04 or 9.05 hereof not
involving any registration of transfer.
Every new Certificate issued pursuant to this Section 2.07, in lieu of
any destroyed, lost or stolen Certificate, shall constitute an original
additional contractual obligation of the Transferor, whether or not the
destroyed, lost or stolen Certificate shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Certificates duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 2.08 PAYMENT OF PRINCIPAL AND INTEREST; PRINCIPAL AND
INTEREST RIGHTS PRESERVED.
(a) For each applicable Accrual Period, the Class A Certificates
shall bear interest on the Outstanding Fixed Tranche Balance and on the
Outstanding Floating Tranche Balance, in each case as of the first day of such
Accrual Period, at the applicable Fixed Rate and the Floating Rate,
respectively. The Fixed Rate and the Floating Rate for each Accrual Period
shall be calculated on the last applicable Reset Date preceding such Accrual
Period until the last Reset Date preceding the Final Payment Date and (to the
extent that the payment of such interest shall be legally enforceable) on any
overdue installment of interest from the date such interest became due and
until fully paid. Interest for each Accrual Period on each Fixed Rate Tranche
shall be calculated on the basis of a 360-day year consisting of 12 months of
30 days each, and interest on each Floating Rate Tranche shall be calculated on
the basis of a 360 day year and actual days elapsed in such Accrual Period.
Interest shall be due and payable in arrears on each Payment Date, with each
payment of interest calculated as described above on the Outstanding Fixed
Tranche
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Balance and the Outstanding Floating Tranche Balance of the Certificates on the
day immediately following the preceding Payment Date or on the applicable
Delivery Date, if there has not been any preceding Payment Date.
In addition to the foregoing, with respect to any Funding occurring in
any Accrual Period since the preceding Payment Date, the related Funding
Amounts shall accrue interest from the related Funding Date through the end of
the Accrual Period in which such Funding occurs in the amount of the applicable
First Period Interest, which interest shall be paid on the next Payment Date to
the Series of Class A Certificates having made such Funding. The First Period
Interest on the Funding Amount shall be determined on the Funding Date at the
rate established on the applicable Reset Date.
In making any such interest payment, if the interest calculation with
respect to a Certificate shall result in a portion of such payment being less
than $0.01, then such payment shall be decreased to the nearest whole cent, and
no subsequent adjustment shall be made in respect thereof.
(b) The Class B Certificates shall bear interest on the
Outstanding Principal Amount thereof for each applicable Accrual Period at the
Class B Interest Rate for such Series in effect at the beginning of the related
Accrual Period, until the last day preceding the Payment Date on which its
principal balance has been reduced to zero and (to the extent provided for in
the related Supplement and to the extent that the payment of such interest
shall be legally enforceable) on any overdue installment of interest from the
date such interest became due until fully paid and, unless otherwise specified
in the related Supplement, calculated on the basis of a 360-day year consisting
of 12 months of 30 days each. Interest shall be due and payable in arrears on
each Payment Date, with each payment of interest calculated as described above
on the Outstanding Principal Amount of the Class B Certificates immediately
following the preceding Payment Date or on the applicable Delivery Date, if
there has not been any preceding Payment Date; provided that the payment of
current interest on the Class B Certificates is subordinate to the payment of
interest on the Class A Certificates and payments of certain prior interest
shortfalls are subordinate to the payment of interest on the Class A
Certificates and to certain other payments as specified in Section 12.02(d)
and 6.08 and that interest, principal and other amounts are due and payable on
the Class B Certificates only to the extent there are funds available therefor
on such Payment Date in accordance with the priorities set forth in Section
12.02 (d).
In addition to the foregoing, with respect to any Funding occurring in
any Accrual Period since the preceding Payment Date, the related Funding
Amounts shall accrue interest from the related Funding Date through the end of
the Accrual Period in which such Funding occurs in the amount of the applicable
First Period Interest, which interest shall be paid on the next Payment Date to
the Series, if any, of Class B Certificates having made such Funding. The First
Period Interest on the Funding Amount shall be determined on the Funding Date
at the rate established on the applicable Reset Date.
In making any such interest payment, if the interest calculation with
respect to a Certificate shall result in a portion of such payment being less
than $0.01, then such payment shall be decreased to the nearest whole cent, and
no subsequent adjustment shall be made in respect thereof.
(c) The principal of each Certificate shall be payable in
installments ending no later than the applicable Stated Maturity or Expected
Maturity thereof unless such Certificate becomes due and payable at an earlier
date by declaration of acceleration, call for redemption or otherwise. All
reductions in the principal amount of a Certificate effected by payments of
installments of principal made on any Payment Date shall be binding upon all
future Holders of such Certificate and of any Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is
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noted on such Certificate. Each installment of principal payable on the Class
A Certificates shall be in an amount equal to the Class A Principal
Distribution Amount and the Additional Principal Amount, if any, available to
be paid in accordance with the priorities of Section 12.02(d) hereof, except
that at the Stated Maturity of any Series of Class A Certificates, the
outstanding principal amount of such Class A Certificates shall be paid in full
prior to the allocation of any other payments of principal to any other Series
of Certificates on such Payment Date. Each installment of principal payable on
the Class B Certificates shall be in an amount equal to the Class B Principal
Distribution Amount; provided that the payment of the Class B Principal
Distribution Amount shall be subordinate to the payments of principal and
interest on the Class A Certificates and to certain other payments in
accordance with Sections 12.02(d) and 6.08 hereof. The principal payable on
the Class A Certificates of any Series shall be paid on each Payment Date
beginning on the Initial Payment Date and ending on the applicable Final
Payment Date, and the principal payable on the Class B Certificates of any
Series shall be paid on each Payment Date beginning on the Initial Payment Date
for the applicable Related Series of Class A Certificates, or, if such Series
of Class B Certificates is issued after such Initial Payment Date, beginning on
the first Payment Date after issuance unless otherwise specified in the related
Supplement and ending on the applicable Final Payment Date. All payments of
principal with respect to all of the Certificates of any Class of a Series,
shall be made on a pro rata basis based upon the ratio that the Outstanding
Principal Amount of a Certificate bears to the Outstanding Principal Amount of
all Certificates of such Class of such Series; provided, however, that if as a
result of such proration a portion of such principal would be less than $.01,
then such payment shall be increased to the nearest whole cent, and such
portion shall be deducted from the next succeeding principal payment.
(d) The principal, interest and any other amounts paid on the
Certificates are payable by wire transfer in immediately available funds to the
account specified in writing to the Trustee by such Registered Holder at least
five Business Days prior to the Record Date for such Payment Date (and if no
such account is specified or if such wire fails, by check mailed by first-class
mail to the Person whose name appears as the Registered Holder of such
Certificate on the Certificate Register at the address of such Person as it
appears on the Certificate Register) in such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts. Except as set forth in the final sentence of this
Section 2.08(d), all payments on the Certificates shall be paid without any
requirement of presentment. The Transferor shall notify the Person in whose
name a Certificate is registered at the close of business on the Record Date
next preceding the Payment Date on which the Transferor expects that the final
installment of principal of such Certificate will be paid that the Transferor
expects that such final installment will be paid on such Payment Date. Such
notice shall be mailed no later than the tenth day prior to such Payment Date
and shall specify the place where such Certificate may be surrendered. Funds
representing any such checks returned undeliverable shall be held in accordance
with Section 7.16 hereof. Each Certificateholder shall surrender its
Certificate to the Trustee prior to payment of the final installment of
principal of such Certificate.
(e) Notwithstanding any of the foregoing provisions with respect
to payments of principal of and interest on the Certificates, if the
Certificates have become or been declared due and payable following an Event of
Default and such acceleration of maturity and its consequences have not been
rescinded and annulled, then payments of principal of and interest on such
Certificates shall be made in accordance with Section 6.08 hereof.
(f) Each Holder of a Certificate, by acceptance of its
Certificate, agrees that during the term of this Agreement and for one year and
one day after the termination hereof, such Holder or any Affiliate thereof will
not file any involuntary petition or otherwise institute any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
proceeding under any federal or state
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bankruptcy or similar law against the Transferor.
(g) The Certificates are payable only out of the Trust Estate and
do not represent recourse obligations of the Transferor, the Servicer or any
affiliate thereof or any successor thereto.
SECTION 2.09 PERSONS DEEMED OWNER.
Prior to due presentment for registration of transfer of any
Certificate, the Transferor, MBIA, the Trustee and any agent of the Transferor,
MBIA or the Trustee shall treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
payments of principal of and interest on such Certificate and for all other
purposes whatsoever, whether or not such Certificate be overdue, and none of
the Transferor, MBIA, the Trustee and any agent of the Transferor, MBIA or the
Trustee shall be affected by notice to the contrary.
SECTION 2.10 CANCELLATION.
All Certificates surrendered to the Trustee for payment, registration
of transfer or exchange (including Certificates surrendered to any Person other
than the Trustee which shall be delivered to the Trustee) shall be promptly
canceled by the Trustee. No Certificates shall be authenticated in lieu of or
in exchange for any Certificates canceled as provided in this Section 2.10,
except as expressly permitted by this Agreement. All canceled Certificates
held by the Trustee shall be disposed of by the Trustee as is customary with
its standard practice.
SECTION 2.11 TAX TREATMENT.
The Transferor has structured this Agreement and the Certificates with
the intention that the Class A Certificates qualify under applicable tax laws
as indebtedness secured by the Trust Estate. The Transferor further intends
that for tax purposes the Trust formed hereby be disregarded as an entity
separate from the Transferor if and until the date when a Series of Class B
Certificates is issued, and thereafter that the Trust be treated as a
partnership, with the assets of the partnership including all of the assets
comprising the Trust Estate, the partners of the partnership being the Class B
Certificateholders and the Transferor, and the Class A Certificates being
nonrecourse debt of such partnership. The Transferor, the Trustee, the
Servicer, MBIA and each Certificateholder, by acceptance of its Certificate
(and any Person that is a beneficial owner of any interest in a Certificate, by
virtue of such Person's acquisition of a beneficial interest therein) agree to
report the transactions contemplated hereby in accordance with such stated
intentions unless and until determined to the contrary by an applicable taxing
authority. In connection therewith, the Transferor shall be designated as the
"tax matters partner" of the Trust and shall be authorized, to the extent
necessary, to maintain capital accounts and make partnership allocations in
accordance with section 704 of the Code, which allocations shall track as
nearly as possible the cash distributions made to the various parties
hereunder.
In no event shall the Trust, or any party with the authority to act on
behalf of the Trust, make the election described in Treasury Regulation
301.7701-3(a) to treat the Trust as an association taxable as a corporation for
United States federal income tax purposes, or in any comparable state tax law.
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ARTICLE THREE
FUNDINGS; CONVERSIONS
SECTION 3.01 FUNDINGS.
Subject to satisfaction of the conditions precedent set forth in
Section 3.03 hereof and Eligible Lease Contracts being available to be acquired
pursuant to the Lease Acquisition Agreement, during the Funding Period for each
Series of Class A Certificates and Related Series of Class B Certificates, if
any, the Transferor shall acquire additional Pools pursuant to the Lease
Acquisition Agreement with the proceeds of a Funding.
SECTION 3.02 FUNDING AMOUNTS.
The Funding Amount for a Pool acquired on a Funding Date shall be
determined by the Servicer on behalf of the Transferor and confirmed by the
Certificate Funding Administrator and the Trustee and shall be reflected in the
Funding Report with respect to Lease Contracts identified on the related
Amended Lease Schedule attached to the GFIV Certificate and the Company
Certificate for such Funding. Each additional Pool shall become subject to
this Agreement pursuant to the GFIV Certificate and the related Lease Contract
Files shall be held by the Trustee as provided herein.
SECTION 3.03 PROCEDURE FOR FUNDINGS.
(a) Conditions Precedent. Each Funding is subject to the
satisfaction of the following conditions precedent on the relevant date
specified below:
(i) no later than 11:00 a.m. (New York time) on the
fourth Business Day immediately prior to the requested Funding Date,
the Transferor shall have delivered (A) to the Trustee, MBIA, the
Certificateholders and the Certificate Funding Administrator (by
telephone or in writing) a request for a Funding to occur and the
approximate amount thereof and (B) to the Certificate Funding
Administrator and the Trustee, by a diskette or electronic transfer, a
list of the proposed Lease Contracts to be funded, and providing for
each such Lease Contract all information required to be provided in
the Amended Lease Schedule as provided in the definition thereof;
(ii) on or before the second Business Day immediately
prior to the requested Funding Date, the Transferor shall have
delivered to the Trustee the original executed counterpart of the
Lease Contracts relating to such Funding and the other items
comprising the related Lease Contract Files;
(iii) on or before the Business Day immediately prior to
the requested Funding Date, the Transferor shall have delivered to the
Trustee the GFIV Certificate and the Company Certificate, each
accompanied by an Amended Lease Schedule, executed by the Company or
the Transferor, as appropriate;
(iv) to the Trustee's knowledge, as evidenced by its
counter signature on the GFIV Certificate, (A) no Default, Event of
Default or Funding Termination Event shall exist or shall result from
the Funding and (B) the related Certificate Insurance Policy shall be
in full force and effect and no MBIA Default or Termination shall have
occurred;
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(v) on the Funding Date, (A) the Lease Contracts to be
funded with such Funding shall be Eligible Lease Contracts, (B) after
giving effect to such Funding, neither the Concentration Limits nor
the applicable Maximum Series Amount shall be exceeded, and (C) if any
Funded Lease Contract is subject to Existing Indebtedness the
Transferor shall use the proceeds of such Funding to repay the
Existing Indebtedness as required by Section 2.03 of the Lease
Acquisition Agreement and shall obtain a release and extinguishment of
rights from the obligee of such Existing Indebtedness, which shall
include an acknowledgment that upon such repayment all obligations
owing to such obligee and relating to such Funded Lease Contract have
been satisfied;
(vi) such Funding shall occur on a date prior to the
applicable Funding Termination Date;
(vii) the Funding Report shall have been delivered to the
Trustee and MBIA pursuant to clause (b) below; and
(viii) such other conditions as may be specified in the
applicable Supplement.
The Trustee shall notify the Transferor, in writing, no later than
11:00 a.m. (New York time) on the Funding Date (with confirmation by telephone)
if the Trustee has not received any of the documentation required to be
delivered to it pursuant to this Section 3.03 and shall request delivery of
such information. If MBIA has not notified the Trustee in writing, no later
than 11:00 a.m. (New York time) on the Funding Date that MBIA has not received
any of the documents required to be delivered to MBIA pursuant to this Article
Three, then the Trustee shall be entitled to assume that MBIA has received such
documentation.
(b) Preparation of Funding Report. The Servicer, together with
the Certificate Funding Administrator, shall review the diskette or electronic
transfer specified in clause (a)(i) above and prepare a Funding Report from the
information provided in such diskette or electronic transfer, any other
information regarding all other Lease Contracts in the possession of the
Servicer and the Certificate Funding Administrator and the information used to
generate the Monthly Servicer's Report. No later than 10:00 a.m. (New York
time) on the third Business Day immediately preceding a proposed Funding Date,
the Certificate Funding Administrator shall fax the Funding Report, and the
amount of the Funding to be funded by Certificateholders, to the Transferor and
the Transferor shall thereupon execute such Funding Report and fax it to MBIA
and the Trustee no later than 11:00 a.m. (New York time) on such date of
receipt. In the Funding Report, the Servicer shall calculate the First Period
Interest on the related Funding Amount. The Servicer shall forward to MBIA by
overnight mail or electronic transfer, for receipt by MBIA on the related
Funding Date, a diskette or other electronic file, containing, in a
standardized format, the same information that was delivered by the Transferor
pursuant to clause (a)(i) above.
SECTION 3.04 VERIFICATION OF FUNDING REPORT.
(a) Upon the Trustee's receipt of a Funding Report pursuant to
Section 3.03(b) hereof, the Trustee shall recompute all of the calculations in
such Funding Report (including without limitation a recalculation of the
Implicit Principal Balances of the related Lease Contracts) based on the
information contained in the list of Lease Contracts forwarded to it by
diskette or electronic transfer, any other information in the possession of the
Servicer and the Certificate Funding Administrator regarding all other Lease
Contracts and the information used to generate the most recent Monthly
Servicer's Report, and if the Trustee does not discover and is not notified of
any errors in the calculations in such Funding Report that
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have not been corrected by 3:00 p.m. (New York time) on the second Business Day
immediately preceding the proposed Funding Date and all of the conditions
precedent set forth in Section 3.03 hereof have been satisfied (provided,
however, that with respect to Section 3.03(a)(v)(A), the Trustee may
conclusively rely on the Company Certificate), the Trustee shall notify the
Certificateholders of the Funding Amount by faxing the Funding Report to the
Certificateholders by 3:00 p.m. (New York time) on such Business Day. If the
Trustee discovers or is notified of any error in the Funding Report that is not
corrected by 3:00 p.m. (New York time) on the second Business Day immediately
preceding the proposed Funding Date or if any of the conditions precedent set
forth in Section 3.03(a) hereof have not been satisfied, the Trustee shall
notify the Certificateholders that the applicable Funding is postponed until
the next Business Day following resolution of any such error, and the Trustee
shall thereupon notify MBIA, the Certificate Funding Administrator and the
Transferor of such error. If MBIA discovers any error in the Funding Report
after a Funding based on such report, MBIA shall promptly notify the Trustee,
the Servicer, the Company, the Certificate Funding Administrator and the
Transferor.
(b) At the end of each Funding Interval for each Series of Class A
Certificates and on the Funding Termination Date (if such date is not the end
of a Funding Interval) for each Series of Class A Certificates, the Transferor
will forward to the Independent Accountants by mailing computer diskettes or by
electronic transfer, the Funding Interval Report prepared in connection with
such Funding Interval together with the information necessary to calculate the
Implicit Principal Balance of the Lease Contracts and the Conversion Amount
included in such Funding Interval Report. The Transferor shall cause the
Independent Accountants to (i) recalculate the Implicit Principal Balances of
the Lease Contracts included in such Funding Interval Report and the related
Conversion Amount, in each case based solely on the information contained in
such reports or on such computer diskettes, and to send the results of such
recalculation to the Transferor, the Servicer, the Certificate Funding
Administrator and MBIA and (ii) re-underwrite a sample of the Lease Contracts
included in such Funding Interval Report, which sample shall represent a number
of Lease Contracts sufficient to generate a 99% confidence level with a 4%
error rate. Each such re-underwritten sample shall include a subset sample for
such Funding Interval similarly sized of those Lease Contracts underwritten
under the Company's Specialized Program designation.
(c) If a Funding occurs based upon a Funding Report with respect
to which an error has been discovered (whether by the Independent Accountants
or otherwise) the Funding Amount shall be adjusted on the following Funding
Date (or the Class A Principal Distribution Amount on the next succeeding
Payment Date if earlier) to correct such error. If the Certificate Funding
Administrator or the Transferor is not able to correct such error to the
satisfaction of the Certificateholders and MBIA by the next succeeding Funding
Date (or by the next succeeding Payment Date if earlier), the Transferor shall
cause the Company to either (i) repurchase the affected Lease Contracts at a
price equal to the Removal Price of such Lease Contracts, (ii) replace the
affected Lease Contracts with Substitute Lease Contracts, in each case on the
earlier of (x) the date upon which the second succeeding Funding is permitted
to occur, (y) the following Determination Date and (z) the Funding Termination
Date or (iii) deposit funds in the Collection Account in the amount, if any, by
which the Funding as recalculated based on the correct information is less than
the erroneous Funding.
SECTION 3.05 FUNDINGS BY CERTIFICATEHOLDERS.
