Exhibit 4.1
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TRANSFER AND SERVICING AGREEMENT
AMONG
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
ISSUER
ANTIGUA FUNDING CORPORATION
DEPOSITOR
AT&T CAPITAL CORPORATION
IN ITS INDIVIDUAL CAPACITY AND AS SERVICER
THE CHASE MANHATTAN BANK
INDENTURE TRUSTEE
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DATED AS OF OCTOBER 1, 1996
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TABLE OF CONTENTS
PAGE
INTRODUCTION 1
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Usage of Terms . . . . . . . . . . . . . . . . . . . . . 10
SECTION 1.3. Calculations . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 1.4. Section References . . . . . . . . . . . . . . . . . . . 10
SECTION 1.5. No Recourse . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE II CONVEYANCE OF CONTRACTS . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.1. Conveyance of Contracts and Related Assets . . . . . . . 11
SECTION 2.2. Custody of Contract Files . . . . . . . . . . . . . . . 12
SECTION 2.3. Further Assurances . . . . . . . . . . . . . . . . . . . 14
SECTION 2.4. Representations and Warranties of Depositor . . . . . . 14
SECTION 2.5. Nonpetition Covenant . . . . . . . . . . . . . . . . . . 17
SECTION 2.6. Purchase of Contracts Upon Breach of Representations
and Warranties . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE III ADMINISTRATION AND SERVICING OF CONTRACTS . . . . . . . . . . . 19
SECTION 3.1. Duties of the Servicer . . . . . . . . . . . . . . . . . 19
SECTION 3.2. Collection of Contract Payments; Modifications of
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.3. Realization Upon Contracts . . . . . . . . . . . . . . . 22
SECTION 3.4. Insurance, Maintenance and Taxes . . . . . . . . . . . . 23
SECTION 3.5. Maintenance of Security Interests in Equipment . . . . . 26
SECTION 3.6. Covenants, Representations, and Warranties of
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.7. Sub-Servicers . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.8. Total Servicing Fee; Payment of Expenses by Servicer . . 28
SECTION 3.9. Servicer's Certificate . . . . . . . . . . . . . . . . . 29
SECTION 3.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.11. Annual Independent Accountants' Report . . . . . . . . . 30
SECTION 3.12. Access to Certain Documentation and Information
Regarding Contracts . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.13. Certain Duties of the Servicer under the Trust
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.14. Duties of the Servicer under the Indenture . . . . . . . 32
SECTION 3.15. Fidelity Bond . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE IV COLLECTIONS AND DEPOSITS . . . . . . . . . . . . . . . . . . . 34
SECTION 4.1. Initial Deposit . . . . . . . . . . . . . . . . . . . . 34
SECTION 4.2. Collections . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 4.3. Application of Collections . . . . . . . . . . . . . . . 35
SECTION 4.4. Net Deposits . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.5. Expiration of Lease Contracts . . . . . . . . . . . . . 36
ARTICLE V TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.1. Optional Purchase of All Contracts; Liquidation of
Trust Assets . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VI THE DEPOSITOR . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.1. Liability of Depositor . . . . . . . . . . . . . . . . . 38
SECTION 6.2. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor; Amendment of Certificate of
Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.3. Limitation on Liability of Depositor and Others . . . . 39
SECTION 6.4. Depositor May Own Equity Certificates or Notes . . . . . 39
ARTICLE VII THE SERVICER . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.1. Liability of Servicer; Indemnities . . . . . . . . . . . 40
SECTION 7.2. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer . . . . . . . . . . . . . . . . . 41
SECTION 7.3. Limitation on Liability of Servicer and Others . . . . . 42
SECTION 7.4. Servicer Not to Resign . . . . . . . . . . . . . . . . . 42
SECTION 7.5. Corporate Existence . . . . . . . . . . . . . . . . . . 42
ARTICLE VIII SERVICER TERMINATION EVENTS . . . . . . . . . . . . . . . . . . 43
SECTION 8.1. Servicer Termination Event . . . . . . . . . . . . . . . 43
SECTION 8.2. Consequences of a Servicer Termination Event . . . . . . 44
SECTION 8.3. Indenture Trustee to Act; Appointment of Successor . . . 45
SECTION 8.4. Notification to Equity Certificateholders and
Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.5. Waiver of Past Defaults . . . . . . . . . . . . . . . . 46
ARTICLE IX MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . 47
SECTION 9.1. Amendment . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9.2. Protection of Title to Trust Assets . . . . . . . . . . 48
SECTION 9.3. Governing Law . . . . . . . . . . . . . . . . . . . . . 50
SECTION 9.4. Severability of Provisions . . . . . . . . . . . . . . . 50
SECTION 9.5. Assignment . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 9.6. Third-Party Beneficiaries . . . . . . . . . . . . . . . 50
SECTION 9.7. Counterparts . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 9.8. Intention of Parties . . . . . . . . . . . . . . . . . . 51
SECTION 9.9. Notices . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 9.10. Income Tax Characterization . . . . . . . . . . . . . . 51
SECTION 9.11. Limitation of Liability . . . . . . . . . . . . . . . . 51
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EXHIBITS
Exhibit A-1 -- Schedule of Lease Contracts and Leased Equipment
Exhibit A-2 -- Schedule of Loan Contracts
Exhibit B -- Form of Servicer's Certificate
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THIS TRANSFER AND SERVICING AGREEMENT, dated as of October 1, 1996, is
made among CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1 (the "Issuer"), ANTIGUA
FUNDING CORPORATION, a Delaware corporation, as Depositor (the "Depositor"),
AT&T CAPITAL CORPORATION, a Delaware corporation, in its individual capacity and
as Servicer (in its individual capacity, "TCC"; in its capacity as Servicer, the
"Servicer"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as
trustee under the Indenture hereinafter referred to (the "Indenture Trustee").
In consideration of the mutual agreements herein contained, and of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. All terms defined in the Indenture or the
Trust Agreement (each as defined below) shall have the same meaning in this
Agreement. Whenever capitalized and used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the following
meanings:
ACCOUNTANTS' REPORT: The report of a firm of nationally recognized
independent accountants described in Section 3.11.
ACCOUNTING DATE: With respect to a Payment Date, the last day of the
preceding calendar month.
ADMINISTRATIVE FEE: With respect to any Collection Period, all
administrative fees, expenses and charges collected in respect of the Contracts
during such Collection Period, including late fees, late payment interest,
documentation fees, insurance administration charges and that portion of any
Extension Fees allocated to the Servicer.
AFFILIATE: With respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect 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.
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AGREEMENT OR "THIS AGREEMENT": This Transfer and Servicing Agreement,
all amendments and supplements thereto and all exhibits and schedules to any of
the foregoing.
BOOK VALUE: With respect to any Leased Equipment, the value of such
Leased Equipment as shown on the accounting books and records of TCC or the
applicable Originator, as appropriate, as of the Cut-Off Date. The Book Value
for each item of Leased Equipment shall be set forth on Exhibit A-1 hereto.
BUSINESS DAY: Any day (other than a Saturday, Sunday or legal
holiday) on which commercial banking institutions in New York, New York, or any
other location of any successor Servicer or successor Indenture Trustee, are
open for regular business.
COLLECTION ACCOUNT: The account designated as such in, and
established and maintained pursuant to, Section 8.02 of the Indenture.
COLLECTION PERIOD: With respect to a Payment Date, the calendar month
preceding the month in which such Payment Date occurs (such calendar month being
referred to as the "related" Collection Period with respect to such Payment
Date). With respect to an Accounting Date, the Collection Period in which such
Accounting Date occurs is referred to herein as the "related" Collection Period
with respect to such Accounting Date.
COLLECTION RECORDS: All manually prepared or computer generated
records relating to collection efforts or payment histories with respect to the
Contracts.
CONTRACT FILE: The documents, electronic entries, instruments and
writings listed in Section 2.2 pertaining to a particular Contract.
CONTRACT POOL PRINCIPAL BALANCE: With respect to any Payment Date,
the sum of the Contract Principal Balances (computed as of the related
Accounting Date) for all Contracts.
CONTRACT PRINCIPAL BALANCE: As of any Accounting Date:
(i) in the case of a Lease Contract, the present value of the unpaid
Scheduled Payments due on such Lease Contract after such Accounting Date
(excluding all Scheduled Payments due on or prior to, but not received as
of, such Accounting Date, as well as any Scheduled Payments due after, but
received as of, such Accounting Date), after giving effect to any
Prepayments received on or prior to such Accounting Date, discounted
monthly at the rate of 8.10% per annum (assuming, for purposes of such
calculation, that each Scheduled Payment is due on the last day of the
applicable Collection Period), and
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(ii) in the case of a Loan Contract, the lesser of (a) the unpaid
principal balance of such Loan Contract as of such Accounting Date (after
giving effect to any Scheduled Payments due on or prior to such Accounting
Date, whether or not received, as well as any Prepayments, and any
Scheduled Payments due after such Accounting Date, received as of such
Accounting Date), and (b) the present value of the unpaid Scheduled
Payments due on such Loan Contract after such Accounting Date (excluding
all Scheduled Payments due on or prior to, but not received as of, such
Accounting Date, as well as any Scheduled Payments due after, but received
as of, such Accounting Date), after giving effect to any Prepayments
received on or prior to such Accounting Date, discounted monthly at the
rate of 8.10% per annum (assuming, for purposes of such calculation, that
each Scheduled Payment is due on the last day of the applicable Collection
Period);
PROVIDED that, for purposes of computing the Monthly Principal Amount or the
Requisite Cash Collateral Amount for a given Payment Date (as well as all
Payment Dates thereafter), the Contract Principal Balance of any Contract which
became a Liquidated Contract during the related Collection Period or was
required to be purchased by TCC as of the last day of the related Collection
Period in accordance with Section 2.6, will be deemed to be zero on and after
the last day of such Collection Period.
CONTRACT REPRESENTATIONS AND WARRANTIES: As defined in Section 2.6.
CONTRACTS: The Lease Contracts and the Loan Contracts.
CORPORATE TRUST OFFICE: With respect to the Owner Trustee, the
principal office of the Owner Trustee at which at any particular time its
corporate trust business shall be administered, which office on the date of
execution and delivery of this Agreement is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
12 East, New York, New York 10286, Attention: Corporate Trust Administration--
Asset Backed Unit; the telecopy number for the Corporate Trust Office of the
Owner Trustee on the date of execution and delivery of this Agreement is (212)
815-5544; with respect to the Indenture Trustee, the principal office of the
Indenture Trustee at which at any particular time its corporate trust business
shall be administered, which office is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Advance Structured Products Group; the telecopy number
for the Corporate Trust Office of the Indenture Trustee on the date of execution
and delivery of this Agreement is (▇▇▇) ▇▇▇-▇▇▇▇.
CUT-OFF DATE: October 1, 1996.
CUT-OFF DATE CONTRACT POOL PRINCIPAL BALANCE: $3,185,229,329.
DEPOSIT DATE: With respect to any Collection Period, the Business Day
immediately preceding the related Determination Date.
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DEPOSITOR: Antigua Funding Corporation, a Delaware corporation, or
its successor in interest pursuant to Section 6.2.
DETERMINATION DATE: With respect to any Collection Period, the fifth
Business Day immediately preceding the related Payment Date.
ELIGIBLE SERVICER: TCC, the Indenture Trustee or another Person
which at the time of its appointment as Servicer (i) is servicing a portfolio of
equipment lease contracts, installment sale contracts, promissory notes, loan
and security agreements and/or other similar types of receivables comparable to
the Contracts, (ii) is legally qualified and has the capacity to service the
Contracts, (iii) has demonstrated the ability professionally and competently to
service a portfolio of equipment lease contracts, installment sale contracts,
promissory notes, loan and security agreements and other similar types of
receivables comparable to the Contracts with reasonable skill and care, and (iv)
has available software which is adequate to perform its duties and
responsibilities under this Agreement.
EQUIPMENT: With respect to any Contract, the property which is leased
or purchased pursuant to such Contract, or which otherwise provides security for
the payment of amounts payable thereunder.
EQUITY CERTIFICATE BALANCE: As of any date, the Original Equity
Certificate Balance less all distributions previously made to the Equity
Certificates in respect of principal.
EQUITY CERTIFICATE MAJORITY: Holders of Equity Certificates
representing more than 50% of the Equity Certificate Balance.
EXTENSION FEES: With respect to any Contract, any fee received by the
Servicer in consideration for the granting of an extension on the payment of any
Scheduled Payment due under such Contract. Any Extension Fees received shall be
allocated as follows: (1) 50% thereof shall be allocated to the Issuer and
shall constitute Pledged Revenues; and (2) 50% thereof shall be allocated to the
Servicer and shall constitute an Administrative Fee.
INDENTURE: The Indenture, dated as of October 1, 1996, between the
Issuer and the Indenture Trustee, as the same may be amended and supplemented
from time to time.
INDENTURE TRUSTEE: The Person acting as Trustee under the Indenture,
its successors in interest and any successor Trustee under the Indenture.
INDEPENDENT ACCOUNTANTS: As defined in Section 3.11(a).
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INSURANCE, MAINTENANCE AND TAX ACCOUNTS: The accounts which are
established and maintained pursuant to Section 3.4(a).
INSURANCE POLICY: With respect to a Contract, any insurance policy
benefiting the lessor or secured party under the Contract providing loss or
physical damage, theft or similar coverage with respect to the Equipment.
ISSUER: Capita Equipment Receivables Trust 1996-1.
LEASE CONTRACTS: The lease contracts listed on Exhibit A-1 hereto
(excluding any such lease contract which has become a Purchased Contract) and
all rights and obligations under such contracts, including, without limitation,
all monies at any time paid or payable thereon or in respect thereof from and
after the Cut-Off Date (whether in the form of (i) Scheduled Payments (including
those Scheduled Payments due prior to, but not received as of, the Cut-Off Date,
but excluding those Scheduled Payments due on or after, but received prior to,
the Cut-Off Date), (ii) Prepayments, (iii) Liquidation Proceeds, (iv) Extension
Fees, (v) payments to be applied by the Servicer to the payment of insurance
charges, maintenance, taxes or other similar obligations, (vi) payments to be
retained by the Servicer in payment of Administrative Fees, or otherwise), and
all rights of the lessor in the related Equipment (other than any ownership
interest of the lessor in such Equipment), Insurance Policies and any other
security for the payment of amounts due under such contracts.
LEASED EQUIPMENT: With respect to any Lease Contract, the Equipment
subject to such Lease Contract, as more particularly described on Exhibit A-1
hereto.
LIEN: Any security interest, lien, charge, pledge, preference, equity
or encumbrance of any kind, including tax liens, mechanics' liens and any liens
that attach by operation of law.
LIQUIDATED CONTRACT: With respect to any Collection Period, (i) a
Contract which, during such Collection Period, was charged off as uncollectible
by the Servicer in accordance with its credit and collection policies and
procedures (which shall be no later than the date as of which the Servicer has
repossessed and disposed of the related Equipment and otherwise collected all
proceeds (including any proceeds of insurance to be applied as described in
Section 3.4(c)(ii)) which, in the Servicer's reasonable judgment, can be
collected under such Contract) following a default thereunder or upon damage to
or destruction of such Equipment (if such Equipment is not to be replaced or
repaired in accordance with Section 3.4(c)(i)), or (ii) a Contract as to which,
during such Collection Period, 10% or more of a Scheduled Payment shall have
become 180 days delinquent.
LIQUIDATION PROCEEDS: All amounts received by the Servicer (i) in
connection with the liquidation of any Contract and disposition of the related
Equipment or (ii) as insurance proceeds with respect to any damaged or destroyed
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Equipment to be applied as described in Section 3.4(c)(ii), in each case net of
(a) reasonable out-of-pocket expenses incurred by or on behalf of the Servicer
in connection with the collection of such Contract and the maintenance,
repossession, repair, storage and disposition of the related Equipment
(including taxes and insurance charges, to the extent in excess of amounts
available therefor and relating to such Contract in the Insurance, Maintenance
and Tax Accounts, as well as attorneys' fees) and (b) amounts that are required
to be refunded to the Obligor on such Contract; PROVIDED, HOWEVER, that the
Liquidation Proceeds with respect to any Contract and disposition of the related
Equipment shall in no event be less than zero. Liquidation Proceeds shall be
allocated as follows: (1) in the case of any Loan Contract, all Liquidation
Proceeds shall be allocated to the Issuer; and (2) in the case of any Lease
Contract, Liquidation Proceeds shall be allocated pro rata between the Issuer,
on the one hand, and the Depositor, on the other, based upon the Required Payoff
Amount for such Lease Contract (determined as of the Collection Period during
which such Lease Contract became a Liquidated Contract) and the Book Value of
the related Leased Equipment, respectively; PROVIDED that, in the event the
Liquidation Proceeds exceed the sum of the Required Payoff Amount for a given
Lease Contract plus the Book Value of the related Leased Equipment, any such
excess shall be allocated solely to the Depositor.
LOAN CONTRACTS: The installment sale contracts, promissory notes,
loan and security agreements and other similar types of receivables listed on
Exhibit A-2 hereto (excluding any such contract, note, agreement or receivable
which has become a Purchased Contract) and all rights and obligations under such
contracts, including, without limitation, all monies at any time paid or payable
thereon or in respect thereof from and after the Cut-Off Date (whether in the
form of (i) Scheduled Payments (including those Scheduled Payments due prior to,
but not received as of, the Cut-Off Date, but excluding those Scheduled Payments
due on or after, but received prior to, the Cut-Off Date), (ii) Prepayments,
(iii) Liquidation Proceeds, (iv) Extension Fees, (v) payments to be applied by
the Servicer to the payment of insurance charges, maintenance, taxes or other
similar obligations, (vi) payments to be retained by the Servicer in payment of
Administrative Fees, or otherwise), and all rights of the secured party in the
related Equipment, Insurance Policies and any other security for the payment of
amounts due under such contracts.
MONTHLY RECORDS: All records and data maintained by the Servicer with
respect to the Contracts in accordance with its customary standards, policies
and procedures.
NOTE DISTRIBUTION ACCOUNT: The account designated as such in, and
established and maintained pursuant to, Section 8.04 of the Indenture.
NOTE MAJORITY: Holders of Notes representing a majority of the
Principal Balance of each Class of the Notes then Outstanding.
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OBLIGOR: The lessee, borrower, purchaser or any other Person or
Persons who are obligated to make payments under a Contract.
OPINION OF COUNSEL: A written opinion of counsel acceptable in form
and substance and from counsel acceptable to the Owner Trustee and, if such
opinion or a copy thereof is required to be delivered to the Indenture Trustee,
to the Indenture Trustee.
ORIGINAL TERM: With respect to any Contract, the term of such
Contract as of the Cut-Off Date (which shall include any renewals or extensions
of the original term thereof prior to the Cut-Off Date), as such term may be
extended in accordance with Section 3.2(c) or as a result of a bankruptcy
proceeding with respect to the related Obligor, but excluding, in the case of
any Lease Contract, any other extensions or renewals thereof.
ORIGINATORS: AT&T Capital Leasing Services, Inc., AT&T Credit
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ Credit Corp. and AT&T Commercial Finance Corporation.
OWNER TRUSTEE: The Bank of New York, acting not individually but
solely as trustee, or its successor in interest, and any successor Owner Trustee
appointed as provided in the Trust Agreement.
PAYMENT DATE: The fifteenth day of each calendar month (or, if such
fifteenth day is not a Business Day, the next succeeding Business Day),
commencing November 15, 1996.
PERSON: Any legal person, including any individual, corporation,
partnership, joint venture, estate, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof, or any other entity.
PLEDGED REVENUES: (i) All Scheduled Payments on the Contracts
received on or after the Cut-Off Date (including all Scheduled Payments due
prior to, but not received as of, the Cut-Off Date, but excluding any Scheduled
Payments due on or after, but received prior to, the Cut-Off Date); (ii) any
Prepayments received on the Contracts on or after the Cut-Off Date (other than,
in the case of a Lease Contract, any portion thereof allocated to the
Depositor); (iii) the Purchase Amount of any Contracts purchased by TCC in
accordance with Section 2.6 (other than any portion thereof attributable to the
Book Value of the Leased Equipment); (iv) the amount paid by the Depositor to
purchase the Contracts pursuant to Section 5.1; (v) that portion of the
Liquidation Proceeds received in respect of any Contracts and the disposition of
the related Equipment on or after the Cut-Off Date and allocated to the Issuer;
(vi) that portion of any Extension Fees received on or after the Cut-Off Date
and allocated to the Issuer; and (vii) any earnings on the investment of amounts
credited to the Collection Account and the Note Distribution Account.
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PREPAYMENT: With respect to any Collection Period for any Contract, a
voluntary prepayment during such Collection Period of amounts due and owing
under such Contract; PROVIDED that, in the case of any Lease Contract, the
amount, if any, by which any such Prepayment exceeds the Required Payoff Amount
for such Contract shall be allocated to the Depositor in respect of the related
Leased Equipment.
PRINCIPAL BALANCE: As of any date, when used with respect to a Class
of Notes, the original principal balance of such Class, less all distributions
previously made to such Class in respect of principal.
PURCHASE AGREEMENT: The Purchase and Sale Agreement, dated as of
October 1, 1996, among TCC, the Originators and the Depositor.
PURCHASE AMOUNT: With respect to a Contract and related Equipment
required to be purchased by TCC in accordance with Section 2.6, the sum of (i)
the Required Payoff Amount for such Contract as of the Accounting Date on which
such obligation to so purchase arises, plus (ii) in the case of a Lease
Contract, the Book Value of the related Leased Equipment (that portion of the
Purchase Amount attributable to such Book Value to be allocated to the
Depositor).
PURCHASED CONTRACT: As of any Deposit Date, any Contract which TCC
has purchased as of the related Accounting Date, as required by Section 2.6, and
as to which, on or before such Deposit Date, (i) that portion of the Purchase
Amount relating to the Required Payoff Amount for such Contract has been
deposited in the Collection Account, and (ii) that portion, if any, of the
Purchase Amount relating to the Book Value of the related Leased Equipment has
been distributed to the Depositor.
RELATED ASSETS: The assets, in addition to the Contracts, transferred
by the Depositor to the Issuer pursuant to Section 2.1(a).
RELATED DOCUMENTS: The Trust Agreement, the Indenture, the Equity
Certificates, the Notes, the Purchase Agreement and the Cash Collateral Account
Agreement. The Related Documents executed by any party are referred to herein
as "such party's Related Documents," "its Related Documents" or by a similar
expression.
REQUIRED PAYOFF AMOUNT: With respect to any Collection Period for any
Contract, the sum of (i) the Scheduled Payment due in such Collection Period,
together with any Scheduled Payments due in prior Collection Periods but not yet
received, plus (ii) the Contract Principal Balance of such Contract (after
taking into account the Scheduled Payment due in such Collection Period, whether
or not received).
RESPONSIBLE OFFICER: When used with respect to the Servicer, the
Depositor or any other Person, the President, any Vice-President or Assistant
Vice-President or the Controller of such Person, or any other officer or
employee having similar functions.
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SCHEDULE OF CONTRACTS: Collectively, the schedules of Lease Contracts
and Loan Contracts (which shall be made available to the parties hereto on a
computer disk or other data storage medium) attached hereto as (or described in)
Exhibit A-1 and Exhibit A-2, respectively.
SCHEDULED PAYMENT: With respect to any Collection Period for any
Contract during the Original Term of such Contract, the scheduled payment or
payments due under such Contract in such Collection Period other than those
portions of such payments which, under such Contract, are to be (i) applied by
the Servicer to the payment of insurance charges, maintenance, taxes and other
similar obligations, or (ii) retained by the Servicer in payment of
Administrative Fees.
SERVICER: AT&T Capital Corporation, its successor in interest
pursuant to Section 8.2 or, after any termination of the Servicer upon a
Servicer Termination Event, any successor Servicer.
SERVICER TERMINATION EVENT: An event described in Section 8.1.
SERVICER'S CERTIFICATE: With respect to each Determination Date, a
certificate, completed by and executed on behalf of the Servicer, in accordance
with Section 3.9, substantially in the form attached hereto as Exhibit B.
SERVICING ACCOUNT: The account designated as such in, and established
and maintained pursuant to, Section 8.05 of the Indenture.
SERVICING FEE: With respect to any Collection Period, the fee payable
to the Servicer for services rendered during such Collection Period, which shall
be equal to one-twelfth of the Servicing Fee Rate multiplied by the Contract
Pool Principal Balance determined as of the last day of the preceding Collection
Period (or, in the case of the Servicing Fee with respect to the Collection
Period commencing on the Cut-Off Date, the Contract Pool Principal Balance as of
the Cut-Off Date).
SERVICING FEE RATE: 1.25% per annum.
SUB-SERVICER: The Person named as servicer or sub-servicer in any
agreement between the Servicer and such Person by which such Person is
contractually obligated to perform on the Servicer's behalf all or a part of the
servicing obligations described herein.
TCC: AT&T Capital Corporation, a Delaware corporation.
TOTAL SERVICING FEE: The sum of the Servicing Fee, the Administrative
Fees and any earnings on the investment of amounts in the Servicing Account.
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TRUST ACCOUNTS: The Collection Account, the Note Distribution
Account, the Servicing Account, the Insurance, Maintenance and Tax Accounts and
such other accounts as may be established in the name of the Issuer or the
Indenture Trustee pursuant to the Trust Agreement or this Agreement.
TRUST AGREEMENT: The Amended and Restated Trust Agreement, dated as
of October 1, 1996, between the Depositor and the Owner Trustee, as the same may
be amended and supplemented from time to time in accordance with the terms
thereof.
UCC: The Uniform Commercial Code as in effect in the relevant
jurisdiction.
SECTION 1.2. USAGE OF TERMS. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation."
SECTION 1.3. CALCULATIONS. All calculations of the amount of the
Servicing Fee shall be made on the basis of a 360-day year consisting of twelve
30-day months. All references to the Contract Principal Balance of a Contract
as of any date shall refer to the close of business on such date.
SECTION 1.4. SECTION REFERENCES. All references to Articles,
Sections, paragraphs, subsections, exhibits and schedules shall be to such
portions of this Agreement unless otherwise specified.
SECTION 1.5. NO RECOURSE. No recourse may be taken, directly or
indirectly, under this Agreement or any certificate or other writing delivered
in connection herewith or therewith, against any stockholder, officer or
director, as such, of the Depositor, TCC, the Servicer, the Indenture Trustee or
the Owner Trustee or of any predecessor or successor of the Depositor, TCC, the
Servicer, the Indenture Trustee or the Owner Trustee.
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ARTICLE II
CONVEYANCE OF CONTRACTS
SECTION 2.1. CONVEYANCE OF CONTRACTS AND RELATED ASSETS. (a)
Subject to the terms and conditions of this Agreement, the Depositor, pursuant
to the mutually agreed upon terms contained herein, hereby transfers, assigns,
and otherwise conveys to the Issuer, without recourse (but without limitation of
its obligations in this Agreement), as of the Closing Date, all of the right,
title and interest, including any security interest, whether now owned or
hereafter acquired, of the Depositor in and to the following:
(i) the Contracts, including, without limitation, (A) all monies at
any time paid or payable thereon or in respect thereof from and after the
Cut-Off Date in the form of (1) Scheduled Payments (including those
Scheduled Payments due prior to, but not received as of, the Cut-Off Date,
but excluding those Scheduled Payments due on or after, but received prior
to, the Cut-Off Date), (2) Prepayments (other than, in the case of a Lease
Contract, any portion thereof allocated to the Depositor in accordance with
this Agreement), (3) Liquidation Proceeds (but only that portion thereof
allocated to the Issuer in accordance with this Agreement), (4) Extension
Fees, (5) payments to be applied by the Servicer to the payment of
insurance charges, maintenance, taxes or other similar obligations, and (6)
payments to be retained by the Servicer in payment of Administrative Fees,
but excluding any payments made and attributable to the purchase price or
use of any Leased Equipment upon expiration of the related Lease Contract
(whether upon completion of the Original Term thereof, Prepayment thereof
or otherwise), (B) all rights of the lessor or the secured party, as the
case may be, in the Equipment related to the Loan Contracts and all present
or future leases and other contracts relating to such Equipment and all
revenues, payments, rights to payment, profits, accounts, chattel paper,
products and contract rights arising from or related to such Equipment or
any use thereof or from any such lease or other contract, (C) all rights of
the lessor or secured party, as the case may be, in all Insurance Policies
and any other security (other than any ownership interest of the lessor in
the Leased Equipment) for the payment of amounts due under the Contracts
(including all rights, if any, the lessor or the secured party may have
against vendors and other third parties for payments of such amounts), (D)
all items contained in the related Contract Files and any and all other
documents that are kept on file in accordance with the applicable
Originator's customary procedures relating to the Contracts, and (E) all
proceeds of the foregoing;
(ii) all funds on deposit from time to time in the Trust Accounts
and all investments therein and proceeds thereof; and
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(iii) the Purchase Agreement, including (A) any Purchase Amount paid
(other than any portion thereof attributable to the Book Value of the
Leased Equipment), and (B) any deemed loan made by the Depositor to the
Originators and all security therefor, including the security interest in
the Contracts and Equipment granted by the Originators to the Depositor to
secure such deemed loan, as described in Section 2.2 of the Purchase
Agreement, and all proceeds of the foregoing.
The foregoing does not constitute, nor is it intended to result in, the creation
or assumption by the Issuer, the Owner Trustee, the Indenture Trustee, any
Noteholder or any Equity Certificateholder of any obligation of the Depositor,
the Servicer or any other Person in connection with the Contracts or the related
Equipment or any agreement or instrument relating thereto, including any
obligation to the Obligors.
(b) Subject to the terms and conditions of this Agreement, upon the
transfer of the Contracts and other assets pursuant to Section 2.1(a), the
Depositor will be entitled to (i) the Leased Equipment and any payments made and
attributable to the purchase price or use of the Leased Equipment upon
expiration of the related Lease Contract (whether upon completion of the
Original Term thereof, Prepayment thereof or otherwise), (ii) that portion of
any Prepayments and Liquidation Proceeds received on or after the Cut-Off Date
and allocated to the Depositor in accordance with this Agreement and (iii) that
portion of any Purchase Amount attributable to the Book Value of the Leased
Equipment.
(c) As security for the payment of amounts described in Section
2.1(a)(i)(3), the Depositor hereby grants to the Issuer a security interest in
all of the right, title and interest, whether now owned or hereafter acquired,
of the Depositor in and to the Leased Equipment and all proceeds thereof.
SECTION 2.2. CUSTODY OF CONTRACT FILES.
(a) The Owner Trustee, on behalf of the Issuer, hereby appoints the
Servicer, and the Servicer hereby accepts such appointment, to act as the agent
of the Issuer as custodian of the following documents or instruments (with
respect to each Contract), which will be, as of the Closing Date, in the
possession of the Servicer or its agents:
(i) The fully executed original of the Contract or a facsimile
copy thereof (together with any agreements modifying the Contract,
including, without limitation, any extension agreements);
(ii) Documents evidencing or related to any Insurance Policy,
or copies thereof; and
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(iii) Such documents, if any, that the applicable Originator
keeps on file in accordance with its customary procedures indicating that
the Equipment is owned or leased by the Obligor and subject to the interest
of the lessor or secured party.
(b) The Servicer agrees to maintain the Contract Files at the
locations where they are currently maintained, or at such other locations as
shall from time to time be identified to the Trustee by written notice. The
Servicer may temporarily move individual Contract Files or any portion thereof
without notice as necessary to conduct collection and other servicing activities
in accordance with its customary practices and procedures.