(a) Upon the issuance of each Series of Certificates and execution
of a Certificate Purchase Agreement with respect thereto, the initial
Certificateholders shall have agreed, and by their acquisition of any
Certificates and execution of an Investment and Assumption Letter after the
applicable Delivery Date any subsequent Certificateholders shall have agreed,
on the terms and conditions set forth herein and in the related Certificate
Purchase Agreement, to make Fundings to the Transferor on the Delivery Date and
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from time to time thereafter on any Funding Date during the Funding Period, as
specified by the Transferor in accordance with Section 3.05(c) below. In the
case of a Series of Class A Certificates, on the related Delivery Date, the
Funding shall take place under the Fixed Rate Tranche of such Series in the
amount equal to the Initial Funding Amount for such Series and each subsequent
Funding shall take place under the Floating Rate Tranche (unless such Funding
is to be made on the last day of a Funding Interval, in which case it can be
made directly under the Fixed Rate Tranche) in an amount equal to the
applicable Funding Amount. Notwithstanding the foregoing, unless otherwise
specified in the related Supplement, (A) for each Funding, the Class A Funding
Amount shall be at least equal to the Minimum Funding Amount, (B) for each
Funding Interval, the aggregate of the Fundings during such Funding Interval
shall be in a minimum amount equal to the Minimum Interval Amount, including
the Initial Funding Amount for such Series, and in a maximum amount equal to
the Maximum Interval Amount and (C) the aggregate amount of all Fundings (as
reduced by any amounts distributed as principal on such Series during the
Funding Period) under any Class of any Series shall not exceed the Maximum
Series Amount for each such Class and Series.
(b) Each Class of each Series of Certificates shall be issued in
an aggregate principal amount equal to the applicable Maximum Series Amount,
although at any one time the Outstanding Principal Amount may be less than the
Maximum Series Amount for such Class. The Certificateholders shall endorse on
a schedule, which shall be attached to each Certificate, the date and amount of
each Funding made by such Certificateholder with respect to the related Series
and the amount of each payment of principal made by the Transferor with respect
thereto; provided, however, that the Certificateholders may, at their option,
record the amount of their respective Fundings and payments in other internal
records rather than on such a schedule. The Certificateholders are authorized
and directed by the Transferor and MBIA to make such endorsements or records
but each Certificateholder's records shall be effective only if such records
are in agreement with the applicable Certificate Register maintained by the
Trustee, absent manifest error in such Certificate Register. Failure by any
Certificateholders to make, or an error by any Certificateholder in making,
such endorsement or record with respect to any Funding shall not limit or
otherwise affect the obligations of the Transferor hereunder or under any
Certificate.
(c) Subject to the terms hereof, each Certificateholder will wire
directly to the Transferor its allocable share of the Funding Amount that is
specified in the Funding Report for such Class and Series at the Transferor
Payment Office by 3:00 p.m. (New York time) on the applicable Funding Date in
immediately available funds. Each Certificateholder's allocable share of a
Funding shall be determined by multiplying the amount of the Funding Amount for
such Class and Series by a fraction, the numerator of which shall be equal to
the maximum principal amount of such Holder's Class of Certificate (as
indicated on the face of such Certificate), and the denominator of which shall
be equal to the Maximum Series Amount for such Class and Series.
(d) The failure of any Certificateholder to remit its pro rata
share of any Class A Funding Amount or Class B Funding Amount for its Series on
any Funding Date (other than the applicable Delivery Date for such Series)
shall not relieve any other Certificateholder in such Series of any obligation
hereunder to make its pro rata share of the Funding on such Funding Date. Any
nondefaulting Certificateholder may, but is not required to, fund the portion
of the Funding Amount not funded by a defaulting Certificateholder of the same
Class and Series. If the nondefaulting Certificateholders do not fund the
portion of the Funding Amount by the defaulting Certificateholder, the Funding
Amount, the Minimum Interval Amount and the Minimum Funding Amount with respect
thereto, shall be reduced by the defaulting Certificateholder=s portion of the
Funding Amount and the Transferor shall have all remedies available to it under
applicable law in respect of the defaulting Certificateholder.
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(e) Immediately following each Funding or payment of principal on
any Series of Certificates, the Trustee shall make an appropriate notation in
the applicable Certificate Register indicating the amount and date of the
Funding or payment and the unused Maximum Series Amount after giving effect to
any such Funding.
SECTION 3.06 CALCULATION OF RATES; CONVERSIONS.
(a) On or before 2:00 p.m. (New York time) on the applicable Reset
Date for an Accrual Period (or such other date as specified in the applicable
Supplement), the Trustee shall determine the LIBOR Rate for such Accrual
Period. Upon each determination of the LIBOR Rate and the Treasury Rate, the
Trustee will promptly provide notice of such determination to MBIA, the
Certificate Funding Administrator, the Holders of the Class A Certificates that
are in their Funding Period and the Servicer. On or before 2:00 p.m. (New York
time) three Business Days preceding each Funding Date or Conversion Date, the
Trustee shall determine the appropriate LIBOR Rate or Treasury Rate on such
date with respect to the Funding Amount for the calculation of the First Period
Interest thereon. Any determination of the LIBOR Rate and the Treasury Rate by
the Trustee shall (in the absence of manifest error) be final and binding on
each Holder of a Class A Certificate.
(b) On the Reset Date preceding each Conversion Date, the Servicer
shall calculate, and the Certificate Funding Administrator shall confirm, in
the Funding Interval Report, the Conversion Rate, the Conversion Amount, the
Outstanding Floating Tranche Balance, and the Outstanding Fixed Tranche
Balance, each to be in effect as of the such Conversion Date, and notify MBIA,
any Holders of Certificates in a Series then in a Funding Period and the
Trustee of the rate or amount determined with respect to each such calculation.
In such Funding Interval Report, the Servicer shall instruct the Trustee to
increase the Outstanding Fixed Tranche Balance by the amounts outstanding, if
any, under the Floating Rate Tranche determined on the third Business Day
preceding such Conversion Date and to reduce the Outstanding Floating Tranche
Balance by a like amount. Such increases and reductions with respect to the
Certificates shall be deemed effective as of the Conversion Date succeeding the
related Reset Date. Any discrepancies shall be worked out among the
Certificate Funding Administrator, the Certificateholders of the applicable
Series and Class and the Trustee within two Business Days and the Certificate
Funding Administrator's reasonable judgment based on such discussions shall
control. Notwithstanding the foregoing, all amounts outstanding under the
Floating Rate Tranche shall be converted to the Fixed Rate Tranche on the
Conversion Date immediately following the Funding Termination Date.
(c) If, as of any Conversion Date as determined on the
Determination Date immediately preceding such Conversion Date, there is an
Outstanding Floating Tranche Balance, the Trustee shall, based on the most
recent Funding Interval Report on which the Trustee may conclusively rely,
increase the Outstanding Fixed Tranche Balance by such amount and reduce the
Outstanding Floating Tranche Balance by a like amount. Such increase and
reductions shall be effective as of such Conversion Date.
SECTION 3.07 APPOINTMENT OF CERTIFICATE FUNDING ADMINISTRATOR.
(a) As a condition to the issuance of any Series of Class A
Certificates, the Transferor shall appoint Rothschild Inc. to act as the
Certificate Funding Administrator to perform the functions described in this
Article Three. If at any time MBIA, or upon an MBIA Default or Termination,
the Certificateholders, shall notify the Trustee and Rothschild Inc. in writing
that Rothschild Inc. has failed to
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perform its duties in accordance with this Article Three or if at any time,
Rothschild Inc. shall become the subject of a proceeding under the United
States Bankruptcy Code or if Rothschild Inc. resigns as Certificate Funding
Administrator, the Servicer shall direct the Transferor to appoint a successor
Certificate Funding Administrator of the Servicer's choosing which shall be
acceptable to MBIA (whose consent shall not be unreasonably withheld) and
notify the Trustee of such appointment. Upon notice of such appointment, the
Trustee shall mail written notice thereof by first-class mail, postage prepaid,
to all Class A Certificateholders. Upon the Certificate Funding
Administrator's resignation or termination pursuant to this Section 3.07, (i)
the Certificate Funding Administrator shall comply with the provisions hereof
and the Insurance Agreement until the acceptance of the appointment of a
successor Certificate Funding Administrator and (ii) until the Trustee receives
MBIA=s written consent to a successor Certificate Funding Administrator, no
Funding shall occur. Any successor Certificate Funding Administrator upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as the Certificate Funding Administrator.
(b) The Transferor agrees to pay the Certificate Funding
Administrator compensation for its services under this Article Three in
accordance with the Certificate Funding Administration Agreement, which fee
shall in no event be an obligation of the Trust Estate.
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ARTICLE FOUR
ISSUANCE OF CERTIFICATES; SUBSTITUTIONS OF COLLATERAL
SECTION 4.01 CONDITIONS TO INITIAL ISSUANCE OF CERTIFICATES.
Each Certificate to be issued on the Initial Delivery Date shall be
executed by the Transferor and delivered to the Trustee for authentication, and
thereupon, the same shall be authenticated and delivered by the Trustee upon
Transferor Order and upon receipt by the Trustee of the following:
(a) a Company Certificate and a GFIV Certificate with the Initial
Series Lease Schedule attached thereto;
(b) the original manually executed counterpart of each Lease
Contract and all other items included in the Lease Contract File, subject to
such exceptions as shall be noted in an exception report delivered by the
Trustee to MBIA and the Certificateholders of the applicable Series;
(c) a copy of the Board Resolution of each of the Transferor, the
Servicer and the Company authorizing, as applicable, the execution, delivery
and performance of the Transaction Documents and the transactions contemplated
hereby and by the other Transaction Documents;
(d) a copy of an officially certified document, dated not more
than 30 days prior to the Initial Delivery Date, evidencing the due
organization and good standing of each of the Transferor, the Servicer and the
Company in their respective states of incorporation;
(e) copies of the Certificate of Incorporation and By-Laws of each
of the Transferor, the Servicer and the Company, certified by the Secretary or
an Assistant Secretary of the Transferor, the Servicer and the Company, as
applicable;
(f) (i) evidence of filing with the Secretary of State of the
State (and with the relevant county, if required by the applicable state law)
of the Company's chief executive office of UCC-1 financing statements executed
by the Company, as debtor, and naming the Transferor as secured party, the
Trustee as assignee for the benefit of the Certificateholders and MBIA and the
Lease Assets as collateral; and (ii) evidence of filing with the Secretary of
State of the State (and with the relevant county, if required by the applicable
state law) of the Transferor's chief executive office of UCC-1 financing
statements executed by the Transferor, as debtor, and naming the Trustee as
secured party for the benefit of the Certificateholders and MBIA, and the Trust
Estate as collateral;
(g) a certificate listing the Servicing Officers of the Servicer
as of the Initial Delivery Date;
(h) an executed copy of a Supplement for each Series of
Certificates to be issued on the Initial Delivery Date and executed copies of
the Servicing Agreement and the Lease Acquisition Agreement;
(i) a Certificate Insurance Policy for the Series of Class A
Certificates being issued on such date;
(j) evidence of the deposit by the Transferor into the Collection
Account of any amounts due and paid on the Lease Contracts since the applicable
Cut-Off Date;
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(k) confirmation from the Rating Agencies that such Series of
Class A Certificates have been rated "AAA" by S&P and "Aaa" by Moody's; and
(l) such other documents as the Trustee, MBIA or the
Certificateholders of the Series being issued may reasonably require, including
such documents and opinions described in the applicable Certificate Purchase
Agreement.
By its delivery of the Certificate Insurance Policy, MBIA shall be
deemed to have received any documentation required to be delivered to it
pursuant to this Section 4.01. By their payment of the Funding Amount in
accordance with Section 3.05 hereof the Certificateholders shall be deemed to
have received any documentation required to be delivered to them pursuant to
this Section 4.01.
SECTION 4.02 ISSUANCES OF ADDITIONAL SERIES OF CERTIFICATES.
(a) Additional Series of Class A Certificates and Class B
Certificates may be issued by the Transferor in accordance with the terms of
this Agreement, provided that no new Series of Class A Certificates shall be
issued while an Outstanding Series of Class A Certificates is in its Funding
Period, provided further that no new Series shall be issued if, after the
issuance of such new Series, the Aggregate IPB (after giving effect to the
addition of any new Lease Contracts on such date of issuance) is not at least
equal to the sum of the Outstanding Principal Amount of all Series of Class A
Certificates (including any Series of Class A Certificates to be issued on such
date) plus the sum of the Series Required Collateralization Amounts for all
such Series. All additional Series of Certificates must be approved in writing
by MBIA, provided, however, that nothing herein shall obligate MBIA to issue
any Certificate Insurance Policy; rather such obligation shall arise only under
a written commitment issued by MBIA to issue a Certificate Insurance Policy.
(b) On or before the Delivery Date relating to any new Series of
Certificates, the parties hereto will execute and deliver a Supplement that
will specify the terms applicable to such new Series of Certificates. The
terms set forth in such Supplement may modify or amend, subject to Article Nine
hereof, the terms of this Agreement solely as applied to such new Series of
Certificates.
(c) Each new Series of Class A Certificates shall be executed by
the Transferor and delivered to the Trustee for authentication, and thereupon,
the same shall be authenticated and delivered by the Trustee upon Transferor
Order and upon receipt by the Trustee of the following:
(i) the original manually executed counterpart of each Lease
Contract to be delivered on the related Delivery Date and an Officer's
Certificate of the Transferor certifying that all of the terms of the
Lease Acquisition Agreement have been complied with and all other
items included in the Lease Contract File;
(ii) an executed Supplement for such Series of Class A Certificates
and if the Transferor is acquiring Lease Contracts from the Company on
the applicable Delivery Date, a Company Certificate and a GFIV
Certificate, subjecting any new Lease Contracts to the provisions of
the Transaction Documents, and providing with respect to such new
Lease Contracts an Initial Series Lease Schedule;
(iii) on or before the tenth Business Day immediately preceding the
Delivery Date for the Class A Certificates to be issued (unless the
parties to be notified agree to a shorter time period), the Transferor
shall have given the Trustee, the Servicer, MBIA and each Rating
Agency notice of
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such issuance and the applicable Delivery Date;
(iv) the Transferor shall have delivered to the Trustee and MBIA an
Officers' Certificate of the Transferor to the effect that (A) such
issuance will not result in the occurrence of a Trigger Event or a
Default under this Agreement and the Transferor is not in Default
under this Agreement, (B) the issuance of the Class A Certificates
applied for will not result in a breach of any of the terms,
conditions or provisions of, or constitute a Default under, any
agreement or instrument to which the Transferor is a party or by which
it is bound, or any order of any court or administrative agency
entered in any proceeding to which the Transferor is a party or by
which it may be bound or to which it may be subject, (C) all
conditions precedent provided in this Agreement relating to the
authentication and delivery of the additional Series of Class A
Certificates applied for have been complied with, and (D) specifying
the applicable Stated Maturity and the principal amount of the
Certificates to be authenticated and delivered;
(v) to the extent not previously filed, (A) evidence of filing
with the Secretary of State of the State (and with the relevant
county, if required by the applicable state law) of the Company's
chief executive office of UCC-1 financing statements executed by the
Company, as debtor, and naming the Transferor as secured party, and
the applicable Lease Assets as collateral; and (B) evidence of filing
with the Secretary of State of the State (and with the relevant
county, if required by the applicable state law) of the Transferor's
chief executive office of UCC-1 financing statements executed by the
Transferor, as debtor, and naming the Trustee for the benefit of the
Certificateholders and MBIA as secured party, and the Trust Estate as
collateral;
(vi) the Transferor shall have delivered to the Trustee and MBIA an
Officer's Certificate to the effect that attached thereto are true and
correct copies of letters signed by each Rating Agency confirming that
the Class A Certificates of such Series have been rated "AAA" by S&P
and "Aaa" by Moody's and that the rating on each other Series of Class
A Certificates has not been or will not be withdrawn or downgraded on
the applicable Delivery Date as a result of such issuance;
(vii) a certificate guaranty insurance policy issued by MBIA with
respect to the payment of principal and interest of any new Series of
Class A Certificates in form and substance substantially the same as
the Certificate Insurance Policy issued by MBIA with respect to the
Class A Certificates issued on the Initial Delivery Date;
(viii) an opinion of counsel to the effect that the Class A
Certificates of any Series to be issued should be characterized as
debt for federal income tax purposes and that the issuance of such
Series will not adversely affect the characterization of the Class A
Certificates of any other Outstanding Series as debt for tax purposes,
or result in a reissuance of such Certificates, or adversely affect
the status of the Trust as not being an association taxable as a
corporation (including pursuant to Section 7704 of the Code), and as
to such additional legal matters as MBIA may reasonably request;
(ix) evidence of the deposit by the Transferor into the Collection
Account of any amounts due and paid under the Lease Contracts of such
Series since the related Cut-Off Date;
(x) such other documents, certificates, instruments, opinions, or
other items as may be required by the terms of the Supplement creating
such Series of Certificates or as may be required by MBIA;
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(xi) to the Trustee's knowledge, no MBIA Default or Termination
shall have occurred and be continuing with respect to any outstanding
Series of Certificates; and
(xii) an Officer's Certificate of the Transferor stating that all
conditions precedent to the issuance of such new Series of
Certificates have been complied with.
If MBIA has not notified the Trustee, in writing, no later than 11:00
a.m. (New York time) on the Delivery Date for such Series (with confirmation by
telephone) that MBIA has not received any of the documentation required to be
delivered to MBIA pursuant to this Section 4.02, then the Trustee shall be
entitled to assume that MBIA has received such documentation. By their payment
of the Funding Amount in accordance with Section 3.05 hereof the
Certificateholders shall be deemed to have received any documentation required
to be delivered to them pursuant to this Section 4.02.
Upon satisfaction of the above conditions, the Trustee shall execute
the Supplement and issue and deliver to or upon the order of the Transferor the
applicable Class A Certificates, and provide notice to all existing
Certificateholders of the issuance of such Series of Certificates.
(d) On or before the Delivery Date relating to any Series of Class
B Certificates, the parties hereto will execute and deliver a Supplement which
will specify the terms of such new Series of Class B Certificates. The terms
set forth in such Supplement may modify or amend, subject to Article Nine
hereof, the terms of this Agreement solely as applied to such new Series of
Class B Certificates. Each new Series of Class B Certificates may be executed
by the Transferor and delivered to the Trustee for authentication, and
thereupon, the same shall be authenticated and delivered by the Trustee upon
Transferor Order and upon receipt:
(i) by the Trustee, of an executed copy of a Supplement for such
Series of Class B Certificates;
(ii) by the Trustee and MBIA, of an Officer's Certificate of the
Transferor to the effect that (A) such issuance will not result in the
occurrence of a Trigger Event or a Default under this Agreement and
the Transferor is not in Default under this Agreement, (B) the
issuance of the Class B Certificates applied for will not result in a
breach of any of the terms, conditions or provisions of, or constitute
a Default under, any agreement or instrument to which the Transferor
is a party or by which it is bound, or any order of any court or
administrative agency entered in any proceeding to which the
Transferor is a party or by which it may be bound or to which it may
be subject, (C) all conditions precedent provided in this Agreement
relating to the authentication and delivery of the additional Series
of Class B Certificates applied for have been complied with, and (D)
specifying the applicable Expected Maturity, the principal amount and
Certificate Interest Rate of the Class B Certificates to be
authenticated and delivered;
(iii) evidence of the deposit of the Class B Deposit into the Cash
Collateral Account; and
(iv) an opinion of counsel to the effect that the issuance of such
Series of Class B Certificates will not adversely affect the
characterization of the Class A Certificates of any Outstanding Series
as debt for federal income tax purposes, or result in a reissuance of
such Certificates, or adversely affect the status of the Trust as not
being an association taxable as a corporation (including pursuant to
Section 7704 of the Code), and as to such additional legal matters as
MBIA may reasonably request.