(c) As custodian, the Servicer shall have and perform the following
powers and duties:
(i) hold the Contract Files on behalf of the Equity
Certificateholders, the Depositor, the Owner Trustee, the Issuer, the
Noteholders and the Indenture Trustee, maintain accurate records pertaining
to each Contract to enable it to comply with the terms and conditions of
this Agreement and the Related Documents, maintain a current inventory
thereof and certify to the Trustee annually that it continues to maintain
possession of such Contract Files;
(ii) implement written policies and procedures with respect to
persons authorized to have access to the Contract Files and the receipting
for Contract Files taken from their storage area by an employee of the
Servicer for purposes of servicing or any other purposes; and
(iii) attend to all details in connection with maintaining
custody of the Contract Files on behalf of the Equity Certificateholders,
the Depositor, the Owner Trustee, the Issuer, the Noteholders and the
Indenture Trustee.
(d) In performing its duties under this Section, the Servicer agrees
to act with reasonable care, using that degree of skill and care that it
exercises with respect to similar contracts owned and/or serviced by it. The
Servicer shall promptly report to the Trustee any failure by it to hold the
Contract Files as herein provided and shall promptly take appropriate action to
remedy any such failure. In acting as custodian of the Contract Files, the
Servicer agrees further not to assert any beneficial ownership interests in the
Contracts or the Contract Files. The Servicer agrees to indemnify the Equity
Certificateholders, the Depositor, the Owner Trustee, the Issuer, the
Noteholders and the Indenture Trustee for any and all liabilities, obligations,
losses, damages, payments, costs or expenses of any kind whatsoever which may be
imposed on, incurred or asserted against the Equity Certificateholders, the
Depositor, the Owner Trustee, the Issuer, the Noteholders or the Indenture
Trustee as the result of any act or omission by the Servicer relating to the
maintenance and custody of the Contract Files; PROVIDED, HOWEVER, that the
Servicer will not be liable for any portion of any such
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amount resulting from the negligence or willful misconduct of any Equity
Certificateholder, the Depositor, the Owner Trustee, the Issuer, any Noteholder
or the Indenture Trustee.
SECTION 2.3. FURTHER ASSURANCES. Following the Closing Date, the
Depositor shall, at the reasonable request of the Owner Trustee, the Indenture
Trustee or the Servicer, and at the Depositor's expense, execute and deliver any
further instruments of transfer or other documents, and shall take all such
other actions that may be necessary, appropriate or desirable, to fully convey
the Contracts and the Related Assets to the Issuer or otherwise to evidence,
effectuate or implement the transactions contemplated hereby. In addition, the
Depositor, as agent for the Issuer, shall defend the Contracts and the Related
Assets against any and all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to that of the Issuer.
SECTION 2.4. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR. By its
execution of this Agreement, the Depositor makes the following representations
and warranties. Unless otherwise specified, such representations and warranties
speak as of the date of execution and delivery of this Agreement or, as to the
representations and warranties contained in paragraphs (k), (l), (m) and (n), as
of the Closing Date.
(a) ORGANIZATION AND GOOD STANDING. The Depositor has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is currently conducted, and had at all relevant
times, and now has, power, authority and legal right to acquire, own and
transfer the Contracts and the other property transferred to the Issuer.
(b) DUE QUALIFICATION. The Depositor is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions where the failure to
do so would materially and adversely affect the performance of its
obligations under this Agreement and the Related Documents.
(c) POWER AND AUTHORITY. The Depositor has the power and
authority to execute and deliver this Agreement and the Depositor's Related
Documents and to carry out the terms hereof and thereof; the Depositor has
full power and authority to transfer and assign the Trust Assets to be
transferred and assigned to and deposited with the Issuer by it and has
duly authorized such transfer and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance of this
Agreement and the Depositor's Related Documents have been duly authorized
by the Depositor by all necessary corporate action.
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(d) NO CONSENT REQUIRED. No consent, license, approval or
authorization of, or registration or declaration with, any Person or any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of this Agreement and the Related
Documents, except for such as have been obtained, effected or made or as
described in paragraph (m) below.
(e) VALID TRANSFER; BINDING OBLIGATIONS. This Agreement
effects, as of the Closing Date, a valid transfer and assignment of the
Contracts and the other Trust Assets, enforceable against the Depositor and
creditors of and purchasers from the Depositor; and this Agreement and the
Depositor's Related Documents, when duly executed and delivered, shall
constitute legal, valid and binding obligations of the Depositor
enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally
and by equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
(f) NO VIOLATION. The execution and delivery of this Agreement
and the Related Documents, the consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents shall
not conflict with, result in any breach of any of the terms and provisions
of or constitute (with or without notice or lapse of time, or both) a
default under the certificate of incorporation or by-laws of the Depositor,
or any indenture, agreement, mortgage, deed of trust or other instrument to
which the Depositor is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or
other instrument, other than this Agreement, or violate any law, order,
rule or regulation applicable to the Depositor of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or any
of its properties.
(g) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the Depositor's knowledge, threatened against the Depositor,
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having jurisdiction over the Depositor or
its properties (A) asserting the invalidity of this Agreement or any of the
Related Documents, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the Related
Documents, (C) seeking any determination or ruling that might materially
and adversely affect the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement or any of the
Related Documents, or (D) seeking to adversely affect (i) the federal
income tax or other federal, state or
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local tax attributes of the Equity Certificates or the Notes or (ii) the
federal, state or local tax treatment of any of the transactions
contemplated by this Agreement and the Related Documents.
(h) PLACE OF BUSINESS. The principal executive offices of the
Depositor, and the offices where the Depositor keeps its records concerning
the Contracts and related documents, are located at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇.
(i) REGISTRATION STATEMENT. No stop order suspending the
effectiveness of the Registration Statement relating to the Notes has been
issued, and no proceeding for that purpose has been instituted or is
threatened, by the Securities and Exchange Commission.
(j) FILINGS. Since the effective date of the Registration
Statement relating to the Notes, there has occurred no event required to be
set forth in an amendment or supplement to the Registration Statement or
Prospectus that has not been so set forth, and there has been no document
required to be filed under the Securities Exchange Act of 1934 and the
rules and regulations of the Securities and Exchange Commission thereunder
that upon such filing would be deemed to be incorporated by reference in
the Prospectus that has not been so filed.
(k) GOOD TITLE. Immediately prior to the transfer and
assignment of the Contracts and Related Assets to the Issuer pursuant to
Section 2.1(a), the Depositor had good title thereto and was the sole owner
thereof (subject, in the case of amounts in the Insurance, Maintenance and
Tax Accounts, to the rights of the Obligors therein), free of any Lien.
Upon the transfer and assignment of the Contracts and Related Assets to the
Issuer pursuant to Section 2.1(a), the Issuer will have good title thereto
and will be the sole owner thereof (subject, in the case of amounts in the
Insurance, Maintenance and Tax Accounts, to the rights of the Obligors
therein), free of any Lien.
(l) NO IMPAIRMENT. No person has a participation in or other
right to receive Scheduled Payments under any Contract, and the Depositor
has taken no action to convey any right to any Person that would result in
such Person having a right to Scheduled Payments received with respect to
any Contract.
(m) LAWFUL ASSIGNMENT. No Contract was originated in, or is
subject to the laws of, any jurisdiction the laws of which would make
unlawful, void or voidable the transfer and assignment of such Contract
from the Depositor to the Issuer under this Agreement. Each Contract may
be sold, assigned and transferred by the Depositor to the Issuer without
the consent of, or prior approval from, or any notification to, the
applicable Obligor, other than (i)
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certain Contracts (which, in proportion to the aggregate of all of the
Contracts, are not material) that require notification of the assignment to
the Obligor, which notification will be given by the Servicer not later
than 10 days following the Closing Date, and (ii) certain Contracts (which,
in proportion to the aggregate of all of the Contracts, are not material)
that require the consent of the Obligor, which consent will be obtained by
the Servicer not later than 10 days following the Closing Date.
(n) ALL FILINGS MADE. All filings and other actions required to
be made, taken or performed by any Person in any jurisdiction to give the
Issuer a first priority perfected lien or ownership interest in the
Contracts has been made, taken or performed.
(o) SCHEDULE OF CONTRACTS ACCURATE. The information with
respect to the Contracts contained in the Schedule of Contracts is true and
correct in all material respects.
SECTION 2.5. NONPETITION COVENANT. None of the Depositor, the
Servicer, the Owner Trustee (in its individual capacity or on behalf of the
Trust) nor TCC shall petition or otherwise invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Issuer or the Depositor under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or the Depositor or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer or the Depositor.
SECTION 2.6. PURCHASE OF CONTRACTS UPON BREACH OF REPRESENTATIONS AND
WARRANTIES. Concurrently with the execution and delivery of this Agreement,
TCC, the Originators and the Depositor have entered into the Purchase Agreement,
the rights of the Depositor under which have been assigned by the Depositor to
the Issuer pursuant to Section 2.1(a). Under the Purchase Agreement, TCC and
the Originators have made certain representations and warranties to the
Depositor with respect to the Contracts (the "Contract Representations and
Warranties"). As of the second Accounting Date following its discovery or its
receipt of notice of any breach of the Contract Representations and Warranties
that materially and adversely affects the value of any Contract (including any
Liquidated Contract), TCC shall, unless such breach shall have been cured in all
material respects, (i) purchase such Contract from the Issuer, and (ii) in the
case of a Lease Contract, purchase the related Leased Equipment from the
Depositor. On or before the related Deposit Date, TCC shall pay the Purchase
Amount to the Servicer on behalf of the Owner Trustee and the Depositor, as
their interests may appear. The obligations of the Depositor with respect to
any such breach of representations and warranties shall be limited to taking any
and all actions necessary to enable the Owner Trustee to enforce directly the
obligations of TCC to purchase the applicable Contract under the Purchase
Agreement. It is understood and agreed that, except as set forth in the
following paragraph, the obligation of TCC to purchase any
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Contract, together with the related Equipment, as to which a breach has occurred
and is continuing shall, if such obligation is fulfilled, constitute the sole
remedy against TCC for such breach available to the Owner Trustee on behalf of
the Equity Certificateholders, to the Depositor or the Indenture Trustee on
behalf of the Noteholders and to the Depositor, as their interests may appear.
In addition to the foregoing and notwithstanding whether the Contract
and related Equipment shall have been purchased by TCC, TCC shall indemnify the
Equity Certificateholders, the Depositor, the Owner Trustee, the Issuer, the
Noteholders and the Indenture Trustee against all costs, expenses, losses,
damages, claims and liabilities, including reasonable fees and expenses of
counsel, which may be asserted against or incurred by any of them as a result of
third party claims arising out of the events or facts giving rise to such
breach.
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ARTICLE III
ADMINISTRATION AND SERVICING OF CONTRACTS
SECTION 3.1. DUTIES OF THE SERVICER. The Servicer is hereby
authorized to act as agent for the Issuer and the Depositor and in such capacity
shall manage, service, administer and make collections on the Contracts, and
perform the other actions required by the Servicer under this Agreement. The
Servicer agrees that its servicing of the Contracts shall be carried out in
accordance with customary and usual procedures of institutions which service
equipment lease contracts, installment sale contracts, promissory notes, loan
and security agreements and other similar types of receivables comparable to the
Contracts and, to the extent more exacting, the degree of skill and attention
that the Servicer exercises from time to time with respect to all comparable
such contracts that it services for itself or others. In performing such
duties, so long as TCC is the Servicer, it shall comply in all material respects
with its customary standards, policies and procedures in effect from time to
time. The Servicer may at any time change its customary standards, policies and
procedures; PROVIDED that any such change shall not materially impair the
collectibility of any Contract nor the Servicer's ability to perform its
obligations under this Agreement and the Related Documents. The Servicer's
duties shall include, without limitation, billing, collection and posting of all
payments, responding to inquiries of Obligors on the Contracts, investigating
delinquencies, sending invoices to Obligors, accounting for collections and
furnishing monthly and annual statements to the Owner Trustee and the Indenture
Trustee with respect to distributions, monitoring the status of Insurance
Policies with respect to the Equipment and performing the other duties specified
herein. The Servicer shall also administer and enforce all material rights and
responsibilities of the lessor or secured party under the Contracts and provided
for in the Insurance Policies, to the extent that such Insurance Policies relate
to the Contracts, the Equipment or the Obligors. To the extent consistent with
the standards, policies and procedures otherwise required hereby, the Servicer
shall follow its customary standards, policies and procedures and shall have
full power and authority to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary or
desirable, including the authority to forego collection efforts under
circumstances deemed appropriate by the Servicer in accordance with its
customary standards, policies and procedures. Without limiting the generality
of the foregoing, the Servicer is hereby authorized and empowered by the Owner
Trustee to execute and deliver, on behalf of the Equity Certificateholders, the
Depositor and the Issuer or any of them, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Contracts and with respect to the
Equipment in accordance with its customary standards, policies and procedures.
The Servicer is hereby authorized to commence, in its own name (or in the name
of the Issuer, PROVIDED the Servicer has obtained the Owner Trustee's consent,
which consent shall not be unreasonably withheld), a legal proceeding to enforce
a Contract pursuant to Section 3.3 or to commence or participate in any other
legal proceeding (including, without limitation, a bankruptcy proceeding)
relating to or
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involving a Contract, an Obligor or the related Equipment. If the Servicer
commences or participates in such a legal proceeding in its own name, the Issuer
shall thereupon be deemed to have automatically assigned such Contract to the
Servicer solely for purposes of commencing or participating in any such
proceeding as a party or claimant, and the Servicer is authorized and empowered
by the Owner Trustee to execute and deliver in the Servicer's name any notices,
demands, claims, complaints, responses, affidavits or other documents or
instruments in connection with any such proceeding. The Owner Trustee shall
furnish the Servicer with any powers of attorney and other documents which the
Servicer may reasonably request and which the Servicer deems necessary or
appropriate and take any other steps which the Servicer may deem necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Agreement.
SECTION 3.2. COLLECTION OF CONTRACT PAYMENTS; MODIFICATIONS OF
CONTRACTS.
(a) Consistent with the standards, policies and procedures required
by this Agreement, the Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Contracts as and when
the same shall become due, and shall follow such collection procedures as it
follows with respect to all comparable contracts that it services for itself or
others and otherwise act with respect to the Contracts, the related Equipment,
the Insurance Policies and the other Trust Assets in such manner as will, in the
reasonable judgment of the Servicer, maximize the amount to be received by the
Issuer and the Depositor with respect thereto. The Servicer is authorized in
its discretion to waive any Administrative Fees or Extension Fees that may be
collected in the ordinary course of servicing any Contract.
(b) The Servicer may at any time agree to a modification or amendment
of a Contract in accordance with its credit and collection policies and
procedures (it being acknowledged that any modification or amendment of a
Contract resulting from a bankruptcy proceeding with respect to the Obligor will
not be deemed to have been agreed to by the Servicer hereunder):
(i) in order to (A) change the Obligor's regular due date to a
date within the Collection Period in which such due date occurs or (B) re-
amortize (over the remainder of the original term) the Scheduled Payments
on a Contract following a partial Prepayment (PROVIDED that the sum of such
partial Prepayment and the Contract Principal Balance of the Contract after
the re-amortization is at least equal to the Required Payoff Amount for
such Contract prior to the partial Prepayment), or
(ii) for any other purpose, PROVIDED that no such modification
or amendment shall:
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(A) change the amount or the due date of any Scheduled Payment
(except as provided in clauses (i)(A) and (B) above, Section 3.2(c)(i)
or Section 3.2(d)),
(B) release the related Equipment from the Contract, unless (1)
equipment of equal or greater value is substituted, (2) the remaining
related Equipment has a value at least equal to the Required Payoff
Amount of the Contract, or (3) the release is pursuant to a partial
Prepayment (which, in the case of a partial Prepayment on a Lease
Contract, meets the requirements of Section 3.2(d)) and the ratio of
the value of the related Equipment to the Contract Principal Balance
of the Contract after such Prepayment and release is at least equal to
such ratio prior to such Prepayment and release;
(C) cause any of the representations or warranties contained in
the Contract Representations and Warranties (excluding, for this
purpose, those representations and warranties contained in clauses
(D), (V) (except as such representation or warranty relates to the
requirement that payments be made on the Contract regardless of the
condition or suitability of the related Equipment and notwithstanding
any defense, set-off or counterclaim against the manufacturer, lessor
or lender), (AA) or (BB)) to cease to be true; or
(D) except as provided in clause (ii)(A) above, result in the
Contract Principal Balance or Required Payoff Amount of the Contract
being less than it would have been absent such modification or
amendment.
(c) The Servicer may grant payment extensions on a Contract in
accordance with its credit and collection policies and procedures (it being
acknowledged that any extensions on a Contract resulting from a bankruptcy
proceeding with respect to the Obligor will not be deemed to have been granted
by the Servicer hereunder) if the Servicer believes in good faith that such
extension is necessary to avoid a termination and liquidation of such Contract
and will maximize the amount to be received by the Issuer with respect to such
Contract; PROVIDED, HOWEVER, that:
(i) the aggregate period of all extensions granted on a
Contract shall not exceed six months; and
(ii) in no event may any Contract be extended beyond the
Collection Period immediately preceding the final Stated Maturity Date.
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Nothing in this Section 3.2(c) shall be deemed to prevent the Servicer from
extending or renewing, or otherwise accepting the continued performance by the
Obligor under, a Contract after expiration of its stated term.
(d) The Servicer may, in its discretion, allow a Prepayment, in whole
or in part, of any Lease Contract which, by its terms, is not prepayable, but
only if the amount of such Prepayment (or, in the case of a partial Prepayment,
the sum of such Prepayment and the remaining Contract Principal Balance of the
Lease Contract after application of such Prepayment), together with such
additional amounts as are (i) available to the Servicer for the purpose of
prepaying such Lease Contract (excluding any monies otherwise constituting
Pledged Revenues) and (ii) deposited in the Collection Account contemporaneously
with the deposit therein of such Prepayment, is at least equal to the Required
Payoff Amount for such Lease Contract.
(e) The Servicer shall remit all payments by or on behalf of the
Obligors (other than amounts constituting Administrative Fees) received by the
Servicer to the Servicing Account as soon as practicable, but in no event later
than the second Business Day after receipt thereof.
SECTION 3.3. REALIZATION UPON CONTRACTS. Consistent with the
standards, policies and procedures required by this Agreement, the Servicer
shall, except as provided in the following paragraph, take such action as is
reasonably necessary (including making commercially reasonable efforts to
repossess (or otherwise comparably convert the ownership of) and dispose of the
related Equipment) to collect from the Obligor or otherwise all amounts payable
under any Contract as to which the Obligor is in default in the making of one or
more Scheduled Payments thereunder, if the Servicer has determined such default
is not likely to be cured. The Servicer will not be required to repossess (or
otherwise comparably convert the ownership of) any Equipment the repossession of
which, in accordance with the Servicer's credit and collection policies and
procedures, and based on the Servicer's good faith estimate of the value of the
Equipment and its availability, would not be reasonable. The Servicer is
authorized to follow such customary practices and procedures as it shall deem
necessary or advisable, consistent with the standard of care required by Section
3.1, which practices and procedures may include the sale of the related
Equipment at public or private sale, the submission of claims under an Insurance
Policy and other actions by the Servicer in order to realize upon such a
Contract. The foregoing is subject to the provision that, in any case in which
the Equipment shall have suffered damage, the Servicer shall not expend funds in
connection with any repair or towards the repossession of such Equipment unless
it shall determine in its reasonable judgment that such repair and/or
repossession shall increase the proceeds of liquidation of the related Contract
by an amount greater than the amount of such expenses. All amounts received
upon liquidation of a Contract (except as otherwise provided below), including
any proceeds derived from the disposition of the related Equipment, shall be
remitted by the Servicer to the Servicing Account as soon as practicable, but in
no event later than the second Business Day after receipt thereof. The Servicer
shall, to the extent
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the proceeds of such liquidation are sufficient therefor, be entitled to recover
all reasonable out-of-pocket expenses incurred by it in the course of
liquidating a Contract, which amounts may be retained by the Servicer from such
proceeds (and shall not be required to be deposited as provided in Section
3.2(e)) to the extent of such expenses. The Servicer shall be entitled to
retain in the Servicing Account, from liquidation proceeds, a reserve for out-
of-pocket liquidation expenses in an amount equal to such expenses, in addition
to those previously incurred, as it reasonably estimates will be incurred. Upon
completion of such liquidation, the remainder of any such reserve, after
reimbursement to the Servicer of all out-of-pocket liquidation expenses, shall
constitute Liquidation Proceeds and be transferred as provided in Section
4.2(a). The Servicer shall, in accordance with Section 3.4(f), pay on behalf of
the Issuer and the Depositor any sales, use, personal property and other taxes
assessed on repossessed Equipment, as well as any sales or similar taxes on the
disposition thereof, and shall be entitled to reimbursement of any such tax from
liquidation proceeds with respect to the related Contract as provided in Section
3.4(b).
Although it is intended that the Servicer repossess and dispose of any
Equipment in a commercially reasonable manner with a view to realizing proceeds
at least equal to the fair market value of the Equipment, the Servicer may, in
its discretion, choose to dispose of Equipment through a new lease or in some
other manner which provides for payment for the Equipment over time. In any
such event, the Servicer will be required to pay from its own funds, and deposit
in the Servicing Account, an amount which, in its reasonable judgment, is equal
to the fair market value of such Equipment (less any related out-of-pocket
liquidation expenses), and the Servicer will be entitled to all payments
received thereafter in respect of such Equipment. Any such amounts so deposited
by the Servicer shall be treated as additional Liquidation Proceeds with respect
to the related Contract and Equipment.
SECTION 3.4. INSURANCE, MAINTENANCE AND TAXES.
(a) The Servicer shall establish one or more insurance, maintenance
and tax accounts (collectively, the "Insurance, Maintenance and Tax Accounts")
in the name of the Servicer and for the benefit of the respective Obligors and,
to the extent provided herein, the Issuer and the Depositor. The Servicer shall
deposit into the Insurance, Maintenance and Tax Accounts any payments made by or
on behalf of Obligors which constitute (i) insurance charges paid by an Obligor
to the lessor or secured party under a Contract, (ii) any insurance payments or
recoveries paid by an insurance company or comparable third party and related to
the damage to, or destruction of, the Equipment related to such Contract (unless
paid directly by such insurance company or comparable third party directly to
the Obligor), (iii) any payments made by or on behalf of Obligors which
constitute amounts paid by an Obligor to the lessor or secured party under a
Contract in respect of the maintenance of the related Equipment, and (iv) taxes
paid by the Obligor with respect to the related Contract or Equipment (except
for any such payments in respect of taxes which were paid by the applicable
Originator prior to the Cut-Off Date, which payments shall
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constitute Scheduled Payments hereunder). None of the foregoing payments shall
constitute Pledged Revenues except under the circumstances described in clause
(c)(ii) below.
(b) The Servicer may pay from its own funds, or may withdraw amounts
from the Insurance, Maintenance and Tax Accounts, when and if appropriate, to
pay, when due (i) all insurance charges in the amounts received under clause
(a)(i) above, (ii) any amounts payable under any applicable maintenance contract
or otherwise with respect to the maintenance of the related Equipment in the
amounts received under clause (a)(iii) above, and (iii) all taxes in the amounts
received under clause (a)(iv) above. If the Servicer has paid any such
insurance charges, maintenance costs or taxes from its own funds (including any
such amounts that may have been paid prior to the Closing Date), the Servicer
shall be entitled to reimbursement therefor from any appropriate amounts
available therefor in the Insurance, Maintenance and Tax Accounts, from payments
thereafter received from the applicable Obligor in respect thereof or from
liquidation proceeds in the event such Contract is liquidated. The Servicer is
authorized in its discretion to waive its right to receive reimbursement of any
such amount.
(c) Amounts on deposit in the Insurance, Maintenance and Tax Accounts
which represent amounts received by the Servicer pursuant to clause (a)(ii)
above shall be applied by the Servicer as follows: (i) if equipment is
purchased to replace the Equipment that was damaged or destroyed, and such
replacement equipment is (in the reasonable opinion of the Servicer) of
comparable use and equivalent value to the Equipment that was damaged or
destroyed, or if the Equipment is to be repaired, the Servicer shall release
such amount so received from the insurance company or comparable third party in
payment or reimbursement for such replacement equipment or such repair; and (ii)
if such replacement option is not exercised or the Equipment is not to be
repaired, then the Servicer shall treat such amount as Liquidation Proceeds and
(A) if the related Contract is a Loan Contract, transfer such amount from the
Insurance, Maintenance and Tax Accounts to the Collection Account, and (B) if
the related Contract is a Lease Contract, (I) transfer that portion thereof
which is allocated to the Issuer (as described in the second sentence of the
definition of "Liquidation Proceeds") from the Insurance, Maintenance and Tax
Accounts to the Collection Account, and (II) distribute the balance thereof from
the Insurance, Maintenance and Tax Accounts to the Depositor.
(d) The Servicer may ▇▇▇ to enforce or collect upon the Insurance
Policies, in its own name, if possible, or as agent of the Issuer and the
Depositor. If the Servicer elects to commence a legal proceeding to enforce an
Insurance Policy, the act of commencement shall be deemed to be an automatic
assignment of the rights of the Issuer and the Depositor under such Insurance
Policy to the Servicer for purposes of collection only. If, however, in any
enforcement suit or legal proceeding it is held that the Servicer may not
enforce an Insurance Policy on the grounds that it is not a real party in
interest or a holder entitled to enforce the Insurance Policy, the Owner
Trustee,
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on behalf of the Issuer and the Depositor, shall take such steps as the Servicer
deems necessary to enforce such Insurance Policy, including bringing suit in its
name or the name of the Owner Trustee for the benefit of the Equity
Certificateholders and the Depositor and the Indenture Trustee for the benefit
of the Noteholders.
(e) Consistent with its customary standards, policies and procedures,
with respect to each Contract, the Servicer shall maintain insurance against
casualty loss with respect to any Equipment financed by or leased pursuant to
the Contract, to the extent the Contract requires the lessor or secured party
under the Contract to maintain such insurance, and shall otherwise require the
Obligor under the Contract to maintain such insurance, to the extent the
Contract requires that such insurance be maintained by the Obligor. The
Servicer shall not otherwise be liable to the Owner Trustee, the Indenture
Trustee, the Depositor or any Noteholder or Equity Certificateholder for any
casualty loss with respect to any Equipment related to a Contract, except to the
extent otherwise explicitly provided in this Agreement.
(f) The Servicer shall determine and pay when due all sales, use,
personal property and other taxes payable in respect of the Equipment related to
each Contract. To the extent the Servicer has previously received from the
related Obligor payments with respect to such taxes and has deposited such
payments in the Insurance, Maintenance and Tax Accounts in accordance with
clause (a)(iv) above, the Servicer shall, in accordance with clause (b)(iii)
above, either (i) pay such taxes from amounts withdrawn from the Insurance,
Maintenance and Tax Accounts, or (ii) pay such taxes from its own funds and
thereafter reimburse itself from amounts withdrawn from the Insurance,
Maintenance and Tax Accounts. In the event the Servicer has not previously
received payments from the Obligor for this purpose, or to the extent any such
payments received were insufficient to pay the taxes due, the Servicer shall
nonetheless pay such taxes from its own funds and shall ▇▇▇▇ the Obligor for any
amounts so paid. The Servicer shall be entitled to reimbursement for any taxes
so paid from its own funds, as provided in clause (b)(iii) above. Failure on
the part of the Servicer to perform its duties in a timely fashion under this
clause shall constitute a breach of this Agreement by the Servicer for which
indemnity will be available in accordance with Section 7.1.
(g) The Servicer shall give prompt written notice to the Indenture
Trustee of the Servicer's failure to pay when due any insurance charge or tax
payment required to be paid pursuant to this Section 3.4 and the reason for such
failure. Upon receipt of any such notice, or if the Indenture Trustee has
otherwise received notice of any such failure to pay an insurance charge or tax
payment, the Indenture Trustee shall take such actions as are reasonably
necessary (including the withdrawal of monies, if any, available therefor in the
Insurance, Maintenance and Tax Accounts and attributable to payments previously
made by the related Obligor and payment of such insurance charge or tax payment)
to cause any such amounts to be paid. The Indenture Trustee shall be permitted
to withdraw monies from the Insurance, Maintenance and
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Tax Accounts for purposes of performing its obligations under this paragraph,
but shall not, in any event, be required to use its own funds for such purposes.
SECTION 3.5. MAINTENANCE OF SECURITY INTERESTS IN EQUIPMENT. To the
extent the Servicer's credit and collection policies and procedures in this
regard would so require (it being acknowledged that, in certain instances, such
credit and collection policies and procedures would not so require), the
Servicer shall take such steps as are necessary to maintain perfection of any
security interest created by each Contract in the related Equipment on behalf of
the Issuer and the Depositor, including, but not limited to, obtaining the
execution by the Obligors and the recording, registering, filing, re-recording,
re-filing, and re-registering of all security agreements, financing statements
and continuation statements as are necessary to maintain such security interest
granted by the Obligors under the respective Contracts. The Owner Trustee
hereby authorizes the Servicer, and the Servicer agrees (to the extent the
Servicer's credit and collection policies and procedures in this regard would so
require), to take any and all steps necessary to re-perfect such security
interest on behalf of the Issuer and the Depositor as necessary because of the
relocation of Equipment or for any other reason.
SECTION 3.6. COVENANTS, REPRESENTATIONS, AND WARRANTIES OF SERVICER.
By its execution and delivery of this Agreement, the Servicer makes the
following representations, warranties and covenants.
(a) The Servicer covenants as follows:
(i) LIENS IN FORCE. The Equipment securing each Contract
shall not be released in whole or in part from any interest the lessor
or secured party may have in such Equipment under the terms of the
Contract, except upon payment in full of the Contract or as otherwise
contemplated herein;
(ii) NO IMPAIRMENT. The Servicer shall do nothing to
impair the rights of the Issuer, the Equity Certificateholders, the
Depositor or the Noteholders in the Contracts, the Insurance Policies
or the other Trust Assets; and
(iii) NO AMENDMENTS. The Servicer shall not extend or
otherwise amend the terms of any Contract with respect to the
Scheduled Payments thereon, except (A) in accordance with Section 3.2,
or (B) at such time as the Notes and the Equity Certificates are no
longer Outstanding, with the consent of the Owner Trustee.