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Upon satisfaction of the above conditions, the Trustee shall execute
the Supplement and issue and deliver to or upon the order of the Transferor the
applicable Class B Certificates, and provide notice to MBIA and all existing
Certificateholders and the Rating Agencies of the issuance of such Series of
Certificates.
SECTION 4.03 PERFECTION OF TRANSFER.
(a) The Transferor and the Company shall file UCC-1 financing
statements described in Sections 4.01(f) and 4.02(c)(vi) hereof in accordance
with such Sections. Within thirty days of the Closing Date, the Transferor and
the Company shall file an application for certificate of title for each item of
titled Equipment, naming the Trustee as first lienholder and with respect to
Lease Contracts which are not Loan Contracts, also naming the Transferor as
owner of such titled Equipment and thereafter the Transferor and the Company
shall deliver such original certificates of title to the Trustee. From time to
time, the Servicer shall take or cause to be taken such actions and execute
such documents as are necessary to perfect and protect the Trustee's and MBIA's
respective interests in the Lease Contracts against all other Persons,
including, without limitation, the filing of financing statements, amendments
thereto and continuation statements, the execution of transfer instruments and
the making of notations on or taking possession of all records or documents of
title.
(b) If any change in either the Company's or the Transferor's
name, identity, structure or the location of its principal place of business or
chief executive office occurs, then the Transferor shall, or the Transferor
shall cause the Company to deliver 30 days prior written notice of such change
or relocation to the Servicer, MBIA and the Trustee and no later than the
effective date of such change or relocation, the Servicer shall file such
amendments or statements as may be required to preserve and protect the
Trustee's and MBIA's respective interests in the Trust Estate.
(c) During the term of this Agreement, the Transferor will
maintain its chief executive office and principal place of business in one of
the States of the United States.
(d) The Servicer agrees to pay all reasonable costs and
disbursements in connection with the perfection and the maintenance of
perfection, as against all third parties, of the Trustee's and MBIA's
respective right, title and interest in and to the Trust Estate.
(e) The Trustee shall hold the original manually executed
counterparts of each Lease Contract at its office in the State of Minnesota,
and at any such new address in the State of Minnesota as the Trustee shall
inform the Servicer, the Transferor, and MBIA in writing from time to time.
The Trustee shall hold each Lease Contract for the benefit of
Certificateholders and MBIA, and maintain accurate records pertaining to each
Lease Contract to maintain a current inventory thereof. The Trustee may, if
requested by the Servicer in writing for purposes of servicing a Lease
Contract, temporarily release to the Servicer such Lease Contract. Any Lease
Contract temporarily released from the custody of the Trustee to the Servicer
or its agents shall have stamped on it prior to delivery a legend to the effect
that the Lease Contract is the property of Norwest Bank Minnesota, National
Association, as Trustee. The Servicer shall promptly return the Lease Contract
to the Trustee when the need therefor no longer exists.
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SECTION 4.04 SUBSTITUTION, REMOVAL AND PURCHASE OF LEASE ASSETS.
(a) If at any time the Transferor, MBIA or the Trustee obtains
knowledge (within the meaning of Section 7.01(e) hereof), discovers or is
notified by the Servicer that any of the representations and warranties of the
Company in the Lease Acquisition Agreement were incorrect at the time as of
which such representations and warranties were made, then the Person
discovering such defect, omission, or circumstance shall promptly notify MBIA
and the other parties to this Agreement.
(b) In the event that any representation or warranty of the
Company in the Lease Acquisition Agreement is incorrect and materially and
adversely affects the interests of MBIA or the Holders of the Certificates, or
if there is any breach of any of the representations and warranties set forth
in Sections 3.01(a)(ii), 3.01(a)(v), 3.01(a)(vii), 3.01(a)(xix) or 3.01(c)(iii)
of the Lease Acquisition Agreement, the Transferor shall require the Company
pursuant to the Lease Acquisition Agreement to eliminate or otherwise cure the
circumstance or condition which has caused such representation or warranty to
be incorrect within 30 days of discovery or notice thereof. If the Company
fails or the Company or the Back-up Servicer is unable to cure such
circumstance or condition in accordance with the Lease Acquisition Agreement,
then the Transferor shall require the Company to substitute or purchase
pursuant to the Lease Acquisition Agreement for any Lease Asset as to which
such representation or warranty is incorrect within the time specified in
Section 3.03 of the Lease Acquisition Agreement. The proceeds of such purchase
shall be remitted by the Transferor to the Servicer for deposit by the Servicer
in the Collection Account pursuant to Section 3.03(c) of the Servicing
Agreement.
(c) If the Transferor fails to enforce the purchase or
substitution obligation of the Company under the Lease Acquisition Agreement,
at the direction of MBIA, or upon the occurrence of an MBIA Default or
Termination, the Controlling Holders (provided, in each case, that the
requirements of Section 7.03(e) have been satisfied) the Trustee shall enforce
such purchase or substitution obligation for the benefit of the
Certificateholders and MBIA, and the Trustee is hereby appointed
attorney-in-fact to act on behalf of and in the name of the Transferor to
require such purchase or substitution.
(d) (i) With respect to any Lease Contract to be prepaid or
terminated early pursuant to Section 3.09 of the Servicing Agreement the
Transferor shall and (ii) with respect to any Lease Contract that becomes a
Defaulted Lease Contract or a Delinquent Lease Contract, the Transferor may,
upon five Business Days notice to the Trustee, remove such Lease Contract from
the Trust Estate and deposit the Removal Price and/or deliver a Substitute
Lease Contract meeting the same requirements as those specified in Section 3.04
of the Lease Acquisition Agreement for substitutions and purchases by the
Company upon breaches of a representation or warranty by the Company
thereunder; provided, however, that the aggregate Implicit Principal Balance of
such prepaid and early terminated Lease Contracts that are substituted and
Defaulted Lease Contracts and Delinquent Lease Contracts that are substituted
or removed by the Transferor shall be subject to an overall limit of 10% of the
Aggregate Initial Series IPB; and, provided, further that no substitution or
repurchase shall be made if (A) such substitution or repurchase is made with
any intent to hinder, delay, or defraud any entity to which the Company is or
will become indebted; (B) there shall be any reason to believe that the Company
is insolvent or that such substitution or repurchase will render the Company
insolvent on the date thereof or as a result of such substitution or
repurchase; (C) at the time of such substitution or repurchase, the Company is
engaged in business, or about to engage in business, for which the assets
remaining with it after the substitution or repurchase will be an unreasonably
small amount of capital; or (D) the Company intends or believes that it will
incur debts beyond its ability to pay as such debts mature.
(e) The Transferor shall comply with the requirements relating to
Substitute Lease Contracts and Funded Lease Contracts as set forth in the Lease
Acquisition Agreement (including compliance with the Eligibility Criteria and
the Concentration Limits) within the time periods set forth therein. In
addition,
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in the case of any Funded Lease Contracts, the Transferor shall provide to the
Trustee and MBIA, as applicable, the items listed in Section 3.03(a) hereof
which are required to be delivered to the Trustee and/or MBIA pursuant to such
Section. On or prior to the Business Day preceding the Initial Delivery Date
or within two Business Days of the related Funding Date the Trustee will review
the related Lease Contract Files. The Trustee shall confirm, by execution and
delivery of a certificate of the Trustee to the Transferor, the
Certificateholders and MBIA, that: (1) the Trustee has received the Lease
Contract Files; and (2) that the Trustee has received the manually executed
original of each Lease Contract. In the case of any Substitute Lease Contracts
acquired by the Transferor, the Transferor shall provide to the Trustee on the
applicable date of delivery the items listed in (i) and (ii) below, and to MBIA
the item listed in (i) below:
(i) a Company Certificate and a GFIV Certificate, each
such certificate having attached thereto an Amended Lease Schedule and
subjecting such Substitute Lease Contract to the provisions thereof
and hereof and providing with respect to the Substitute Lease Contract
the information required to supplement the related Series Lease
Schedule, and with respect to titled Equipment, an application to
retitle or originate title in such Equipment, as applicable, in the
name of the Transferor and naming the Trustee as secured party; and
(ii) the original executed counterpart of the Lease
Contract relating to such Substitute Lease Contract and all other
items included in the Lease Contract File.
The Transferor shall also provide to the Trustee and MBIA, at the end of each
calendar quarter, evidence that financing statements have been filed in
accordance with Sections 4.01(f), 4.02(c)(v) and 4.03 hereof with respect to
all such Substitute Lease Contracts or Funded Lease Contracts acquired during
such period.
(f) If, upon examination of the Lease Contract Files in accordance
with Section 4.04(e) hereof, the Trustee determines that any such Lease
Contract File does not satisfy the requirements set forth in Section 4.04(e)
hereof, or is unable to confirm that the requirements have been met, the
Trustee shall promptly notify the Transferor, the Servicer and MBIA by
telephone or telecopy. If the Transferor or the Servicer does not satisfy the
Trustee that the requirements of Section 4.04(e) hereof have been met prior to
the related Funding Date, the Trustee shall return the applicable Lease
Contract and related files to the Transferor.
(g) Within thirty days after each Delivery Date, the Trustee shall
review any exception report delivered in connection therewith and shall verify
that it has possession of any missing items noted thereon. The Trustee shall
send such verification report and notice of any defects to the Transferor, the
Company and MBIA within such thirty days and shall take any appropriate action
under the Lease Acquisition Agreement.
SECTION 4.05 RELEASES.
(a) The Transferor shall be entitled to obtain a release from the
lien of this Agreement for any Lease Contract and, except in the case of a
re-lease under (iii) below, the related Equipment at any time (i) after a
payment by the Company or the Transferor of the Removal Price of the Lease
Receivable, (ii) after a Substitute Lease Contract is substituted for such
Lease Contract, or (iii) upon the termination of a Lease Contract following the
sale, lease or other disposition of the related Equipment in accordance with
Section 3.01(b)(vii) of the Servicing Agreement, if the Transferor delivers to
the Trustee and MBIA an Officer's Certificate (A) identifying the Lease
Receivable and the related Lease Contract and Equipment to
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be released, (B) requesting the release thereof, (C) setting forth the amount
deposited in the Collection Account with respect thereto, in the event a Lease
Contract and the related Equipment are being released from the lien of this
Agreement pursuant to (i) or (iii) above, and (D) certifying that the amount
deposited in the Collection Account (x) equals the Removal Price of the Lease
Contract, in the event a Lease Contract and the related Equipment are being
released from the lien of this Agreement pursuant to (i) above or (y) equals
the entire amount of Insurance Proceeds, Recoveries or Residual Proceeds
received or expected to be received with respect to such Lease Contract and
related Equipment in the event of a release from the Lien of this Agreement
pursuant to (iii) above.
(b) Upon satisfaction of the conditions specified in subsection
(a), the Trustee shall release from the lien of this Agreement and deliver to
or upon the order of the Transferor (or to or upon the order of the Company if
it has satisfied its obligations under Section 4.04 hereof and Section 3.04 of
the Lease Acquisition Agreement with respect to a Lease Contract) the Lease
Contract, the Lease Receivable and the Equipment described in the Transferor's
request for release.
SECTION 4.06 TRUST ESTATE.
The Trustee may, and when required by the provisions of Articles Four,
Five, Six and Twelve hereof shall, execute instruments to release property from
the lien of this Agreement, or convey the Trustee's interest in the same, in a
manner and under circumstances which are not inconsistent with the provisions
of this Agreement. No party relying upon an instrument executed by the Trustee
as provided in this Article Four shall be bound to ascertain the Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.
SECTION 4.07 NOTICE OF RELEASE.
The Trustee shall be entitled to receive at least 10 days' notice of
any action to be taken pursuant to Section 4.06(a) hereof, accompanied by
copies of any instruments involved.
SECTION 4.08 NATURE OF TRANSFER.
To the extent that the transfer of the Trust Estate from the
Transferor to the Trustee is deemed to be a secured financing, the Transferor
shall be deemed hereunder to have granted to the Trustee, and the Transferor
does hereby grant to the Trustee, a security interest in all of the
Transferor's right, title and interest in, to and under the Trust Estate,
whether now owned or hereafter acquired. For purposes of such grant, this
Agreement shall constitute a security agreement under applicable law.
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ARTICLE FIVE
SATISFACTION AND DISCHARGE
SECTION 5.01 SATISFACTION AND DISCHARGE OF AGREEMENT.
(a) Following payment in full of (i) all of the Certificates, (ii)
the fees and charges of the Trustee, (iii) all other obligations of the
Transferor under the Transaction Documents and (iv) all amounts owing to MBIA
under the Insurance Agreement, and the release by the Trustee of the Trust
Estate in accordance with Section 5.01(b) hereof, this Agreement shall be
discharged and the Trustee shall notify the Rating Agencies thereof.
(b) Upon payment in full of the amounts referred to in clauses
(i) through (iv) of Section 5.01(a) hereof, the Transferor may submit to the
Trustee an Officer's Certificate requesting the release to the Transferor or
its designee of a stated amount of the funds on deposit in the Cash Collateral
Account and some or all of the other Trust Estate (collectively, the "Withdrawn
Collateral"), accompanied by an Opinion of Counsel reasonably acceptable to
MBIA or, if an MBIA Default or Termination has occurred and is continuing,
acceptable to the Controlling Holders, to the effect that, after the release of
the Withdrawn Collateral, there will remain an amount in the Cash Collateral
Account or otherwise subject to this Agreement at least equal to the payments
of interest due on the Outstanding Certificates and the Class A Principal
Distribution Amounts and Class B Principal Distribution Amounts that are
subject to recapture as preferential transfers pursuant to Section 547 of the
Bankruptcy Code or, alternatively, to the effect that no such payments are
subject to recapture. In rendering such Opinion of Counsel, such counsel may
rely as to factual matters, including, without limitation, the date on which
funds were received and the source of funds, upon an Officer's Certificate.
Promptly after receipt of such Officer's Certificate, Opinion of Counsel and
authorization to release from MBIA, the Trustee shall release the Withdrawn
Collateral from the lien of this Agreement, and deliver the Withdrawn
Collateral to the Transferor or its designee. The Transferor shall be entitled
to deliver more than one such Officer's Certificate and Opinion of Counsel
until the entire Trust Estate is released and delivered to the Transferor or
its designee. Notwithstanding the foregoing, MBIA or, if an MBIA Default or
Termination has occurred and is continuing, the Controlling Holders, may waive
the requirement that the Transferor deliver such Officer's Certificate and/or
Opinion of Counsel and authorize the Trustee by written direction to release
all or a portion of the Cash Collateral Account or other items of the Trust
Estate from the lien of this Agreement upon payment in full of the amounts
referred to in clauses (i) through (iv) of Section 5.01(a) hereof.
Notwithstanding termination of this Agreement, the Trustee shall remain
obligated to make claims under the applicable Certificate Insurance Policy with
respect to any Preference Claim.
(c) In connection with the discharge of this Agreement and the
release of the Trust Estate, the Trustee shall release from the Lien of this
Agreement and deliver to or upon the order of the Transferor all property
remaining in the Trust Estate and shall execute and file, at the expense of the
Transferor, UCC termination statements evidencing such discharge and release.
SECTION 5.02 APPLICATION OF TRUST MONEY.
Subject to the last paragraph of Section 7.16 hereof, all monies
deposited with the Trustee pursuant to Section 5.01 hereof shall be held in
trust and if invested, shall be invested in Eligible Investments of the type
described in clause (a) of the definition thereof, and applied by the Trustee,
in accordance with the provisions of the Certificates and this Agreement, to
the payment, either directly or through any Paying Agent as the Trustee may
determine, to the Persons entitled thereto, of the principal
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and interest for whose payment such money has been deposited with the Trustee;
but such money need not be segregated from other funds except to the extent
required in this Agreement or to the extent required by law.
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ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT.
"Event of Default" wherever used herein means any one of the following
events:
(a) default in the payment of any interest or any other
amounts due and owing to the Class A Certificateholders when the same
becomes due and payable, and if there are no Class A Certificates
Outstanding, default in the payment of any interest upon any Class B
Certificates when the same becomes due and payable; or
(b) default in the payment of any principal of any Class
A Certificate when the same becomes due and payable, and if there are
no Class A Certificates Outstanding, default in the payment of any
principal of any Class B Certificates when the same becomes due and
payable; or
(c) default in the performance of, or breach of any
representation, warranty or covenant of, the Transferor set forth in
this Agreement, the Lease Acquisition Agreement, the Insurance
Agreement, the Certificate Purchase Agreement or the Servicing
Agreement which has a material adverse effect on the
Certificateholders or MBIA, (other than a covenant or warranty default
in the performance of which or breach of which is elsewhere in this
Section specifically dealt with), and continuance of such default or
breach for a period of 30 days after the Transferor has actual
knowledge thereof;
(d) the entry of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Transferor under
the United States Bankruptcy Code or any other applicable federal or
state bankruptcy, insolvency, reorganization, liquidation or other
similar law now or hereafter in effect or any arrangement with
creditors or appointing a receiver, liquidator, assignee, trustee, or
sequestrator (or other similar official) for the Transferor or for any
substantial part of its property, or ordering the winding up or
liquidation of the Transferor's affairs, and the continuance of any
such decree or order unstayed and in effect for a period of 60
consecutive days; or
(e) the institution by the Transferor of proceedings to
be adjudicated a bankrupt or insolvent, or the consent by the
Transferor to the institution of bankruptcy or insolvency proceedings
against the Transferor, or the filing by the Transferor of a petition
or answer or consent seeking reorganization or relief under the United
States Bankruptcy Code or any other applicable Federal or state
bankruptcy insolvency, reorganization, liquidation or other similar
law now or hereafter in effect, or the consent by the Transferor to
the filing of any such petition or to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or other similar official) of the Transferor or of any
substantial part of the Transferor's property, or the making by the
Transferor of any assignment for the benefit of creditors, or the
admission by it in writing of its inability, or the failure by it
generally, to pay its debts as they become due, or the taking of
corporate action by the Transferor in furtherance of any such action.
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SECTION 6.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default occurs and is continuing, then, and in every
such case, the Trustee shall, at the direction of MBIA, or if there is an MBIA
Default or Termination, the Trustee shall, at the direction of the Controlling
Holders, declare the principal of all the Certificates then Outstanding to be
immediately due and payable, by notice given in writing to the Transferor (and
to the Trustee if given by Certificateholders); provided that, MBIA shall not
direct the Trustee to declare the Outstanding Principal Amount of all of the
Certificates immediately due and payable unless MBIA shall have endorsed the
Certificate Insurance Policies to provide coverage for any shortfall in the
payment of accelerated principal and any interest due on the Class A
Certificates on the date established for redemption thereof pursuant to such
acceleration, and upon any such declaration, such principal shall become
immediately due and payable without any presentment, demand, protest or other
notice of any kind (except such notices as shall be expressly required by the
provisions of this Agreement), all of which are hereby expressly waived.