(b) The Servicer represents, warrants and covenants as of the
date of execution and delivery of this Agreement:
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(i) ORGANIZATION AND GOOD STANDING. The Servicer has
been duly organized and is validly existing and in good standing under
the laws of its jurisdiction of organization, with power, authority
and legal right to own its properties and to conduct its business as
such properties are currently owned and such business is currently
conducted, and had at all relevant times, and now has, power,
authority and legal right to enter into and perform its obligations
under this Agreement and the Servicer's Related Documents;
(ii) DUE QUALIFICATION. The Servicer is duly qualified to
do business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all jurisdictions
where the failure to do so would materially and adversely affect the
performance of its obligations under this Agreement and the Related
Documents;
(iii) POWER AND AUTHORITY. The Servicer has the power and
authority to execute and deliver this Agreement and to carry out the
terms hereof; and the execution, delivery and performance of this
Agreement and the Servicer's Related Documents have been duly
authorized by the Servicer by all necessary corporate action;
(iv) BINDING OBLIGATION. This Agreement and the
Servicer's Related Documents shall each constitute the legal, valid
and binding obligation of the Servicer enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or
at law;
(v) NO VIOLATION. The execution and delivery of this
Agreement, the consummation of the transactions contemplated by this
Agreement and the Servicer's Related Documents, and the fulfillment of
the terms hereof, shall not conflict with, result in any breach of any
of the terms and provisions of, or constitute (with or without notice
or lapse of time, or both) a default under, the articles of
incorporation or bylaws of the Servicer, or any indenture, agreement,
mortgage, deed of trust or other instrument to which the Servicer is a
party or by which it is bound, or result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust or other
instrument, other than this Agreement or any Related Document, or
violate any law, order, rule or regulation applicable to the Servicer
of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or any of its properties;
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(vi) NO PROCEEDINGS. There are no proceedings or
investigations pending or, to the Servicer's knowledge, threatened
against the Servicer, before any court, regulatory body,
administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Servicer or its
properties (A) asserting the invalidity of this Agreement or any of
the Servicer's Related Documents, (B) seeking to prevent the issuance
of the Equity Certificates or the Notes or the consummation of any of
the transactions contemplated by this Agreement or any of the
Servicer's Related Documents, or (C) seeking any determination or
ruling that might materially and adversely affect the performance by
the Servicer of its obligations under, or the validity or
enforceability of, this Agreement or any of the Servicer's Related
Documents or (D) seeking to adversely affect (i) the federal income
tax or other federal, state or local tax attributes of the Equity
Certificates or the Notes or (ii) the federal, state or local tax
treatment of any of the transactions contemplated by this Agreement
and the Related Documents; and
(vii) NO CONSENTS. The Servicer is not required to obtain
the consent of any other party or any consent, license, approval or
authorization, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Agreement or
any of the Servicer's Related Documents.
SECTION 3.7. SUB-SERVICERS. The Servicer may, without the Owner
Trustee's or the Indenture Trustee's consent, maintain or enter into one or more
agreements with Sub-Servicers for the servicing and administration of the
Contracts by such Sub-Servicers. Notwithstanding the terms or existence of any
such agreement between the Servicer and a Sub-Servicer, the Servicer shall not
be relieved of any of its obligations under this Agreement by reason of such
agreement and shall be obligated to the same extent and under the same terms and
conditions as if the Servicer alone was servicing and administering the
Contracts, and neither the Owner Trustee nor the Indenture Trustee shall have
any obligation to deal with anyone other than the Servicer with respect to the
servicing of the Contracts.
SECTION 3.8. TOTAL SERVICING FEE; PAYMENT OF EXPENSES BY SERVICER.
On each Payment Date, the Servicer shall be entitled to receive out of the
Collection Account the Servicing Fee (less that portion thereof to be retained
and applied by the Trustee in accordance with the Cash Collateral Account
Agreement) for the related Collection Period pursuant to Section 8.03(i) of the
Indenture. The Servicer shall be entitled to retain, as additional servicing
compensation under this Agreement, any Administrative Fees and any earnings on
the investment of amounts in the Servicing Account. The Servicer shall be
required to pay all expenses incurred by it in connection with its activities
under this Agreement (including taxes imposed on the Servicer and all expenses
incurred in connection with reports to Equity Certificateholders and
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Noteholders). In addition, the Servicer (i) shall pay to the Indenture Trustee,
and the Indenture Trustee shall be entitled to, certain annual fees and shall
reimburse the Indenture Trustee for all ordinary and reasonable out-of-pocket
expenses incurred or made by it in connection with the performance of its duties
under the Indenture (excluding those incurred or made in the performance of its
duties under Article V of the Indenture, as referred to in Section 6.07(b) of
the Indenture), (ii) shall pay to the Owner Trustee, and the Owner Trustee shall
be entitled to, certain annual fees and shall reimburse the Owner Trustee for
all ordinary and reasonable out-of-pocket expenses incurred or made by it in
connection with the performance of its duties under the Trust Agreement and
(iii) shall pay to the Luxembourg Paying Agent and the Luxembourg Listing Agent
(collectively, the "Luxembourg Agents"), and the Luxembourg Agents shall be
entitled to, certain annual fees and shall reimburse the Luxembourg Agents for
all ordinary and reasonable out-of-pocket expenses incurred or made by them in
connection with the performance of their duties under the Indenture. Such
expenses shall include the reasonable compensation and expenses, disbursements
and advances of the agents, counsel, accountants and experts of the Indenture
Trustee, the Owner Trustee and the Luxembourg Agents, as appropriate.
SECTION 3.9. SERVICER'S CERTIFICATE. No later than 10:00 a.m. New
York City time on each Determination Date, the Servicer shall deliver to the
Owner Trustee, the Indenture Trustee and each Rating Agency a Servicer's
Certificate executed by a Responsible Officer of the Servicer containing, among
other things, (i) all information necessary to enable the Indenture Trustee to
make the withdrawals and distributions required by Sections 8.03 and 8.06 of the
Indenture (including, for purposes of making withdrawals from the Cash
Collateral Account pursuant to Section 8.06(c) of the Indenture, notice to the
Indenture Trustee of any amounts to be so withdrawn which have not resulted,
directly or indirectly, from delinquencies or defaults, or both, on the
Contracts), (ii) all information necessary to enable the Indenture Trustee to
send the statements to Noteholders and Equity Certificateholders required by
Section 7.05 of the Indenture, and (iii) all information necessary to enable the
Indenture Trustee to reconcile all deposits to, and withdrawals from, the
Servicing Account and the Collection Account for the related Collection Period
and Payment Date, including the accounting required by Section 4.4. Contracts
purchased by TCC on the related Deposit Date or by the Depositor on the related
Accounting Date, and each Contract which became a Liquidated Contract or which
was paid in full during the related Collection Period, shall be identified by
account number (as set forth in the Schedule of Contracts). A copy of such
certificate may be obtained by any Equity Certificateholder or Noteholder (or by
any Note Owner, upon certification that such Person is a Note Owner and payment
of any expenses associated with the distribution thereof) by a request in
writing to the Indenture Trustee addressed to the Corporate Trust Office.
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SECTION 3.10. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF SERVICER
TERMINATION EVENT.
(a) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency, on or before March 31 (or 90 days after the end
of the Servicer's fiscal year, if other than December 31) of each year,
beginning on March 31, 1997, a certificate signed by any Responsible Officer of
the Servicer, dated as of December 31 (or other applicable date) of the
immediately preceding year, stating that (i) a review of the activities of the
Servicer during the preceding 12-month period (or such other period as shall
have elapsed from the Closing Date to the date of the first such certificate)
and of its performance under this Agreement has been made under such officer's
supervision, and (ii) to such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
period, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency, promptly after having obtained knowledge
thereof, but in no event later than two Business Days thereafter, written notice
in a certificate signed by any Responsible Officer of the Servicer of any event
which with the giving of notice or lapse of time, or both, would become a
Servicer Termination Event under Section 8.1(a). The Depositor or the Servicer
shall deliver to the Owner Trustee, the Indenture Trustee, the Servicer or the
Depositor (as applicable) and each Rating Agency promptly after having obtained
knowledge thereof, but in no event later than three Business Days thereafter,
written notice in a certificate signed by any Responsible Officer of the
Servicer of any event which with the giving of notice or lapse of time, or both,
would become a Servicer Termination Event under any other clause of Section 8.1.
SECTION 3.11. ANNUAL INDEPENDENT ACCOUNTANTS' REPORT.
(a) The Servicer shall cause a firm of nationally recognized
independent certified public accountants (the "Independent Accountants"), who
may also render other services to the Servicer, to deliver to the Owner Trustee,
the Indenture Trustee and each Rating Agency, on or before March 31 (or 90 days
after the end of the Servicer's fiscal year, if other than December 31) of each
year, beginning on March 31, 1997, with respect to the twelve months ended the
immediately preceding December 31 (or other applicable date) (or such other
period as shall have elapsed from the Closing Date to the date of such
certificate), a statement (the "Accountant's Report") addressed to the Board of
Directors of the Servicer, to the Owner Trustee and to the Indenture Trustee, to
the effect that such firm has audited the financial statements of the Servicer
and issued its report thereon and that such audit was made in accordance with
generally accepted auditing standards, and accordingly included such tests of
the accounting records and such other auditing procedures as such firm
considered necessary in the circumstances, including procedures as determined by
the Independent Accountants related to (i) the documents and records concerning
the servicing of
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equipment lease contracts, installment sale contracts, promissory notes, loan
and security agreements and/or other similar types of receivables under
servicing agreements substantially similar one to another (such Accountant's
Report to have attached thereto a schedule setting forth the servicing
agreements covered thereby, including this Agreement); and (ii) the delinquency
and loss statistics relating to the Servicer's portfolio of equipment lease
contracts, installment sale contracts, promissory notes, loan and security
agreements and/or other similar types of receivables; and except as described in
the Accountant's Report, disclosed no exceptions or errors in the records
relating to the contracts serviced for others that, in the firm's opinion,
generally accepted auditing standards requires such firm to report. The
Accountant's Report shall further state that (1) a review of certain agreed upon
procedures was performed with respect to two randomly selected Servicer's
Certificates during the applicable period, and (2) except as disclosed in the
Report, no exceptions or errors in the Servicer's Certificates so examined were
found.
(b) The Accountants' Report shall also indicate that the firm is
independent of the Depositor and the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
(c) A copy of the Accountants' Report may be obtained by any Equity
Certificateholder or Noteholder (or by any Note Owner, upon certification that
such Person is a Note Owner and payment of any expenses associated with the
distribution thereof) by a request in writing to the Indenture Trustee addressed
to the Corporate Trust Office.
SECTION 3.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING CONTRACTS. The Servicer shall provide to representatives of the Owner
Trustee and the Indenture Trustee reasonable access to the documentation
regarding the Contracts. In each case, such access shall be afforded without
charge but only upon reasonable request and during normal business hours.
Nothing in this Section shall derogate from the obligation of the Servicer to
observe any applicable law, rule or contractual provision with an Obligor
prohibiting disclosure of information regarding the Obligors, and the failure of
the Servicer to provide access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section.
SECTION 3.13. CERTAIN DUTIES OF THE SERVICER UNDER THE TRUST
AGREEMENT. The Servicer shall, and hereby agrees that it will, monitor the
Issuer's compliance with all applicable provisions of federal securities laws,
notify the Issuer of any actions to be taken by the Issuer necessary for
compliance with such laws and prepare on behalf of the Issuer all notices,
filings or other documents or instruments required to be filed under such laws.
SECTION 3.14. DUTIES OF THE SERVICER UNDER THE INDENTURE. The
Servicer shall, and hereby agrees that it will, perform on behalf of the Issuer
and the Owner
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Trustee the following duties of the Issuer or the Owner Trustee, as applicable,
under the Indenture (references are to the applicable Sections in the
Indenture):
(a) the direction to the Paying Agents, if any, to deposit
moneys with the Indenture Trustee (Section 3.03);
(b) the obtaining and preservation of the Issuer's qualification
to do business in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of the Indenture,
the Notes and each other instrument and agreement included in the Trust
Estate (Section 3.04);
(c) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance and
other instruments, in accordance with Section 3.05 of the Indenture,
necessary to protect the Trust Estate (Section 3.05);
(d) the annual delivery of Opinions of Counsel, in accordance
with Section 3.06 of the Indenture, as to the Trust Estate, and the annual
delivery of the Officers' Certificate and certain other statements, in
accordance with Section 3.09 of the Indenture, as to compliance with the
Indenture (Sections 3.06 and 3.09);
(e) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the
Indenture (Section 4.01);
(f) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officers' Certificate and the obtaining of the Opinion of Counsel and the
Independent Certificate relating thereto (Section 4.01);
(g) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee and
any written instruments necessary in connection with the resignation or
removal of any co-trustee or separate trustee (Sections 6.08 and 6.11);
(h) the opening of one or more accounts in the Issuer's name,
the preparation of Issuer Orders, Officers' Certificates and Opinions of
Counsel and all other actions necessary with respect to investment and
reinvestment of funds in the Trust Accounts (Sections 8.02, 8.04 and 8.05);
(i) the determination, and giving notice, of the amounts, if
any, specified in clauses (i) through (iii) of Section 8.06(c) of the
Indenture for each Payment Date (Section 8.06);
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(j) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures (Sections 9.01, 9.02 and 9.03);
(k) the preparation of all Officers' Certificates, Opinions of
Counsel and Independent Certificates with respect to any requests by the
Issuer to the Indenture Trustee to take any action under the Indenture
(Section 11.01); and
(l) the recording of the Indenture, if applicable (Section
11.15).
SECTION 3.15. FIDELITY BOND. Within 30 days after the Closing Date,
the Servicer shall obtain, and shall thereafter maintain, (i) a policy or
policies of insurance covering errors and omissions by the Servicer, and (ii) a
fidelity bond. Such policy or policies and such fidelity bond shall be in such
form and amount as is generally customary among persons that service a portfolio
of equipment lease contracts, installment sale contracts, promissory notes, loan
and security agreements and/or other similar types of receivables having an
unpaid balance of at least $100,000,000 and which are generally regarded as
servicers acceptable to institutional investors. Each such policy shall name
the Issuer, the Indenture Trustee and the Depositor as parties insured
thereunder as their respective interests may appear.
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ARTICLE IV
COLLECTIONS AND DEPOSITS
SECTION 4.1. INITIAL DEPOSIT. On the Closing Date, the Servicer
shall deposit in the Servicing Account (i) all Scheduled Payments and
Prepayments of Contracts received by the Servicer on or after the Cut-Off Date
(including those Scheduled Payments due prior to, but not received as of, the
Cut-Off Date, but excluding those Scheduled Payments due on or after, but
received prior to, the Cut-Off Date) and on or prior to the second Business Day
immediately preceding such date and (ii) all Liquidation Proceeds (including
proceeds of Insurance Policies to be treated as such in accordance with Section
3.4) realized in respect of the Contracts and related Equipment and applied by
the Servicer after the Cut-Off Date.
SECTION 4.2. COLLECTIONS.
(a) Pursuant to the Indenture, the Indenture Trustee has established
the Servicing Account. The Servicer shall make deposits to and transfers from
the Servicing Account, and shall be entitled to make withdrawals therefrom, as
provided in this Agreement. The Servicer shall remit to the Servicing Account
all payments by or on behalf of the Obligors on the Contracts (other than
amounts constituting Administrative Fees) and all Liquidation Proceeds
(including (1) proceeds of Insurance Policies to be treated as such in
accordance with Section 3.4 and (2) deficiency amounts paid by the Servicer with
respect to the disposition of Equipment to be treated as such in accordance with
the last paragraph of Section 3.3) received by the Servicer, in each case, as
soon as practicable, but in no event later than the second Business Day after
receipt thereof. Within three Business Days after the deposit of such payments
and proceeds therein, the Servicer shall transfer all amounts credited to the
Servicing Account on account of such payments and proceeds (i) to the extent
they constitute Pledged Revenues, to the Collection Account, and (ii) to the
extent they represent amounts allocated to the Depositor, to the Depositor.
Notwithstanding the foregoing, the Servicer may utilize an alternative
remittance schedule acceptable to the Servicer if the Servicer provides to the
Indenture Trustee written confirmation from each Rating Agency that such
alternative remittance schedule will not result in the downgrading or withdrawal
by the Rating Agency of the rating then assigned to the Notes or the Equity
Certificates. Amounts from time to time in the Servicing Account shall be
invested in accordance with Section 8.07 of the Indenture, and the Servicer
shall be entitled to any earnings on such investments as additional servicing
compensation hereunder. In the event of any losses on such investments, the
Servicer shall deposit in the Servicing Account the amount thereof, net of any
earnings otherwise distributable to the Servicer.
(b) The Servicer shall remit to the Collection Account (i) that
portion of any Purchase Amount relating to the Required Payoff Amount received
by the Servicer upon the purchase by TCC of any Contract pursuant to Section
2.6, and (ii) that portion
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of the amount paid by the Depositor to purchase the Contracts pursuant to
Section 5.1 as is required to be deposited in the Collection Account pursuant to
such Section.