At any time after such a declaration of acceleration has been made,
but before any Sale of the Trust Estate has been made or a judgment or decree
for payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, MBIA, or if an MBIA Default or Termination has occurred,
the Controlling Holders, by written notice to the Transferor and the Trustee,
may rescind and annul such declaration and its consequences (except that in the
case of a payment default on the Class A Certificates, or if no Class A
Certificates are Outstanding, the Class B Certificates, the consent of all the
Holders of such Class shall be required to rescind and annul such a declaration
and its consequences) if:
(1) the Transferor has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all Class A
Certificates, or if no Class A Certificates are Outstanding, the Class
B Certificates;
(B) the principal of any Class A Certificates, or if no
Class A Certificates are Outstanding, the Class B Certificates which
have become due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by such Certificates from the time
such principal first became due until the date when paid; and
(C) all sums paid or advanced, together with interest
thereon, by the Trustee, MBIA or any Certificateholder hereunder or by
MBIA under the Insurance Agreement or any Certificate Insurance
Policy, and the reasonable compensation, expenses, disbursements and
advances of the Trustee, MBIA and the Certificateholders, their agents
and counsel incurred in connection with the enforcement of this
Agreement to the date of such payment or deposit; and
(2) all Events of Default have been cured or waived as provided in
Section 6.15 hereof (other than the nonpayment of the principal on the
Class A Certificates, or if no Class A Certificates are Outstanding,
the Class B Certificates which have become due solely by such
declaration of acceleration).
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 6.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE.
The Transferor covenants that if an Event of Default shall occur and
be continuing and any of the
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Certificates have been declared due and payable and such declaration has not
been rescinded and annulled, the Transferor will, upon demand of the Trustee
and at the direction of MBIA, or if an MBIA Default or Termination has occurred
at the direction of the Controlling Holders, pay to the Trustee, for the
benefit of the Holders of the Certificates and MBIA, the whole amount then due
and payable on the Certificates for principal and interest, with interest upon
the overdue principal at the rate borne by the Certificates and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee and MBIA, their respective agents and
counsel.
If the Transferor fails to pay such amount forthwith upon such demand,
the Trustee, in its own name and as Trustee of an express trust shall, at the
direction of MBIA, and if an MBIA Default or Termination has occurred the
Trustee may, and shall, at the direction of the Controlling Holders, institute
Proceedings for the collection of the sums so due and unpaid, and prosecute
such Proceeding to judgment or final decree, and enforce the same against the
Transferor and collect the monies adjudged or decreed to be payable in the
manner provided by law out of the property of the Transferor, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee shall, at
the direction of MBIA, and if an MBIA Default or Termination has occurred the
Trustee may in its discretion proceed, and shall at the direction of the
Controlling Holders proceed, to protect and enforce its rights and the rights
of MBIA by such appropriate Proceedings as the Trustee, at the direction of
MBIA, or if an MBIA Default or Termination has occurred, at its discretion
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Agreement or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 6.04 REMEDIES.
If an Event of Default shall have occurred and be continuing, the
Trustee shall, at the direction of MBIA, and if an MBIA Default or Termination
has occurred, the Trustee shall, at the direction of the Controlling Holders,
do one or more of the following:
(a) institute Proceedings for the collection of all
amounts then due and payable on the Certificates or under this
Agreement, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Transferor the monies adjudged due;
(b) take possession of and sell the Trust Estate securing
the Certificates or any portion thereof or rights or interest therein,
at one or more Sales called and conducted in any manner permitted by
law;
(c) institute any Proceedings from time to time for the
complete or partial foreclosure of the Lien created by this Agreement
with respect to the Trust Estate;
(d) during the continuance of a default under a Lease
Contract, exercise any of the rights of the lessor under such Lease
Contract;
(e) exercise any remedies of a secured party under the
Uniform Commercial Code or any applicable law and take any other
appropriate action to protect and enforce the rights and remedies of
the Trustee, MBIA and the Holders of the Certificates hereunder; and
(f) institute proceedings against MBIA for the collection
of any amounts then due
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and payable under any Certificate Insurance Policy, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from MBIA the monies adjudged due;
provided, however, that without the consent of MBIA, or if an MBIA Default or
Termination has occurred, all the Controlling Holders, the Trustee may not sell
or otherwise liquidate any portion of the Trust Estate unless the proceeds of
such Sale or liquidation distributable to the Certificateholders are sufficient
to discharge in full the amounts then due and unpaid upon the Certificates of
such Controlling Holders for principal and interest together with any amounts
owed to MBIA under the Insurance Agreement.
SECTION 6.05 OPTIONAL PRESERVATION OF TRUST ESTATE.
If (i) an Event of Default shall have occurred and be continuing with
respect to the Certificates and (ii) no Certificates have been declared due and
payable, or such declaration and its consequences have been annulled and
rescinded, the Trustee shall, at the direction of MBIA, or if an MBIA Default
or Termination has occurred, the Trustee may in its sole discretion if it
determines it to be in the best interests of the Controlling Holders and shall,
upon request from the Controlling Holders elect, by giving written notice of
such election to the Transferor, to take possession of and retain the Trust
Estate securing the Certificates intact, collect or cause the collection of the
proceeds thereof and make and apply all payments and deposits and maintain all
accounts in respect of such Certificates in accordance with the provisions of
Article Twelve of this Agreement. If the Trustee is unable to or is stayed from
giving such notice to the Transferor for any reason whatsoever, such election
shall be effective as of the time of such determination or request, as the case
may be, notwithstanding any failure to give such notice, and the Trustee shall
give such notice upon the removal or cure of such inability or stay (but shall
have no obligation to effect such removal or cure). Any such election may be
rescinded with respect to any portion of the Trust Estate securing the
Certificates remaining at the time of such rescission by written notice to the
Trustee and the Transferor from MBIA or, if an MBIA Default or Termination has
occurred, from the Controlling Holders.
SECTION 6.06 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, conservatorship,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial Proceeding relating to the Transferor or any
other obligor upon any of the Certificates or the property of the Transferor or
of such other obligor or their creditors, the Trustee (irrespective of whether
the principal of any of the Certificates shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Transferor for the payment of
overdue principal or interest) shall be entitled and empowered, to intervene in
such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Certificates
issued hereunder and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 7.07 hereof) and of
MBIA and the Certificateholders allowed in such judicial Proceeding,
and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same,
and any receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such judicial
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Proceeding is hereby authorized by MBIA and each Certificateholder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to MBIA or the Certificateholders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07 hereof.
Nothing contained in this Agreement shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of MBIA or any
Certificateholder any plan of reorganization, arrangement, adjustment or
composition affecting MBIA or any of the Certificates or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim of
MBIA or any Certificateholder in any such Proceeding.
SECTION 6.07 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES.
(a) In all Proceedings brought by the Trustee (and also any
Proceedings involving the interpretation of any provision of this Agreement to
which the Trustee shall be a party), the Trustee shall be held to represent all
of the Certificateholders, and it shall not be necessary to make any
Certificateholder a party to any such Proceedings.
(b) All rights of actions and claims under this Agreement or any
of the Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
Proceeding relating thereto, and any such Proceedings instituted by the Trustee
shall be brought in its own name as Trustee of an express trust, and any
recovery whether by judgment, settlement or otherwise shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for MBIA and the ratable
benefit of the Holders of the Certificates.
SECTION 6.08 APPLICATION OF MONEY COLLECTED.
If the Certificates have been declared due and payable following an
Event of Default and such declaration has not been rescinded or annulled, any
money collected by the Trustee with respect to the Certificates pursuant to
this Article Six or otherwise and any other money that may be held thereafter
by the Trustee as security for the Certificates shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or interest, upon
presentation of the Certificates and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid; provided that
proceeds of a claim under a Certificate Insurance Policy will be used only to
pay interest and principal on the applicable Class A Certificates of a Series
in the manner set forth in clauses Fifth and Seventh below:
FIRST: To the payment to the Trustee of the Trustee Fee then due, and
any costs and expenses incurred by it in connection with enforcing the remedies
provided for in this Article Six;
SECOND: To the payment of all the Servicer Fee and other amounts due
the Servicer pursuant to Section 12.02(d)(i) hereof and to pay the Servicer the
amount necessary to reimburse the Servicer for any other unrecovered Servicer
Advances;
THIRD: To the payment to the Back-up Servicer of the Back-up Servicer
Fee then due;
FOURTH: To the payment to MBIA of the MBIA Premium then due;
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FIFTH: To the payment of the amounts then due and unpaid upon the
Class A Certificates of each Series for interest, with interest (to the extent
payment thereof is legally enforceable at the respective rate or rates
prescribed therefor in the Certificates) on overdue interest, in the proportion
in which the Outstanding Principal Amount of each Series of Class A
Certificates represents of the Outstanding Principal Amount of all Series of
Class A Certificates, without preference or priority of any kind, according to
the amounts due and payable on the Class A Certificates for interest;
SIXTH: To the payment of interest due on that Payment Date on all
outstanding Class B Certificates and any overdue interest in an amount not to
exceed with respect to each Series, the product of the Class B Interest Rate
divided by twelve, the related Class B Advance Rate and the related Series IPB,
to be applied as provided in Section 2.08 hereof, provided that any proceeds
of claims under any of the Certificate Insurance Policies shall be not be used
to pay any amounts due under this paragraph;
SEVENTH: To the payments of the remaining Outstanding Principal
Amount of the Class A Certificates, in the proportion in which the Outstanding
Principal Amount of each Series of Class A Certificates represents of the
Outstanding Principal Amount of all Series of Class A Certificates, without
preference or priority of any kind;
EIGHTH: To the payment to MBIA of any amounts previously paid by
MBIA under any of the Certificate Insurance Policies and not theretofore repaid,
together with interest thereon and any other amounts due under the Insurance
Agreement;
NINTH: To reimburse MBIA, and in the event an MBIA Default or
Termination has occurred, to reimburse the Certificateholders, for any costs or
expenses incurred in connection with any enforcement action with respect to
this Agreement or the Certificates;
TENTH: To the payment to the Servicer of any other amounts due the
Servicer as expressly provided herein and in the Servicing Agreement;
ELEVENTH: To the payment to the Trustee and the Back-up Servicer, of
any other amounts due to the Trustee or the Back-up Servicer as expressly
provided herein and in the Servicing Agreement;
TWELFTH: To the payment of any other amounts then due and unpaid
upon the Class B Certificates for interest that was not paid pursuant to
paragraph SIXTH above, to be applied as provided in Section 2.08 hereof;
THIRTEENTH:To the payment of the remaining Outstanding Principal
Amount of the Class B Certificates, in the proportion in which the Outstanding
Principal Amount of each Series of Class B Certificate represents of the
Outstanding Principal Amount of all Series of Class B Certificates, without
preference or priority of any kind; and
FOURTEENTH: To the payment of any surplus to or at the written
direction of the Transferor or any other person legally entitled thereto.
SECTION 6.09 LIMITATION ON SUITS.
No Holder of any Certificate shall have any right to institute any
Proceeding, judicial or otherwise, with respect to this Agreement, or for the
appointment of a receiver or trustee, or for any other remedy
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hereunder for so long as an MBIA Default or Termination has not occurred, and
if an MBIA Default or Termination has occurred, unless
(a) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(b) the Controlling Holders shall have made written
request to the Trustee to institute Proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 30 days after its receipt of such
notice, request and offer of security or indemnity has failed to
institute any such Proceedings; and
(e) no direction inconsistent with such written request
has been given to the Trustee during such 30-day period by the
Controlling Holders; it being understood and intended that no one or
more Holders of Certificates shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this
Agreement to affect, disturb or prejudice the rights of any other
Holders of Certificates, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Agreement, except in the manner herein provided and for the equal and
ratable benefit of all the Holders of Certificates.
SECTION 6.10 UNCONDITIONAL RIGHT OF CERTIFICATEHOLDERS TO RECEIVE
PRINCIPAL AND INTEREST.
Notwithstanding any other provision in this Agreement, the Holder of
any Class A Certificate shall have the right, which is absolute and
unconditional, to receive payment of the principal and interest on such Class A
Certificate as such principal and interest becomes due and payable and to
institute any Proceeding for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder.
SECTION 6.11 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee, MBIA or any Certificateholder has instituted any
Proceeding to enforce any right or remedy under this Agreement and such
Proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee, MBIA or to such Certificateholder, then,
and in every case, the Transferor, the Trustee, MBIA and the Certificateholders
shall, subject to any determination in such Proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Trustee, MBIA and the Certificateholders shall continue as
though no such Proceeding had been instituted.
SECTION 6.12 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of Section 2.07 hereof, no right or remedy herein conferred upon or
reserved to the Trustee, MBIA or to the Certificateholders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in
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addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.13 DELAY OR OMISSION; NOT WAIVER.
No delay or omission of the Trustee, MBIA or of any Holder of any
Certificate to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or any acquiescence therein. Every right and remedy given by this
Article Six or by law to the Trustee, MBIA or to the Certificateholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee, MBIA or by the Certificateholders, as the case may be, subject in
each case, however, to the right of MBIA to control any such right and remedy
except as provided in Section 13.14 hereof.
SECTION 6.14 CONTROL BY MBIA OR CERTIFICATEHOLDERS.
MBIA or, if an MBIA Default or Termination has occurred, the
Controlling Holders shall have the right to direct the time, method and place
of conducting any Proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee; provided that:
(a) such direction shall not be in conflict with any rule
of law or with this Agreement including, without limitation, any
provision hereof which expressly provides for approval by a greater
percentage of Outstanding Principal Amount of all Certificates;
(b) any direction to the Trustee by the
Certificateholders of a Class to undertake a private sale of the Trust
Estate shall be by the Holders of all Outstanding Certificates of such
Class, unless the condition set forth in Section 6.18(b)(ii) hereof is
met;
(c) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction;
provided, however, that, subject to Section 7.01 hereof, the Trustee
need not take any action which a Responsible Officer or Officers of
the Trustee in good faith determines might involve the Trustee or such
officer in personal liability or be prejudicial to the
Certificateholders of the same Class as the Class of the Controlling
Holders and not consenting thereto; and
(d) the Trustee has been furnished reasonable indemnity
against costs, expenses and liabilities which it might incur in
connection therewith as provided in Section 7.01(f) hereof.
SECTION 6.15 WAIVER OF CERTAIN EVENTS BY MBIA OR
CERTIFICATEHOLDERS.
MBIA, or if an MBIA Default or Termination has occurred the
Controlling Holders, may on behalf of the Holders of all the Certificates waive
any past Default or Trigger Event hereunder and its consequences, except:
(a) a Default in the payment of the principal of or
interest on any Certificate, or a Default described in Sections
6.01(d) and (e) hereof, or
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(b) in respect of a covenant or provision hereof which
under Article Nine hereof cannot be modified or amended without the
consent of the Holder of each Outstanding Certificate affected.
Upon any such waiver, such Default or Trigger Event shall cease to exist, and
any Event of Default or other consequence arising therefrom shall be deemed to
have been cured for every purpose of this Agreement; but no such waiver shall
extend to any subsequent or other Default or Trigger Event or impair any right
consequent thereon.
SECTION 6.16 UNDERTAKING FOR COSTS.
All parties to this Agreement agree, and each Holder of any
Certificate by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Agreement, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 6.16 shall not apply to any suit
instituted by the Trustee or MBIA, or to any suit instituted by the Controlling
Holders, or to any suit instituted by any Certificateholder for the enforcement
of the payment of the principal of or interest on any Certificate on or after
the Stated Maturity expressed in such Certificate.
SECTION 6.17 WAIVER OF STAY OR EXTENSION LAWS.
The Transferor covenants (to the extent that it may lawfully do so)
that it will not, at any time, insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Agreement; and the Transferor (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
SECTION 6.18 SALE OF TRUST ESTATE.
(a) The power to effect any sale (a "Sale") of any portion of the
Trust Estate pursuant to Section 6.04 hereof shall not be exhausted by any one
or more Sales as to any portion of the Trust Estate remaining unsold, but shall
continue unimpaired until the entire Trust Estate securing the Certificates
shall have been sold or all amounts payable on the Certificates and under this
Agreement with respect thereto shall have been paid. The Trustee may from time
to time postpone any Sale by public announcement made at the time and place of
such Sale.
(b) To the extent permitted by applicable law, the Trustee shall
not, in any private Sale, sell to a third party the Trust Estate, or any
portion thereof unless:
(i) MBIA, or if an MBIA Default or Termination has
occurred the Controlling Holders, consent in writing to or directs the
Trustee to make such Sale; or
(ii) if an MBIA Default or Termination has occurred, the
proceeds of such Sale would not be less than the sum of all amounts
due to the Trustee hereunder and the
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Outstanding Principal Amount of the Certificates of the Class of the
Controlling Holders and interest due or to become due thereon on the
Payment Date next succeeding such Sale, together with any amount owing
to MBIA under the Insurance Agreement.
(c) The Trustee, MBIA or the Certificateholders may bid for and
acquire any portion of the Trust Estate in connection with a public Sale
thereof, and in lieu of paying cash therefor, any Certificateholder may make
settlement for the purchase price by crediting against amounts owing on the
Certificates of such Holder or other amounts owing to such Holder secured by
this Agreement, that portion of the net proceeds of such Sale to which such
Holder would be entitled, after deducting the reasonable costs, charges and
expenses incurred by the Trustee, MBIA or the Certificateholders in connection
with such Sale. The Certificates need not be produced in order to complete any
such Sale, or in order for the net proceeds of such Sale to be credited against
the Certificates. The Trustee, MBIA or the Certificateholders may hold, lease,
operate, manage or otherwise deal with any property so acquired in any manner
permitted by law.
(d) The Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the Trust
Estate in connection with a Sale thereof. In addition, the Trustee is hereby
irrevocably appointed the agent and attorney-in-fact of the Transferor to
transfer and convey its interest in any portion of the Trust Estate in
connection with a Sale thereof, and to take all action necessary to effect such
Sale. No purchaser or transferee at such a sale shall be bound to ascertain the
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
(e) The method, manner, time, place and terms of any Sale of all
or any portion of the Trust Estate shall be commercially reasonable.
SECTION 6.19 ACTION ON CERTIFICATES.
The Trustee's right to seek and recover judgment on the Certificates
or under this Agreement shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to this Agreement.
Neither the lien of this Agreement nor any rights or remedies of the Trustee or
the Certificateholders shall be impaired by the recovery of any judgment by the
Trustee against the Transferor or by the levy of any execution under such
judgment upon any portion of the Trust Estate or upon any of the assets of the
Transferor.
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ARTICLE SEVEN
THE TRUSTEE
SECTION 7.01 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default known to
the Trustee as provided in subsection (e) below:
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement, and
no implied covenants or obligations shall be read into this Agreement
against the Trustee; and
(ii) in the absence of bad faith or negligence on its
part, the Trustee may conclusively rely as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to
the requirements of this Agreement; but in the case of any such
certificates or opinions, which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same and to determine whether or
not they conform to the requirements of this Agreement.
(b) In case an Event of Default known to the Trustee as provided
in subsection (e) below has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and
shall use the same degree of care and skill in its exercise, as a reasonable
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(c) No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct or bad faith, except that:
(i) this subsection (c) shall not be construed to limit
the effect of subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of MBIA or the Controlling Holders (or other such
percentage as may be required by the terms hereof) in accordance with
Section 6.14 hereof relating to the time, method and place of
conducting any Proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement, the Lease Acquisition Agreement or the Servicing Agreement;
and
(iv) no provision of this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
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reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it, provided that nothing contained in this Agreement shall
excuse the Trustee for failure to perform its duties as Trustee under
this Agreement.
(d) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 7.01.
(e) For all purposes under this Agreement, the Trustee shall not
be deemed to have notice of any Event of Default described in Section 6.01(d)
or 6.01(e) hereof or any Default described in Section 6.01(c) hereof or of any
Trigger Event or Funding Termination Event unless a Responsible Officer
assigned to and working in the Trustee's corporate trust department has actual
knowledge thereof or unless written notice of any event which is in fact such
an Event of Default, Default or Trigger Event or Funding Termination Event is
received by the Trustee at the Corporate Trust Office, and such notice
references any of the Certificates generally, the Transferor, the Trust Estate
or this Agreement.
(f) The Trustee shall be under no obligation to institute any
suit, or to take any remedial proceeding under this Agreement, or to enter any
appearance or in any way defend in any suit in which it may be made defendant,
or to take any steps in the execution of the trusts hereby created or in the
enforcement of any rights and powers hereunder until it shall be indemnified to
its satisfaction against any and all costs and expenses, outlays and counsel
fees and other reasonable disbursements and against all liability, except
liability that is adjudicated, in connection with any action so taken.
(g) Notwithstanding any extinguishment of all right, title and
interest of the Transferor in and to the Trust Estate following an Event of
Default and a consequent declaration of acceleration of the maturity of any of
the Certificates, whether such extinguishment occurs through a Sale of the
Trust Estate to another person or the acquisition of the Trust Estate by the
Trustee, the rights of the Certificateholders shall continue to be governed by
the terms of this Agreement.
(h) Notwithstanding anything to the contrary contained herein, the
provisions of subsections (e) through (g), inclusive, of this Section 7.01
shall be subject to the provisions of subsections (a) through (c), inclusive,
of this Section 7.01.
(j) The Trustee shall provide the reports and accountings as
required pursuant to Section 12.04 hereof.
SECTION 7.02 NOTICE OF DEFAULT AND OTHER EVENTS.
Promptly after the occurrence of any Default, Trigger Event, Funding
Termination Event, or MBIA Default or Termination known to the Trustee (within
the meaning of Section 7.01(e) hereof) which is continuing, within one Business
Day of obtaining such knowledge, the Trustee shall transmit by telephonic or
telegraphic communication confirmed by mail to MBIA and to all Holders of
Certificates, as their names and addresses appear on the Certificate Register,
notice of such Default, Trigger Event, Funding Termination Event, or MBIA
Default or Termination known to the Trustee, unless in the case of notice of
Default or notice of any Trigger Event to Certificateholders, such Default
shall have been promptly cured or waived or such Trigger Event shall have been
waived by MBIA in accordance with this Agreement.
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SECTION 7.03 CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 7.01,
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, note or other obligation, paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Transferor mentioned
herein shall be sufficiently evidenced by a Transferor Request or
Transferor Order and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officer's
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel selected by the Trustee with due care or any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement at the
request or direction of any of the Certificateholders pursuant to this
Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction;
(f) unless so directed by the Controlling Holders or MBIA
and if, in either case, the requirements of clause (e) above have been
satisfied, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Transferor, upon reasonable notice and at reasonable
times personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys.
SECTION 7.04 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
CERTIFICATES.
(a) The recitals contained in this Agreement and in the
Certificates, except the certificates of authentication on the Certificates,
shall be taken as the statements of the Transferor, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or condition of the Trust Estate or any part thereof, or as to
the title of the Transferor or Trust thereto or as to the security afforded
thereby or hereby, or as to the validity or genuineness of any securities at
any time pledged and deposited with the Trustee hereunder or as to the validity
or sufficiency of this Agreement or
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any of the Certificates. The Trustee shall not be accountable for the use or
application by the Transferor of any of the Certificates or the proceeds
thereof or of any money paid to the Transferor or upon Transferor Order under
any provisions hereof.
(b) Except as otherwise expressly provided herein and in Section
7.15 and without limiting the generality of the foregoing, the Trustee shall
have no responsibility or liability for or with respect to the validity of any
Equipment or Lease Contract, the perfection of any security interest (whether
as of the date hereof or at any future time), the maintenance of or the taking
of any action to maintain such perfection, the validity of the assignment of
any portion of the Trust Estate to the Trustee or of any intervening
assignment, the review of any Lease Contract (it being understood that the
Trustee has not reviewed and does not intend to review the substance or form of
any such Lease Contract), the performance or enforcement of any Lease Contract,
the validity and sufficiency of the Certificate Insurance Policies, the
compliance by the Transferor or the Servicer with any covenant or the breach by
the Transferor or the Servicer of any warranty or representation made hereunder
or in any related document or the accuracy of any such warranty or
representation, any investment of monies in the Collection Account or any loss
resulting therefrom, the acts or omissions of the Transferor, the Servicer,
MBIA or any Customer, any action of the Servicer taken in the name of the
Trustee, or the validity of the Servicing Agreement or the Lease Acquisition
Agreement.
(c) Except as otherwise expressly provided herein, the Trustee
shall not have any obligation or liability under any Lease Contract by reason
of or arising out of this Agreement or the assignment of such Lease Contract
hereunder or the receipt by the Trustee of any payment relating to any Lease
Contract pursuant hereto, nor shall the Trustee be required or obligated in any
manner to perform or fulfill any of the obligations of the Transferor under or
pursuant to any Lease Contract, or to make any payment, or to make any inquiry
as to the nature or the sufficiency of any payment received by it, or the
sufficiency of any performance by any party, under any Lease Contract.
SECTION 7.05 MAY HOLD CERTIFICATES.
The Trustee, the Servicer, any Paying Agent, the Certificate
Registrar, any Authenticating Agent or any other agent of the Transferor, in
its individual or any other capacity, may become the owner or pledgee of
Certificates, and if operative, may otherwise deal with the Transferor with the
same rights it would have if it were not Trustee, Servicer, Paying Agent,
Certificate Registrar, Authenticating Agent or such other agent.
SECTION 7.06 MONEY HELD IN TRUST.
Money and investments held in trust by the Trustee or any Paying Agent
hereunder shall be held in one or more trust accounts hereunder but need not be
segregated from other funds except to the extent required in this Agreement or
required by law. The Trustee or any Paying Agent shall be under no liability
for interest on any money received by it hereunder except as otherwise agreed
with the Transferor or otherwise specifically provided in this Agreement.
SECTION 7.07 COMPENSATION AND REIMBURSEMENT.
The Transferor agrees:
(a) to pay the Trustee monthly its fee for all services
rendered by it hereunder as Trustee, in the amount of the Trustee Fee
(which compensation shall not otherwise be
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limited by any provision of law in regard to the compensation of a
trustee of an express trust), and to pay to the Back-up Servicer its
fee for all services rendered hereunder and under the Servicing
Agreement as Back-up Servicer, in the amount of the Back-up Servicer
Fee;
(b) except as otherwise expressly provided herein, to
reimburse the Trustee or the Back-up Servicer upon its request for all
reasonable out-of-pocket expenses, disbursements and advances incurred
or made by the Trustee or the Back-up Servicer in accordance with any
provision of this Agreement or Servicing Agreement (including the
reasonable compensation and the expenses and disbursements of the
Trustee's and Back-up Servicer's agents and counsel), except any such
expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify and hold harmless the Trust Estate, the
Trustee, the Back-up Servicer and the Certificateholders from and
against any loss, liability, expense, damage or injury (other than any
loss attributable to a Certificateholder's investment in any of the
Certificates) sustained or suffered pursuant to this Agreement by
reason of any acts, omissions or alleged acts or omissions arising out
of activities of the Trust Estate, the Trustee or the Back-up
Servicer (including without limitation any violation of any applicable
laws by the Transferor as a result of the transactions contemplated by
this Agreement), including, but not limited to, any judgment, award,
settlement, reasonable attorneys' fees and other expenses incurred in
connection with the defense of any actual or threatened action,
proceeding or claim; provided that the Transferor shall not indemnify
the Trustee if such loss, liability, expense, damage or injury is due
to the Trustee's gross negligence or willful misconduct, willful
misfeasance or bad faith in the performance of duties. Any
indemnification pursuant to this Section shall only be payable from
the assets of the Transferor and shall not be payable from the assets
of the Trust Estate. The provisions of this indemnity shall run
directly to and be enforceable by an injured person subject to the
limitations hereof and this indemnification agreement shall survive
the termination of this Agreement.
SECTION 7.08 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a trustee hereunder which shall be a
corporation or association organized and doing business under the laws of the
United States of America or of any state, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $100,000,000 (or a lesser amount with the approval of MBIA, the Rating
Agencies and the Controlling Holders), subject to supervision or examination by
Federal or state authority and having an office within the United States of
America, and which shall have a commercial paper or other short-term rating of
the highest short term rating categories by each of the Rating Agencies, or
otherwise acceptable to each of the Rating Agencies and MBIA. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
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SECTION 7.09 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 7.10 hereof.
(b) The Trustee may resign at any time by giving 30 days' written
notice thereof to the Transferor, MBIA and to each Certificateholder. If an
instrument of acceptance by a successor Trustee shall not have been delivered
to the Trustee within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and may prescribe, appoint a successor
Trustee.
(c) The Trustee may be removed by MBIA or, if an MBIA Default or
Termination shall have occurred and is continuing, the Controlling Holders, at
any time if one of the following events have occurred:
(i) the Trustee shall cease to be eligible under Section
7.08 hereof and shall fail to resign after written request therefor by
the Transferor, MBIA or by any Certificateholder, or
(ii) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, or
(iii) the Trustee has failed to perform its duties in this
Agreement or has breached any representation of warranty made in this
Agreement.
(d) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any cause
with respect to any of the Certificates, the Transferor by a Board Resolution,
shall promptly appoint a successor Trustee satisfactory to MBIA, or, if an
MBIA Default or Termination has occurred, to the Controlling Holders. If no
successor Trustee shall have been so appointed by the Transferor within 30 days
of notice of removal or resignation and shall have accepted appointment in the
manner hereinafter provided, then MBIA may appoint a successor Trustee. If
MBIA shall fail to appoint a successor Trustee within 90 days or in the event
of an MBIA Default or Termination, then the Controlling Holders may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Certificates.
(e) The Transferor shall give notice in the manner provided in
Section 13.04 hereof of each resignation and each removal of the Trustee and
each appointment of a successor Trustee with respect to the Certificates to the
Certificateholders and the Rating Agencies. Each notice shall include the name
of the successor Trustee and the address of its Corporate Trust Office.
SECTION 7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Transferor and the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee but, on request of the Transferor or
the successor Trustee, such retiring Trustee shall,
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upon payment of its reasonable out-of-pocket costs and expenses, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its lien, if any, provided for in
Section 7.07 hereof. Upon request of any such successor Trustee, the
Transferor shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be eligible under this Article.
SECTION 7.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF TRUSTEE.
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Person shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, and notice thereof shall be provided by the
Trustee to the Certificateholders and the Rating Agencies. In case any
Certificates have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the
Certificates so authenticated with the same effect as if such successor Trustee
had itself authenticated such Certificates.
SECTION 7.12 CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the legal
requirements of any jurisdiction in which any of the Trust Estate may at the
time be located, the Transferor, MBIA and the Trustee shall have power to
appoint, and, upon the written request of the Trustee, MBIA or, if an MBIA
Default or Termination has occurred and is continuing, of the Holders
representing at least 25% in Outstanding Principal Amount of all Certificates,
the Transferor shall for such purpose join with the Trustee in the execution,
delivery and performance of all instruments and agreements necessary or proper
to appoint, one or more Persons approved by the Trustee and meeting the
requirements of Section 7.08 hereof, either to act as co-Trustee, jointly with
the Trustee of all or any part of such Trust Estate, or to act as separate
Trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such Person or
persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section. If the
Transferor does not join in such appointment within 15 days after the receipt
by it of a request so to do, or in case an Event of Default has occurred and is
continuing, the Trustee alone shall have power to make such appointment.
Should any written instrument from the Transferor be reasonably
required by any co-Trustee or separate Trustee so appointed for more fully
confirming to such co-Trustee or separate Trustee such property, title, right
or power, any and all such instruments shall, on request, be executed,
acknowledged and delivered by the Transferor.
Every co-Trustee or separate Trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(a) the Certificates shall be authenticated and delivered
by, and all rights, powers, duties and obligations under this
Agreement in respect of the custody of
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securities, cash and other personal property held by, or required to
be deposited or pledged with, the Trustee under this Agreement, shall
be exercised solely by the Trustee;
(b) the rights, powers, duties and obligations conferred
or imposed upon the Trustee by this Agreement in respect of any
property covered by such appointment shall be conferred or imposed
upon and exercised or performed by the Trustee or by the Trustee and
such co-Trustee or separate Trustee jointly, as shall be provided in
the instrument appointing such co-Trustee or separate Trustee, except
to the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such
co-Trustee or separate Trustee;
(c) the Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Transferor evidenced by a
Board Resolution, may accept the resignation of or remove any
co-Trustee or separate Trustee, appointed under this Section, and, in
case an Event of Default has occurred and is continuing, the Trustee
shall have power to accept the resignation of, or remove, any such
co-Trustee or separate Trustee without the concurrence of the
Transferor. Upon the written request of the Trustee, the Transferor
shall join with the Trustee in the execution, delivery and performance
of all instruments and agreements necessary or proper to effectuate
such resignation or removal. A successor to any co-Trustee or separate
Trustee that has so resigned or been removed may be appointed in the
manner provided in this Section;
(d) no co-Trustee or separate Trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee or
any other such Trustee hereunder nor shall the Trustee be liable by
reason of any act or omission of any co-Trustee or separate Trustee
selected by the Trustee with due care or appointed in accordance with
directions to the Trustee pursuant to Section 6.14; and
(e) any Act of Certificateholders delivered to the
Trustee shall be deemed to have been delivered to each such co-Trustee
and separate Trustee.
SECTION 7.13 RIGHTS WITH RESPECT TO THE SERVICER.
The Trustee's rights and obligations with respect to the Servicer and
the Back-up Servicer shall be governed by the Servicing Agreement.
SECTION 7.14 APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with respect
to the Certificates which shall be authorized to act on behalf of the Trustee
to authenticate Certificates issued upon original issue or upon exchange,
registration of transfer or pursuant to Section 2.05 hereof, and Certificates
so authenticated shall be entitled to the benefits of this Agreement and shall
be valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Agreement to the authentication
and delivery of Certificates by the Trustee or the Trustee's certificate of
authentication or the delivery of Certificates to the Trustee for
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent
and delivery of the
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Certificates to the Authenticating Agent on behalf of the Trustee. Each
Authenticating Agent shall be acceptable to the Transferor, MBIA and if an MBIA
Default or Termination has occurred and is continuing, the Certificateholders
and shall at all times be a corporation having a combined capital and surplus
of not less than the equivalent of $50,000,000 and subject to supervision or
examination by Federal or state authority or the equivalent foreign authority,
in the case of an Authenticating Agent who is not organized and doing business
under the laws of the United States of America, any state thereof or the
District of Columbia. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent without the execution or filing of any paper or any
further act on the part of the Trustee or such Authenticating Agent; provided,
such corporation shall be otherwise eligible under this Section.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee, MBIA and to the Transferor. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent, MBIA and to the Transferor. Upon
receiving such a notice of resignation or upon such a termination, or in case
at any time such Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Transferor and MBIA and
shall mail written notice of such appointment by first-class mail, postage
prepaid, to all Holders of Certificates, if any, with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Certificate Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Trustee may pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section but the Trustee
shall not be entitled to be reimbursed for such payments.
If an appointment is made pursuant to this Section, the Certificates
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
This is one of the Certificates described in the within-mentioned
Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
As Trustee
By:
-------------------------------
As Authenticating Agent
By:
-------------------------------
Authorized Officer
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SECTION 7.15 TRUSTEE TO HOLD LEASE CONTRACTS.
The Trustee hereby acknowledges receipt (subject to any exceptions as
may be noted by the Trustee to the Servicer, MBIA and the Certificateholders
within 10 days of the related Delivery Date) of and shall hold each Lease
Contract together with any documents relating thereto that may from time to
time be delivered to the Trustee, until such time as such Lease Contract is
released from the Trust Estate pursuant to the terms of this Agreement.
Upon receipt of the Lease Contracts, the Trustee shall determine that
they are listed on the applicable Series Lease Schedule. The Trustee shall be
under no duty or obligation to inspect, review or examine the Lease Contracts
and other documents to determine that the same are genuine, enforceable or
appropriate for the represented purpose or that they have actually been
recorded or that they are other than what they purport to be on their face.
SECTION 7.16 MONEY FOR CERTIFICATE PAYMENTS TO BE HELD IN TRUST.
The Trustee agrees, and if there is any Paying Agent other than the
Trustee, the Transferor will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee and MBIA an instrument in which such Paying
Agent shall agree with the Trustee that, subject to the provisions of this
Section, such Paying Agent will:
(a) hold all sums held by it for the payment of principal
or interest on Certificates in trust for the benefit of the
Certificateholders entitled thereto and MBIA until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee, MBIA and the Certificateholders
notice of any Default by the Transferor (or any other obligor upon the
Certificates) in the making of any payment of principal or interest;
and
(c) at any time during the continuance of any such
Default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Transferor may at any time, for the purpose of obtaining the
satisfaction and discharge of this Agreement or for any other purpose, pay, or
by Transferor Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Trustee upon
the same trusts as those upon which such sums were held by such Paying Agent;
and, upon such payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent in trust for
the payment of the principal or interest on any Certificate and remaining
unclaimed for three years after such principal or interest has become due and
payable shall be paid to the Transferor on Transferor Request or to MBIA if
such payment had been made by MBIA; and the Holder of such Certificate shall
thereafter, as an unsecured general creditor, and subject to any applicable
statute of limitations, look only to the Transferor for payment thereof, and
all liability of the Trustee, such Paying Agent or MBIA with respect to such
trust money or the related Certificate, shall thereupon cease; provided,
however, that the Trustee or such Paying
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Agent, before being required to make any such repayment, may at the expense of
the Transferor cause to be published once, in a newspaper published in the
English language, customarily published on each Business Day and of general
circulation in the city in which the Corporate Trust Office is located, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the
Transferor; and provided, further, that any amounts held that are proceeds of a
claim made under a Certificate Insurance Policy shall be returned to MBIA, and
the Certificateholders shall look only to MBIA for such payments. The Trustee
may also adopt and employ, at the expense of the Transferor, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Certificateholders whose right to or
interest in monies due and payable but not claimed is determinable from the
records of any Paying Agent, at the last address as shown on the Certificate
Register for each such Certificateholder).
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ARTICLE EIGHT
THE CERTIFICATE INSURANCE POLICIES
SECTION 8.01 PAYMENTS UNDER THE CERTIFICATE INSURANCE POLICIES.
If on the close of business on the second Business Day prior to any
Payment Date, the funds on deposit in the Collection Account and available to
be distributed on such Payment Date pursuant to Section 12.02(d) hereof (after
taking into account any transfers from the Cash Collateral Account in
accordance with Section 12.03 and any amounts payable pursuant to Section
12.02(d)(i) through (iv) hereof) are not sufficient to make the payment of any
interest due on the Outstanding Class A Certificates of the applicable Series
on such Payment Date in accordance with Section 12.02(d)(v) hereof, the Trustee
shall, no later than 10:00 a.m. New York time, on the Business Day immediately
preceding such Payment Date make a claim under the applicable Certificate
Insurance Policy in an amount equal to such insufficiency. In addition, if on
the close of business on the second Business Day immediately prior to any
Stated Maturity the funds on deposit in the Collection Account (after taking
into account any transfers from the Cash Collateral Account in accordance with
Section 12.03 and any amounts payable pursuant to Section 12.02(d)(i) through
(vi) hereof) are not sufficient to pay the entire Outstanding Principal Amount
of all Class A Certificates of the applicable Series (after giving effect to
the application of funds available to pay the Pro Rata Share of the Class A
Principal Distribution Amount of each Outstanding Series in accordance with
Section 12.02(d)(vii) hereof), the Trustee shall, no later than 10:00 a.m. New
York time, on the Business Day immediately preceding such Stated Maturity, make
a claim under the applicable Certificate Insurance Policy in an amount equal to
such insufficiency. Proceeds of claims on the Certificate Insurance Policies
shall be deposited in the Collection Account and used solely to pay amounts due
in respect of interest on the applicable Class A Certificates on each Payment
Date and principal of the applicable Class A Certificates at their Stated
Maturity.