(c) Notwithstanding the provisions of subsections (a) and (b) hereof,
the Servicer will be entitled to be reimbursed from amounts on deposit in the
Servicing Account or the Collection Account with respect to a Collection Period
for amounts previously deposited in the Servicing Account or the Collection
Account but later determined by the Servicer in good faith to (i) have resulted
from mistaken deposits or postings or checks returned for insufficient funds, or
(ii) be required to be repaid to an Obligor. The amount to be reimbursed
hereunder may be retained pursuant to Section 4.4 at any time or may otherwise
be paid to the Servicer on the related Payment Date pursuant to Section 8.03(i)
of the Indenture upon certification by the Servicer of such amounts and the
provision of such information to the Indenture Trustee as may be necessary to
verify the accuracy of such certification.
(d) The Servicer shall remit directly to the Depositor that portion
of any Purchase Amount relating to the Book Value of any Leased Equipment
received by the Servicer upon the purchase by TCC of any Contract pursuant to
Section 2.6.
SECTION 4.3. APPLICATION OF COLLECTIONS. For the purposes of this
Agreement, all collections for a Collection Period shall be applied by the
Servicer as follows:
(a) With respect to each Contract, payments by or on behalf of
the Obligor thereof (other than Administrative Fees with respect to such
Contract, to the extent collected) shall be applied to Scheduled Payments
and Prepayments in accordance with the terms of such Contract and the
Servicer's credit and collection policies and procedures. With respect to
each Liquidated Contract, that portion of the Liquidation Proceeds
allocated to the Issuer shall be applied, for purposes of this Agreement
and the Indenture only, to Scheduled Payments and Prepayment on the
Contract as if the Liquidation Proceeds had been paid by the Obligor on the
Accounting Date, and then to any other amounts due and payable with respect
to such Contract. The Servicer shall not be entitled to any Administrative
Fees with respect to a Liquidated Contract unless the Required Payoff
Amount for such Contract has been deposited in the Collection Account.
(b) With respect to each Contract that has become a Purchased
Contract as of any Deposit Date, that portion of the Purchase Amount
relating to the Required Payoff Amount shall be applied, for purposes of
this Agreement and the Indenture only, to Scheduled Payments and Prepayment
on the Contract as if the Purchase Amount had been paid by the Obligor on
the related Accounting Date. All payments by or on behalf of an Obligor
received with respect to any Purchased Contract after the Accounting Date
immediately
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preceding the Deposit Date on which the Purchase Amount was paid by TCC,
shall be paid to TCC and shall not be included in Pledged Revenues.
(c) With respect to each Contract that has been purchased by the
Depositor pursuant to Section 5.1, the purchase price shall be applied, for
purposes of this Agreement and the Indenture only, to Scheduled Payments
and Prepayments on the Contract as if such purchase price had been paid by
the Obligor on the Accounting Date. All payments by or on behalf of an
Obligor received with respect to any Contract so purchased after the
Accounting Date on which the purchase price was paid by the Depositor,
shall be paid to the Depositor and shall not be included in the Amount
Available.
SECTION 4.4. NET DEPOSITS. So long as no Servicer Termination Event
shall have occurred and be continuing with respect to the Servicer, the Servicer
may make the remittances or transfers to be made by it pursuant to Section 4.2
net of amounts (which amounts may be netted prior to any such remittance or
transfer) that would otherwise be distributed to it pursuant to Section 8.03(i)
of the Indenture; PROVIDED, HOWEVER, that the Servicer shall account for all of
such amounts in the related Servicer's Certificate as if such amounts were
deposited and distributed separately; and PROVIDED, FURTHER, that the amounts
that would otherwise be distributed to the Servicer pursuant to Section 8.03(i)
of the Indenture shall not include that portion of the Servicing Fee for the
related Collection Period to be applied by the Indenture Trustee in accordance
with the Cash Collateral Account Agreement. If an error is made by the Servicer
in calculating the amount to be deposited or retained by it, with the result
that an amount less than required is deposited in the Collection Account, the
Servicer shall make a payment of the deficiency to the Collection Account
immediately upon becoming aware, or receiving notice from the Indenture Trustee,
of such error.
SECTION 4.5. EXPIRATION OF LEASE CONTRACTS. In the case of any Lease
Contract which has reached the end of its Original Term, is not in default and
as to which, in accordance with the terms of such Lease Contract, the lessor
thereunder is entitled to the related Equipment, the Servicer shall take such
action as the Depositor shall direct to cause title to such Equipment in the
Depositor to be free and clear of any Liens created by this Agreement or any
Related Document. Any payments thereafter made by the Obligor in respect of
such Equipment, whether on the related Lease Contract or otherwise, shall be the
property of the Depositor or its designated assignee.
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ARTICLE V
TERMINATION
SECTION 5.1. OPTIONAL PURCHASE OF ALL CONTRACTS; LIQUIDATION OF TRUST
ASSETS.
(a) At such time as the sum of the Aggregate Principal Balance of the
Notes and the Equity Certificate Balance is less than 10% of the Cut-Off Date
Contract Pool Principal Balance, the Depositor shall have the option to purchase
the corpus of the Issuer (excluding any rights the Issuer may have with respect
to the Cash Collateral Account); PROVIDED, HOWEVER, that the amount to be paid
for such purchase (as set forth in the following sentence) shall, in any event,
be sufficient to pay the full amount of unpaid principal of and interest payable
on the Notes and the Equity Certificates on the related Payment Date. To
exercise such option, Depositor shall, on any Accounting Date, pay to the
Servicer the aggregate purchase price for the Contracts (which shall be an
amount equal to the sum of the Required Payoff Amounts for all of the
Contracts), plus the appraised value of any other property (including the right
to receive any future recoveries) held as part of the Issuer, such appraisal to
be conducted by an appraiser mutually agreed upon by the Depositor and the
Indenture Trustee (or, if the Notes are no longer Outstanding, the Owner
Trustee), and shall succeed to all interests in and to the Trust Assets. The
fees and expenses related to such appraisal shall be paid by the Depositor. The
Servicer shall immediately deposit the purchase price so paid into the
Collection Account, to be treated as Available Pledged Revenues and distributed
in accordance with Section 8.03 of the Indenture.
(b) Notice of any termination of the Issuer shall be given by the
Servicer to the Owner Trustee and the Indenture Trustee as soon as practicable
(but in no event more than three Business Days) after the Servicer has received
notice thereof.
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ARTICLE VI
THE DEPOSITOR
SECTION 6.1. LIABILITY OF DEPOSITOR. The Depositor shall be liable
hereunder only to the extent of the obligations in this Agreement specifically
undertaken by the Depositor and the representations made by the Depositor.
SECTION 6.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, DEPOSITOR; AMENDMENT OF CERTIFICATE OF INCORPORATION.
(a) The Depositor shall not merge or consolidate with any other
Person or permit any other Person to become the successor to the Depositor's
business except in accordance with the requirements of this Section. The
certificate of incorporation of any corporation (i) into which the Depositor may
be merged or consolidated, (ii) resulting from any merger or consolidation to
which the Depositor shall be a party, or (iii) succeeding to the business of
Depositor, shall contain provisions relating to limitations on business and
other matters substantively identical to those contained in the Depositor's
certificate of incorporation. Any such successor corporation shall execute an
agreement of assumption of every obligation of the Depositor under this
Agreement and each Related Document and, whether or not such assumption
agreement is executed, shall be the successor to the Depositor under this
Agreement without the execution or filing of any document or any further act on
the part of any of the parties to this Agreement. The Depositor shall provide
prompt notice of any merger, consolidation or succession pursuant to this
Section 6.2 to the Owner Trustee, the Indenture Trustee and the Rating Agencies.
Notwithstanding the foregoing, the Depositor shall not merge or consolidate with
any other Person or permit any other Person to become a successor to the
Depositor's business, unless (w) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 2.4 shall
have been breached (for purposes hereof, such representations and warranties
shall speak as of the date of the consummation of such transaction) and no event
that, after notice or lapse of time, or both, would become an Event of Default
or a Servicer Termination Event shall have occurred and be continuing, (x) the
Depositor shall have delivered to the Owner Trustee and the Indenture Trustee a
certificate of a Responsible Officer of the Depositor and an Opinion of Counsel
each stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section 6.2 and that all conditions precedent, if
any, provided for in this Agreement relating to such transaction have been
complied with, (y) the Depositor shall have delivered to the Owner Trustee and
the Indenture Trustee an Opinion of Counsel, stating that, in the opinion of
such counsel, either (A) all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary to
preserve and protect the interest of the Issuer in the Trust Assets and reciting
the details of the filings or (B) no such action shall be necessary to preserve
and protect such interest, and (z) the Rating Agency Condition shall have been
satisfied.
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(b) The Depositor hereby agrees that it shall not (i) take any action
prohibited by Article XVI of its certificate of incorporation or (ii) without
the prior written consent of the Owner Trustee and the Indenture Trustee and
without satisfaction of the Rating Agency Condition, amend Article III, Article
IX, Article XIV or Article XVI of its certificate of incorporation.
SECTION 6.3. LIMITATION ON LIABILITY OF DEPOSITOR AND OTHERS. The
Depositor and any director or officer or employee or agent of the Depositor may
rely in good faith on the advice of counsel or on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising under this Agreement. The Depositor shall not be under any obligation
to appear in, prosecute or defend any legal action that is not incidental to its
obligations as transferor of the Contracts under this Agreement and that in its
opinion may involve it in any expense or liability.
SECTION 6.4. DEPOSITOR MAY OWN EQUITY CERTIFICATES OR NOTES. Each of
the Depositor and any Affiliate of the Depositor may in its individual or any
other capacity become the owner or pledgee of Equity Certificates or Notes with
the same rights as it would have if it were not the Depositor or an Affiliate
thereof except as otherwise specifically provided herein or in the Related
Documents. Equity Certificates or Notes so owned by or pledged to the Depositor
or such Affiliate shall have an equal and proportionate benefit under the
provisions of this Agreement or any Related Document, without preference,
priority, or distinction as among all of the Equity Certificates or Notes;
PROVIDED that any Equity Certificates or Notes owned by the Depositor or any
Affiliate thereof, during the time such Equity Certificates or Notes are owned
by them, shall be without voting rights for any purpose set forth in this
Agreement or any Related Document (it being acknowledged that any Equity
Certificate held by the Revolving Trust Trustee shall not be deemed to be owned
by the Depositor or an Affiliate of the Depositor for this purpose). The
Depositor shall notify the Owner Trustee and the Indenture Trustee promptly
after it or any of its Affiliates become the owner or pledgee of an Equity
Certificate or a Note.
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ARTICLE VII
THE SERVICER
SECTION 7.1. LIABILITY OF SERVICER; INDEMNITIES.
(a) The Servicer (in its capacity as such and, in the case of TCC,
without limitation of its obligations under the Purchase Agreement) shall be
liable hereunder only to the extent of the obligations in this Agreement
specifically undertaken by the Servicer and the representations made by the
Servicer.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, their
respective officers, directors, agents and employees, the Equity
Certificateholders and the Noteholders from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent that such cost,
expense, loss, claim, damage or liability arose out of, or was imposed upon the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the Equity
Certificateholders or the Noteholders through the Servicer's breach of this
Agreement, the gross negligence, willful misfeasance or bad faith of the
Servicer in the performance of its duties under this Agreement or by reason of
reckless disregard of its obligations and duties under this Agreement.
(c) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee, in its individual capacity, its officers, directors, agents and
employees, from and against all costs, taxes (other than income taxes on fees
and expenses payable to the Owner Trustee), expenses, losses, claims, damages
and liabilities arising out of or incurred in connection with the acceptance or
performance of the trusts and duties contained in the Trust Agreement and the
Related Documents, except to the extent that such cost, taxes (other than income
taxes), expense, loss, claim, damage or liability (A) is due to the willful
misfeasance or gross negligence of the Owner Trustee, or (B) arises from the
Owner Trustee's breach of any of its representations or warranties set forth in
Section 7.3 of the Trust Agreement.
(d) Indemnification under this Article shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Servicer has made any indemnity payments pursuant to this Article and the
recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts collected to the Servicer, together with any
interest earned thereon.
(e) TCC, in its individual capacity, hereby acknowledges that the
indemnification provisions in the Purchase Agreement benefiting the Issuer, the
Owner Trustee and the Indenture Trustee are enforceable by each hereunder.
(f) The provisions of this Section shall survive the resignation or
removal of the Owner Trustee and the termination of the Related Documents.
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SECTION 7.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER. The Servicer shall not merge or consolidate with
any other Person, convey, transfer or lease substantially all its assets as an
entirety to another Person, or permit any other Person to become the successor
to the Servicer's business unless, after the merger, consolidation, conveyance,
transfer, lease or succession, the successor or surviving entity shall be an
Eligible Servicer and shall be capable of fulfilling the duties of the Servicer
contained in this Agreement. Any corporation (i) into which the Servicer may be
merged or consolidated, (ii) resulting from any merger or consolidation to which
the Servicer shall be a party, (iii) which acquires by conveyance, transfer, or
lease substantially all of the assets of the Servicer, or (iv) succeeding to the
business of the Servicer, in any of the foregoing cases shall execute an
agreement of assumption to perform every obligation of the Servicer under this
Agreement and, whether or not such assumption agreement is executed, shall be
the successor to the Servicer under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties to this
Agreement, anything in this Agreement to the contrary notwithstanding; PROVIDED,
HOWEVER, that nothing contained herein shall be deemed to release the Servicer
from any obligation. The Servicer shall provide notice of any merger,
consolidation or succession pursuant to this Section to the Owner Trustee, the
Indenture Trustee and each Rating Agency. Notwithstanding the foregoing, the
Servicer shall not merge or consolidate with any other Person or permit any
other Person to become a successor to the Servicer's business, unless
(a) immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.6 shall have been breached (for purposes
hereof, such representations and warranties shall speak as of the date of the
consummation of such transaction) and no event that, after notice or lapse of
time, or both, would become a Servicer Termination Event shall have occurred and
be continuing, (b) the Servicer shall have delivered to the Owner Trustee and
the Indenture Trustee a certificate of a Responsible Officer of the Servicer and
an Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, (c) the Servicer shall have delivered to
the Owner Trustee and the Indenture Trustee an Opinion of Counsel, stating that,
in the opinion of such counsel, either (1) all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary to preserve and protect the interest of the Owner Trustee in the
Trust Assets and reciting the details of the filings or (2) no such action shall
be necessary to preserve and protect such interest, and (d) the Rating Agency
Condition has been satisfied.
SECTION 7.3. LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Neither
the Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Issuer, the Equity
Certificateholders, the Depositor, the Noteholders, the Owner Trustee or the
Indenture Trustee except as provided in this Agreement, for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement; PROVIDED, HOWEVER, that this provision shall not
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protect the Servicer or any such person against any liability that would
otherwise be imposed by reason of a breach of this Agreement or willful
misfeasance, bad faith or gross negligence (excluding errors in judgment) in the
performance of duties, by reason of reckless disregard of obligations and duties
under this Agreement or any violation of law by the Servicer or such person, as
the case may be; PROVIDED FURTHER, that this provision shall not affect any
liability to indemnify the Owner Trustee and the Indenture Trustee for costs,
taxes, expenses, claims, liabilities, losses or damages paid by the Owner
Trustee or the Indenture Trustee, each in its individual capacity. The Servicer
and any director, officer, employee or agent of the Servicer may rely in good
faith on the advice of counsel or on any document of any kind PRIMA FACIE
properly executed and submitted by any Person respecting any matters arising
under this Agreement.