In addition, on any day that the Trustee has actual knowledge or
receives notice that any amount previously paid to a Holder of Class A
Certificates has been subsequently recovered from such Certificateholder
pursuant to a final order of a court of competent jurisdiction that such
payment constitutes an avoidable preference within the meaning of any
applicable bankruptcy law to such Certificateholder (a "Preference Claim"), the
Trustee shall make a claim within one Business Day upon the relevant
Certificate Insurance Policy for the full amount of such Preference Claim in
accordance with the terms of such Certificate Insurance Policy. Any proceeds
of any such Preference Claim received by the Trustee shall be paid to the
related Class A Certificateholders.
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ARTICLE NINE
AMENDMENTS
SECTION 9.01 AMENDMENTS WITHOUT CONSENT OF CERTIFICATEHOLDERS.
The Transferor, the Servicer, the Back-up Servicer and the Trustee,
with the prior written consent of MBIA but without the consent of the Holders
of any Certificates, at any time and from time to time, may enter into one or
more amendments hereto, in form satisfactory to the Trustee, for any of the
following purposes, provided that any such amendment, as evidenced by an
Opinion of Counsel if requested by the Trustee, will not have a material
adverse affect on the Controlling Holders:
(a) to correct or amplify the description of any property
at any time included in the Trust Estate, or better to assure, convey
and confirm unto the Trustee any property included or required to be
included in the Trust Estate, or to include in the Trust Estate any
additional property; or
(b) to evidence the succession of another Person to the
Transferor, and the assumption by such successor of the covenants of
the Transferor herein and in the Certificates contained, in accordance
with Section 11.02(o) hereof; or
(c) to add to the covenants of the Transferor, for the
benefit of MBIA or the Holders of all Certificates or to surrender any
right or power herein conferred upon the Transferor; or
(d) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee; or
(e) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provisions with respect to matters or questions arising under this
Agreement, which shall not be inconsistent with the provisions of this
Agreement; or
(f) to evidence the succession of the Trustee pursuant to
Article Seven hereof, provided that any such amendment does not modify
this Agreement in a manner described in paragraphs (i) through (viii)
of Section 9.02(a) hereof;
(g) as may be necessary to effectuate the issuance of any
additional Series of Certificates in accordance with the terms of this
Agreement and the related Supplement; provided that any such amendment
does not modify this Agreement in a manner described in paragraphs (i)
through (viii) of Section 9.02(a) hereof; or
(h) as may be necessary to effectuate the issuance of a
Class of B Certificates Related to a Series of A Certificates if such
Class B Certificates were not issued on the Delivery Date for such
Class A Certificates in accordance with the terms of this Agreement
and the related Supplement; provided that any such amendment does not
modify this Agreement in a manner described in paragraphs (i) through
(viii) of Section 9.02(a) or (b) hereof, or
(i) to amend the definitions of "Net Worth Requirement"
in connection with a change in
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control of the Servicer or "Concentration Limits".
The Trustee is hereby authorized to join in the execution of any such
amendment and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
any such amendment that affects the Trustee's own rights, duties, liabilities
or immunities under this Agreement or otherwise.
Promptly after the execution by the Transferor, the Servicer, the
Back-up Servicer and the Trustee of any amendment pursuant to this Section, the
Transferor shall mail to the Rating Agencies and each Certificateholder a copy
of such amendment.
Notwithstanding the foregoing, provided that MBIA, in its sole
discretion, and Holders of more than 50% of Outstanding Principal Amount of
Class B Certificates (exclusive of any Class B Certificates held by the
Transferor) have given their prior written consent, Holders of any Series of
Class A Certificates, by their acceptance of their Class A Certificates, agree
that the definition of "Advance Rate" can be amended without the consent of
any Holder of a Class A Certificate if the Rating Agencies confirm that such
amendment will not affect the then current rating on any Outstanding Series
and, subject to the fulfillment of such conditions, the Trustee, the Back-up
Servicer, the Transferor and the Servicer may enter into one or more amendments
hereunder to effect such change.
SECTION 9.02 AMENDMENTS AND MODIFICATIONS TO AGREEMENT WITH
CONSENT OF CERTIFICATEHOLDERS.
(a) With the prior written consent of MBIA and the Controlling
Holders, by Act of said Holders delivered to the Transferor and the Trustee,
the Transferor, the Servicer, the Back-up Servicer and the Trustee may enter
into an amendment or modification of this Agreement 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
Holders of the Certificates under this Agreement (other than as described in
Section 9.01); provided, however, that no such amendment shall, without the
consent of the Holders of each Outstanding Certificate affected thereby:
(i) change the Stated Maturity of any Certificate or the
due date of any installment of principal of, or any installment of
interest on, any Certificate, or change the principal amount thereof
or the Certificate Interest Rate or change any place of payment where,
or the coin or currency in which, any Certificate or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment; or
(ii) reduce the percentage in Outstanding Principal Amount
of Certificates, the consent of the Holders of which is required for
any such amendment, or the consent of the Holders of which is required
for any waiver of compliance with certain provisions of this Agreement
or Events of Default or their consequences; or
(iii) impair or adversely affect the Trust Estate; or
(iv) modify or alter the definition of the term
"Outstanding" or "Outstanding Principal Amount" or "Controlling
Holders" or "Series Required Collateralization Amount"; or
(v) modify or alter the provisions of the proviso to
Section 6.04 hereof; or
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(vi) modify any of the provisions of this Section 9.02,
except to increase the percentage of Holders required for any
modification or waiver or to provide that certain other provisions of
this Agreement cannot be modified or waived without the consent of
each Holder of each Outstanding Certificate affected thereby; or
(vii) permit the creation of any lien ranking prior to, on
a parity with, or subordinate to the Lien of this Agreement with
respect to any part of the Trust Estate or terminate or release the
lien of this Agreement on any property at any time subject hereto or
deprive the Holder of any Certificate of the security afforded by the
Lien of this Agreement; or
(viii) modify any of Sections 6.01, 6.02, 6.03, 6.18, or
Section 12.02(d) hereof.
(b) With the prior written consent of MBIA and the Holders of not
less than 66-2/3% in Outstanding Principal Amount of each Class of any Series
of Certificates that is in its Funding Period, by Act of said Holders delivered
to the Transferor and the Trustee, the Transferor, the Servicer, the Back-up
Servicer and the Trustee may enter into amendments hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of Article Three hereof or the definitions used therein, provided
that any such amendment does not modify the Agreement in a manner described in
clauses (i) through (viii) of paragraph (a) of this Section 9.02.
(c) With the prior written consent of MBIA and the Holders of not
less than 66-2/3% in Outstanding Principal Amount of any Series of Class B
Certificates and provided that an Opinion of Counsel has been rendered that
such amendment will not, in any material way, affect the tax treatment of any
Series of Certificates, by Act of said Holders delivered to the Transferor and
the Trustee, the Transferor, the Servicer, the Back-up Servicer and the Trustee
may enter into amendments hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions, including
definitions, contained herein relating to such Series of Class B Certificates,
provided that any such amendment does not modify this Agreement in a manner
described in clauses (i) through (viii) of paragraph (a) of this Section 9.02.
(d) The Trustee is hereby authorized to join in the execution of
any amendments to this Agreement pursuant to clause (a), (b) or (c) above and
to make any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into any such
amendment that affects the Trustee's own rights, duties, liabilities or
immunities under this Agreement It shall not be necessary for any Act of
Certificateholders under this Section to approve the particular form of any
proposed supplemental agreement, but it shall be sufficient if such Act shall
approve the substance thereof. Promptly after the execution by the Transferor,
the Servicer, the Back-up Servicer and the Trustee of any amendment pursuant to
this Section, the Transferor shall mail to the Holders of the Certificates,
MBIA and the Rating Agencies a copy of such amendment, together with any
consents obtained from MBIA in connection therewith.
SECTION 9.03 EXECUTION OF AMENDMENTS.
In executing any amendment permitted by this Article or the
modifications thereby of the trusts created by this Agreement, the Trustee
shall be entitled to receive upon request, and (subject to Section 7.01 hereof)
shall be fully protected in relying in good faith upon, an Opinion of Counsel
reasonably acceptable to the Trustee stating that the execution of such
amendment is authorized or permitted by this Agreement. The Trustee may, but
shall not be obligated to, enter into any such amendment which affects
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the Trustee's own duties or immunities under this Agreement or otherwise.
SECTION 9.04 EFFECT OF AMENDMENTS.
Upon the execution of any amendment under this Article, this Agreement
shall be modified in accordance therewith, and such amendment shall form a part
of this Agreement for all purposes; and every Holder of Certificates
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 9.05 REFERENCE IN CERTIFICATES TO AMENDMENTS.
Certificates authenticated and delivered after the execution of any
amendment pursuant to this Article may, and if required by the Trustee shall,
bear a notation in form approved by the Trustee as to any matter provided for
in such amendment. If the Transferor shall so determine, new Certificates so
modified as to conform, in the opinion of the Trustee and the Transferor, to
any such amendment may be prepared and executed by the Transferor and
authenticated and delivered by the Trustee in exchange for Outstanding
Certificates.
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ARTICLE TEN
REDEMPTION OF CERTIFICATES
SECTION 10.01 REDEMPTION AT THE OPTION OF THE TRANSFEROR; ELECTION TO
REDEEM.
(a) The Transferor shall have the option to purchase all Lease
Assets related to a specific Series Lease Schedule at any time after the Series
IPB for such Series is less than or equal to 10% times the Initial Series IPB
for such Series, at a price equal to the Removal Price for all Lease Contracts
in that Series plus any fees due hereunder and all amounts due to MBIA under
the Insurance Agreement with respect to such Series; provided; however, the
Transferor shall not be entitled to exercise such right if the Removal Price is
less than the Redemption Price for such Class A Certificates. The Transferor
shall deposit such Removal Price in the Redemption Account.
(b) The Transferor shall give notice to the Trustee of its
intention to purchase all Lease Assets related to a specific Series Lease
Schedule pursuant to Section 10.01(a) above and the Trustee shall set the
Redemption Date and the Redemption Record Date for such Series of Certificates
and give notice thereof to the Certificateholders of such Series pursuant to
Section 10.02 hereof.
(c) In the absence of the exercise by the Transferor of its
purchase option described in Section 10.01(a) hereof, MBIA shall have the
option to cause a redemption of the Class A Certificates of a particular Series
at any time after the Outstanding Principal Amount for such Series of Class A
Certificates declines below 10% of the Outstanding Principal Amount of such
Class of Certificates as of the related Funding Termination Date at the
applicable Redemption Price plus any fees due hereunder.
(d) MBIA shall give notice to the Trustee of its intention to
cause a redemption of the Class A Certificates of a particular Series pursuant
to Section 10.01(c) hereof and the Trustee shall set the Redemption Date and
the Redemption Record Date for such Series of Class A Certificates and give
notice thereof pursuant to Section 10.02 hereof.
(e) Installments of interest and principal that are due regarding
a Series of Certificates on or prior to the related Redemption Date shall
continue to be payable to the Holders of such Certificates called for
redemption as of the relevant Record Dates according to their terms and the
provisions of Section 2.08 hereof. The election of the Transferor to purchase
Series Lease Assets or MBIA to redeem any Class A Certificates pursuant to this
Section shall be evidenced by a Board Resolution or written notice from MBIA,
respectively, directing the Trustee to make the payment of the Redemption Price
on all of the Certificates to be redeemed from monies deposited with the
Trustee pursuant to Section 10.04 hereof.
(f) No Class B Certificates can be redeemed while any Class A
Certificates of a Related Series are then Outstanding.
SECTION 10.02 NOTICE TO TRUSTEE; DEPOSIT OF REDEMPTION PRICE.
In the case of any redemption pursuant to Section 10.01 hereof, at
least 15 days prior to the related Redemption Date, the Trustee shall notify
the applicable Certificateholders of such Redemption Date and shall direct the
Transferor or MBIA, as applicable, to deposit into the Redemption Account on
such notification date an amount equal to the Removal Price of all Lease Assets
related to the specific Series Lease Schedule to be purchased or the
Redemption Price of all Certificates to be redeemed, as applicable, on such
Redemption Date plus any fees due hereunder and all amounts due to MBIA under
the Insurance Agreement.
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SECTION 10.03 NOTICE OF REDEMPTION BY THE TRANSFEROR.
Upon receipt of the notice pursuant to Section 10.01 above and such
deposit set forth in Section 10.02 above, the Trustee shall provide notice of
redemption pursuant to Section 10.01 hereof by first-class mail, postage
prepaid, mailed no later than the Business Day following the date on which such
deposit was made, to each Holder of Certificates whose Certificates are to be
redeemed, at such Holder's address in the Certificate Register.
All notices of redemption shall state:
(a) the applicable Redemption Date;
(b) the applicable Redemption Price; and
(c) that on such Redemption Date, the Redemption Price will become
due and payable upon each such Certificate in the related Series, and that
interest thereon shall cease to accrue on such date.
Any such Notice shall be given by the Trustee in the name and at the
expense of the Transferor or MBIA, as applicable. Failure to give such notice
or any defect therein, to any Holder of any Certificate selected for redemption
shall not impair or affect the validity of the redemption of any other
Certificate.
SECTION 10.04 CERTIFICATES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as provided in Section 10.03
hereof, the Series of Certificates to be redeemed shall, on the applicable
Redemption Date, become due and payable at the Redemption Price and on such
Redemption Date such Certificates shall cease to bear interest. The Holders of
such Certificates shall be paid the Redemption Price by the Paying Agent on
behalf of the Transferor; provided, however, that installments of principal and
interest that are due regarding such Series of Certificates on or prior to such
Redemption Date shall be payable to the Holders of such Certificates registered
as such on the relevant Record Dates according to their terms and the
provisions of Section 2.08 hereof.
If the Holders of any Certificate called for redemption shall not be
so paid, the principal and premium on such Series of Certificates, if any,
shall, until paid, bear interest from the applicable Redemption Date at the
related Certificate Interest Rate.
Upon purchase of all Lease Assets related to a specific Series Lease
Schedule pursuant to Section 10.01(a) hereof and payment of the Redemption
Price and all other amounts owing to each related Holder, any funds remaining
in the Redemption Account after the payment of all such amounts shall be
transferred to the Collection Account by the Trustee.
SECTION 10.05 RELEASE OF SERIES LEASE CONTRACTS.
In connection with any redemption permitted under this Article Ten,
the Transferor or MBIA, as the case may be, shall be permitted to obtain a
release of the related Series Lease Contracts to the extent that (a) after
giving effect to such release, the sum of (i) the amount of funds then held in
the Cash
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Collateral Account and (ii) the Aggregate IPB is equal to or exceeds the sum of
the Series Required Collateralization Amounts for all Series then Outstanding
plus the Outstanding Principal Amount of all Series of Class A Certificates
(after giving effect to such redemption and the issuance of any new Series of
Certificates) and (b) the applicable Redemption Price shall have been deposited
into the Redemption Account as required by Section 10.02.
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ARTICLE ELEVEN
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 11.01 REPRESENTATIONS AND WARRANTIES.
The Transferor hereby makes the following representations and
warranties for the benefit of the Trustee, MBIA and the Certificateholders on
which the Trustee relies in accepting the Trust Estate in trust and in
authenticating the Certificates. Such representations and warranties are made
as of the Initial Delivery Date and, except as specifically provided herein,
each additional Delivery Date, and shall survive the transfer, conveyance and
assignment of the Trust Estate to the Trustee.
(a) Organization and Good Standing. The Transferor is a
corporation duly organized, validly existing and in good standing under the law
of the State of Delaware and each other State where the nature of its business
requires it to qualify, except to the extent that the failure to so qualify
would not in the aggregate materially adversely affect the ability of the
Transferor to perform its obligations under the Transaction Documents;
(b) Authorization. The Transferor has the power, authority and
legal right to execute, deliver and perform under the terms of the Transaction
Documents and the execution, delivery and performance of the Transaction
Documents have been duly authorized by the Transferor by all necessary
corporate action;
(c) Binding Obligation. Each of (i) this Agreement, assuming due
authorization, execution and delivery by the Trustee, the Back-up Servicer and
the Servicer, (ii) the Insurance Agreement, assuming due authorization,
execution and delivery by MBIA, the Trustee, the Back-up Servicer, the Company,
the Certificate Funding Administrator and the Servicer, (iii) the Servicing
Agreement, assuming due authorization, execution and delivery by the
Transferor, the Servicer, the Trustee and the Servicer and (iv) the applicable
Certificate Purchase Agreement, assuming due authorization, execution and
delivery by the purchaser named therein and (v) the Lease Acquisition
Agreement, assuming due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of the Transferor,
enforceable against the Transferor in accordance with its terms except that (A)
such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws (whether statutory, regulatory or decisional)
now or hereafter in effect relating to creditors' rights generally and (B) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to certain equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought, whether a
proceeding at law or in equity;
(d) No Violation. The consummation of the transactions
contemplated by the fulfillment of the terms of the Transaction Documents will
not conflict with, result in any breach of any of the terms and provisions of
or constitute (with or without notice, lapse of time or both) a default under
the organizational documents or bylaws of the Transferor, or any material
indenture, agreement, mortgage, deed of trust or other instrument to which the
Transferor is a party or by which it is bound, or in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of such
indenture, agreement, mortgage, deed of trust or other such instrument, other
than any Lien created or imposed pursuant to the terms of the Transaction
Documents, or violate any law, or any material 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 any of its properties.
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(e) No Proceedings. There are no Proceedings or investigations to
which the Transferor, or any of the Transferor's Affiliates, is a party
pending, or, to the knowledge of Transferor, threatened, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality (A) asserting the invalidity of the Transaction Documents, (B)
seeking to prevent the issuance of any of the Certificates or the consummation
of any of the transactions contemplated by the Transaction Documents or (C)
seeking any determination or ruling that would materially and adversely affect
the performance by the Transferor of its obligations under, or the validity or
enforceability of, the Transaction Documents.
(f) Approvals. All approvals, authorizations, consents, orders or
other actions of any Person, or of any court, governmental agency or body or
official, required in connection with the execution and delivery of the
Transaction Documents and with the valid and proper authorization, issuance and
sale of the Certificates pursuant to this Agreement (except approvals of State
securities officials under the Blue Sky Laws), have been or will be taken or
obtained on or prior to the applicable Delivery Date.
(g) Place of Business. As of the Initial Delivery Date, the
Transferor's principal place of business and chief executive office is located
at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and the
Transferor has done business only under the name GF Funding Corp. IV.
(h) Transfer and Assignment of Lease Assets. Upon the delivery
to the Trustee of the Lease Contracts and the filing of the financing
statements described in Sections 4.01(f) and 4.02(c)(vi) hereof, the Trustee
for the benefit of the Certificateholders and MBIA shall have a first priority
perfected security interest in the Lease Receivables and the Lease Contracts
and in the proceeds thereof, except for Liens permitted under Section 11.02(a)
and limited to the extent set forth in Section 9-306 of the UCC as in effect in
the applicable jurisdiction. All filings (including, without limitation, UCC
filings) as are necessary in any jurisdiction to perfect the ownership or other
interest of the Trustee in the Trust Estate (other than filings with respect to
Equipment underlying Lease Contracts), including the transfer of the Lease
Contracts and the payments to become due thereunder, have been made.
(i) Parent of the Transferor. The Company is the registered owner
of all of the issued and outstanding common stock of the Transferor, all of
which common stock has been validly issued, is fully paid and nonassessable.
(j) Lease Acquisition Agreement As of the Initial Delivery Date
the Transferor has entered into the Lease Acquisition Agreement with the
Company relating to its acquisition of the Lease Contracts, the Lease
Receivables and the Equipment, and the representations and warranties made by
the Company relating to the Lease Contracts, Lease Receivables and the
Equipment have been validly assigned to and are for the benefit of the
Transferor, the Trustee, MBIA and the Certificateholders and such
representations and warranties are true and correct.
(k) Bulk Transfer Laws. The transfer, assignment and conveyance
of the Lease Contracts, the Equipment and the Lease Receivables by the Company
to the Transferor pursuant to the Lease Acquisition Agreement or by the
Transferor pursuant to this Agreement is not subject to the bulk transfer or
any similar statutory provisions in effect in any applicable jurisdiction.
(l) The Lease Contracts. The Transferor hereby restates and makes
each of the representations and warranties with respect to the Lease Contracts,
the Lease Receivables and the Equipment that are made by the Company in Section
3.01 of the Lease Acquisition Agreement as of the date on which such
representations and warranties were made.
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(m) Investment Company Act. The Transferor is not an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
SECTION 11.02 COVENANTS.
The Transferor hereby makes the following covenants for the benefit
of the Trustee, MBIA and the Certificateholders, on which the Trustee relies in
accepting the Trust Estate in trust and in authenticating the Certificates.
Such covenants shall survive the transfer, conveyance and assignment of the
Trust Estate to the Trustee.
(a) No Liens. Except for the conveyances and assignment
hereunder, the Transferor will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on
any Trust Estate now existing or hereafter created, or any interest therein
prior to the termination of this Agreement pursuant to Section 5.01 hereof; the
Transferor will notify the Trustee of the existence of any Lien on any Trust
Estate immediately upon discovery thereof; and the Transferor shall defend the
right, title and interest of the Trustee in, to and under the Trust Estate now
existing or hereafter created, against all claims of third parties claiming
through or under the Transferor; provided, however, that nothing in this
Section 11.02(a) shall prevent or be deemed to prohibit the Transferor from
suffering to exist upon any of the Equipment any Liens for municipal or other
local taxes and other governmental charges owed by the Transferor or a
Customer if such taxes or governmental charges shall not at the time be due and
payable or if the Transferor or related Customer shall currently be contesting
the validity thereof in good faith by appropriate proceedings and the
Transferor shall have set aside on its books adequate reserves with respect
thereto.
(b) Delivery of Collections. The Transferor agrees to hold in
trust and promptly pay to the Servicer all amounts received by the Transferor
in respect of the Trust Estate (other than amounts distributed to or for the
benefit of the Transferor pursuant to Article Twelve hereof).
(c) Obligations with Respect to Lease Contracts. The Transferor
will duly fulfill all obligations on its part to be fulfilled under or in
connection with each Lease Contract and will do nothing to impair the rights of
the Trustee (for the benefit of the Certificateholders and MBIA) in the Lease
Receivables, the Lease Contracts and any other part of the Trust Estate. As
long as there is no event of default under the applicable Lease Contract, the
Transferor will not disturb the Customer's quiet and peaceful possession of the
related Equipment and the Customer's unrestricted use thereof for its intended
purpose.
(d) Compliance with Law. The Transferor will comply, in all
material respects, with all acts, rules, regulations, orders, decrees and
directions of any governmental authority applicable to the Lease Contracts or
any part thereof. The Transferor will comply, in all material respects, with
all requirements of law applicable to the Transferor.
(e) Preservation of Security Interest. The Transferor shall
execute and file such continuation statements and any other documents which may
be required by law to fully preserve and protect the interest of the Trustee
(for the benefit of the Certificateholders and MBIA) in the Trust Estate.
(f) Maintenance of Office, etc. The Transferor will not, without
providing 30 days notice to the Trustee and MBIA and without filing such
amendments to any previously filed financing statements as the Trustee or MBIA
may require or as may be required in order to maintain the Trustee's perfected
security interest in the Trust Estate, (a) change the location of its principal
executive office, or (b) change
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its name, identity or corporate structure in any manner which would make any
financing statement or continuation statement filed by the Transferor in
accordance with the Servicing Agreement or this Agreement seriously misleading
within the meaning of Article 9-402(7) of any applicable enactment of the UCC.
(g) Further Assurances. The Transferor will make, execute or
endorse, acknowledge, and file or deliver to the Trustee from time to time
such schedules, confirmatory assignments, conveyances, transfer endorsements,
powers of attorney, certificates, reports and other assurances or instruments
and take such further steps relating to the Trust Estate, as the Trustee may
request and reasonably require.
(h) Notice of Liens. The Transferor shall notify the Trustee and
MBIA promptly after becoming aware of any Lien on any Trust Estate, except for
any Liens on Equipment for municipal or other local taxes if such taxes shall
not at the time be due or payable without penalty or if the Transferor or the
related Customer shall currently be contesting the validity thereof in good
faith by appropriate proceedings and the Transferor shall have set aside on its
books adequate reserves with respect thereto.
(i) Activities of the Transferor. The Transferor (a) shall engage
in only (1) the acquisition, ownership, leasing, selling and pledging of the
property acquired by the Transferor pursuant to the Lease Acquisition
Agreement, and causing the issuance of, receiving and selling the Certificates
issued pursuant to this Agreement and (2) the exercise of any powers permitted
to corporations under the corporate law of the State of Delaware which are
incidental to the foregoing or necessary to accomplish the foregoing and the
Transferor shall incur no debt other than trade payables and expense accruals
in connection with its operations in the normal course of business, and other
than as contemplated by the Transaction Documents; (b) will (1) maintain its
books, records and cash management accounts separate from the books and records
of any other entity and in accordance with generally accepted accounting
principles, (2) maintain separate bank accounts and no funds of the Transferor
shall be commingled with funds of any other entity except for a limited period
of time between receipt by the Company in its capacity as Servicer or the
Lockbox Bank of certain payments on the Lease Contracts and the underlying
proceeds as specified in the Servicing Agreement, (3) keep in full effect its
existence, rights and franchises as a corporation under the laws of its State
of incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this
Agreement, (4) observe all corporate procedures required by its Certificate of
Incorporation, its bylaws and the laws of the state of Delaware, (5) maintain
its good standing under the laws of the state of Delaware, (6) keep correct and
complete books and records of account and minutes of meeting and other
proceedings of its Board of Directors and shareholder meetings, (7) obtain
proper authorization from its directors or shareholders, as appropriate and act
solely in its corporate name and through its duly authorized officers and
agents in the conduct of its business, (8) reflect in its financial statements
that the Lease Assets have been sold and assigned to the Transferor and that
the Lease Receivables have been sold and assigned from the Transferor to the
Trust and that the assets of the Transferor are not available to pay the
creditors of the Company, (9) maintain a separate telephone number and
stationery reflecting a separate address and identity from that of the Company;
and (c) will not (1) dissolve or liquidate in whole or in part, (2) own any
subsidiary or lend or advance any moneys to, or make an investment in, any
Person, (3) make any capital expenditures, (4)(A) commence any case, proceeding
or other action under any existing or future bankruptcy, insolvency or similar
law seeking to have an order for relief entered with respect to it, or seeking
reorganization, arrangement, adjustment, wind-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, (B) seek
appointment of a receiver, trustee, custodian or other similar official for it
or any part of its assets, (C) make a general assignment for the benefit of
creditors, or (D) take any action in furtherance of, or consenting or
acquiescing in, any of the foregoing, (5) guarantee (directly or indirectly),
endorse or
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otherwise become contingently liable (directly or indirectly) for the
obligations of, or own or purchase any stock, obligations or securities of or
any other interest in, or make any capital contribution to, any other Person,
(6) merge or consolidate with any other Person, (7) engage in any other action
that bears on whether the separate legal identity of the Transferor will be
respected, including without limitation (A) holding itself out as being liable
for the debts of any other party or (B) acting other than in its corporate name
and through its duly authorized officers or agents, or (8) create, incur,
assume, or in any manner become liable in respect of any indebtedness other
than as contemplated by the Transaction Documents and other than trade payables
and expense accruals incurred in the ordinary course of business and which are
incidental to its business purpose; provided, however, that the Transferor may
take any action prohibited by this clause (8) if (x) the Transferor shall
cause, prior to the taking of such action, an Opinion of Counsel experienced
in federal bankruptcy matters, in substance satisfactory to the Trustee, the
Certificateholders, MBIA and the Rating Agencies confirming the
non-consolidation of the Transferor and the Company, to be delivered to the
Trustee, the Certificateholders, MBIA and the Rating Agencies, (y) the Rating
Agencies shall indicate in writing that the taking of such action will not
affect the then current rating of any Series of Certificates, and (z) MBIA
shall have given its prior written consent The Transferor shall not amend any
article in its Certificate of Incorporation that deals with any matter
discussed above without the prior written consent of MBIA. On or before April
15 of each year, so long as any of the Certificates are Outstanding, the
Transferor shall furnish to each Certificateholder, the Trustee and MBIA, an
Officer's Certificate confirming that the Transferor has complied with its
obligations under this Section 11.02(i).
(j) Directors. The Transferor agrees that at all times, at least
two of the directors and one of the executive officers of the Transferor (or
two persons, one of whom is serving as both a director and an executive
officer) will not be a director, officer or employee of any direct or ultimate
parent, or Affiliate of the parent or of the Transferor; provided, however,
that such independent directors and officers may serve in similar capacities
for other "special purpose corporations" formed by the Company and its
Affiliates. The Transferor's Certificate of Incorporation shall at all times
provide that such independent directors shall have a fiduciary duty to the
Holders of the Certificates and will always require unanimous consent of the
board of directors to file any bankruptcy petition.
(k) Preservation of the Equipment. The Transferor warrants that
it is the lawful owner and possessor of the Equipment or has a valid security
interest therein and that it will warrant and defend such Equipment against all
Persons, claims and demands whatsoever. The Transferor shall not assign, sell,
pledge, or exchange, or in any way encumber or otherwise dispose of the
Equipment, except as permitted under this Agreement.
(l) Tax Treatment. The Transferor shall comply with Sections 2.11
of this Agreement at all times and its financial and tax records shall reflect
such tax treatment.
(m) Maintenance of Office or Agency. The Transferor will maintain
an office or agency within the United States of America where Certificates may
be presented or surrendered for payment, where Certificates may be surrendered
for registration of transfer or exchange and where notices and demand to or
upon the Transferor in respect of the Certificates and this Agreement may be
served. The Transferor hereby initially appoints the Trustee as the Paying
Agent and its Corporate Trust Office as the office for each of said purposes.
The Transferor will give 30 days prior written notice to the Trustee, MBIA and
the Certificateholders of any change in the identity of the Paying Agent or the
location, of any such office or agency. If at any time the Transferor shall
fail to maintain any such office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Trustee, and the Transferor hereby appoints the
Trustee its agent to receive
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all such presentations, surrenders, notices and demands.
(n) Enforcement of Servicing Agreement and Lease Acquisition
Agreement. The Transferor will take all actions necessary, and diligently
pursue all remedies available to it, to the extent commercially reasonable, to
enforce the obligations of the Servicer under the Servicing Agreement and the
Company under the Lease Acquisition Agreement and to secure its rights
thereunder.
(o) Transferor May Consolidate, etc., Only on Certain Terms. The
Transferor shall not consolidate or merge with or into any other Person or
convey or transfer its properties and assets substantially as an entirety to
any Person, unless:
(i) the Person (if other than the Transferor) formed by
or surviving such consolidation or merger or which acquires by
conveyance or transfer the properties and assets of the Transferor
substantially as an entirety shall be a Person organized and existing
as a limited purpose corporation under the laws of the United States
of America or any State thereof and shall have expressly assumed, by
an amendment hereto, executed and delivered to the Trustee and MBIA,
in form and substance reasonably satisfactory to the Trustee and MBIA,
the obligation to make due and punctual payments of the principal of
and interest on all of the Certificates and to perform every covenant
of this Agreement on the part of the Transferor to be performed or
observed; and
(ii) the Transferor shall have caused the Trustee to have
received a letter from the Rating Agencies to the effect that the
rating issued with respect to the Certificates is confirmed,
notwithstanding the consummation of such merger, consolidation,
transfer or conveyance together with the consent of MBIA to such
merger, consolidation transfer or conveyance; and
(iii) immediately after giving effect to such transaction,
no Event of Default or Default shall have occurred and be continuing;
and
(iv) the Transferor shall have delivered to the Trustee
and MBIA an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger, conveyance or transfer and
such Supplement comply with this Article Eleven and that all
conditions precedent herein provided for relating to such transaction
have been complied with; and
(v) such consolidation, merger, conveyance or transfer
shall be on such terms as shall fully preserve the lien and security
of this Agreement, the perfection and priority thereof and the rights
and powers of the Trustee, MBIA and the Holders of the Certificates
under this Agreement; and
(vi) the surviving corporation shall be a "special purpose
corporation"; i.e., shall have an organizational charter substantially
similar to the Certificate of Incorporation of the Transferor
including specific limitations on the business purposes, and
provisions for independent directors; and
(vii) MBIA shall have given its prior written consent,
which consent shall not be unreasonably withheld or delayed.
(p) Successor Substituted. Upon any consolidation or merger, or
any conveyance or transfer
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of the properties and assets of the Transferor substantially as an entirety in
accordance with Section 11.02(o) hereof, the Person formed by or surviving such
consolidation or merger (if other than the Transferor) or the Person to which
such conveyance or transfer is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Transferor under this Agreement
with the same effect as if such Person had been named as the Transferor herein
upon the execution of an assignment and assumption agreement by such Person. In
the event of any such conveyance or transfer, the Person named as the
"Transferor" in the first paragraph of this Agreement or any successor which
shall theretofore have become such in the manner prescribed in this Article
shall be released from its liabilities as obligor and maker on all the
Certificates and from its obligations under this Agreement and may be
dissolved, wound-up and liquidated at any time thereafter.
(q) Use of Proceeds. The proceeds from the sale of the
Certificates will be used by the Transferor (i) to pay the Existing
Indebtedness, (ii) to pay the expenses associated with this transaction and
(iii) for general corporate purposes, including the cost of funding additional
Lease Contracts. None of the transactions contemplated in the Transaction
Documents (including the use of the proceeds from the sale of the Certificates)
will result in a violation of Section 7 of the Securities and Exchange Act of
1934, as amended, or any regulations issued pursuant thereto, including
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II. The Transferor does not own or intend to carry
or purchase any "margin security" within the meaning of said Regulation G,
including margin securities originally issued by it or any "margin stock"
within the meaning of said Regulation U.
(r) Notice of Trigger Events or Funding Termination Events. Upon
the Transferor's obtaining knowledge of the occurrence of any Trigger Event or
Funding Termination Event, the Transferor shall within one Business Day of
obtaining such knowledge notify MBIA, the Rating Agencies and the
Certificateholders of such occurrence.
(s) Required Audits. The Transferor shall cause the Servicer to
perform the Required Audits on a timely basis.
SECTION 11.03 OTHER MATTERS AS TO THE TRANSFEROR.
(a) Limitation on Liability of Directors, Officers, or Employees
of the Transferor Except as provided in subsection (b) of this Section and
elsewhere in this Agreement, the directors, officers, or employees of the
Transferor shall not be under any personal liability to the Trust, the Trustee,
the Certificateholders, the Servicer, or any other Person hereunder or pursuant
to any documents delivered hereunder, it being expressly understood that all
such liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement and the issuance of the
Certificates, except with respect to liability resulting from such person's
fraudulent or willful misconduct. 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 documents of any kind, prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
(b) Parties Will Not Institute Insolvency Proceedings. During the
term of this Agreement and for one year and one day after the termination
hereof, none of the parties hereto or any Affiliate thereof will file any
involuntary petition or otherwise institute any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceeding under any
federal or state bankruptcy or similar law against the Transferor.
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ARTICLE TWELVE
ACCOUNTS AND ACCOUNTINGS
SECTION 12.01 COLLECTION OF MONEY.
Except as otherwise expressly provided herein, the Trustee may demand
payment or delivery of, and shall receive and collect, all money and other
property payable to or receivable by the Trustee pursuant to this Agreement.
The Trustee shall, upon request from the Servicer, provide the Servicer with
sufficient information regarding the amount of collections with respect to the
Lease Contracts received by the Trustee in the Lockbox Account (if such account
is held by the Trustee) and the other accounts held in the name of the Trustee
to permit the Servicer to perform its duties under the Servicing Agreement. The
Trustee shall hold all such money and property so received by it as part of the
Trust Estate and shall apply it as provided in this Agreement. If any Lease
Contract becomes a Defaulted Lease Contract, the Trustee, upon Transferor or
Servicer request may, and upon the request of MBIA or if an MBIA Default or
Termination has occurred and is continuing, the Controlling Holders shall take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate Proceedings. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Agreement and to proceed thereafter as provided in Article
Six hereof. If the Transferor receives any amounts payable to or receivable by
the Trustee pursuant to this Agreement, the Transferor shall immediately, but
not later than two Business Days after receipt, remit such amounts to the
Trustee for deposit in the Collection Account.
SECTION 12.02 COLLECTION ACCOUNT; REDEMPTION ACCOUNT.
(a) Prior to the Initial Delivery Date, the Trustee shall open and
maintain a trust account at its Corporate Trust Office (the "Collection
Account") in the name of the Trustee for the benefit of the Certificateholders
and MBIA, for the receipt of (i) payments remitted to the Trustee by the
Servicer and ACH Bank pursuant to Sections 3.03 and 3.04 of the Servicing
Agreement, amounts transferred from the Lockbox Account in accordance with
Section 3.03 of the Servicing Agreement and any amounts received by the Trustee
pursuant to Section 12.01 hereof, (ii) amounts transferred from the Cash
Collateral Account in accordance with Section 12.03(d)(i), (ii) and (iii)
hereof, (iii) with respect to the Class A Certificates, proceeds of claims
made under any of the Certificate Insurance Policies, in accordance with
Article Eight hereof, upon receipt, and (iv) any Reinvestment Income.
Notwithstanding the foregoing, Residual Proceeds shall not be deposited into
the Collection Account. Funds in the Collection Account shall not be
commingled with any other monies. All payments to be made from time to time by
the Transferor to the Certificateholders out of funds in the Collection Account
pursuant to the Agreement shall be made by the Trustee or the Paying Agent of
the Transferor. All monies deposited from time to time in the Collection
Account pursuant to this Agreement shall be held by the Trustee as part of the
Trust Estate as herein provided.
(b) Upon Transferor Order, the Trustee shall invest the funds in
the Collection Account in Eligible Investments; provided, however, that all
monies on deposit in the Collection Account pursuant to Section 12.02(a)(iii)
hereof shall remain uninvested. The Transferor Order shall specify the Eligible
Investments in which the Trustee shall invest, shall state that the same are
Eligible Investments and shall further specify the percentage of funds to be
invested in each Eligible Investment. No such Eligible Investment shall mature
later than the second Business Day preceding the next following Payment Date
and shall not be sold or disposed of prior to its maturity; provided that,
Eligible Investments of the type described in clause (a) of the definition of
Eligible Investments may mature on such Payment Date. In the absence of a
Transferor Order, the Trustee shall invest funds in the Collection Account in
Eligible
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Investments described in clause (g) of the definition thereof. Eligible
Investments shall be made in the name of the Trustee for the benefit of the
Certificateholders and MBIA. The Trustee shall provide to the Servicer and
MBIA monthly written confirmation of such investments, describing the Eligible
Investments in which such amounts have been invested. Any funds not so
invested must be insured by the Federal Deposit Insurance Corporation.