SECTION 7.4. SERVICER NOT TO RESIGN. Subject to the provisions of
Section 7.2, the Servicer shall not resign from the obligations and duties
imposed on it by this Agreement as Servicer except upon a determination that by
reason of a change in legal requirements the performance of its duties under
this Agreement would cause it to be in violation of such legal requirements in a
manner which would have a material adverse effect on the Servicer, and a Note
Majority (or, at such time as the Notes are no longer Outstanding, an Equity
Certificate Majority) does not elect to waive the obligations of the Servicer to
perform the duties which render it legally unable to act or to delegate those
duties to another Person. Any such determination permitting the resignation of
the Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Owner Trustee and the Indenture Trustee. No resignation of the
Servicer shall become effective until a successor Servicer that is an Eligible
Servicer shall have assumed the responsibilities and obligations of the
Servicer; PROVIDED, HOWEVER, that in the event a successor Servicer is not
appointed within 60 days after the Servicer has given notice of its resignation
and has provided the Opinion of Counsel required by this Section, the Servicer
may petition a court for its removal.
SECTION 7.5. CORPORATE EXISTENCE. The Servicer shall maintain its
existence, rights and franchises as a corporation under the laws of the
jurisdiction of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which the failure to so qualify would have an adverse effect on the validity or
enforceability of any Contract or this Agreement or on the ability of the
Servicer to perform its duties under this Agreement.
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ARTICLE VIII
SERVICER TERMINATION EVENTS
SECTION 8.1. SERVICER TERMINATION EVENT. For purposes of this
Agreement, each of the following shall constitute a "Servicer Termination
Event":
(a) Any failure by the Servicer to deposit within the time
periods specified in this Agreement in the Collection Account for
distribution to Equity Certificateholders or Noteholders, or to distribute
to the Depositor, any proceeds or payment required to be so deposited or
distributed under the terms of this Agreement (or, if TCC is the Servicer,
the Purchase Agreement) that continues unremedied for a period of five
Business Days (three Business Days with respect to payment of Purchase
Amounts) after written notice is received by the Servicer from the
Indenture Trustee or after discovery of such failure by a Responsible
Officer of the Servicer; or
(b) Failure by the Servicer to deliver to the Indenture Trustee
and the Owner Trustee the Servicer's Certificate by the third Business Day
prior to the related Payment Date, or failure on the part of the Servicer
to observe its covenants and agreements set forth in Section 7.2; or
(c) Failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement (or, if TCC is the Servicer, the
Purchase Agreement), which failure (i) materially and adversely affects the
rights of the Issuer, Equity Certificateholders or Noteholders, and
(ii) continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Owner Trustee, the Indenture Trustee
or any Equity Certificateholder or Noteholder; or
(d) (i) The commencement of an involuntary case under the
federal bankruptcy laws, as now or hereinafter in effect, or another
present or future federal or state bankruptcy, insolvency or similar law
and such case is not dismissed within 60 days; or (ii) the entry of a
decree or order for relief by a court or regulatory authority having
jurisdiction in respect of the Servicer in an involuntary case under the
federal bankruptcy laws, as now or hereafter in effect, or another present
or future, federal or state, bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Servicer or of any
substantial part of their respective properties or ordering the winding up
or liquidation of the affairs of the Servicer; or
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(e) The commencement by the Servicer of a voluntary case under
the federal bankruptcy laws, as now or hereafter in effect, or any other
present or future, federal or state, bankruptcy, insolvency or similar law,
or the consent by the Servicer to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Servicer or of any substantial part of its
property or the making by the Servicer of an assignment for the benefit of
creditors or the failure by the Servicer generally to pay its debts as such
debts become due or the taking of corporate action by the Servicer in
furtherance of any of the foregoing; or
(f) Any representation, warranty or statement of the Servicer
made in this Agreement or any certificate, report or other writing
delivered by the Servicer pursuant hereto shall prove to be incorrect in
any material respect as of the time when the same shall have been made, the
incorrectness of such representation, warranty or statement has a material
adverse effect on the Issuer, Equity Certificateholders or Noteholders,
and, within 30 days after written notice thereof shall have been given to
the Servicer or the Depositor by the Owner Trustee, the Indenture Trustee
or any Equity Certificateholder or Noteholder, the circumstances or
condition in respect of which such representation, warranty or statement
was incorrect shall not have been eliminated or otherwise cured.
SECTION 8.2. CONSEQUENCES OF A SERVICER TERMINATION EVENT. If a
Servicer Termination Event shall occur and be continuing, the Indenture Trustee
may, and at the direction of a Note Majority (or, at such time as the Notes are
no longer Outstanding, an Equity Certificate Majority) shall, by notice given in
writing to the Servicer and the Owner Trustee, terminate all of the rights and
obligations of the Servicer under this Agreement. On or after the receipt by
the Servicer of such written notice, all authority, power, obligations and
responsibilities of the Servicer under this Agreement, whether with respect to
the Equity Certificates, the Notes, the Trust Assets or otherwise, shall be
terminated and automatically shall pass to, be vested in and become obligations
and responsibilities of the Indenture Trustee (unless and until a successor
Servicer is appointed in accordance with Section 8.3); PROVIDED, HOWEVER, that
the Indenture Trustee shall have no liability with respect to any obligation
which was required to be performed by the terminated Servicer prior to the date
that the Indenture Trustee becomes the Servicer or any claim of a third party
based on any alleged action or inaction of the terminated Servicer. The
Indenture Trustee is authorized and empowered by this Agreement to execute and
deliver, on behalf of the terminated Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination. The terminated Servicer agrees to cooperate with the Indenture
Trustee in effecting the termination of the responsibilities and rights of the
terminated Servicer under this Agreement, including, without limitation, the
transfer to the Indenture Trustee for administration by it of all cash amounts
that shall at the time be held by the terminated Servicer for deposit, or have
been deposited by the terminated Servicer, in any of the Trust Accounts or
thereafter received with respect
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to the Contracts and the delivery to the Indenture Trustee of all Contract
Files, Monthly Records and Collection Records and a computer tape in readable
form as of the most recent Business Day containing all information necessary to
enable the Indenture Trustee or a successor Servicer to service the Contracts
and the other Trust Assets. The terminated Servicer shall grant the Owner
Trustee, the Indenture Trustee and the successor Servicer reasonable access to
the terminated Servicer's premises at the terminated Servicer's expense.
SECTION 8.3. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 8.2, the Indenture Trustee shall be the
successor in all respects to the Servicer in its capacity as servicer under this
Agreement and the transactions set forth or provided for in this Agreement, and
shall be subject to all the responsibilities, restrictions, duties, liabilities
and termination provisions relating thereto placed on the Servicer by the terms
and provisions of this Agreement. As compensation therefor, the Indenture
Trustee shall be entitled to receive the Total Servicing Fee. The Owner Trustee
and the Indenture Trustee shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(b) Notwithstanding the foregoing, the Indenture Trustee may, if it
shall be unwilling to so act, or shall, if it is legally unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any Eligible
Servicer as the successor to the Servicer hereunder in the performance of all or
any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Pending appointment of a successor pursuant to the preceding
sentence, the Indenture Trustee shall act as successor Servicer unless it is
legally unable to do so, in which event the outgoing Servicer shall continue to
act as Servicer until a successor has been appointed and accepted such
appointment.
(c) In connection with such appointment and assumption, the
Indenture Trustee may make such arrangements for the compensation of such
successor out of payments on the Contracts as it and such successor shall agree;
PROVIDED, HOWEVER, that no such monthly compensation shall, without the written
consent of the Depositor and 100% of the Noteholders and the Equity
Certificateholders, exceed the Total Servicing Fee. The Indenture Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession.
(d) If a successor Servicer is acting as Servicer hereunder, it
shall be subject to termination under Section 8.2 upon the occurrence of any
Servicer Termination Event applicable to it as Servicer.
(d) At such time as any successor Servicer (including the Indenture
Trustee) becomes Servicer hereunder, it shall agree to perform all of the
obligations of the Servicer under, and be subject to the terms of, the Cash
Collateral Account
-45-
Agreement, and shall take such actions as the parties to the Cash Collateral
Account Agreement may reasonably request to evidence such agreement.
SECTION 8.4. NOTIFICATION TO EQUITY CERTIFICATEHOLDERS AND
NOTEHOLDERS. Upon any termination of, or appointment of a successor to, the
Servicer pursuant to this Article VIII, the Owner Trustee shall give prompt
written notice thereof to Equity Certificateholders at their respective
addresses appearing in the Certificate Register and to each Rating Agency, and
the Indenture Trustee shall give prompt written notice thereof to Noteholders at
their respective addresses appearing in the Note Register.
SECTION 8.5. WAIVER OF PAST DEFAULTS. A Note Majority (or, at such
time as the Notes are no longer Outstanding, an Equity Certificate Majority) may
waive any default by the Servicer in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Termination Event arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. AMENDMENT.
(a) This Agreement may be amended by the Depositor, the Servicer, the
Issuer and the Indenture Trustee without the consent of any of the Noteholders
or Equity Certificateholders, (i) to cure any ambiguity, (ii) to correct or
supplement any provisions in this Agreement that may be inconsistent with any
other provision herein, or (iii) to make any other provisions with respect to
matters or questions arising under this Agreement that are not inconsistent with
the provisions hereof; PROVIDED, HOWEVER, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of the Noteholders or Equity Certificateholders.
(b) This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Issuer and the Indenture Trustee with the consent
of an Equity Certificate Majority and a Note Majority (which consent of any
Holder of an Equity Certificate or Note given pursuant to this Section or
pursuant to any other provision of this Agreement shall be conclusive and
binding on such Holder and on all future Holders of such Equity Certificate or
Note and of any Equity Certificate or Note issued upon the transfer thereof or
in exchange thereof or in lieu thereof whether or not notation of such consent
is made upon the Equity Certificate or Note) 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
Equity Certificates or Notes; PROVIDED, HOWEVER, that no such amendment shall
(a) increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Contracts or distributions required to be
made on any Equity Certificate or Note or the rate of interest payable thereon,
(b) amend any provisions of Section 5.06 or 8.03 of the Indenture in such a
manner as to affect the priority of payment of interest or principal to
Noteholders or Equity Certificateholders, or (c) reduce the aforesaid percentage
required to consent to any such amendment or any waiver hereunder, without the
consent of the Holders of all Equity Certificates or Notes then Outstanding and
affected thereby; and PROVIDED, FURTHER, that no such amendment shall be
effective unless and until the Rating Agency Condition has been satisfied.
(c) Promptly after the execution of any such amendment or consent,
the Owner Trustee or the Indenture Trustee, as appropriate, shall furnish
written notification of the substance of such amendment or consent to each
Equity Certificateholder and Noteholder.
(d) It shall not be necessary for the consent of Equity
Certificateholders or Noteholders pursuant to Section 9.1(b) to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve
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the substance thereof. The manner of obtaining such consents (and any other
consents of Equity Certificateholders and Noteholders provided for in this
Agreement) and of evidencing the authorization of the execution thereof by
Equity Certificateholders or Noteholders shall be subject to such reasonable
requirements as the Owner Trustee or Indenture Trustee, as applicable, may
prescribe, including the establishment of record dates.
(e) Prior to the execution of any amendment to this Agreement, the
Owner Trustee shall be entitled to receive and rely upon an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by this
Agreement, in addition to the Opinion of Counsel referred to in Section 9.2(h).
The Owner Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Owner Trustee's own rights, duties or immunities
under this Agreement or otherwise.
SECTION 9.2. PROTECTION OF TITLE TO TRUST ASSETS.
(a) The Depositor shall execute and file such financing statements
and cause to be executed and filed such continuation and other statements
(including those prepared by the Servicer pursuant to Section 3.14(c)), all in
such manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of the Issuer, the Owner Trustee and the
Indenture Trustee in the Trust Assets and in the proceeds thereof; except that
(i) UCC-1 financing statements and continuation statements, listing the Obligor
as debtor and the related Equipment as collateral, need be filed only as
required by Section 3.5; and (ii) no assignments of any such financing
statements relating to the Equipment shall be filed to reflect the assignment of
the Contracts by the Originators to the Depositor and by the Depositor to the
Issuer. The Depositor shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither the Depositor nor the Issuer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed by the Depositor in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Owner Trustee and
the Indenture Trustee at least 60 days' prior written notice thereof, and shall
promptly file appropriate amendments to all previously filed financing
statements and continuation statements.
(c) Each of the Depositor, the Servicer and the Issuer shall give the
Owner Trustee and the Indenture Trustee at least 60 days' prior written notice
of any relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement. The Servicer shall at all times maintain each office
from which it services Contracts and its principal executive office within the
United States of America.
-48-
(d) The Servicer shall maintain accounts and records as to each
Contract accurately and in sufficient detail to permit (i) the reader thereof to
know at any time the status of such Contract, including payments and recoveries
made and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Contract and the amounts
from time to time deposited in the Collection Account in respect of such
Contract.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of transfer and assignment under this Agreement of the
Contracts to the Issuer, the Servicer's master computer records (including any
backup archives) that refer to any Contract indicate clearly that the Contract
is owned by the Issuer. Indication of the Issuer's ownership of a Contract
shall be deleted from or modified on the Servicer's computer systems when, and
only when, the Contract has been paid in full, liquidated (including receipt of
all recoveries reasonably expected to be collected) or purchased by the
Depositor or TCC.
(f) Upon receipt by the Servicer of reasonable prior notice, Servicer
shall permit the Owner Trustee, the Indenture Trustee and their respective
agents, at any time during the Servicer's normal business hours to inspect,
audit and make copies of and abstracts from the Servicer's records regarding any
Contracts or any other portion of the Trust Assets.
(g) The Servicer shall furnish to the Owner Trustee and the Indenture
Trustee at any time upon request a list (which may, at the option of the
Servicer, be on a computer disk or other electronic storage medium) of all
Contracts then held as part of the Trust Assets, together with a reconciliation
of such list to the Schedule of Contracts and to each of the Servicer's
Certificates furnished before such request indicating removal of Contracts from
the Issuer. Upon request, the Servicer shall furnish a copy of any list to the
Depositor. Subject to the following sentence, the Owner Trustee shall hold any
such list and Schedule of Contracts for examination by interested parties during
normal business hours at the Corporate Trust Office upon reasonable notice by
such Persons of their desire to conduct an examination. The Owner Trustee shall
and shall cause its representatives to hold in confidence all information
thereon relating to the identity of the Obligors except to the extent disclosure
may be required by Section 9-208 of the UCC or by other applicable law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Owner Trustee may reasonably determine that such disclosure
is consistent with its obligations under the Indenture.
(h) The Depositor and the Servicer shall deliver to the Owner Trustee
and the Indenture Trustee simultaneously with the execution and delivery of this
Agreement and of each amendment thereto and upon the occurrence of the events
giving rise to an obligation to give notice pursuant to Section 9.2(b) or (c),
an Opinion of Counsel either (a) stating that, in the opinion of such Counsel,
all financing statements and continuation statements have been executed and
filed that are necessary fully to
-49-
preserve and protect the interest of the Issuer and the Indenture Trustee in the
Contracts and the other Trust Assets, and reciting the details of such filings
or referring to prior Opinions of Counsel in which such details are given, or
(b) stating that, in the opinion of such counsel, no such action is necessary to
preserve and protect such interest.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee, within 90 days after the beginning of each calendar year beginning with
the first calendar year beginning more than three months after the Closing Date,
an Opinion of Counsel, either (a) stating that, in the opinion of such counsel,
all financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of the
Issuer and the Indenture Trustee in the Contracts, and reciting the details of
such filings or referring to prior Opinions of Counsel in which such details are
given, or (b) stating that, in the opinion of such counsel, no action shall be
necessary to preserve and protect such interest.
SECTION 9.3. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
SECTION 9.4. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Equity
Certificates or the Notes or the respective rights of the Holders thereof.
SECTION 9.5. ASSIGNMENT. Notwithstanding anything to the contrary
contained in this Agreement, except as provided in Section 7.2 or Section 8.2
(and as provided in the provisions of the Agreement concerning the resignation
of the Servicer), this Agreement may not be assigned by the Depositor or the
Servicer without (i) the prior written consent of the Owner Trustee, the
Indenture Trustee, a Note Majority and an Equity Certificate Majority, and (ii)
satisfaction of the Rating Agency Condition.
SECTION 9.6. THIRD-PARTY BENEFICIARIES. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any benefit or any legal or equitable right, remedy or
claim under this Agreement.
-50-
SECTION 9.7. COUNTERPARTS. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
SECTION 9.8. INTENTION OF PARTIES. The parties hereto intend that,
in the event that the conveyance of the Contracts and other Trust Assets
pursuant to this Agreement is determined to be made as security for a loan made
by the Issuer, the Equity Certificateholders or the Noteholders to the
Depositor, the Depositor hereby grants to the Issuer to secure such loan a first
priority security interest in all of the Depositor's right, title and interest
in and to the rights and property intended to be conveyed to the Issuer pursuant
to Section 2.1(a). This Agreement shall, in such event, constitute a security
agreement under applicable law.
SECTION 9.9. NOTICES. All demands, notices and communications under
this Agreement shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, or by facsimile transmission, and shall be deemed
to have been duly given upon receipt (a) in the case of TCC, the Depositor or
the Servicer, at the following address: ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, (b) in the case of the Owner Trustee,
at its Corporate Trust Office, and (c) in the case of the Indenture Trustee, at
its Corporate Trust Office, or at such other address as shall be designated by
any such party in a written notice to the other parties.
SECTION 9.10. INCOME TAX CHARACTERIZATION. The Depositor has
structured the Trust Agreement, the Indenture, the Cash Collateral Account
Agreement, the Notes and the Equity Certificates with the intention that the
Notes will qualify under applicable federal, state, local and foreign tax law as
indebtedness of the Depositor secured by the Contracts. The Depositor and the
Servicer agree to treat and to take no action inconsistent with the treatment of
the Notes as such indebtedness for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income.
SECTION 9.11. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by The Bank of New York, not individually or personally but solely as Owner
Trustee of the Issuer under the Trust Agreement, in the exercise of the powers
and authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Issuer is made and
intended not as personal representations, undertakings and agreements by The
Bank of New York but is made and intended for the purpose for binding only the
Issuer, (c) nothing herein contained shall be construed as creating any
liability on The Bank of New York, individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability, if
any, being expressly waived by the parties to this Agreement and by any person
claiming by, through or under them and (d) under no circumstances shall The Bank
of New York be personally liable for the payment of any indebtedness or expenses
of the
-51-
Issuer or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Issuer under this Agreement or
any related documents.
-52-
IN WITNESS WHEREOF, the Issuer, the Depositor, TCC, the Servicer and
the Indenture Trustee have caused this Transfer and Servicing Agreement to be
duly executed by their respective officers as of the day and year first above
written.
ISSUER:
CAPITA EQUIPMENT RECEIVABLES
TRUST 1996-1
By THE BANK OF NEW YORK,
not in its individual capacity but
solely as Owner Trustee
By /s/ ▇▇▇▇▇▇ ▇. Laser
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. Laser
Title: Assistant Vice President
DEPOSITOR:
ANTIGUA FUNDING CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
AT&T CAPITAL CORPORATION
In its individual capacity and as Servicer
By /s/ ▇▇▇▇▇ ▇▇▇▇, ▇▇.
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇, ▇▇.
Title: Vice President and Controller
INDENTURE TRUSTEE:
THE CHASE MANHATTAN BANK
not in its individual capacity but
solely as Indenture Trustee
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
-53-
EXHIBIT A-1
SCHEDULE OF LEASE CONTRACTS AND LEASED EQUIPMENT
A-1-1
INTENTIONALLY
OMITTED
EXHIBIT A-2
SCHEDULE OF LOAN CONTRACTS
A-1-1
INTENTIONALLY
OMITTED
EXHIBIT B
FORM OF SERVICER'S CERTIFICATE
The undersigned, on behalf of AT&T Capital Corporation, in its
capacity as servicer (the "Servicer") under the Transfer and Servicing
Agreement, dated as of October 1, 1996 (the "Transfer and Servicing Agreement"),
among Capita Equipment Receivables Trust 1996-1, Antigua Funding Corporation,
The Chase Manhattan Bank, as trustee under the Indenture, and AT&T Capital
Corporation, in its individual capacity and as Servicer, DO HEREBY CERTIFY that
he/she is a Responsible Officer of the Servicer and, pursuant to Section 3.9 of
the Transfer and Servicing Agreement, DO HEREBY FURTHER CERTIFY the following
with respect to the Payment Date occurring on :
-----------------
B-1
This Certificate shall constitute the Servicer's Certificate required
by Section 3.9 of the Transfer and Servicing Agreement with respect to the above
Payment Date. Any term capitalized but not defined herein shall have the
meaning ascribed thereto in the Transfer and Servicing Agreement.
IN WITNESS WHEREOF the undersigned has hereunto set his/her hand this
day of , .
--------------- ---------------------------- ------------
AT&T CAPITAL CORPORATION
By
Name:
Title:
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
MONTHLY SERVICING REPORT
DETERMINATION DATE:
PAYMENT DATE:
COLLECTION PERIOD:
I. INFORMATION REGARDING THE CONTRACTS
1. CONTRACT POOL PRINCIPAL BALANCE
a. Beginning of Collection Period(1) $
b. End of Collection Period $
c. Reduction for Collected Period $
2. DELINQUENT SCHEDULED PAYMENTS
a. Beginning of Collection Period $
b. End of Collection Period $
3. LIQUIDATED CONTRACTS
a. Number of Liquidated Contracts with respect to
Collection Period _______
b. Required Payoff Amounts of Liquidated Contracts $
c. Total Reserve for Liquidation Expenses
d. Total Liquidation Proceeds Received(2) $
e. Liquidation Proceeds Allocated to Owner Trust $
f. Liquidation Proceeds Allocated to Depositor $
g. Current Realized Losses $
4. PREPAID CONTRACTS
a. Number of Prepaid Contracts with respect to
Collection Period _______
b. Required Payoff Amounts of Prepaid Contracts $
5. PURCHASED CONTRACTS (BY TCC)
a. Number of Contracts Purchased by TCC with respect
to Collection Period _______
b. Required Payoff Amounts of Purchased Contracts $
__________
(1) For Initial Collection Period, equal to $3,185,229,329.
(2) Net of any addition to reserve for liquidation expenses.
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
MONTHLY SERVICING REPORT
DETERMINATION DATE: PAYMENT DATE:
COLLECTION PERIOD:
6. DELINQUENCY STATUS OF CONTRACTS (END OF COLLECTION PERIOD)(3)
----------------------------------------------------------------
% of Aggregate
Number of % of Aggregate Required Required Payoff
Contracts Contracts Payoff Amounts Amounts
----------------------------------------------------------------
a. Current
b. 31-60 days
c. 61-90 days
d. 91-120 days
e. 120+ days
f. Total
___________
(3) Show delinquency of Contracts as of the end of the current Collection
Period.
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
MONTHLY SERVICING REPORT
DETERMINATION DATE: PAYMENT DATE:
COLLECTION PERIOD:
7. HISTORICAL LOSS EXPERIENCE WITH RESPECT TO CONTRACTS
-------------------------------------------------------------
3 Collection 6 Collection
[Month/Year] Periods Periods Cumulative
Collection Ending Ending Since
Period [Month/Year] [Month/Year] Cut-off Date
-------------------------------------------------------------
a. Number of Liquidated
Contacts
b. Number of Liquidated
Contracts as a Percentage
of Initial Contracts
c. Required Payoff Amounts
of Liquidated Contracts
d. Liquidation Proceeds
Allocated to Owner Trust
e. Aggregate Current
Realized Losses
f. Aggregate Current Realized
Losses as a Percentage of
Cut-off Date Contract Pool
Principal Balance
__________
(4) Show loss experience of Contracts for the current Collection Period and
historic experience for most recent 3 and 6 month periods and cumulative
experience for the Trust.
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
MONTHLY SERVICING REPORT
DETERMINATION DATE: PAYMENT DATE:
COLLECTION PERIOD:
8. HISTORICAL DELINQUENCY EXPERIENCE WITH RESPECT TO CONTRACTS(5)
-------------------------------------------------------------------------------------------------------------------------------
Required
Required Required Pay of Required
Payoff Payoff Amounts of Payoff
Amounts of % of Aggregate Amounts of % of Aggregate Contracts % of Aggregate Amounts of % of Aggregate
Contracts Required Contracts Required 91-120 Required Contracts Required
Collection 31-60 Days Payoff 61-90 Days Payoff Days Payoff 120+ Days Payoff
Periods Past Due Amounts Past Due Amounts Past Due Amounts Past Due Amounts
-------------------------------------------------------------------------------------------------------------------------------
__________
(5) Show delinquency experience for current and all prior Collection Periods.
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
MONTHLY SERVICING REPORT
DETERMINATION DATE: PAYMENT DATE:
COLLECTION PERIOD:
II. INFORMATION REGARDING THE SECURITIES
1. SUMMARY OF BALANCE INFORMATION(6)
-------------------------------------------------------------------------------------------------------------------
Principal Class Factor Principal Class Factor
Balance as of as of Balance as of as of
Coupon [Month/Year] [Month/Year] [Month/Year] [Month/Year]
Class Rate Payment Date Payment Date Payment Date Payment Date
----------------------------------------------------------------------------------------------------------------
a. Class A-1 Notes 5.60%
b. Class A-2 Notes 5.95%
c. Class A-3 Notes 6.11%
d. Class A-4 Notes 6.28%
e. Class B Notes 6.57%
f. Equity Certificates 6.75%
g. Total N.A.
___________
(6) Show information for current and immediately preceding Payment Date.
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
MONTHLY SERVICING REPORT
DETERMINATION DATE: PAYMENT DATE:
COLLECTION PERIOD:
2. MONTHLY PRINCIPAL AMOUNT
a. Principal Balance of Notes and Equity Certificates
(End of Collection Period) $
b. Contract Pool Principal Balance (End of Collection
Period) $
c. Monthly Principal Amount $
3. GROSS COLLECTIONS
a. Scheduled Payments Received $
b. Liquidation Proceeds Allocated to Owner Trust $
c. Required Payoff Amounts of Prepaid Contracts $
d. Required Payoff Amounts of Purchased Contracts $
e. Proceeds of Clean-up Call $
f. Investment Earnings on Collection Account and Note
Distribution Account $
g. Extension Fees Allocated to Owner Trust $
h. Total Gross Collections (sum (a) through (g)) $
4. DETERMINATION OF AVAILABLE FUNDS
a. Total Gross Collections $
b. Withdrawal from Cash Collateral Account $
c. Total Available Funds (sum of (a) and (b)) $
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
MONTHLY SERVICING REPORT
DETERMINATION DATE: PAYMENT DATE:
COLLECTION PERIOD:
5. APPLICATION OF AVAILABLE FUNDS
----------------------------------------------------------
Item Amount Remaining Available Funds
----------------------------------------------------------
a. Total Available Funds
b. Servicing Fee
c. Interest on Notes:
i) Class A-1 Notes
ii) Class A-2 Notes
iii) Class A-3 Notes
iv) Class A-4 Notes
v) Class B Notes
d. Interest on Equity
Certificates
e. Principal of Notes and
Equity Certificates:
i) Class A-1 Notes
ii) Class A-2 Notes
iii) Class A-3 Notes
iv) Class A-4 Notes
v) Class B Notes
vi) Equity Certificates
f. Deposit to Cash
Collateral Account
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
MONTHLY SERVICING REPORT
DETERMINATION DATE: PAYMENT DATE:
COLLECTION PERIOD:
----------------------------------------------------------
Item Amount Remaining Available Funds
----------------------------------------------------------
g. Amount to be applied
in accordance with
CCA Loan Agreement
h. Balance, if any, to
Equity Certificates
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
MONTHLY SERVICING REPORT
DETERMINATION DATE: PAYMENT DATE:
COLLECTION PERIOD:
III. INFORMATION REGARDING THE CASH COLLATERAL ACCOUNT
1. BALANCE RECONCILIATION(7)
---------------------------------------------------------------------------------------------------
[Month/Year] [Month/Year]
Item Payment Date Payment Date
---------------------------------------------------------------------------------------------------
a. Available Cash Collateral Amount (Beginning) $ $
b. Deposits to Cash Collateral Account $ $
c. Withdrawals from Cash Collateral Account $ $
d. Releases of Cash Collateral Account Surplus $ $
e. Available Cash Collateral Amount (End) $ $
f. Requisite Cash Collateral Amount $ $
g. Cash Collateral Account Shortfall $ $
2. CALCULATION OF REQUISITE CASH COLLATERAL AMOUNT
a. For Payment Dates from, and including, the
November 1996 Payment Date to, and including,
the October 1997 Payment Date
1) Initial Cash Collateral Amount $207,040,000
b. For Payment Dates from, and including, the November 1997
Payment Date until the Final Payment Date, the sum of
1) 8% of the Contract Pool Principal Balance
2) The Aggregate Principal Balance of the Notes and the
Equity Certificate Balance less the Contract Pool
Principal Balance $
3) Tool $
__________
(7) Show for current and immediately preceding Payment Date.
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
MONTHLY SERVICING REPORT
DETERMINATION DATE: PAYMENT DATE:
COLLECTION PERIOD:
c. Floor equal to the lesser of
1) 2% of Cut-Off Date Contract Pool Principal
Balance ($63,704,600); and
2) the Aggregate Principal Balance of the Notes
and the Equity Certificate Balance $
d. Requisite Cash Collateral Amount $
3. CALCULATION OF CASH COLLATERAL ACCOUNT WITHDRAWALS
a. Interest Shortfalls $
b. Principal Deficiency Amount $
c. Principal Payable at Stated Maturity Date of Class
of Notes or Equity Certificates $
d. Total Cash Collateral Account Withdrawals $
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
MONTHLY SERVICING REPORT
DETERMINATION DATE: PAYMENT DATE:
COLLECTION PERIOD:
IV. INFORMATION REGARDING DISTRIBUTIONS ON SECURITIES
---------------------------------------------------------------------------------------------------------
Distribution Class A-1 Class A-2 Class A-3 Class A-4 Class B Equity
Amounts Notes Notes Notes Notes Notes Certificates
---------------------------------------------------------------------------------------------------------
1. INTEREST DUE
2. INTEREST PAID
3. INTEREST SHORTFALL
4. PRINCIPAL PAID
5. TOTAL DISTRIBUTION AMOUNT
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
MONTHLY SERVICING REPORT
DETERMINATION DATE: PAYMENT DATE:
COLLECTION PERIOD:
V. INFORMATION REGARDING OTHER POOL CHARACTERISTICS (8)
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As of End of [Month/Year] As of End of [Month/Year]
Item Collection Period Collection Period
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1. ORIGINAL CONTRACT CHARACTERISTICS
a. Original Number of Contracts 280,634 N.A.
b. Cut-Off Date Contract Pool $3,185,229,329 N.A.
Principal Balance
c. Original Weighted Average 38.6 months N.A.
Remaining Term
d. Weighted Average Original Term 56.1 months N.A.
2. CURRENT CONTRACT CHARACTERISTICS
a. Number of Contracts
b. Average Contract
Principal Balance
c. Weighted Average Remaining
Term
__________
(8) For Current Contract Characteristics, show for current and immediately
preceding Collection Periods. Original Contract Characteristics do not
change.
CAPITA EQUIPMENT RECEIVABLES TRUST 1996-1
MONTHLY SERVICING REPORT
DETERMINATION DATE: PAYMENT DATE:
COLLECTION PERIOD:
VI. PURCHASED, LIQUIDATED AND PAID CONTRACTS
1. The following list includes the account number for each Contract
which, during the Collection Period to which this report relates, was
(i) purchased by TCC, (ii) designated as a Liquidated Contract or
(iii) paid in full (either due to a prepayment or at maturity):
[Insert list]