(c) Any income or other gain from investments in Eligible
Investments as outlined in (b) above shall be credited to the Collection
Account and any loss resulting from such investments shall be charged to such
account; provided, however, that the Transferor shall make or cause to be made
no later than the applicable Payment Date a deposit to the Collection Account
to the extent of any losses therein. Except as otherwise specifically set
forth herein, the Trustee shall not be liable for any loss incurred on any
funds invested in Eligible Investments pursuant to the provisions of this
Section 12.02 (other than in its capacity as obligor under any Eligible
Investment).
(d) On each Payment Date if either no Default or Event of Default
shall have occurred and be continuing or a Default or Event of Default shall
have occurred and be continuing but the entire Outstanding Principal Amount of
all Certificates shall not have been declared due and payable pursuant to
Section 6.02 hereof, then on such Payment Date, after making all transfers and
deposits to the Collection Account referred to in Section 12.02(a) hereof, the
Trustee shall withdraw from the Collection Account (other than amounts
representing payments of Lease Receivables due after the Calculation Date
immediately preceding such Payment Date unless such amounts are used toward
Servicer Advances pursuant to Section 3.04 of the Servicing Agreement)
including the Reinvestment Income therein, and shall make the following
disbursements in the following order in accordance with the provisions of and
instructions on the Monthly Servicer's Report; provided, however, that (x) the
proceeds of claims under any of the Certificate Insurance Policies shall be
used solely to pay interest and principal due under paragraphs (v) and (vii) of
this Section 12.02(d) in accordance with the terms of the applicable
Certificate Insurance Policy; (y) the Trustee shall withdraw from the
Collection Account and make interest payments based on the Outstanding
Principal Amount of all Class A Certificates even if it shall not have received
the Monthly Servicer's Report; and (z) if there are insufficient funds to make
the payments of interest or principal specified in clause (v) or (vii) below,
then the amount available to be paid pursuant to such clause will be allocated
to each Series of Certificates based on the applicable Pro Rata Share,
provided, however, that proceeds of a claim under a Certificate Insurance
Policy to pay any Outstanding Principal Amount upon the Stated Maturity of a
Series of Class A Certificates shall be used solely to pay such Outstanding
Principal Amount after giving effect to the application of funds available to
pay the Pro Rata Share of the Class A Principal Distribution Amount of each
Outstanding Series:
(i) to pay to the Servicer: (A) the Servicer Fee then
due for all Series then Outstanding; (B) the amounts necessary to
reimburse the Servicer and any successor Servicer and subservicer as
provided in Section 3.08(a) of the Servicing Agreement for reasonable
costs and expenses incurred by the Servicer (including reasonable
attorney's fees and out-of-pocket expenses) in connection with the
realization, attempted realization or enforcement of rights and
remedies upon Lease Contracts that have become Defaulted Lease
Contracts, from amounts received as Recoveries from such Defaulted
Lease Contracts; (C) any amounts received from Customers to pay the
taxes described in Section 3.07 of the Servicing Agreement, to the
extent deposited in the Collection Account; (D) the amount necessary
to reimburse the Servicer for any Nonrecoverable Advance; and (E) all
amounts received in respect of Lease Receivables as to which the
Servicer has made an unrecovered Servicer Advance, to the extent of
such Servicer Advance;
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(ii) to pay to the Back-up Servicer the Back-up Servicer
Fee then due for all Series then Outstanding;
(iii) to pay to the Trustee the Trustee Fee then due for
all Series then Outstanding;
(iv) to pay to MBIA the MBIA Premium then due for all of
the Class A Certificates then Outstanding;
(v) to pay the interest due on that Payment Date on all
outstanding Class A Certificates and any overdue interest, to be
applied as provided in Section 2.08 hereof;
(vi) to pay the interest due on that Payment Date on all
outstanding Class B Certificates and any overdue interest in an amount
not to exceed with respect to each Series, the product of the Class B
Interest Rate divided by twelve, the related Class B Advance Rate and
the related Series IPB, to be applied as provided in Section 2.08
hereof, provided that any proceeds of claims under any of the
Certificate Insurance Policies shall be not be used to pay any amounts
due under this paragraph;
(vii) first, to pay the Class A Principal Distribution
Amount on all outstanding Class A Certificates of a Series at Stated
Maturity of such Series, and second, to pay the Class A Principal
Distribution Amount on all outstanding Class A Certificates of all
other Series, to be applied to the payment of Certificate principal as
provided in Section 2.08 hereof;
(viii) to pay to MBIA, any amounts previously paid by MBIA
under any Certificate Insurance Policy and not heretofore repaid,
together with interest thereon in accordance with each Insurance
Agreement;
(ix) to pay to a successor Servicer after a successor
Servicer has been appointed pursuant to Section 6.02 of the Servicing
Agreement, the Additional Servicer Fee, if any, and to pay any
successor Servicer or the Trustee, any Transition Costs incurred by
any successor Servicer (solely pursuant to Section 6.02(d) of the
Servicing Agreement) or the Trustee and not previously reimbursed;
(x) on and after each Payment Date following the initial
occurrence of a Trigger Event, apply any remaining funds (the
"Additional Principal Amount") to the payment of Certificate principal
on all Outstanding Class A Certificates, in the amount of the Pro Rata
Share of any Additional Principal Amount for each such Series of
Certificates;
(xi) to pay the interest due on that Payment Date on all
Outstanding Class B Certificates and any overdue interest and interest
thereon that was not paid pursuant to clause (vi) above, to be applied
as provided in Section 2.08 hereof;
(xii) to pay the Class B Principal Distribution Amount due
on that Payment Date on all Outstanding Class B Certificates, to be
applied to the payment of Certificate principal as provided in Section
2.08 hereof;
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(xiii) to pay to MBIA, any other amounts due under any
Insurance Agreement;
(xiv) to pay to the Trustee and the Back-up Servicer, any
other amounts due to the Trustee or the Back-up Servicer as expressly
provided herein and in the Servicing Agreement;
(xv) to pay to the Servicer any other amounts due the
Servicer as expressly provided herein and in the Servicing Agreement;
(xvi) to remit any excess funds to or at the direction of
the Transferor in accordance with the instructions on the Monthly
Servicer's Report.
(e) Prior to the Initial Delivery Date, the Transferor shall cause
the Trustee to open and maintain a trust account at the Corporate Trust Office
(the "Redemption Account") in the name of the Trustee for the benefit of
Certificateholders and MBIA, for the receipt of the Redemption Price of any
Certificates to be redeemed in accordance with Article Ten hereof. On any
Redemption Date, the Trustee shall withdraw the applicable Redemption Price
from the Redemption Account and the Paying Agent shall remit the Redemption
Price to the applicable Certificateholders in accordance with Section 10.04
hereof. Moneys in the Redemption Account shall be invested in Eligible
Investments that mature no later than two Business Days prior to the relevant
Redemption Date. Eligible Investments shall be made in the name of the Trustee
for the benefit of the Certificateholders and MBIA. Any monies deposited in
the Redemption Account for purposes of redeeming Certificates pursuant to
Article Ten hereof shall, subject to Section 7.16 hereof, remain in the
Redemption Account until used to redeem such Certificates.
(f) If payments on the Lease Contracts are made by means of
electronic transfers from a Customer bank account, the Servicer shall either
remit such payments to the Collection Account in accordance with Section
3.03(a) of the Servicing Agreement, or the Transferor shall open and maintain
an account at the ACH Bank (the "ACH Account") in the name of the Trustee for
the sole benefit of the Certificateholders and MBIA for the receipt of such
collections in accordance with the Servicing Agreement. Upon the opening of
the ACH Account, the Transferor shall make an initial deposit therein (the
"Initial ACH Deposit") in an amount equal to $50,000. The Trustee shall
transfer moneys from the ACH Account to the Collection Account on the
applicable Determination Date in order to comply with Section 3.03(d) of the
Servicing Agreement. Moneys in the ACH Account shall be invested in Eligible
Investments that mature no later than the relevant Determination Date.
Eligible Investments shall be made in the name of the Trustee for the benefit
of the Certificateholders and MBIA.
SECTION 12.03 CASH COLLATERAL ACCOUNT.
(a) Prior to the Initial Delivery Date, the Transferor shall cause
the Trustee to open and maintain a trust account at the Corporate Trust Office
(the "Cash Collateral Account") in the name of the Trustee for the benefit of
the Certificateholders and MBIA, for the receipt of (i) any Class B Deposits or
Rate Event Deposits required to be made with respect to a Series of
Certificates, and (ii) any other deposits required under a Supplement. Monies
received in the Cash Collateral Account will be invested at the written
direction of the Transferor in Eligible Investments during the term of this
Agreement, and any income or other gain realized from such investment, shall be
held by the Trustee in the Cash Collateral Account as part of the Trust Estate
subject to disbursement and withdrawal as herein provided. Eligible
Investments shall be made in the name of the Trustee for the benefit of the
Certificateholders and MBIA. No such Eligible Investment shall mature later
than the second Business Day preceding the next following Payment Date and
shall not be sold or disposed of prior to its maturity; provided that, Eligible
Investments
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of the type described in clause (a) of the definition of Eligible Investments
may mature on such Payment Date. In the absence of a Transferor Order, the
Trustee shall invest funds in the Cash Collateral Account in Eligible
Investments described in clause (g) of the definition thereof. Monies shall be
subject to withdrawal in accordance with Section 12.03(d) hereof.
(b) The Trustee shall provide to the Servicer and MBIA monthly
written confirmation of investments of funds held in the Cash Collateral
Account, describing the Eligible Investments in which such amounts have been
invested. Any funds not so invested must be insured by the Federal Deposit
Insurance Corporation.
(c) If any amounts invested as provided in Section 12.03(a) hereof
shall be needed for disbursement from the Cash Collateral Account as set forth
in Section 12.03(d) hereof, the Trustee shall cause such investments of such
Cash Collateral Account to be sold or otherwise converted to cash to the credit
of such Cash Collateral Account. The Trustee shall not be liable for any
investment loss resulting from investment of money in the Cash Collateral
Account in any Eligible Investment in accordance with the terms hereof (other
than in its capacity as obligor under any Eligible Investment).
(d) Disbursements from the Cash Collateral Account shall be made,
to the extent funds therefore are available, only as follows:
(i) in the event that the amount in the Collection
Account at 10:00 a.m. Minneapolis time on the Determination Date
immediately preceding any Payment Date (other than amounts
representing payments of Lease Receivables due after the Calculation
Date immediately preceding such Payment Date unless such amounts are
used toward Servicer Advances pursuant to Section 3.04 of the
Servicing Agreement) is less than the amounts required to be paid
from the Collection Account on such Payment Date pursuant to clauses
(i) through (vii), and once there are no Class A Certificates
Outstanding clauses (xi) and (xii) also, of Section 12.02(d) hereof,
the Trustee shall withdraw funds from the Cash Collateral Account on
or prior to 4:00 p.m. New York time on such Determination Date to the
extent necessary to make such payments on such Payment Date and
deposit such funds into the Collection Account; and
(ii) in the event that on any Payment Date a Trigger Event
has occurred, the Trustee shall withdraw all funds from the Cash
Collateral Account and deposit such funds into the Collection Account
for disbursement in accordance with the provisions of Section 12.02(d)
hereof; and
(iii) any amounts remaining in the Cash Collateral Account
upon termination of the Trust shall be distributed to or at the
direction of the Transferor.
SECTION 12.04 REPORTS BY TRUSTEE TO MBIA AND CERTIFICATEHOLDERS.
(a) On each Payment Date the Trustee shall account to each Holder
of Certificates on which payments of principal and interest are then being made
the amount which represents principal and the amount which represents interest,
and shall contemporaneously advise the Transferor and MBIA of all such
payments. The Trustee may satisfy its obligations under this Section 12.04 by
delivering the Monthly Servicer's Report to each such Holder of the
Certificates, MBIA, the Transferor, the Rating Agencies and the Placement
Agent. On or before the 15th day prior to any Final Payment Date the Trustee
shall provide notice to MBIA, the Rating Agencies and the Holders of the
applicable Series of Certificates of the Final
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Payment Date for such Certificates. Such notice shall include (1) a statement
that interest shall cease to accrue as of the last day preceding the date on
which the Final Payment Date occurs, and (2) shall specify the place or places
at which presentation and surrender may be made.
(b) The Trustee shall, on a monthly basis beginning on the first
Calculation Date, confirm the credit rating or, if more than one credit rating
has been assigned, each such credit rating of each institution in which funds
are invested pursuant to clause (f) of the definition of Eligible Investments
and shall promptly notify the Certificateholders and MBIA if any such credit
rating has been lowered.
(c) At least annually, or as otherwise required by law, the
Trustee shall distribute to Certificateholders any information returns or
other tax information or statements as are required by applicable tax law to
be distributed to the Certificateholders. The Servicer shall prepare or cause
to be prepared all such information for distribution by the Trustee to the
Certificateholders.
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ARTICLE THIRTEEN
PROVISIONS OF GENERAL APPLICATION
SECTION 13.01 GENERAL PROVISIONS.
All of the provisions of this Article shall apply to this Agreement,
as supplemented by each Supplement.
SECTION 13.02 ACTS OF CERTIFICATEHOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee, and, where it is hereby
expressly required, to the Transferor. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Certificateholders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Agreement and (subject to
Section 7.01 hereof) conclusive in favor of the Trustee and the Transferor, if
made in the manner provided in this Section 13.02.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(c) The ownership of Certificates shall be proved by the
Certificate Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Certificate shall bind the
Holder of every Certificate issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof, in respect of anything done, omitted
or suffered to be done by the Trustee or the Transferor in reliance thereon,
whether or not notation of such action is made upon such Certificate.
SECTION 13.03 NOTICES, ETC., TO TRUSTEE, MBIA, TRANSFEROR AND
SERVICER.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Certificateholders or other document provided or permitted by this
Agreement to be made upon, given or furnished to, or filed with any party
hereto shall be sufficient for every purpose hereunder if in writing and
telecopied or mailed, first-class postage prepaid and addressed to the
appropriate address below:
(a) to the Trustee at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at any other address previously
furnished in writing to the Transferor, MBIA, the Certificateholders
and the Servicer; or
(b) to MBIA at MBIA Insurance Corporation, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Structured Finance -
Insured Portfolio Management (SF-IPM), or at any other address
previously furnished in writing by MBIA to the Trustee, the
Certificateholders, the Servicer and the Transferor; or
(c) to the Transferor at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇-▇, ▇▇▇▇▇▇, ▇▇
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80403, Attention: President, or at any other address previously
furnished in writing to the Trustee, MBIA, the Certificateholders and
the Servicer by the Transferor; or
(d) to the Servicer at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: President, or at any other
address previously furnished in writing to the Trustee, MBIA, the
Certificateholders and the Transferor.
(e) to each of (i) S & P at ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed Surveillance Group, and (ii)
▇▇▇▇▇'▇ at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
Notwithstanding any provision to the contrary contained in this Trust
and Security Agreement, all reports, notices, communications and consents which
are required, by the terms of this Trust and Security Agreement, to be
delivered by MBIA, the Certificateholders or Controlling Holders to the
Trustee, as the context requires, shall be required to be delivered to the
Trustee in writing.
SECTION 13.04 NOTICES TO CERTIFICATEHOLDERS; WAIVER.
Where this Agreement provides for notice to Certificateholders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Certificateholder affected by such event, at his address as it appears on
the Certificate Register, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice. In any case in
which notice to Certificateholders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Certificateholder shall affect the sufficiency of such notice with respect to
other Certificateholders, and any notice which is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Agreement provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Certificateholders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Certificateholders when such notice is required
to be given pursuant to any provision of this Agreement, then any manner of
giving such notice as shall be satisfactory to the Trustee shall be deemed to
be a sufficient giving of such notice.
SECTION 13.05 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 13.06 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Agreement by the Transferor shall
bind its successors and assigns, whether so expressed or not. Notwithstanding
the foregoing, no party shall assign any of its rights under this Agreement, or
delegate any of its duties, except in accordance with the provisions of
Sections 2.06, 7.10 and 11.02(o) hereof. The Transferor further agrees not to
assign any of its rights hereunder without first obtaining an opinion of tax
counsel confirming the status of the Trust and the Certificates for federal
income tax purposes and confirming that any such assignment shall not
constitute a reissuance of
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any of the Certificates for federal income tax purposes and then to only one
transferee.
SECTION 13.07 SEPARABILITY.
In case any provision in this Agreement or in the Certificates shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 13.08 BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Certificates, express or implied,
shall give to any Person, other than the parties hereto, the
Certificateholders, and any Paying Agent which may be appointed pursuant to the
provisions hereof, and any of their successors hereunder, any benefit or any
legal or equitable right, remedy or claim under this Agreement or under the
Certificates, except that MBIA is an express third party beneficiary to this
Agreement.
SECTION 13.09 LEGAL HOLIDAYS.
In any case in which the date of any Payment Date, the Stated Maturity
or the Expected Maturity of any Certificate shall not be a Business Day, then
(notwithstanding any other provision of a Certificate or this Agreement)
payment of principal or interest need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made
on the nominal date of any such Stated Maturity, Expected Maturity or Payment
Date and, assuming such payment is actually made on such subsequent Business
Day, no additional interest shall accrue on the amount so paid for the period
from and after any such nominal date.
SECTION 13.10 GOVERNING LAW.
THE AGREEMENT AND EACH CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED THEREIN, WITHOUT REGARD TO THE CONFLICT OF
LAWS PROVISIONS OF ANY STATE.
SECTION 13.11 COUNTERPARTS.
The Agreement may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 13.12 CORPORATE OBLIGATION.
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, stockholder, employee, officer
or director of the Transferor or of any predecessor or successor of the
Transferor with respect to the Trustor under this Agreement or any certificate
or other writing delivered in connection herewith.
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SECTION 13.13 COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application, order or request by the Transferor or the
Servicer to the Trustee to take any action under any provision of this
Agreement for which a specific request is required under this Agreement, the
Transferor or the Servicer, as applicable, shall furnish to the Trustee an
Officer's Certificate of the Transferor or the Servicer, as applicable, stating
that all conditions precedent, if any, provided for in this Agreement relating
to the proposed action have been complied with, except that in the case of any
such application or request as to which the furnishing of a different
certificate is specifically required by any provision of this Agreement
relating to such particular application or request, no additional certificate
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(a) a statement that each individual signing such
certificate or opinion has read or has caused to be read such covenant
or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such
individual, such individual has made such examination or investigation
as is necessary to enable such individual to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 13.14 MBIA DEFAULT OR TERMINATION.
If an MBIA Default or Termination occurs and is continuing, MBIA's
right to consent hereunder and under any other Transaction Document and to
direct the Trustee shall be void and, in such event, in all provisions of this
Agreement wherein MBIA's consent or direction is required or permitted, the
consent or direction of the Controlling Holders shall be required or permitted
unless a larger number of Holders is required under the relevant provision of
this Agreement; provided, however, notwithstanding anything else to the
contrary, MBIA's consent shall be required for any amendment to this Agreement
which materially and adversely affects MBIA's interests.
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IN WITNESS WHEREOF, the Transferor, the Servicer, the Trustee and the
Back-up Servicer have caused this Agreement to be duly executed by their
respective officers thereunto duly authorized as of the date and year first
above written.
GF FUNDING CORP. IV, Transferor
By:
---------------------------------------
Name:
Title:
GRANITE FINANCIAL, INC., Servicer
By:
---------------------------------------
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee and
Back-up Servicer
By:
---------------------------------------
Name:
Title: