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Exhibit 10.15
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APPENDIX I
STANDARD TERMS AND CONDITIONS OF
INDENTURE
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Dated as of November 1, 1994
▇▇▇▇▇▇▇▇▇ LEASE FINANCE CONDUIT V
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TABLE OF CONTENTS
PRELIMINARY STATEMENT
ARTICLE ONE
DEFINITIONS
Section 1.01 Definitions ..................................................1
ARTICLE TWO
THE NOTES
Section 2.01 Form Generally ..............................................24
Section 2.02 Series; Denomination ........................................24
Section 2.03 Execution, Authentication, Delivery and Dating ..............25
Section 2.04 Temporary Notes .............................................26
Section 2.05 Registration, Registration of Transfer and Exchange .........26
Section 2.06 Limitation on Transfer and Exchange .........................27
Section 2.07 Mutilated, Destroyed Lost or Stolen Note ....................28
Section 2.08 Payment of Principal and Interest; Principal and
Interest Rights Preserved ...................................29
Section 2.09 Persons Deemed Owner ........................................31
Section 2.10 Cancellation ................................................31
Section 2.11 Tax Treatment ...............................................31
ARTICLE THREE
WAREHOUSE FUNDINGS
Section 3.01 General .....................................................32
Section 3.02 Warehouse Note ..............................................32
Section 3.03 Procedure for Warehouse Fundings ............................32
Section 3.04 Verification of Warehouse Funding Report ....................34
Section 3.05 Disbursement of Funds .......................................35
Section 3.06 Repayments of Principal .....................................35
Section 3.07 Appointment of Note Administrator ...........................35
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ARTICLE FOUR
ISSUANCE OF NOTES; SUBSTITUTIONS OF COLLATERAL
Section 4.01 Conditions to Initial Issuance of Notes .....................37
Section 4.02 Issuances of Additional Series of Notes .....................38
Section 4.03 Security for Notes ..........................................40
Section 4.04 Substitution, Purchase and Addition of Lease Contracts ......41
Section 4.05 Releases ....................................................43
Section 4.06 Trust Estate ................................................43
Section 4.07 Notice of Release ...........................................44
ARTICLE FIVE
SATISFACTION AND DISCHARGE
Section 5.01 Satisfaction and Discharge of Indenture .....................44
Section 5.02 Application of Trust Money ..................................46
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01 Events of Default ...........................................47
Section 6.02 Acceleration of Maturity; Rescission and Annulment...........48
Section 6.03 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee ..........................................49
Section 6.04 Remedies ....................................................49
Section 6.05 Optional Preservation of Trust Estate .......................50
Section 6.06 Indenture Trustee May File Proofs of Claim ..................51
Section 6.07 Indenture Trustee May Enforce Claims Without Possession
of Notes ...................................................51
Section 6.08 Application of Money Collected ..............................52
Section 6.09 Limitation on Suits .........................................53
Section 6.10 Unconditional Right of Noteholders to Receive
Principal and Interest ....................................54
Section 6.11 Restoration of Rights and Remedies ..........................54
Section 6.12 Rights and Remedies Cumulative ..............................54
Section 6.13 Delay or Omission; Not Waiver ...............................55
Section 6.14 Control by Noteholders ......................................55
Section 6.15 Waiver of Past Defaults .....................................55
Section 6.16 Undertaking for Costs .......................................56
Section 6.17 Waiver of Stay or Extension Laws ............................56
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Section 6.18 Sale of Trust Estate ........................................56
Section 6.19 Action on Notes..............................................57
ARTICLE SEVEN
THE INDENTURE TRUSTEE
Section 7.01 Certain Duties and Responsibilities .........................58
Section 7.02 Notice of Default and Trigger Events ........................60
Section 7.03 Certain Rights of Indenture Trustee .........................60
Section 7.04 Not Responsible for Recitals or Issuance of Notes ...........61
Section 7.05 May Hold Notes ..............................................62
Section 7.06 Money Held in Trust .........................................62
Section 7.07 Compensation and Reimbursement ..............................62
Section 7.08 Corporate Trustee Required; Eligibility .....................63
Section 7.09 Resignation and Removal; Appointment of Successor ...........64
Section 7.10 Acceptance of Appointment by Successor ......................65
Section 7.11 Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee ..............................65
Section 7.12 Co-Indenture Trustees and Separate Indenture Trustees .......65
Section 7.13 Rights with Respect to the Servicer .........................67
Section 7.14 Appointment of Authenticating Agent .........................67
Section 7.15 Indenture Trustee to Hold Lease Contracts ...................69
Section 7.16 Money for Note Payments to be Held in Trust .................69
ARTICLE EIGHT
THE NOTE INSURANCE POLICIES
Section 8.01 Payments under the Note Insurance Policies ..................71
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures without Consent of Noteholders ......72
Section 9.02 Supplemental Indentures with Consent of Noteholders .........73
Section 9.03 Execution of Supplemental Indentures ........................74
Section 9.04 Effect of Supplemental Indentures ...........................75
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Section 9.05 Reference in Notes to Supplemental Indentures ...............75
ARTICLE TEN
REDEMPTION OF NOTES
Section 10.01 Redemption at the Option of the Issuer,
Election to Redeem ........................................76
Section 10.02 Notice to Indenture Trustee; Deposit of Redemption Price ....76
Section 10.03 Notice of Redemption by the Issuer ..........................77
Section 10.04 Notes Payable on Redemption Date ............................77
Section 10.05 Release of Series Lease Contracts ...........................77
ARTICLE ELEVEN
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 11.01 Representations and Warranties ..............................79
Section 11.02 Covenants ...................................................81
Section 11.03 Other Matters as to the Issuer ..............................86
ARTICLE TWELVE
ACCOUNTS AND ACCOUNTINGS
Section 12.01 Collection of Money .........................................87
Section 12.02 Collection Account; Advance Payment Account;
ACH Account; Redemption Account ...........................87
Section 12.03 Cash Collateral Account .....................................91
Section 12.04 Reports by Indenture Trustee to MBIA and
Noteholders .................................................93
ARTICLE THIRTEEN
PROVISIONS OF GENERAL APPLICATION
Section 13.01 General Provisions ..........................................94
Section 13.02 Acts of Noteholders .........................................94
Section 13.03 Notices, etc., to Indenture Trustee, MBIA, Issuer and
Servicer ..................................................94
Section 13.04 Notices to Noteholders; Waiver ..............................95
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Section 13.05 Effect of Headings and Table of Contents .........95
Section 13.06 Successors and Assigns ...........................96
Section 13.07 Separability .....................................96
Section 13.08 Benefits of Indenture ............................96
Section 13.09 Legal Holidays ...................................96
Section 13.10 Governing Law ....................................96
Section 13.11 Counterparts .....................................96
Section 13.12 Corporate Obligation .............................97
Section 13.13 Compliance Certificates and Opinions .............97
Section 13.14 MIA Default ......................................97
Exhibit A Form of Investment Letter ......................... A
Exhibit B Supplement to Indenture for Grant of Substitute
Lease Contracts................................... B
Exhibit C Form of Indenture Supplement ...................... C
Exhibit D Forms of Note Insurance Policy .................... D-1 and D-2
Exhibit E-1 Form of Term Note ................................. E-1
Exhibit E-2 Form of Warehouse Note ............................ E-2
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These STANDARD TERMS AND CONDITIONS OF INDENTURE (the "Standard
Indenture Terms"), dated as of November 1, 1994, are incorporated by reference
and are intended to form a part of the SPECIFIC TERMS AND CONDITIONS OF
INDENTURE dated as of November 1, 1994 (the "Specific Indenture Terms") to which
these Standard Indenture Terms are appended (together, the "Indenture") and
which Indenture shall be supplemented from time to time with Supplements as
described herein.
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of the
Indenture to provide for the issuance of the Issuer's Notes issuable as provided
in the Indenture. All covenants and agreements made by the Issuer, the Servicer,
the Indenture Trustee and the Back-up Servicer herein are for the benefit and
security of the Holders of the Notes and MBIA. The Issuer, the Servicer, the
Indenture Trustee and the Back-up Servicer are entering into the Indenture, and
the Indenture Trustee is accepting the trusts created hereby, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
All things necessary to make the Indenture a valid agreement of the
Issuer, the Servicer, the Indenture Trustee and the Back-up Servicer in
accordance with its terms have been done.
ARTICLE ONE
DEFINITIONS
SECTION 1.01 DEFINITIONS.
Except as otherwise, expressly provided herein or in the Specific
Indenture Terms or the applicable Supplement, or unless the context otherwise
requires, the following terms have the respective meanings set forth below for
all purposes of the Indenture, and the definitions of such terms are equally
applicable both to the singular and plural forms of such terms. Capitalized
terms used herein but not otherwise defined shall have the respective meanings
assigned to such terms in the Servicing Agreement or the Lease Acquisition
Agreement.
"Accrual Date": With respect to any Series of Notes, the date upon
which interest begins accruing on such Notes, as specified in such Notes and the
related Supplement.
"Accrual Period": The period beginning on the twentieth day of each
month and ending on the nineteenth day of the immediately following month (or,
in the case of the Accrual Period that is applicable to an Initial Payment Date,
beginning on the Accrual Date for such Notes).
"Act": With respect to any Noteholder, the meaning specified in Section
13.02.
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"ACH": The National Automated Clearinghouse System.
"ACH Account": Unless otherwise specified in the Specific Indenture
Terms, the account .established by the Issuer for the sole benefit of the
Noteholders and MBIA pursuant to Section 12.02(f) hereof, into which account
shall be deposited payments related to the Lease Receivables.
"ACH Bank": shall mean the bank specified in the applicable Specific
Servicing Terms so long as such bank meets the requirements of a Trustee as set
forth in Section 7.08 of the Standard Indenture Terms.
"Additional Principal Amount": The amount, if any, payable to
Noteholders pursuant to Section 12.02(d)(xi) hereof.
"Additional Servicer Fee": The amount, if any, of the fee payable in
accordance with Section 6.02 of the Standard Servicing Terms to a successor
Servicer appointed pursuant to Section 6.02 of the Standard Servicing Terms that
is in excess of the Servicer Fee.
"Advance Payment": With respect to a Lease Contract and a Due Period,
any Scheduled Payment or portion thereof made by, or on behalf of, a Customer
and received by the Servicer during such Due Period, which Scheduled Payment or
portion thereof does not become due until a subsequent Due Period.
"Advance Payment Account": The account or accounts established and
maintained pursuant to Section 12.02(e) hereof.
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Aggregate IPB": The aggregate of the Implicit Principal Balances of all
Series Lease Contracts for all Outstanding Series.
"Aggregate Initial Series IPB": The sum of all Series Initial IPB for
all Series of Notes Outstanding.
"Amended Lease Schedule": With respect to any Series Lease Schedule, the
list of Lease Contracts amending such Series Lease Schedule pursuant to any
substitution, repurchase, modification or Warehouse Fundings in accordance with
the terms hereof and the Lease Acquisition Agreement, and accompanied by an
Amendment to Indenture for New Lease Contracts and an Amendment to Lease
Acquisition Agreement for New Lease Contracts.
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"Amendment to Lease Acquisition Agreement for New Lease Contracts": The
Amendment to Lease Acquisition Agreement for New Lease Contracts, a form of
which is attached to the Standard Lease Acquisition Terms as Exhibit A.
"Amendment to Indenture for New Lease Contracts": The Amendment to
Indenture for New Lease Contracts, a form of which is attached hereto as
Exhibit B.
"Annualized Default Rate": Unless otherwise specified in the Specific
Indenture Terms, for any Due Period, the sum of the Implicit Principal Balances
as of the Calculation Date occurring in such Due Period of all Lease Contracts
that became Defaulted Lease Contracts during such Due Period (including any such
Lease Contracts that have been purchased or substituted), minus the sum of
Recoveries and Residual Proceeds and, if included in the term Lease
Receivables, Servicing Charges, received during such Due Period, divided by the
Aggregate IPB on, the Calculation Date immediately preceding such Due Period
multiplied by twelve.
"Assignment and Assumption Agreement": An assignment and assumption
agreement between the Issuer and the Company, in the form attached to the
Specific Lease Acquisition Terms as Exhibit B.
"Authenticating Agent": Any entity appointed by the Indenture Trustee
pursuant to Section 7.14 hereof.
"Available Warehouse Amount": The amount, if any, by which the Warehouse
Note Limit for a Series of Notes exceeds the aggregate Outstanding Principal
Amount of all Warehouse Notes of such Series.
"Back-up Servicer": The entity identified as such in the Specific
Indenture Terms.
"Back-up Servicer Fee": The fee payable on each Payment Date to the
Back-up Servicer in consideration for the Back-up Servicer's performance of its
duties pursuant to the Indenture and the Servicing Agreement as Back-up
Servicer, in an amount equal to the product of one-twelfth of the Back-up
Servicer Fee Rate and the Outstanding Principal Amount of all Series of Notes
immediately following the preceding Payment Date.
"Back-up Servicer Fee Rate": The percentage specified in the Specific
Indenture Terms.
"Benefit Plan Investor": shall have the meaning set forth in 29 C.F.R.
ss. 2510.3-101.
"Board of Directors": Either the board of directors of the Issuer or of
the Servicer, as the context requires, or any duly authorized committee of such
Board.
"Board Resolution": A copy of a resolution certified by the Secretary or
an Assistant Secretary of the Issuer or of the Servicer to have been duly
adopted by its Board of Directors and to be in full force and effect on the date
of such certification and delivered to the Indenture Trustee.
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"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City or in the city in which the
principal place of business of the Issuer or the Servicer or the corporate trust
office of the Indenture Trustee under the Indenture is located are authorized or
obligated by law or executive order to close.
"Calculation Date": The last day of a Due Period, except that (a) with
respect to any calculation of the Series Initial IPB or the Term Note Funding
Amount for any Series of Term Notes, the Calculation Date shall mean the close
of business on the related Cut-Off Date and (b) with respect to any calculations
made regarding any Warehouse Funding or calculation of the Series Initial IPB
for any Series of Warehouse Notes, the Calculation Date shall mean the
Calculation Date that was the basis for the most recent Monthly Services Report;
provided, however, that with respect to any Warehouse Fundings that occur prior
to delivery of the initial Monthly Servicer's Report, the Calculation Date shall
mean the Cut-Off Date for the Initial Delivery Date.
"Cash Collateral Account": The trust account or accounts created and
maintained pursuant to Section 12.03 hereof.
"Cash Collateral Account Factor": The meaning specified in the Specific
Indenture Terms.
"Cash Collateral Account Deposit": With respect to the issuance of any
Series of Notes, the amount to be deposited on the Closing Date as set forth in
the related Indenture Supplement and on every third Payment Date, beginning on
February 16, 1995, the amount of the Cash Collateral Account Deposit shall be
equal to the maximum amount of Scheduled Payments due on the related Due Date.
"Cash Collateral Account Required Balance": As of any determination
date, an amount equal to the sum of any Cash Collateral Account Deposits plus
the product of
(a) the Required Collateralization Amount minus the positive difference
between
(i) the Aggregate IPB, and
(ii) the Outstanding Principal Amount of all Series of Notes,
after giving effect to any payments of principal expected to occur on
the related Payment Date and the Warehouse Funding expected to occur on
the related Warehouse Funding Date prior to the next Payment Date; and
(b) the Cash Collateral Account Factor;
provided, however, if a Trigger Event has occurred, an amount equal to zero.
"Change in Control": The occurrence of any one of the events set forth
in the Specific Indenture Terms.
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"Code": The Internal Revenue Code of 1986, as amended.
"Collateral": The meaning specified in the Granting Clause of the
Specific Indenture Terms.
"Collateralization Percentage": The percentage specified in the Specific
Indenture Terms.
"Collection Account": The trust account or accounts created and
maintained pursuant to Section 12.02 hereof.
"Company": The entity identified as such in the Specific Indenture
Terms.
"Concentration Limits": The Lease Contract pool concentration limits
specified in the Specific Lease Acquisition Terms; provided, however, that with
the approval of MBIA, the limitations set forth in the Specific Lease
Acquisition Terms may be increased or decreased.
"Corporate Trust Office": The principal corporate trust office of the
Indenture Trustee at the location identified in the Specific Indenture Terms or
at such other address as the Indenture Trustee may designate from time to time
by notice to MBIA, the Noteholders and the Issuer, or the principal corporate
trust office of any successor Indenture Trustee.
"Customer": The lessee under each related Lease Contract, including any
guarantor of such lessee and their respective successors and assigns.
"Cut-Off Date": With respect to any Series of Term Notes, the meaning
specified in the applicable Supplement, and with respect to any Series of
Warehouse Notes, each Warehouse Funding Date.
"Default": Any occurrence or circumstance which with notice or the lapse
of time or both would become an Event of Default.
"Defaulted Lease Contract": Unless otherwise specified in the Specific
Indenture Terms, a Lease Contract shall become a Defaulted Lease Contract at the
earlier of the day (i) which is the last day of the fifth month following a
month in which the Servicer made a Servicer Advance which has not been
reimbursed from the related Lease Contract, or (ii) the Servicer determines in
accordance with its customary practices that it shall not make a Servicer
Advance, that a prior Servicer Advance is unrecoverable or that the remaining
Scheduled Payments under the related Lease Contract are uncollectible.
"Defaulted Lease Purchase and Substitution Limit": The meaning specified
in the Specific Indenture Terms.
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"Delinquency Rate": For any Due Period, the sum of the Implicit
Principal Balances of all Lease Contracts as of the Calculation Date occurring
in such Due Period with respect to which a Customer has not made any Scheduled
Payment due in the immediately prior Due Period (including any such Lease
Contracts that have been purchased or substituted), divided by the Aggregate IPB
on such Calculation Date (including any such Lease Contracts that have been
purchased or substituted).
"Delinquent Lease Contract": For any Due Period, any Lease Contract (a)
with respect to which a Customer has not made any Scheduled Payment due in such
Due Period and which remains unpaid as of the Calculation Date at the end of
such Due Period and (b) which is not a Defaulted Lease Contract.
"Delinquent Lease Purchase and Substitution Limit": the meaning
specified in the Specific Indenture Terms.
"Delivery Date": The date on which the Notes of a Series are first
executed, authenticated and delivered, as specified in the related Supplement.
"Determination Date": The fourth Business Day preceding each Payment
Date.
"Discount Rate": With respect to a Series of Warehouse Notes, the rate
equal to the sum of the Trustee Fee Rate, the Back-up Servicer Fee Rate, the
applicable MBIA Premium Rate, and (a) with respect to the portion of Warehouse
Notes paying interest based upon a treasury rate, applicable Warehouse Note
Interest Rate and (b) with respect to the portion of Warehouse Notes paying
interest based upon LIBOR, the applicable Maximum Warehouse Note Interest Rate
and with respect to any Series of Term Notes, the rate equal to the sum of the
applicable Note Interest Rate, the Trustee Fee Rate, the Back-up Servicer Fee
Rate and the applicable MBIA Premium Rate.
"Dollar(s)": Lawful money of the United States of America.
"Due Date": With respect to each Lease Contract, each date on which
payment is due thereunder.
"Due Period": As to any Determination Date or Payment Date, the period
beginning on the first day and ending on the last day of the calendar month
preceding the month in which such Determination Date or Payment Date occurs.
"Electronic Ledgers": The electronic master records of all lease
contracts of the Company or the Servicer similar to and including the Lease
Contracts.
"Eligible Investments": Any and all of the following:
(i) direct obligations of, and obligations fully guaranteed by, the
United States of America, the Federal Home Loan Mortgage Corporation, the
Federal National Mortgage
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Association, the Federal Home Loan Banks or any agency or instrumentality of
the United States of America the obligations of which are backed by the full
faith and credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit of,
banker's acceptances issued by or federal funds sold by any depository
institution or trust company (including the Indenture Trustee or its agent
acting in their respective commercial capacities) incorporated under the
laws of the United States of America or any State thereof and subject to
supervision and examination by federal and/or state authorities, so long as
at the time of such investment or contractual commitment providing for such
investment, such depository institution or trust company has a short term
unsecured debt rating in the highest available rating category of each of
the Rating Agencies and provided that each such investment has an original
maturity of no more than 365 days, and (B) any other demand or time deposit
or deposit which is fully insured by the Federal Deposit Insurance
Corporation;
(iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered into with
a depository institution or trust company (acting as a principal) rated "A"
or higher by S&P and A2 or higher by Moody's; provided, however, that
collateral transferred pursuant to such repurchase obligation must (A) be
valued weekly at current market price plus accrued interest, (B) pursuant to
such valuation, equal, at all times, 105% of the cash transferred by the
Indenture Trustee in exchange for such collateral and (C) be delivered to
the Indenture Trustee or, if the Indenture Trustee is supplying the
collateral, an agent for the Indenture Trustee, in such a manner as to
accomplish perfection of a security interest in the collateral by possession
of certificated securities.
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any State thereof which has a long term unsecured debt rating in the highest
available rating category of each of the Rating Agencies at the time of such
investment;
(v) commercial paper having an original maturity of less than 365 days
and issued by an institution having a short term unsecured debt rating in
the highest available rating category of each of the Rating Agencies at the
time of such investment;
(vi) a guaranteed investment contract approved by each of the Rating
Agencies and MBIA and issued by an insurance company or other corporation
having a long term unsecured debt rating in the highest available rating
category of each of the Rating Agencies at the time of such investment;
(vii) money market funds having ratings in the highest available rating
category of each of the Rating Agencies at the time of such investment which
invest only in other Eligible Investments; any such money market funds which
provide for demand withdrawals
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being conclusively deemed to satisfy any maturity requirement for Eligible
Investments set forth in the Indenture; and
(viii) any investment approved in writing by each of the Rating Agencies
and MBIA.
The Indenture Trustee may purchase from or sell to itself or an affiliate,
as principal or agent, the Eligible Investments listed above.
"Enumerated States": At any time of determination, those States in which
the Equipment is located such that the aggregate Implicit Principal Balance of
all Lease Contracts in those States is at least equal to 70% of the aggregate
Implicit Principal Balances of all Lease Contracts at such time.
"Equipment": The equipment leased to the Customers pursuant to the Lease
Contracts and described by general equipment type under the column heading "eq
type" on the Series Lease Schedule.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended
or any successor statute thereto.
"Event of Default": The meaning specified in Section 6.01 hereof.
"Existing Indebtedness": The meaning specified in the Specific Lease
Acquisition Terms.
"Final Due Date": With respect to each Lease Contract, the final Due
Date thereunder.
"Final Payment Date": With respect to any Note of a Series, the date on
which the final principal payment on such Note is made as therein or herein
provided, whether at the Stated Maturity, or by acceleration or redemption.
"First Period Warehouse Interest": With respect to any Warehouse
Funding, the amount, if any, of interest that will accrue on the related
Warehouse Funding Amount at the Warehouse Note Interest Rate in effect on the
Reset Date for the related Warehouse Funding Date, commencing on such Warehouse
Funding Date and ending on the last day of the Accrual Period in which such
Warehouse Funding occurs.
"Fixed Interest Rate": The meaning specified in the applicable
Supplement, but not to exceed the applicable Maximum Warehouse Note Rate.
"Floating Interest Rate": The meaning specified in the applicable
Supplement, but not to exceed the applicable Maximum Warehouse Note Rate.
"Floor Percentage": The meaning specified in the Specific Indenture
Terms.
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"Grant": To grant, bargain, sell, warrant alienate, remise, release,
convey, assign, transfer, mortgage, pledge, create and grant a security interest
in and right of set-off against, deposit, set over and confirm. A Grant of the
Lease Contracts, the Lease Receivables or of any other instrument shall include
all rights, powers and options (but none of the obligations) of the Granting
party thereunder, including, without limitation, the immediate and continuing
right to claim, collect, receive and receipt for payments in respect of the
Lease Contracts and the Lease Receivables, or any other payment due thereunder,
to give and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring proceedings in the name
of the Granting party or otherwise, and generally to do and receive anything
which the Granting party is or may be entitled to do or receive thereunder or
with respect thereto.
"Guaranty Amounts": Any and all amounts paid by the individual guarantor
indicated on the applicable Lease Contract.
"Holdback Rate": The percentage specified in the Specific Indenture
Terms.
"Holder" or "Noteholder": The person in whose name a Note is registered
in the Note Register.
"Implicit Principal Balance": As of any date of determination, the
present value of the remaining stream of Scheduled Payments due with respect to
each Lease Contract after the applicable Calculation Date (reduced by the
applicable Servicer Fee but not reduced by any Additional Servicer Fee) based
upon discounting such Scheduled Payments (assuming such Scheduled Payments are
received on the last day of the related Due Period) to such Calculation Date at
an annual rate equal to the applicable Discount Rate, at the same frequency as
the Payment Dates; except that on the Calculation Date,
(w) on or immediately following the deposit into the Collection Account
of Insurance Proceeds equal to the outstanding Implicit Principal
Balance of the related Lease Contract or the Purchase Price, or on or
immediately following the delivery of a Substitute Lease Contract,
(x) immediately on or after the date that a Lease Contract has become a
Defaulted Lease Contract, or
(y) immediately preceding the Final Payment Date,
the Implicit Principal Balance of each such related Lease Receivable shall be
zero. To the extent that the Final Due Date of any Series Lease Contract is
later than the Stated Maturity of the last maturing Notes of the related Series,
any Scheduled Payments due on such Lease Receivable after the Calculation Date
immediately preceding such Stated Maturity shall not be taken into account in
calculating the Implicit Principal Balance of such Lease Receivable.
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"Indenture": These Standard Indenture Terms together with the Specific
Indenture Terms and as supplemented by Supplements, in the form when originally
executed and, if from time to time further supplemented or amended by one or
more indentures supplemental hereto or Amendment to Indenture for New Lease
Contracts entered into pursuant to the applicable provisions hereof, as the
Specific Indenture Terms or Standard Indenture Terms are so supplemented or
amended. All references in these Standard Indenture Terms designated "Articles,"
"Sections," "Subsections" and other subdivisions are to the designated Articles,
Sections, Subsections and other subdivisions of these Standard Indenture Terms
as originally executed, or if amended or supplemented, as so amended and
supplemented, all references in the Specific Indenture Terms to the designated
"Articles," "Sections," "Subsections" and other subdivisions are to the
designated Articles, Sections, Subsections and other subdivisions of the
Specific Indenture Terms, and all references in a Supplement to the designated
"Articles," "Sections," "Subsections" and other subdivisions are. to the
designated Articles, Sections, Subsections and other subdivisions of such
Supplement. The words "herein," "hereof," "hereunder" and other words of similar
import when not related to a specific subdivision of these Standard Indenture
Terms, refer to the Indenture as a whole and not, to any particular Article,
Section, Subsection or other subdivision of these Standard Indenture Terms, the
Specific Indenture Terms or any Supplement.
"Indenture Trustee": The entity specified in the Specific Indenture
Terms, until a successor Person shall have become the Indenture Trustee pursuant
to the applicable provisions of the Indenture, and thereafter "Indenture
Trustee" shall mean such successor Person.
"Independent": When used with respect to any specified Person means such
a Person, who (1) is in fact independent of the Issuer, (2) does not have any
direct financial interest or any material indirect financial interest in the
Issuer or in any Affiliate of the Issuer and (3) is not connected with the
Issuer as an officer, employee, promoter, underwriter, trustee, partner,
director, or person performing similar functions. Whenever it is herein provided
that any Independent Person's opinion or certificate shall be furnished to the
Indenture Trustee, such Person shall be appointed by a Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read this definition and that the
signer is Independent within the meaning hereof.
"Independent Accountants": The meaning specified in the Specific
Indenture Terms.
"Initial ACH Deposit": The meaning specified in the Specific Indenture
Terms.
"Initial Cash Deposit": The meaning specified in the applicable
Supplement.
"Initial Delivery Date": The date on which the first Series of Notes are
executed, authenticated and delivered.
"Initial Payment Date": The meaning specified in the applicable
Supplement.
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"Insurance Agreement": Shall mean the Insurance Agreement, dated as of
the Transaction Documents Date, by and among MBIA, the Issuer, the Company, the
Back-up Servicer and the Indenture Trustee.
"Insurance Policy": With respect to an item of Equipment and a Lease
Contract, any insurance policy maintained by the Customer pursuant to the
related Lease Contract that covers physical damage to the Equipment or general
liability (including policies procured by the Company or the Servicer on behalf
of the Customer), and which may be further specified in the Specific Indenture
Terms.
"Insurance Proceeds": With respect to an item of Equipment and a Lease
Contract, any amount received during the related Due Period pursuant to an
Insurance Policy issued with respect to such Equipment and the related Lease
Contract, net of any costs of collecting such amounts not otherwise reimbursed.
"Insurer": Any insurance company or other insurer providing any
Insurance Policy.
"Issuer": The entity identified as such in the Specific Indenture Terms.
"Issuer Order" and "Issuer Request": A written order or request signed
in the name of the Issuer by its Chairman of the Board, President, or a Vice
President and delivered to the Indenture Trustee.
"Issuer Payment Office": The meaning specified in the Specific Indenture
Terms or such other location as the Issuer shall notify to the Warehouse Lender
no later than two Business Days prior to a proposed Warehouse Funding Date.
"Issuer State of Incorporation": The meaning specified in the Specific
Indenture Terms.
"Key Employee": The meaning specified in the Specific Indenture Terms.
"Lease Acquisition Agreement": The Specific Lease Acquisition Terms
together with the Standard Lease Acquisition Terms.
"Lease Assets": The meaning specified in the Lease Acquisition
Agreement.
"Lease Contracts": The lease contracts and loan contracts (and all
rights with respect thereto, including all guaranties and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of any Lease Contract and all rights with respect to any agreements or
arrangements with the vendors, dealers or manufacturers of the Equipment to the
extent specifically related to any Lease Contract) which are identified on
either a Series Lease Schedule delivered to the Indenture Trustee and MBIA on a
Delivery Date or on an Amended Lease Schedule delivered to the Indenture Trustee
and MBIA on a Warehouse Funding Date or on the date on which Substitute Lease
Contracts are delivered to the Indenture Trustee, and any other lease
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contract specified in the Specific Indenture Terms and any amendments, riders
and annexes thereto; provided that, from and after the date on which a Lease
Contract is purchased or substituted by the Company or the Issuer in accordance
with Section 4.04 hereof, such repurchased or replaced Lease Contract shall no
longer constitute a Lease Contract for purposes of the Transaction Documents.
"Lease Receivables": With respect to any Lease Contract, all of, and the
right to receive all of (i) the Scheduled Payments, (ii) any Guaranty Amounts,
(iii) any Insurance Proceeds, (iv) any Residual Proceeds, (v) any Recoveries and
(vi) if so specified in the Specific Indenture Terms, any Servicing Charges.
"LIBOR Rate": Unless otherwise specified in the applicable Supplement,
with respect to each Accrual Period, an interest rate per annum equal to the
rate for London interbank offered, quotations for one-month Eurodollar deposits
determined by the Indenture Trustee for such Accrual Period as follows:
(a) On each Reset Date, the Indenture Trustee will determine the LIBOR
Rate on the basis of the rate for deposits in U.S. Dollars for a period
of one month that appears on the Telerate Page 3750 as of 11:00 am.
(London time) on such Reset Date. If such rate does not appear on
Telerate Page 3750, the rate for such Reset Date will be determined on
the basis of the rates at which deposits in U.S. Dollars are offered by
the Reference Banks at approximately 11:00 a.m. (London time) on such
date to prime banks in the London interbank market for a period of one
month commencing on that Reset Date. The Indenture Trustee will request
the principal London office of each of the Reference Banks to provide
such a quotation.
(b) If, on any Reset Date, at least two Reference Banks provide
quotations when requested, the LIBOR Rate for such Reset Date will be
the arithmetic mean of the quotations so received.
(c) If, on any Reset Date, only one or none of the Reference Banks
provides such a quotation, the LIBOR Rate will be the arithmetic mean of
the offered rates quoted by major banks in New York City selected by the
Indenture Trustee at approximately 11:00 a.m. (New York City time) on
such Reset Date for loans to leading European banks, in U.S. Dollars for
a period of one month commencing on that Reset Date.
(d) If, on any Reset Date, the LIBOR Rate cannot be calculated pursuant
to one of the above methods, the LIBOR Rate for such Reset Date shall be
the Maximum Warehouse Note Rate.
"Lien": The meaning specified in the Lease Acquisition Agreement.
"Liquidated Lease Receivable" A Lease Receivable that has been
liquidated pursuant to Section 3.01 (b) of the Standard Servicing Terms.
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"Loan Contract": A Lease Contract that evidences a sale of the related
Equipment to the Customer and the retention by the lessor of a security interest
in such Equipment, including any TRAC Lease.
"London Banking Day": Any day on which dealings in deposits in Dollars
are transacted in the London interbank market.
"Material Affiliate": The meaning specified in the Specific Indenture
Terms.
"Maximum Default Rate": The meaning specified in the Specific Indenture
Terms.
"Maximum Delinquency Rate": The meaning specified in the Specific
Indenture Terms.
"Maximum Warehouse Note Rate": The rate specified in the applicable
Supplement.
"MBIA": Municipal Bond Investors Assurance Corporation.
"MBIA Default": The occurrence and continuance of any of the following
events:
(a) the failure by MBIA to make a payment under a Note Insurance
Policy in accordance with its terms; or
(b) the occurrence of an "Insurer Insolvency", as that term is
defined in the Insurance Agreement, with respect to MBIA.
"MBIA Premium": The sum of all MBIA Premiums specified in the
Supplements.
"MBIA Premium Rate": The meaning specified in the applicable Supplement.
"Minimum Required Collateralization Amount": On any date of
determination, an amount equal to the Required Collateralization Amount, as last
calculated (or, if not previously calculated, as specified in the Specific
Indenture Terms with respect to the Initial Delivery Date), plus or minus the
following amounts, as applicable:
(i) in the case of a Warehouse Funding occurring on any date of
determination, plus the product of the Holdback Rate and the Warehouse
Funding IPB;
(ii) in the case of an issuance of a Series of Term Notes on any date of
determination, plus the product of the Holdback Rate and the Series
Initial IPB for such Series of Notes;
(iii) in the case of the payment in full of any Series of Notes on any
date of determination, minus the product of the Holdback Rate and the
related Series Initial IPB.
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"Monthly Servicer's Report" shall mean the report prepared by the
Servicer pursuant to Section 4.01 of the Standard Servicing Terms.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Worth Requirement": The meaning specified in the Specific Indenture
Terms.
"Nonrecoverable Advance": The meaning specified in the Servicing
Agreement.
"Note Administrator": Rothschild Inc. or any successor Note.
Administrator approved by MBIA.
"Noteholder" or "Holder": The Person in whose name a Note is registered
in the Note Register.
"Note Insurance Policies": The note guaranty insurance policies issued
by MBIA insuring each Series of Term Notes or Warehouse Notes, respectively, in
accordance with the terms thereof, the forms of which are attached hereto as
Exhibit D-I and D-2, respectively.
"Note Interest Rate": With respect to any Series of Term Notes, the
annual rate at which interest accrues on the Notes of such Series, as specified
in such Notes and in the related Supplement, and with respect to any Series of
Warehouse Notes, the applicable Warehouse Note Interest Rate.
"Note Register" and "Note Registrar": The respective meanings specified
in Section 2.05 hereof.
"Notes": Collectively, all Outstanding Series of Term Notes and
Warehouse Notes or all Outstanding Notes of any one Series, as is consistent
with the context in which such term is used.
"Officer's Certificate": A certificate signed by the Chairman of the
Board, the President, a Vice President, the Treasurer, the Controller, an
Assistant Controller or the Secretary of the company on whose behalf the
certificate is delivered, and delivered to the Indenture, Trustee, which
certificate shall comply with the applicable requirements of Section 13.13
hereof. Unless otherwise specified, any reference in the Indenture to an
Officer's Certificate shall be to an Officer's Certificate of the Issuer.
"Opinion of Counsel": A written opinion of counsel who may, except as
otherwise expressly provided in the Indenture, be counsel for the Issuer and who
shall be reasonably satisfactory to the Indenture Trustee and MBIA and which
opinion shall comply with the applicable requirements of Section 13.13 hereof.
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"Outstanding": With respect to Notes, as of any date of determination,
all Notes theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes for whose payment money in the necessary amount has been
theretofore irrevocably deposited with the Indenture Trustee or any Paying
Agent (other than the Issuer) in trust for the Holders of such Notes
(provided, however, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to the Indenture or any provision
therefor, satisfactory to the Indenture Trustee, has been made); and
(iii) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to the Indenture, unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
provided, however, that for purposes of disbursing payments from the Note
Insurance Policies and in determining whether the Holders of the requisite
Outstanding Principal Amount of Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Issuer or any other obligor upon the Notes or any Affiliate of the Issuer or
such other obligor shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Indenture Trustee shall be protected in relying
upon any such request demand, authorization, direction, notice, consent, or
waiver, only Notes which the Indenture Trustee knows to be so owned shall be so
disregarded.
"Outstanding Principal Amount": With respect to any Outstanding Term
Note or Series of Term Notes, the unpaid principal amount of such Note or all
Notes of such Series, as applicable, and with respect to any Outstanding
Warehouse Note or Series of Warehouse Notes, the sum of all Warehouse Fundings
made under such Note or Series, as applicable, less the amount of all principal
payments previously made with respect to such Note or Series.
"Overdue Payment": With respect to a Due Period and a Delinquent Lease
Contract, all payments due in a prior Due Period that the Servicer receives from
or on behalf of a Customer during the related Due Period on such Delinquent
Lease Contract, including any Servicing Charges unless otherwise specified in
the Specific Indenture Terms.
"Paying Agent": The Indenture Trustee or any other Person that meets the
eligibility standards for the Indenture Trustee specified in Section 7.08 hereof
and is authorized by the Issuer pursuant to Section 7.16 hereof to pay the
principal of, or interest on, any Notes on behalf of the Issuer.
"Payment Date": For each Series, the twentieth day of each calendar
month (or if such day is not a Business Day, the next succeeding Business Day)
commencing on the Initial Payment Date for such Series.
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"Person": Any individual, corporation, partnership, association,
joint-stock company, trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision thereof.
"Placement Agent": Rothschild Inc.
"Principal Distribution Amount": As to each Series of Notes and (a) as
of each Payment Date prior to the Stated Maturity of such Series, an amount
equal to the lesser of
(i) the applicable Target Principal Distribution Amount for such Series
for such Payment Date, and
(ii) if the amounts available in the Collection Account and the Cash
Collateral Account (including any reinvestment income in the latter
account) after payment of all amounts required by clauses (i) through
(vi) of Section 12.02(d) hereof are less than the aggregate Target
Principal Distribution Amounts for all Series of Notes, an amount equal
to the product of (A) the total funds available for payment of principal
on the Notes, in accordance with the priorities set forth in Section
12.02(d) hereof, and (B) the applicable Pro Rata Share of the Target
Principal Distribution Amount for such Series of Notes;
and (b) as of the State d Maturity of such Series, an amount equal to the
Outstanding Principal Amount of the Notes of such Series as of such date.
"Private Placement Memorandum" or "Final Private Placement Memorandum":
The Private Placement Memorandum related to any direct or indirect offering of a
Series of Notes and having the date specified in the related Supplement.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Pro Rata Share": With respect to any distribution of principal or
interest on any Series of Notes on any Payment Date, a percentage determined by
dividing the Target Principal Distribution Amount or amount of interest, as
applicable, scheduled to be paid on such Series of Notes by the aggregate Target
Principal Distribution Amount or amount of interest, as applicable, scheduled to
be paid on all Series of Notes on such Payment Date.
"Purchase Price": With respect to any Lease Contract repurchased by the
Company pursuant to Sections 2.04 or 3.03 of the Lease Acquisition Agreement or
by the Issuer pursuant to Sections 3.04 or 4.04(d) hereof, the sum of (i) the
Implicit Principal Balance of the related Lease Receivable on the Calculation
Date on or immediately preceding the date when the Lease Contract is
repurchased, (ii) any Scheduled Payments with respect to the Lease Contract due
on or prior to such Calculation Date but not received through such Calculation
Date and (iii) with respect to the related
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Equipment, the amount recorded in the books and records of the Issuer as the
"unguaranteed residual."
"Rating Agencies": ▇▇▇▇▇'▇ and S & P.
"Record Date": The close of business on the last day of the month
preceding the applicable Payment Date, whether or not a Business Day, except
with respect to an Initial Payment Date, the Record Date shall be the related
Delivery Date.
"Recoveries": For any Due Period occurring after the date on which any
Lease Contract becomes a Defaulted Lease Contract and with respect to such
Defaulted Lease Contract, all payments that the Servicer received from or on
behalf of a Customer during such Due Period in respect of such Defaulted Lease
Contract or from liquidation or re-leasing of the related Equipment, including
but not limited to Scheduled Payments, Overdue Payments, Guaranty, Amounts, and
Insurance Proceeds, as reduced by (i) any unreimbursed Servicer Advances with
respect to such Lease Contract and (ii) any reasonably incurred out-of-pocket
expenses incurred by the Servicer in enforcing such Defaulted Lease Contract.
"Redemption Date": A date fixed pursuant to Section 10.01 hereof.
"Redemption Price": With respect to any Series of Notes being redeemed
pursuant to Article Ten hereof, and as of the related Redemption Date, the
Outstanding Principal Amount of such Series of Notes, together with interest
accrued thereon to but excluding the related Redemption Date at the applicable
Note Interest Rate (exclusive of installments of interest and principal maturing
on or prior to such date, payment of which shall have been made or duly provided
for to the Holder of such Note on the applicable Record Date or as otherwise
provided in the Indenture).
"Redemption Record Date": With respect to any redemption of Notes, a
date fixed pursuant to Section 10.01 hereof.
"Reference Banks": Four leading banks selected by the Indenture Trustee
that are engaged in transactions in eurodollar deposits in the international
Eurocurrency market, each of which shall have an established place of business
in London.
"Registered Holder": The Person whose name appears on the Note Register
on the applicable Record Date or Redemption Record Date.
"Reinvestment Income": Any interest or other earnings earned on all or
part of the Trust Estate, other than interest or other earnings from
investments in the Cash Collateral Account.
"Required Collateralization Amount": As of any date of determination,
the lesser of
(a) the Minimum Required Collateralization Amount, and
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(b) the greatest of (i) the Collateralization Percentage multiplied by
the Aggregate IPB (including any Lease Contracts to be purchased or
funded and excluding any Lease Contracts to be released pursuant to
Section 10.05 on such date of determination), (ii) the aggregate
Implicit Principal Balance of the Lease Contracts (including any Lease
Contracts to be purchased or funded on such date of determination)
relating to the three Customers whose Lease Contracts have the greatest
remaining Implicit Principal Balances, and (iii) the Floor Percentage
multiplied by the Aggregate Initial Series IPB (including any Lease
Contracts to be purchased or funded on such date of determination).
"Reset Date": During the Warehouse Funding Period, on the second
Business Day before each Warehouse Funding Date and on the second Business Day
immediately preceding the commencement of each Accrual Period; provided that if
such date is not both a Business Day and also a London Banking Day, the Reset
Date shall be the first preceding day that is both a Business Day and a London
Banking Day.
"Residual Proceeds": With respect to a Lease Contract that is not a
Defaulted Lease Contract and the related Equipment, the net proceeds (excluding
Insurance Proceeds) of any sale, re-lease (including any lease renewal) or other
disposition of such Equipment.
"Responsible Officer": When used with respect to the Indenture Trustee,
any officer assigned to the Corporate Trust Department (or any successor
thereto), including any Vice President, Senior Trust Officer, Trust Officer,
Assistant Trust Officer, any Assistant Secretary, any Trust other Officer of the
Indenture Trustee customarily performing functions similar to Officer or an)
those performed by any of the above designated officers and having direct
responsibility for the administration of the Indenture, and also, with respect
to a particular matter, any other officer, to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Sale": The meaning specified in Section 6.18 hereof.
"Scheduled Expenses": On any Determination Date, the Servicer Fee, the
Back-up Servicer Fee, the MBIA Premium and the Trustee Fee to be due on the next
succeeding Payment Date.
"Scheduled Payment": With respect to a Payment Date and a Lease
Contract, the periodic payment, including, if so specified in the Specific
Indenture Terms, any payments pursuant to any "PUT" (Purchase Upon Termination)
or balloon clause and "TRAC" (Terminal Rate Adjustment Clause) clause (exclusive
of any amounts in respect of taxes) set forth in such Lease Contract due from
the Customer in the related Due Period, calculated without regard to any
modification granted pursuant to Section 3.01(b)(v) of the Standard Servicing
Terms.
"Series": A separate Series of Notes issued pursuant to the Indenture,
with the specific terms identified in the applicable Supplement.
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"Series Initial IPB": (a) With respect to any Series of Term Notes, the
aggregate Implicit Principal Balance of the related Series Lease Contracts as
calculated on the close of business on the related Cut-Off Date, and (b) with
respect to any Series of Warehouse Notes, the sum of all related Warehouse
Funding IPBs.
"Series IPB": With respect to any Series of Notes, the sum of the
Implicit Principal Balances of all related Series Lease Contracts.
"Series Lease Contracts": For each Series of Notes, the Lease Contracts
listed on the related Series Lease Schedule.
"Series Lease Schedule": For each Series of Notes, the list of Lease
Contracts and Lease Receivables attached to the related Supplement for such
Series of Notes, together with and as amended by all related Amended Lease
Schedules, each of which shall include with respect to each Lease Contract: (a)
a number identifying the Lease Contract (b) the Implicit Principal Balance, (c)
the Customer, (d) the State of the Customer's billing address, (e) the original
and remaining term, (f) the Scheduled Payment, (g) the frequency with which
Scheduled Payments are due, (h) whether such Lease Contract is a "true lease," a
Loan Contract or a TRAC Lease, (i) the zip code of the Customer's billing
address; (j) the amount of any PUT or TRAC payments; (k) the equipment type and
(1) any additional items specified in the Specific Indenture Terms.
"Servicer": Initially, the party specified in the Specific Indenture
Terms and any successor Servicer appointed pursuant to Section 6.02 of the
Standard Servicing Terms.
"Servicer Advance" The meaning set forth in Section 3.04 of the Standard
Servicing Terms.
"Servicer Fee": The amount payable to the Servicer as the Servicer Fee
on each Payment Date in the amount set forth in the Specific Servicing Terms.
The Servicer Fee shall not include the Additional Servicer Fee.
"Servicing Agreement": The Specific Servicing Terms together with the
Standard Servicing Terms.
"Servicing Charges": The sum of (i) all late payment charges paid by
Customers on Delinquent Lease Contracts after payment in full of any Scheduled
Payments due in a prior Due Period and Scheduled Payments for the related Due
Period and (ii) any other incidental charges or fees received from a Customer,
including but not limited to, late fees, collection fees and bounced check
charges.
"S & P": Standard & Poor's Ratings Group, a division of McGraw Hill.
"Specific Indenture Terms": The Specific Terms and Conditions of
Indenture dated as of the Transaction Documents Date, among the Issuer, the
Servicer, the Back-up Servicer and the Indenture Trustee.
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"Specific Lease Acquisition Terms": The Specific Terms and Conditions of
Lease Acquisition dated as of the Transaction Documents Date, between the Issuer
and the Company.
"Specific Servicing Terms": The Specific Terms and Conditions of
Servicing dated as of the Transaction Documents Date, among the Issuer, the
Servicer, the Back-up Servicer and the Indenture Trustee.
"Standard Indenture Terms": The Standard Terms and Conditions of
Indenture dated as of the Transaction Documents Date, appended to the Specific
Indenture Terms.
"Standard Lease Acquisition Terms": The Standard Terms and Conditions of
Lease. Acquisition dated as of the Transaction Documents Date, appended to the
Specific Lease Acquisition Terms.
"Standard Servicing Terms": The Standard Terms and Conditions of
Servicing dated as of the Transaction Documents Date, appended to the Specific
Servicing Terms.
"State": Any state of the United States of America and, in addition, the
District of Columbia and Puerto Rico.
"Stated Maturity": With respect to any Note, the meaning specified in
the applicable Supplement.
"Substitute Lease Contract": The meaning specified in the Lease
Acquisition Agreement.
"Supplement": With respect to any Series of Notes, the supplement to the
Indenture in the form attached as Exhibit C hereto and pursuant to which the
terms of such Series are specified as provided in Section 2.02 hereof.
"Targeted Balance": For any Payment Date and (a) any Series of Term
Notes, the amount indicated under the column "Targeted Balance" on Schedule B to
the applicable Supplement for such Payment Date and (b) any Series of Warehouse
Notes, the greater of (i) the related Series IPB minus the product of the then
current Holdback Rate and the Series Initial IPB for such Warehouse Notes and
(ii) the product of one minus the then current Collateralization Percentage and
the Series IPB for such Warehouse Notes.
"Target Principal Distribution Amount": With respect to each Payment
Date and each Series of Term Notes, (a) for any Payment Date prior to the
applicable Stated Maturity, an amount equal to the Outstanding Principal Amount
of the Notes of such Series as of such Payment Date (before giving effect to
distributions on such date), minus the lesser of (i) the amount of the
applicable Targeted Balance for such Payment Date and (ii) the applicable Series
IPB, and (b) on the applicable Stated Maturity, an amount equal to the
Outstanding Principal Amount of Notes of such Series as of such date.
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With respect to each Payment Date and each Series of Warehouse Notes,
(a) for any Payment Date during the Warehouse Funding Period and prior to the
applicable Stated Maturity, an amount equal to the greater of (i) zero and (ii)
the Outstanding Principal Amount of the Notes of such Series as of such Payment
Date (before giving effect to distributions on such date), minus the applicable
Series IPB, (b) for any Payment Date after the Warehouse Funding Termination
Date and prior to the applicable Stated Maturity, an amount equal to the amount
by which the Outstanding Principal Amount of the Notes of such Series as of such
Payment Date (before giving effect to distributions on such date), exceeds the
Targeted Balance for such Payment Date, and (c) on the applicable Stated
Maturity, an amount equal to the Outstanding Principal Amount of Notes of such
Series as of such date.
"Term Note": Any Series of Notes designated as such in the applicable
Supplement.
"Term Note Funding Amount": As of any date of determination, the amount,
if any, by which the sum of (a) the amount of funds then held in the Cash
Collateral Account plus (b) the Aggregate IPB (including any Lease Contracts
being purchased or funded on such date of determination) and minus (c) the
Series IPB of any Series of Notes to be redeemed in full on such date of
determination, exceeds the sum of (i) the Required Collateralization Amount and
(ii) the aggregate Outstanding Principal Amount of all Series of Notes (after
providing for any payment or redemption of principal on such date of
determination, and not including the principal amount of any new Series of Notes
to be issued on such date of determination); provided, however, that the Term
Note Funding Amount shall not exceed the amount specified in the applicable
Supplement.
"TRAC Lease": A Lease Contract that meets the requirements of
Section 7701(h) of the Code.
"Transaction Documents": The Indenture, the Servicing Agreement, the
Lease Acquisition Agreement, the Notes, the Insurance Agreement and the Note
Insurance Policies.
"Transaction Documents Date": With respect to each Series of Notes, the
meaning specified in the Supplement.
"Transition Cost": Any documented expenses reasonably incurred by a
successor Servicer or the Indenture Trustee in connection with a transfer of
servicing from the Servicer to a successor Servicer as successor Servicer
pursuant to Section 6.02 of the Standard Servicing Terms, but not to exceed the
amount set forth in the Specific Indenture Terms.
"Treasury Rate": The yield on actively-traded U.S. government securities
with a maturity of two years as set forth on page "USD" of the Bloomberg
Financial Markets Screen (or if not available, any other nationally recognized
trading screen reporting on-line intra-day trading in United States government
securities) at 11:00 a.m. (New York time) on any date of determination, or in
the event no such nationally recognized trading screen is available, the
arithmetic mean of the
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yields for the two columns under the heading "Week Ending" published in the
Statistical Release under the caption "Treasury Constant Maturities" for two
year maturities.
"Trigger Event": The occurrence of any one of the following events: (1)
for any three consecutive Due Periods, the average of the Annualized Default
Rates for such consecutive Due Periods was equal to or greater than the Maximum
Default Rate; (2) in any Due Period, the Annualized Default Rate was equal to or
greater than three times the Maximum Default Rate; (3) in any two consecutive
Due Periods, the sum of the Annualized Default Rates for such Due Periods was
equal to or greater than three times the Maximum Default Rate; (4) for any three
consecutive Due Periods, the average of the Delinquency Rates for such Due
Periods was equal to or greater than the Maximum Delinquency Rate; (5) the Net
Worth Requirement is not met; (6) the occurrence of any Change in Control; (7)
an Event of Default occurs;(8) the Issuer or the Trust Estate becomes an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended; (9) a voluntary bankruptcy filing of the Servicer or an involuntary
bankruptcy filing of the Servicer which is not discharged within sixty (60)
days; or (10) the occurrence of any additional event set forth in the Specific
Indenture Terms as a "Trigger Event".
"Trust Estate": The meaning specified in the Granting Clause of the
Specific Indenture Terms.
"Trustee Fee": The fee payable on each Payment Date to the Indenture
Trustee in consideration for the Indenture Trustee's performance of its duties
pursuant to the Indenture as Indenture Trustee, in an amount equal to the
product of one-twelfth of the Trustee Fee Rate and the Outstanding Principal
Amount of all Series of Notes immediately following the preceding Payment Date.
"Trustee Fee Rate": The percentage specified in the Specific Indenture
Terms.
"Vice President": With respect to the Issuer or the Indenture Trustee,
any vice president whether or not designated by a number or a word or words
added before or after the title "vice president."
"Warehouse Conversion Event": The meaning specified in the related
Supplement.
"Warehouse Expected Termination Date": The date specified in the related
Supplement.
"Warehouse Funded Lease Contract": A Lease Contract acquired by the
Issuer through a Warehouse Funding.
"Warehouse Funding": An extension of credit by the Warehouse Lender to
the Issuer in accordance with Article III hereof and the related Supplement, in
the amount equal to the principal amount stated on the related Warehouse Funding
Report.
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"Warehouse Funding Amount": As of any Warehouse Funding Date, the
amount, if any, by which the sum of (a) the Aggregate IPB and (b) the Warehouse
Funding IPB for the current Warehouse Funding Date, exceeds the sum of (i) the
Required Collateralization Amount and (ii) the Outstanding Principal Amount of
all Series of Notes; provided, however, that the Warehouse Funding Amount shall
not exceed the Available Warehouse Amount or be less than zero.
"Warehouse Funding Agreement": The Warehouse Funding Agreement comprised
of the Standard Terms and Conditions of Warehouse Funding and the Specific Terms
and Conditions of Warehouse Funding, between the Issuer and a Warehouse Lender
in connection with the provision of Warehouse Fundings by such Warehouse Lender.
"Warehouse Funding Date": Any Monday on which the Issuer desires to
obtain a Warehouse Funding in accordance with the terms hereof, or if such
Monday is not a Business Day, the following Business Day, and provided, however,
that (a) except as otherwise set forth in the Specific Indenture Terms, no
Warehouse Fundings shall occur on any date between and including a Determination
Date and the related Payment Date and (b) no Warehouse Fundings shall occur
after the date that the Issuer provides notice to the Indenture Trustee pursuant
to Section 10.02 hereof that such Series of Warehouse Notes are to be redeemed
by the Issuer.
"Warehouse Funding IPB": The sum of the Implicit Principal Balances of
the Lease Contracts to be acquired by or on behalf of the Issuer on any
Warehouse Funding Date.
"Warehouse Funding Period": The period of time commencing on the initial
issuance of a Series of Warehouse Notes and ending on the applicable Warehouse
Funding Termination Date.
"Warehouse Funding Report": The report prepared by the Note
Administrator substantially in the form of Schedule C to the related Supplement.
"Warehouse Funding Termination Date": With respect to any Series of
Warehouse Notes, the earliest of (a) the Warehouse Expected Termination Date,
(b) the day on which a Trigger Event occurs, (c) the date on which such Series
of Notes is redeemed pursuant to Article Ten hereof and (d) any other date
specified in the applicable Supplement.
"Warehouse Lender": The party identified in the related Supplement.
"Warehouse Note": Any Note issued pursuant to Article III hereof by the
Issuer in favor of a Warehouse Lender and designated as such in the related
Supplement.
"Warehouse Note Interest Rate": As provided in the related Supplement.
"Warehouse Note Limit": The maximum principal amount of a Series of
Warehouse Notes, which amount shall be specified in the applicable Supplement
and the applicable Warehouse Notes.
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ARTICLE TWO
THE NOTES
SECTION 2.01 FORM GENERALLY.
The Term Notes and the certificates of authentication shall be in
substantially the form set forth in Exhibit E-1 hereto and the Warehouse Note
and the certificate of authentication shall be in substantially the form set
forth in Exhibit E-2 hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
the Indenture, and may, have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon, as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any manner acceptable to the Indenture Trustee and
the initial purchasers of the Notes, all as determined by the officers executing
such Notes, as evidenced by their execution of such Notes.
SECTION 2.02 SERIES; DENOMINATION.
(a) The Indenture provides for the issuance by the Issuer from time
to time of one or more Series of Notes consisting of Term Notes and Warehouse
Notes, all subject to and in accordance with the terms of the Indenture and the
applicable Supplement and provided that, except in the case of a Warehouse
Conversion Event, only one Series of Warehouse Notes may be Outstanding at any
one time. Each Note in a Series shall bear upon the face thereof the designation
selected for the Series to which it belongs. All Series of Notes shall be
identical except for differences among the Series for Note Interest Rates,
Stated Maturities and the other items identified below.
All Notes of all Series issued under the Indenture shall be in all
respects equally and ratably secured by the Collateral Granted by the Issuer on
the Initial Delivery Date and from time to time thereafter (although the
obligation insurance policies are issued specific to each Series only), and
shall be entitled to the benefits hereof without preference, priority or
distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of the Indenture and
the applicable Supplement.
The Supplement with regard to a Series of Notes shall establish,
without limitation, the following terms and provisions of the Notes of such
Series, each of which the Issuer shall determine in authorizing the issuance of
any Series:
(i) designation of the Series;
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(ii) the applicable Delivery Date, Initial Payment Date,
Accrual Date, the Transaction Documents Date, the
schedules to be attached to such Supplement containing the
Targeted Balances with respect to any Series of Term Notes
and the Series Lease Schedule, and if applicable, the
Cut-off Date, Warehouse Funding Termination Date and the
Warehouse Expected Termination Date;
(iii) the maximum aggregate principal amount of Notes of such
Series that may be issued, including, without limitation,
the Warehouse Note Limit and the maximum Term Note Funding
Amount;
(iv) the Note Interest Rate for a Series of Term Notes, or with
respect to a Series of Warehouse Notes, the terms used in
the definition of Note Interest Rate that require further
specification in the applicable Supplement, including
without limitation, the applicable Fixed Interest Rate,
the Floating Interest Rate and the Maximum Warehouse Note
Rate;
(v) any Initial Cash Deposit;
(vi) the identity of the Warehouse Lender, if applicable;
(vii) the MBIA Premium, the MBIA Premium Rate and the due dates
for the MBIA Premium;
(viii) the Stated Maturity for such Series; and
(ix) the Note Insurance Policy number.
(b) The aggregate principal amount of Notes of each Series which
maybe authenticated and delivered under the Indenture is specified in the
applicable Supplement, except for Notes authenticated and delivered upon
registration of transfer or in exchange for or in lieu of, other Notes pursuant
to Sections 2.04, 2.05, 2.07 or 9.05 hereof. The Notes shall be issuable only as
registered Notes without coupons in denominations of at least $250,000 and any
amount in excess thereof; PROVIDED, HOWEVER, that, the foregoing shall not
restrict or prevent the transfer in accordance with Sections 2.05 and 2.06
hereof of any Note with a remaining Outstanding Principal Amount of less than
$250,000.
SECTION 2.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Notes shall be executed on behalf of the Issuer by its President or
one of its Vice Presidents under its corporate seal imprinted or otherwise
reproduced thereon. The signature of these officers on the Notes must be manual.
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Notes bearing the manual signatures of individuals who were at any time
the proper officers of the Issuer shall bind the Issuer, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication or delivery of such Notes or did not hold offices at the date of
authentication or delivery of such Notes.
Each Note shall bear on its face the applicable Delivery Date and be
dated as of the date of its authentication.
No Note shall be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee or by any Authenticating Agent by the manual signature of one
of its authorized officers, and such certificate. upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
SECTION 2.04 TEMPORARY NOTES.
Pending the preparation of definitive Notes, the Issuer may execute, and
upon Issuer Order, the Indenture Trustee shall authenticate and deliver,
temporary Notes which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any denomination, substantially of the tenor of the
definitive Notes in lieu of which they are issued and with such variations as
the officers executing such Notes may determine, as evidenced by their execution
of such Notes.
If temporary Notes are issued, the Issuer will cause definitive Notes to
be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 11.02(n) hereof, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Notes, the Issuer
shall execute and the Indenture Trustee shall authenticate and deliver in
exchange therefor one or more definitive Notes of any authorized denominations
and of a like initial aggregate principal amount and Stated Maturity. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under the Indenture as definitive Notes.
SECTION 2.05 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Issuer shall cause to be kept at an office or agency to be
maintained by the Issuer in accordance with Section 11.02(n) hereof a register
(the "Note Register"), in which, subject to such reasonable regulations as it
may prescribe, the Issuer shall provide for the registration of Notes and the
registration of transfers of Notes. Norwest Bank Minnesota, National
Association, 6th Street and Marquette Avenue, Minneapolis, Minnesota 55479-0069,
is hereby appointed "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. The Indenture Trustee shall have the
right to examine the Note Register at all reasonable times and to rely
conclusively upon a Certificate of the Note Registrar as to the names and
addresses of the Holders of the Notes and the principal amounts and numbers of
such Notes as held.
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(b) Upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 11.02(n)
hereof and subject to the conditions set forth in Section 2.06 hereof, the
Issuer shall execute, and the Indenture Trustee or its agent shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Notes of any authorized denominations, and of a like aggregate
principal amount, Series and Stated Maturity.
(c) At the option of the Holder, Notes of a Series may be exchanged for
other Notes of such Series of any authorized denominations and of a like
aggregate principal amount and Stated Maturity, upon surrender of the Notes to
be exchanged at such office or agency. Whenever any Notes are so surrendered for
exchange, the Issuer shall execute, and the Indenture Trustee or its agent shall
authenticate and deliver, the Notes which the Noteholder making the exchange is
entitled to receive.
(d) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt and
entitled to the same benefits under the Indenture, as the Notes surrendered upon
such registration of such transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Issuer or the Note Registrar) be duly
endorsed or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Note Registrar duly executed, by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.04 or 9.05 hereof not involving any registration
of transfer.
Notwithstanding anything else to the contrary contained in the
Indenture, the obligation of the Issuer to pay the principal of and interest on
the Notes is not a general obligation of the Issuer, but is limited solely to
the Collateral pledged under the Indenture and the applicable Note Insurance
Policies.
SECTION 2.06 LIMITATION ON TRANSFER AND EXCHANGE.
(a) The Notes have not been registered or qualified under the Securities
Act of 1933 (the 1933 Act") or the securities laws of any state. No transfer of
any Note shall be made unless that transfer is made in a transaction which does
not require registration or qualification under the 1933 Act or under applicable
state securities laws. In the event that a transfer is to be made without
registration or qualification, such Noteholder's prospective transferee shall
either (i) deliver to the Indenture Trustee an investment letter substantially
in the form set forth on Exhibit A hereto, or other applicable document (the
"Investment Letter") or (ii) deliver to the Indenture Trustee an
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opinion of counsel that the transfer is exempt from the Act. Neither the Issuer
nor the Indenture Trustee is obligated to register or qualify the Notes under
the 1933 Act or any other securities law. Any such Holder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Indenture Trustee,
MBIA and the Issuer against any liability, cost or expense (including attorneys'
fees) that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws. The Indenture Trustee shall
promptly, after receipt of such information as is set forth in the next
succeeding sentence, furnish to any Holder, or any Prospective Owner designated
by a Holder, the information required to be delivered to Holders and Prospective
Owners of Notes in connection with resales of the Notes to permit compliance
with Rule 144A of the 1933 Act in connection with such resales. Such information
shall be provided to the Indenture Trustee by the Servicer.
(b) No acquisition or transfer of a Note, or any interest therein may be
made to any "Benefit Plan Investor" (as defined in 29 C.F.R. ss. 2510.3-101) or
to any person who is directly or indirectly purchasing the Notes or an interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of,
such a Benefit Plan Investor unless the Indenture Trustee is provided with
evidence that establishes to the satisfaction of the Trustee that (i) either no
"prohibited transaction" under ERISA or the Code will occur in connection with
such prospective acquiror's or transferee's acquisition. and holding of the
Notes or that the acquisition and holding of the Notes by such prospective
acquiror or transferee is subject to a statutory or administrative exemption,
and (ii) that the prospective acquiror's or transferee's acquisition and holding
will not subject the Issuer, the Servicer, the Indenture Trustee, or the Note
Administrator to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
explicitly undertaken in the Transaction Documents.
The Indenture Trustee shall have no liability to the Trust Estate or any
Noteholder arising from a transfer of any such Note in reliance upon a
certification described in this Section 2.06.
SECTION 2.07 MUTILATED, DESTROYED, LOST OR STOLEN NOTE.
If (i) any mutilated Note is surrendered to the Note Registrar, or the
Indenture Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, and (ii) there is delivered to the Indenture Trustee and
MBIA such security or indemnity as may be required by the Indenture Trustee to
save the Issuer, the Indenture Trustee and MBIA or any agent of any of them
harmless, then, in the absence of notice to the Issuer or the Note Registrar
that such Note has been acquired by a bona fide purchaser, the Issuer shall
execute and, upon its request, the Indenture Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a new Note of the same tenor, Series, initial principal amount and
Stated Maturity, bearing a number not contemporaneously outstanding. If after
the delivery of such new Note, a bona fide purchaser of the original Note in
lieu of which such new Note was issued presents for payment such original Note,
MBIA, the Issuer and the Indenture Trustee shall be entitled to recover such new
Note from the person to whom it was delivered or any person taking therefrom,
except a bona fide purchaser, and shall be entitled to recover upon the security
or indemnity provided therefor to the extent of any loss, damage, cost or
expenses incurred by MBIA, the Issuer
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or the Indenture Trustee or any agent of any of them in connection therewith. If
any such mutilated, destroyed, lost or stolen Note shall have become or shall be
about to become due and payable, or shall have become subject to redemption in
full, instead of issuing a new Note, the Issuer may pay such Note without
surrender thereof, except that any mutilated Note shall be surrendered.
Upon the issuance of any new Note under this Section, the Issuer may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Indenture Trustee) connected therewith.
Every new Note issued pursuant to this Section 2.07, in lieu of any
destroyed, lost or stolen Note, shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of the Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.08 PAYMENT OF PRINCIPAL AND INTEREST; PRINCIPAL AND INTEREST
RIGHTS PRESERVED.
(a) The Notes shall bear interest on the Outstanding Principal Amount
thereof for each applicable Accrual Period at the Note Interest Rate in effect
at the beginning of the related Accrual Period (calculated on the basis of a
360-day year consisting of 12 months of 30 days each) for such Series, until the
last day preceding the Final Payment Date and (to the extent that the payment of
such interest shall be legally enforceable) on any overdue installment of
interest from the date such interest became due and payable (giving effect to
any applicable grace periods provided herein) until fully paid. Interest shall
be due and payable in arrears on each Payment Date, with each payment of
interest calculated as described above on the Outstanding Principal Amount of
the Notes immediately following the preceding Payment Date or on the applicable
Delivery Date, if there has not been any preceding Payment Date, except that
with respect to any Warehouse Fundings occurring since the preceding Payment
Date, interest on the related Warehouse Funding Amounts from the related
Warehouse Funding Date through the end of the Accrual Period in which such
Warehouse Funding occurs shall be paid in the amount of the applicable First
Period Warehouse Interest at the time of such fundings as provided in Section
3.05 hereof. In making any such interest payment, if the interest calculation
with respect to a Note shall result in a portion of such payment being less than
$.01, then such payment shall be decreased to the nearest whole cent, and no
subsequent adjustment shall be made in respect thereof.
(b) The principal of each Note shall be payable in installments ending
no later than the applicable Stated Maturity thereof unless such Note becomes
due and payable at an earlier date by
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declaration of acceleration, call for redemption or otherwise. All reductions in
the principal amount of a Note effected by payments of installments of principal
made on any Payment Date shall be binding upon all future Holders of such Note
and (if any Note issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, whether or not such payment is noted on such Note.
Each installment of principal payable on the Notes shall be in an amount equal
to the Principal Distribution Amount and the Additional Principal Amount, if any
available to be paid in accordance with the priorities of Section 12.02(d)
hereof. The principal payable on the Notes of each Series, shall be paid on each
Payment Date beginning on the applicable Initial Payment Date and ending on the
applicable Final Payment Date, and with respect to all of the Notes of one
Series, on a pro rata basis based upon the ratio that the Outstanding Principal
Amount of a Note bears to the Outstanding Principal Amount of all Notes of such
Series; provided, however, that if as a result of such proration a portion of
such principal would be less than $.01, then such payment shall be decreased to
the nearest whole cent, and such portion shall be applied to the next succeeding
principal payment.
(c) The principal of and interest on the Notes are payable by check
mailed by first-class mail to the Person whose name appears as the Registered
Holder of such Note on the Note Register at the address of such Person as it
appears on the Note Register or by wire transfer in immediately available funds
to the account specified in writing to the Indenture Trustee by such Registered
Holder at least five Business Days prior to the Record Date for the Payment Date
on which wire transfers will commence, in such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts. Except as set forth in the final sentence of this
Section 2.08(c), all payments on the Notes shall be paid without any requirement
of presentment. The Issuer shall notify the Person in whose name a Note is
registered at the close of business on the Record Date next preceding the
Payment Date on which the Issuer expects that the final installment of principal
of such Note will be paid that the Issuer expects that such final installment
will be paid on such Payment Date. Such notice shall be mailed no later than the
tenth day prior to such Payment Date and shall specify the place where such Note
may be surrendered. Funds representing any such checks returned undeliverable
shall be held in accordance with Section 7.16. Each Noteholder shall surrender
its Note to the Indenture Trustee prior to payment of the final installment of
principal of such Note.
(d) Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Notes, if the Notes have become or
been declared due and payable following an Event of Default and such
acceleration of maturity and its consequences have not been rescinded and
annulled, then payments of principal of and interest on such Notes shall be made
in accordance with Section 6.08 hereof.
(e) On or before 2:00 p.m. (New York time) on each applicable Reset
Date, the Indenture Trustee shall determine the applicable LIBOR Rate for any
Outstanding Series of Warehouse Notes. Upon each determination of the LIBOR
Rate, the Indenture Trustee will promptly provide notice of such determination
to MBIA, the Note Administrator, the Warehouse Lender and the Servicer. The
determination of the LIBOR Rate by the Indenture. Trustee and the Indenture
Trustee's
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subsequent calculation of the Note Interest Rate for a Series of Warehouse Notes
for the relevant Reset Date shall (in the absence of manifest error) be final
and binding on each Noteholder.
SECTION 2.09 PERSONS DEEMED OWNER.
Prior to due presentment for registration of transfer of any Note, the
Issuer, MBIA, the Indenture Trustee and any agent of the Issuer, MBIA or the
Indenture Trustee shall treat the Person in whose name any Note is registered as
the owner of such Note for the purpose of receiving payments of principal of and
interest on such Note and for all other purposes whatsoever, whether or not such
Note be overdue, and neither the Issuer, MBIA, the Indenture Trustee nor any
agent of the Issuer, MBIA or the Indenture Trustee shall be affected by notice
to the contrary.
SECTION 2.10 CANCELLATION.
All Notes surrendered to the Indenture Trustee for payment, registration
of transfer or exchange (including Notes surrendered to any Person other than
the Indenture Trustee which shall be delivered to the Indenture Trustee) shall
be promptly cancelled by the Indenture Trustee. No Notes shall be authenticated
in lieu of or in exchange for any Notes cancelled as provided in this
Section 2.10, except as expressly permitted by the Indenture. All cancelled
Notes held by the Indenture Trustee shall be disposed of by the Indenture
Trustee as is customary with its standard practice.
SECTION 2.11 TAX TREATMENT.
The Issuer has structured the Indenture and the Notes with the intention
that the Notes will qualify under applicable tax law as indebtedness of the
Issuer, and, except as provided in the Specific Terms, the Issuer, the Company,
the Servicer and each Noteholder, by acceptance of its Note, agree to treat the
Notes as debt for all purposes.
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[PAGE MISSING]
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executed documents effecting the transfer of ownership of such titled
Equipment from the vendor of such titled Equipment to the Issuer, a
manufacturer's certificate of origin reflecting the Issuer as owner of
the titled Equipment and a stamped application evidencing the filing
with the appropriate Departments of Motor Vehicles of a request to title
such Equipment in the name of the Issuer and naming the Indenture
Trustee as secured party, and (b) with respect to titled Equipment which
is titled in the name of the Company or a third party, either (1) a
certificate of title issued by the appropriate Departments of Motor
Vehicles in the name of the Issuer and naming the Indenture Trustee as
secured party, or (2) a stamped application evidencing the filing with
the appropriate Departments of Motor Vehicles of a request to title such
Equipment in the name of the Issuer and naming the Indenture Trustee as
secured party, together with an opinion of counsel to the effect that
all requirements of the applicable certificate of title statutes have
been complied with;
(iii) the delivery by the Issuer to the Indenture Trustee on or
before the Business Day immediately prior to the requested Warehouse
Funding Date of the Series Lease Schedule with respect to the initial
Warehouse Funding for a Series of Warehouse Notes and thereafter an
Amended Lease Schedule accompanied by an Amendment to Indenture for New
Lease Contracts and Amendment to Lease Acquisition Agreement for New
Lease Contracts executed by the Issuer and the Company, as appropriate;
(iv) no Default or Event of Default shall exist or shall result
from such Warehouse Funding;
(v) the Note Insurance Policy shall be in full force and effect
and no MBIA Default shall have occurred;
(vi) the Lease Contracts proposed to be funded with such
Warehouse Funding shall be Eligible Lease Contracts, and after giving
effect to such Warehouse Funding, neither the Concentration Limits nor
the Warehouse Note Limit shall be exceeded;
(vii) as of the second Business Day immediately prior to the
requested Warehouse Funding Date, a Note Administrator is in place in
accordance with Section 3.07 hereof,
(viii) as of the second Business Day immediately prior to the
requested Warehouse Funding Date, the Warehouse Note facility fee
provided for under the applicable Warehouse Funding Agreement is not
past due;
(ix) none of the following shall have occurred: by reason of any
changes arising after the Initial Delivery Date (A) the effective cost
to the Warehouse Lender of funding a proposed Warehouse Funding shall
exceed the LIBOR Rate applicable to such Warehouse Funding, (B) the
making of any Warehouse Funding has become impracticable as a result of
a contingency which has occurred and which materially and adversely
affects the London interbank market, or (C) the making of any Warehouse
Funding has been made unlawful by
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compliance by the Warehouse Lender in good faith with any law or
governmental rule, regulation, guideline or order (whether or not having
the force of law);
(x) such Warehouse Funding shall occur on a date prior to the
Warehouse Funding Termination Date;
(xi) such other conditions as may be specified in the applicable
Supplement; and
(xii) the Trustee and the Note Administrator shall have received
notice by facsimile by the Issuer, received no later than four business
days prior to a Warehouse Funding Date that a Warehouse Funding shall
occur on such Warehouse Funding Date.
(b) PREPARATION OF WAREHOUSE FUNDING REPORT. Upon receipt by the Note
Administrator of the list of the proposed Lease Contracts to be funded, the Note
Administrator shall review such diskette and prepare a Warehouse Funding Report
from the information provided in such diskette, the existing information
regarding all other Lease Contracts and the existing information used to
generate the Monthly Servicer's Report. No later than 10:00 a.m. (New York time)
on each Business Day immediately preceding a proposed Warehouse Funding Date,
the Note Administrator shall fax the Warehouse Funding Report to the Issuer and
the Issuer shall thereupon execute such report and fax it to the Indenture
Trustee no later than 11:00 am. (New York time) on such date of receipt. The
Note Administrator shall electronically transfer or forward to MBIA by overnight
mail for receipt by MBIA on the related Warehouse Funding Date, a diskette
containing, in a standardized format, the same information that was delivered by
the Issuer pursuant to Section 3.03(a)(i) hereof.
SECTION 3.04 VERIFICATION OF WAREHOUSE FUNDING REPORT.
(a) Upon the Indenture Trustee's receipt of a Warehouse Funding
Report, the Indenture Trustee shall recompute all of the calculations in such
report (including without limitation a recalculation of the Implicit Principal
Balances of the related Lease Contracts) based on the information contained in
the list of Lease Contracts forwarded to it by diskette or electronic transfer,
the existing information regarding all other Lease Contracts and the existing
information used to generate the Monthly Servicer's Report, and if the Indenture
Trustee does not discover and is not notified of any errors in the calculations
in such report that have not been corrected by 3:00 p.m. (New York time) on the
Business Day immediately preceding the proposed Warehouse Funding Date and all
of the conditions precedent set forth in Section 3.03(a) hereof have been
satisfied, the Indenture Trustee shall notify the Warehouse Lender of the
Warehouse Funding Amount by faxing the Warehouse Funding Report to the Warehouse
Lender and MIA by 3:00 p.m. on the Business Day immediately preceding the
proposed Warehouse Funding Date. If the Indenture Trustee discovers or is
notified of any error in the Warehouse Funding Report that is not corrected by
3:00 p.m. (New York time) on the Business Day immediately preceding the proposed
Warehouse Funding Date or if any of the conditions precedent set forth in
Section 3.03(a) hereof have not been satisfied, the Indenture Trustee shall
notify the Warehouse Lender that the applicable Warehouse Funding is postponed
until resolution of any such error, and the Indenture Trustee shall thereupon
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notify MBIA, the Note Administrator and the Issuer of such error. If MBIA
discovers any error in the Warehouse Funding Report after a funding based on
such report, MBIA shall notify the Indenture Trustee, the Note Administrator and
the Issuer.
(b) If a Warehouse Funding occurs based upon a Warehouse Funding Report
with respect to which an error has been discovered and the Note Administrator or
the Issuer is not able to correct such error to the satisfaction of the
Warehouse Lender and MBIA by the next succeeding date upon which a Warehouse
Funding is permitted to occur (or, in the case of the final Warehouse Funding
preceding the applicable Warehouse Funding Termination Date, by the Payment Date
immediately following such Warehouse Funding Termination Date), the Issuer shall
either (i) repurchase the affected Lease Contracts at a price equal to the
Implicit Principal Balance of such Lease Contracts, (ii) replace the affected
Lease Contracts with Substitute Lease Contracts, in each case on the earlier of
W the second succeeding date upon which a Warehouse Funding is permitted to
occur and (y) the following Determination Date or (iii) deposit funds in the
Collection Account in the amount, if any, by which the Warehouse Funding Amount
as recalculated based on the correct information is less than the affected
Warehouse Funding.
SECTION 3.05 DISBURSEMENT OF FUNDS. Subject to the terms of the
Indenture, the Warehouse Lender will make available to the Issuer each Warehouse
Funding Amount set forth on the applicable Warehouse Funding Report, less any
First Period Warehouse Interest, at the Issuer Payment Office by 3:00 p.m. (New
York time) on the applicable Warehouse Funding Date in immediately available
funds.
SECTION 3.06 REPAYMENTS OF PRINCIPAL. On each Payment Date, the Issuer
shall make payments of principal on the Warehouse Note in whole or in part, in
the amount, if any, of the Principal Distribution Amount for the Warehouse Note
for such Payment Date and any Additional Principal Amount required to be paid by
the Issuer in accordance with clauses (vii) and (xi) of Section 12.02(d) hereof.
SECTION 3.07 APPOINTMENT OF NOTE ADMINISTRATOR.
(a) The Issuer hereby appoints Rothschild Inc. as Note Administrator
with respect to the Warehouse Notes. By the execution of a separate agreement
between the Note Administrator and the Issuer, attached hereto as Exhibit F (the
"Note Administration Agreement"), Rothschild Inc. shall accept its appointment
as Note Administrator and agree to be bound by the provisions of Article Three
hereof. If at any time MBIA, or upon an MBIA Default, the Noteholders shall
notify the Indenture Trustee and Rothschild Inc. in writing that Rothschild Inc.
has failed to perform its duties in accordance with this Article Three or the
Note Administration Agreement, or if at any time, Rothschild Inc. shall become
the subject of a proceeding under the federal Bankruptcy Code, the Issuer shall
appoint a successor Note Administrator which shall be acceptable to MBIA and
notify the Indenture Trustee of such appointment. Upon notice of such
appointment, the Issuer shall mail written notice thereof by first-class mail,
postage prepaid, to all Holders of Warehouse Notes. Upon the Note
Administrator's resignation or termination pursuant to this Section 3.07, the
Note
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Administrator shall comply with the provisions of the Indenture and the
Insurance Agreement until the acceptance of the appointment of a successor Note
Administrator. Any successor Note Administrator upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as the
Note Administrator.
(b) The Issuer agrees to pay the Note Administrator compensation for its
services under this Article Three in accordance with the terms of the Note
Administration Agreement, which fee shall in no event be an obligation of the
Trust Estate.
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ARTICLE FOUR
ISSUANCE OF NOTES; SUBSTITUTIONS OF COLLATERAL
SECTION 4.01 CONDITIONS TO INITIAL ISSUANCE OF NOTES.
Each Series of Notes to be issued on the Initial Delivery Date, may be
executed by the Issuer and delivered to the Indenture Trustee for
authentication, and thereupon, the same shall be authenticated and delivered by
the Indenture Trustee upon Issuer Order and upon receipt by the Indenture
Trustee of the following:
(a) with respect to the issuance of the initial Series of Term Notes, an
Assignment and, Assumption Agreement with the related Series Lease Schedule
attached thereto;
(b) the original executed counterpart of each Lease Contract and all
other items included in the Lease Contract File;
(c) a Board Resolution of each of the Issuer, the Servicer and the
Company authorizing, as applicable, the execution, delivery and performance of
the Transaction Documents and the transactions contemplated hereby and by the
other Transaction Documents, certified by the Secretary or an Assistant
Secretary of the Issuer, the Servicer or the Company, as applicable;
(d) a copy of an officially certified document, dated not more than 30
days prior to the Initial Delivery Date, evidencing the due organization and
good standing of each of the Issuer, the Servicer and the Company;
(e) copies of the Certificate of Incorporation and By-Laws of each of
the Issuer, the Servicer and the Company, certified by the Secretary or an
Assistant Secretary of the Issuer, the Servicer and the Company, as applicable;
(f) (i) evidence of filing with the Secretary of State of the State (and
with the relevant county, if required by the applicable state law) of the
Company's chief executive office of UCC-1 financing statements executed by the
Company, as debtor, and naming the Issuer as secured party, and the Lease Assets
as collateral; and (ii) evidence of filing with the Secretary of State of the
State (and with the relevant county, if required by the applicable state law) of
the Issuer's chief executive office of UCC-1 financing statements executed by
the Issuer, as debtor, and naming the Indenture Trustee for the benefit of the
Noteholders and MBIA as secured party, and the Trust Estate as collateral;
(g) a certificate listing the Servicing Officers of the Servicer as of
the Initial Delivery Date;
(h) an executed copy of a Supplement for each Series of Notes to be
issued on the Initial Delivery Date and the Servicing Agreement and the Lease
Acquisition Agreement;
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(i) a Note Insurance Policy for each Series of Notes being issued on
such date;
(j) evidence of the deposit by the Issuer of interest on the initial
Series of Term Notes at the applicable Note Interest Rate pursuant to
Section 12.02(a)(iv) hereof; and
(k) such other documents as the Indenture Trustee or MBIA may reasonably
require or as may be specified in the Specific Indenture Terms.
SECTION 4.02 ISSUANCES OF ADDITIONAL SERIES OF NOTES.
(a) Additional Series of Term Notes and Warehouse Notes may be issued by
the Issuer in accordance with the terms of the Indenture, provided that any new
Series of Term Notes shall have an aggregate initial principal balance not to
exceed the Term Note Funding Amount and any new Series of Warehouse Notes shall
have an aggregate initial principal balance not to exceed the maximum amount
specified in the applicable Supplement.
(b) On or before the Delivery Date relating to any new Series of Notes,
the parties hereto will execute and deliver a Supplement which will specify the
terms applicable to such new Series. The terms set forth in such Supplement may
modify or amend the terms of the Indenture solely as applied to such new Series.
Each new Series of Notes may be executed by the Issuer and delivered to the
Indenture Trustee for authentication, and thereupon, the same shall be
authenticated and delivered by the Indenture Trustee upon Issuer Order and upon
receipt by the Indenture Trustee of the following:
(i) original executed counterpart of each new Lease Contract and
all other items included in the Lease Contract File;
(ii) a Supplement and if the Issuer is acquiring Lease Contracts
from the Company, an Assignment and Assumption Agreement, subjecting any
new Lease Contracts to the provisions of the Transaction Documents, and
providing with respect to such new Lease Contracts a Series Lease
Schedule (unless with respect to a Series of Warehouse Notes, no
Warehouse Funding is to occur on the applicable Delivery Date);
(iii) on or before the tenth Business Day immediately preceding
the Delivery Date for the Notes to be issued, the issuer shall have
given the Indenture Trustee, the Servicer, MBIA and each Rating Agency
notice of such issuance and the applicable Delivery Date;
(iv) the Issuer shall have delivered to the Indenture Trustee and
MBIA the related Supplement, executed by each party hereto other than.
the Indenture Trustee;
(v) the Issuer shall have delivered to the Indenture Trustee and
MBIA an Officers' Certificate of the Issuer to the effect that (A) such
issuance will not result in the occurrence
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of a Trigger Event or a Default under the Indenture and the, Issuer is
not in Default under the Indenture, (B) the issuance of the Notes
applied for will not result in a breach of any of the terms, conditions
or provisions of, or constitute a Default under, any agreement or
instrument to which the Issuer is a party or by which it is bound, or
any order of any court or administrative agency entered in any
proceeding to which the Issuer is a party or by which it may be bound or
to which it may be subject (C) all conditions precedent provided in the
Indenture relating to the authentication and delivery of the additional
Series of Notes applied for have been complied with, and (D) specifying
the Series, whether such Series is to be comprised of Term Notes or
Warehouse Notes, the applicable Stated Maturity and the principal amount
and Note Interest Rate of the Notes to be authenticated and delivered;
(vi) (A) if the Issuer is acquiring the Lease Assets from the
Company, evidence of filing with the Secretary of State of the State
(and with the relevant county, if required by the applicable state law)
of the Company's chief executive office of UCC-1 financing statements
executed by the Company, as debtor, and naming the Issuer as secured
party, and the Lease Assets as collateral; (B) evidence of filing with
the Secretary of State of the State (and with the relevant county, if
required by the applicable state law) of the Issuer's chief executive
office of UCC-1 financing statements executed by the Issuer, as debtor,
and naming the Indenture Trustee for the benefit of the Noteholders and
MBIA as secured party, and the Trust Estate as collateral; and (C) with
respect to any titled Equipment, evidence acceptable to MBIA that
applications have been filed to re-title or originate title in the
related Equipment in the name of the Issuer and naming the Indenture
Trustee as secured party;
(vii) the Issuer shall have delivered to the Indenture Trustee
and MBIA an Officers' Certificate to the effect that attached thereto am
true and correct copies of letters signed by each Rating Agency
confirming that the Notes of such Series have been rated "AAA" by S&P
and "Aaa" by ▇▇▇▇▇'▇ and that the rating on each other Series of Notes
is in full force and effect on the applicable Delivery Date;
(viii) a financial guaranty insurance policy with respect to the
payment of principal and interest of such new Series of Notes in form
and substance substantially the same as the Note Insurance Policy issued
by MBIA with respect to the Series of Term Notes or Warehouse Notes, as
applicable, on the Initial Delivery Date, and evidence that MBIA shall
not have been downgraded from an "AAA" or "Aaa" rating;
(ix) an opinion of counsel to the effect that the Notes of such
Series will be characterized as debt and that the issuance of such
Series will not adversely affect the characterization of the Notes of
any Outstanding Series as debt; and
(x) such other documents, certificates, instruments, opinions, or
other items as may be required by the terms of the Supplement creating
such Series of Notes or as may be specified in the Specific Indenture
Terms.
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Upon satisfaction of the above conditions, the Indenture Trustee shall execute
the Supplement and issue and deliver to or upon the order of the Issuer the
applicable Notes, and provide notice to all existing Noteholders of the issuance
of such Series of Notes.
SECTION 4.03 SECURITY FOR NOTES.
(a) The Issuer and the Company shall file UCC-I financing statements
described in Sections 4.01 (f) and 4.02(b)(vi) hereof in accordance with such
Sections. In addition, as soon as practicable but no later than 30 days after
the Initial Delivery Date and any subsequent Delivery Date, as the case may be,
(i) the Issuer shall file with respect to all Lease Contracts other than Loan
Contracts, UCC- I financing statements with the Secretaries of State (and with
the relevant county, if required by the applicable state law) of the Enumerated
States, executed by the Issuer, as debtor, and naming the Indenture Trustee for
the benefit of the Noteholders and MBIA as secured party and the Equipment
located in such States as collateral; provided that no filings naming an
individual Customer as debtor shall be required; and (ii), with respect to any
titled Equipment underlying a Lease Contract, the Issuer and the Company shall
provide evidence to the Indenture Trustee acceptable to MBIA that applications
have been filed to retitle or originate title in such Equipment, as applicable,
in the name of the Issuer and naming the Indenture Trustee as secured party, and
immediately upon receipt, the Issuer shall deliver or cause to be delivered to
the Indenture Trustee, certificates of title naming the Issuer as title owner
and the Indenture Trustee as secured party. From time to time, the Servicer
shall take or cause to be taken such actions and execute such documents as are
necessary to perfect and protect the Indenture Trustee's and MBIA's respective
interests in the Lease Contracts and the Equipment owned by the Issuer and
initially located in the Enumerated States against all other Persons, including,
without limitation, the filing of financing statements, amendments thereto and
continuation statements, the execution of transfer instruments and the making of
notations on or taking possession of all records or documents of title.
(b) If any change in either the Company's or the Issuer's name,
identity, structure or the location of its principal place of business or chief
executive office occurs, then the Issuer shall, or the Issuer shall cause the
Company, to deliver 30 days prior written notice of such change or relocation to
the Servicer, MBIA and the Indenture Trustee and no later than the effective
date of such change or relocation, the Servicer shall file such amendments or
statements as may be required to preserve and protect the Indenture Trustee's
and MBIA's respective interests in the Trust Estate.
(c) During the term of the Indenture, the Issuer will maintain its chief
executive office and principal place of business in one of the States of the
United States.
(d) The Servicer agrees to pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of the Indenture Trustee's and MBIA's respective right, title and
interest in and to the Trust Estate (other than the Equipment not initially
located in the Enumerated States).
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(e) The Indenture Trustee may, if requested by the Servicer for purposes
of servicing a Lease Contract, temporarily release to the Servicer such Lease
Contract. Any Lease Contract temporarily released from the custody of the
Indenture Trustee to the Servicer or its agents shall have stamped on it prior
to delivery a legend to the effect that the Lease Contract is the property of
the Issuer and has been pledged to Norwest Bank Minnesota, National Association,
as Indenture Trustee. The Servicer shall promptly return the Lease Contract to
the Indenture Trustee when the need therefor no longer exists.
SECTION 4.04 SUBSTITUTION, PURCHASE AND ADDITION OF LEASE CONTRACTS.
(a) If at any time the Issuer, MBIA or the Indenture Trustee obtains
knowledge (within the meaning of 7.01 (e) hereof), discovers or is notified by
the Servicer that any of the representations and warranties of the Company in
the Lease Acquisition Agreement were incorrect at the time as of which such
representations and warranties were made, then the Person discovering such
defect, omission, or circumstance shall promptly notify MBIA and the other
parties to this Indenture.
(b) In the event that (i) any representation or warranty of the Company
in the Lease Acquisition Agreement is incorrect and materially and adversely
affects the interests of MBIA or the Holders of the Notes, or if any breach of
any of the representations and warranties set forth in Sections 3.01(a)(ii),
3.01(a)(v), 3.01(a)(vii) or 3.01(a)(xxi) of the Standard Lease Acquisition
Terms, or (ii) the Indenture Trustee shall fail to receive evidence acceptable
to MBIA that each application for re-titling certificates of title has been
filed within 30 days of the Initial Delivery Date required pursuant to Section
4.03(a) hereof, then in the case of clause (i) above, the Issuer shall require
the Company pursuant to the Lease Acquisition Agreement to eliminate or
otherwise cure the circumstance or condition which has caused such
representation or warranty to be incorrect within 30 days of discovery or notice
thereof, and in the case of clause (ii) above, the Issuer shall require the
Company pursuant to the Lease Acquisition Agreement to deliver all original
certificates of title still in its possession to the Back-up Servicer, who shall
file applications for re-titling the related certificates of title at the
expense of and based on instructions from the Company. In the case of clause (i)
above, if the Company fails or the Company or the Back-up Servicer is unable to
cure such circumstance or condition in accordance with the Lease Acquisition
Agreement, or in the case of clause (ii) above, if the Indenture Trustee shall
fail to receive evidence acceptable to MBIA within 60 days of the Initial
Delivery Date required pursuant to Section 4.03(a) hereof, then the Issuer shall
require the Company to substitute or purchase pursuant to the Lease Acquisition
Agreement for any Lease Contract as to which the certificate of title was not
delivered to the Indenture Trustee within the required time period or such
representation or warranty is incorrect within the time specified in Section
3.03 of the Lease Acquisition Agreement. The proceeds of a purchase shall be
remitted by the Issuer to the Servicer for deposit by the Servicer in the
Collection Account pursuant to Section 3.03(a) of the Standard Servicing Terms.
(c) If the Issuer fails to enforce the purchase or substitution
obligation of the Company under the Lease Acquisition Agreement, the Indenture
Trustee is hereby appointed attorney-in-fact to act on behalf of and in the name
of the Issuer to require such purchase or substitution.
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(d) With respect to (i) any Lease Contract to be prepaid or terminated
early pursuant to Section 3. 10 of the Standard Servicing Terms and (ii) any
Defaulted Lease Contract or Delinquent Lease Contract, the Issuer shall be
entitled to with respect to (ii) above, and shall with respect to (i) above,
upon five Business Days notice to the Indenture Trustee, purchase such Lease
Contract or deliver a Substitute Lease Contract meeting the same requirements as
those specified in Section 3.04 of the Standard Lease Acquisition Terms for
substitutions and purchases by the Company upon breaches of a representation or
warranty by the Company thereunder; provided, however, that (w) the cumulative
Implicit Principal Balance of prepaid or early terminated Lease Contracts on any
Series Lease Schedule which are substituted by the Issuer (measured as of the
date of substitution) shall not exceed 10% of the applicable Series Initial IPB,
(x) the cumulative Implicit Principal Balance of Defaulted Lease Contracts on
any Series Lease Schedule which are purchased or substituted by the Issuer
(measured as of the date of substitution) shall not exceed the Defaulted Lease
Purchase and Substitution Limit times the applicable Series Initial IPB and (y)
the cumulative Implicit Principal Balance of Delinquent Lease Contracts on any
Sublease Schedule which are purchased or substituted by the Issuer (measured as
of the date of substitution) shall not exceed the applicable Delinquent Lease
Purchase and Substitution Limit times the applicable Series Initial IPB.
(e) The Issuer shall comply with the requirements relating to Substitute
Lease Contracts and Warehouse Funded Lease Contracts as set forth in the Lease
Acquisition Agreement within the time periods set forth therein. In addition, in
the case of any new Lease Contracts acquired by the Issuer pursuant to a
Warehouse Funding, the Issuer shall provide to the Indenture Trustee and MBIA,
as applicable, the items listed in Section 3.03(a) hereof which are required to
be delivered to the Indenture Trustee and/or MBIA pursuant to such Section. In
the case of any Substitute Lease Contracts acquired by the Issuer, the Issuer
shall provide to the Indenture Trustee on the applicable date of delivery the
items listed in (i) and (ii) below, and to MBIA the item listed in (i) below. In
the case of any new Lease Contracts acquired by the Issuer pursuant to either a
Warehouse Funding or a substitution of a Lease Contract, the Issuer shall
provide to the Indenture Trustee and MBIA at the end of each calendar quarter
the items listed in (iii) below with respect to any Substitute Lease Contracts
substituted or Lease Contracts acquired through a Warehouse Funding during such
period:
(i) an Amendment to Lease Acquisition Agreement for New Lease
Contracts and an Amendment to Indenture for New Lease Contracts
substantially in the forms of Exhibit A to the Standard Lease
Acquisition Terms and Exhibit B to the Standard Indenture Terms,
respectively, each amendment having attached thereto an Amended Lease
Schedule and subjecting such Substitute Lease Contract to the provisions
thereof and hereof and providing with respect to the Substitute Lease
Contract the information required to supplement the related Series Lease
Schedule, and with respect to titled Equipment, an application to
retitle or originate title in such Equipment, as applicable, in the name
of the Issuer and naming the Indenture Trustee as secured party;
(ii) the original executed counterpart of the Lease Contract
relating to such Substitute Lease Contract and all other items included
in the Lease Contract File; and
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(iii) evidence that financing statements have been filed with
respect to such Substitute Lease Contract or Warehouse Funded Lease
Contract in accordance with Sections 4.01(f), 4.02(b)(vi) and 4.03
hereof.
SECTION 4.05 RELEASES.
(a) The Issuer shall be entitled to obtain a release from the lien of
the Indenture for any Lease Contract and, except in the case of a re-lease under
(iii) below, the related Equipment at any time (i) after a payment by the
Company or the Issuer of the Purchase Price of the Lease Receivable, (ii) after
a Substitute Lease Contract is substituted for such Lease Contract, or (iii)
upon the termination of a Lease Contract following the sale, lease or other
disposition of the related Equipment in accordance with Section 3.01(b)(vii) of
the Standard Servicing Terms, if the Issuer delivers to the Indenture Trustee
and MBIA an Officer's Certificate (A) identifying the Lease Receivable and the
related Lease Contract and Equipment to be released, (B) requesting the release
thereof, (C) setting forth the amount deposited in the Collection Account with
respect thereto, in the event a Lease Contract and the related Equipment are
being released from the lien of this Indenture pursuant to (i) or (iii) above,
and (D) certifying that the amount deposited in the Collection Account (x)
equals the Purchase Price of the Lease Contract, in the event a Lease Contract
and the related Equipment are being released from the lien of the Indenture
pursuant to (i) above or (y) equals the entire amount of Insurance Proceeds,
Recoveries or Residual Proceeds. received with respect to such Lease Contract
and related Equipment in the event of a release from the lien of the Indenture
pursuant to (iii) above.
(b) Upon satisfaction of the conditions specified in subsection (a), the
Indenture Trustee shall release from the lien of the Indenture and deliver to or
upon the order of the Issuer (or to or upon the order of the Company if it has
satisfied its obligations under Section 4.04 hereof and Section 3.04 of the
Lease Acquisition Agreement with respect to a Lease Contract) the Lease
Contract, the Lease Receivable and the Equipment described in the Issuer's
request for release.
SECTION 4.06 TRUST ESTATE.
The Indenture Trustee may, and when required by the provisions of
Articles Four, Five, Six and Twelve hereof shall, execute instruments to release
property from the lien of this Indenture, or convey the Indenture Trustee's
interest in the same, in a manner and under circumstances which are not
inconsistent with the provisions of the Indenture. No party relying upon an
instrument executed by the Indenture Trustee as provided in this Article Four
shall be bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
monies.
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SECTION 4.07 NOTICE OF RELEASE.
The Indenture Trustee shall be entitled to receive at least 10 days'
notice of any action to be taken pursuant to Section 4.05(a) hereof, accompanied
by copies of any instruments involved.
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ARTICLE FIVE
SATISFACTION AND DISCHARGE
SECTION 5.01 SATISFACTION AND DISCHARGE OF INDENTURE.
(a) Following payment in full of (i) all of the Notes, (ii) the fees and
charges of the Indenture Trustee, (iii) all other obligations of the Issuer
under this Indenture and (iv) all amounts owing to MBIA under the Insurance
Agreement, and the release by the Indenture Trustee of the Trust Estate in
accordance with Section 5.01(b) hereof, the Indenture shall be discharged.
Notice of the matters specified in this Section 5.01(a) shall be provided to
Moody's in the manner provided in Section 13.03(e).
(b) Upon payment in full of the amounts referred to in clauses (i)
through (iv) of Section 5.01 (a) hereof, the Issuer may submit to the Indenture
Trustee an Officer's Certificate requesting the release to the Issuer or its
designee of a stated amount of the funds on deposit in the Cash Collateral
Account and some or all of the other Trust Estate (collectively, the "Withdrawn
Collateral"), accompanied by an Opinion of Counsel reasonably acceptable to MBIA
to the effect that, after the release of the Withdrawn Collateral, there will
remain an amount in the Cash Collateral Account or otherwise subject to the
Indenture at least equal to the payments of interest due on the Outstanding
Notes and the Principal Distribution Amounts that am subject to recapture as
preferential transfers pursuant to Section 547 of the Bankruptcy Code or,
alternatively, to the effect that no such payments are subject to recapture. In
rendering such Opinion Of Counsel, such counsel may rely as to factual matters,
including, without limitation, the date on which funds were received and the
source of funds, upon an Officer's Certificate. Promptly after receipt of such
Officer's Certificate, Opinion of Counsel and authorization to release from
MBIA, the Indenture Trustee shall release the Withdrawn Collateral from the lien
of the Indenture, and deliver the Withdrawn Collateral to the Issuer or its
designee. The Issuer shall be entitled to deliver more than one such Officer's
Certificate and Opinion of Counsel until the entire Trust Estate is released and
delivered to the Issuer or its designee. Notwithstanding the foregoing, MBIA may
waive the requirement that the Issuer deliver such Officer's Certificate and/or
Opinion of Counsel and authorize the Indenture Trustee by written direction to
release all or a portion of the Cash Collateral Account or other items of the
Trust Estate from the lien of the Indenture upon payment in full of the amounts
referred to. in clauses (i) through (iv) of Section 5.01(a) hereof.
Notwithstanding termination of this Indenture, the Indenture Trustee shall
remain obligated to make claims under the Note Insurance Policy with respect to
any Preference Claim.
(c) In connection with the discharge of the Indenture and the release of
the Trust Estate, the Indenture Trustee shall release from the lien of the
Indenture and deliver to or upon the order of the Issuer all property remaining
in the Trust Estate and shall execute and file, at the expense of the Issuer,
UCC financing statements evidencing such discharge and release.
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SECTION 5.02 APPLICATION OF TRUST MONEY.
Subject to the last paragraph of Section 7.16 hereof, all monies
deposited with the Indenture Trustee pursuant to Section 5.01 hereof shall be
held in trust, invested in Eligible Investments listed in Section (1) of the
definition thereof, and applied by the Indenture Trustee, in accordance with the
provisions of the Notes and the Indenture, to the payment, either directly or
through any Paying Agent as the Indenture Trustee may determine, to the Persons
entitled thereto, of the principal and interest for whose payment such money
has been deposited with the Indenture Trustee; but such money need not be
segregated from other funds except to the extent required in the, Indenture or
to the extent required by law.
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ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT.
"Event of Default" wherever used herein means any one of the following
events:
(1) default in the payment of any interest upon any Note when the same
becomes due and payable; or
(2) default in the payment of any principal of any Note when the same
becomes due and payable; or
(3) default in the performance of any covenant of the Issuer, or
material breach of any representation or warranty of the Issuer, in the
Indenture, the Lease Acquisition Agreement, the Insurance Agreement or the
Servicing Agreement (other than a covenant or warranty default in the
performance of which or breach of which is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a period
of 30 days after the Issuer has actual knowledge thereof,
(4) the entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer under the Federal
Bankruptcy Code or any other applicable Federal or state bankruptcy, insolvency,
reorganization, liquidation or other similar law now or hereafter in effect or
any arrangement with creditors or appointing a receiver, liquidator, assignee,
trustee, or sequestrator (or other similar official) for the Issuer or for any
substantial part of its property, or ordering the winding up or liquidation of
the Issuer's affairs, and the continuance OF any such decree or order unstayed
and in effect for a period of 60 consecutive days; or
(5) the institution by the Issuer of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by the Issuer to the institution of
bankruptcy or insolvency proceedings against the Issuer, or the filing by the
Issuer of a petition or answer or consent seeking reorganization or relief under
the Federal Bankruptcy Code or any other applicable Federal or state bankruptcy
insolvency, reorganization, liquidation or other similar law now or hereafter in
effect, or the consent by the Issuer to the filing of any such petition or to
the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or other similar official) of the Issuer or
of any substantial part of the Issuer's property, or the making by the Issuer of
any assignment for the benefit of creditors, or the admission by it in writing
of its inability, or the failure by it generally, to pay its debts as they
become due, or the taking of corporate action by the Issuer in furtherance of
any such action.
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SECTION 6.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to any of the Notes at the time
Outstanding occurs and is continuing, then, and in every such case, the
Indenture Trustee shall, at the direction of MBIA, or if there is an MBIA
Default, the Indenture Trustee shall, at the direction of the Holders of not
less than 66-2/3% in Outstanding Principal Amount of all Notes, declare the
principal of all the Notes to be immediately due and payable, by notice given in
writing to the Issuer (and to the Indenture Trustee if given by Noteholders);
provided that, MBIA shall not declare the Outstanding Principal Amount of all of
the Notes immediately due and payable unless it shall have endorsed the Note
Insurance Policies to provide coverage for any shortfall in the payment of
accelerated principal and any interest due on the Outstanding Notes on the date
established for redemption thereof pursuant to such acceleration, and upon any
such declaration, such principal shall become immediately due and payable
without any presentment, demand, protest or other notice of any kind (except
such notices as shall be expressly required by the provisions of the Indenture),
all of which are hereby expressly waived.
At any time after such a declaration of acceleration has been made, but
before any Sale of the Trust Estate has been made or a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article provided, MBIA, or if an MBIA Default has occurred,
the Holders of not less than a majority of the Outstanding Principal Amount of
all Notes, by written notice to the Issuer and the Indenture Trustee, may
rescind and annul such declaration and its consequences (except that in the case
of a payment default on the Notes, the consent of all the Noteholders shall be
required to rescind and annul such a declaration and its consequences) if:
(1) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay
(A) all overdue installments of interest on all Notes;
(B) the principal of any Notes which has become due otherwise
than by such declaration of acceleration and interest thereon at the
rate borne by such Notes from the time such principal first became due
until the date when paid; and
(C) all sums paid or advanced, together with interest thereon, by
the Indenture Trustee, MBIA or any Noteholder hereunder or by MBIA under
the Insurance Agreement or any Note Insurance Policy, and the reasonable
compensation, expenses, disbursements and advances of the Indenture
Trustee, MBIA and the Noteholders, their agents and counsel incurred in
connection with the enforcement of the Indenture to the date of such
payment or deposit; and
(2) all Events of Default, other than the nonpayment of the
principal on any of the Notes which has become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 6.15 hereof.
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No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 6.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
The Issuer covenants that if an Event of Default shall occur and be
continuing and any of the Notes have been declared due and payable and such
declaration has not been rescinded and annulled, the Issuer will, upon demand of
the Indenture Trustee and at the direction of MBIA, pay to the Indenture
Trustee, for the benefit of the Holders of the Notes and MBIA, the whole amount
then due and payable on the Notes for principal and interest, with interest upon
the overdue principal at the rate borne by the Notes and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and MBIA, their respective agents and counsel.
If the Issuer fails to pay such amount forthwith upon such demand, the
Indenture Trustee, in its own name and as Indenture Trustee of an express trust
shall, at the direction of MBIA, and if an MBIA Default has occurred the
Indenture Trustee may, and shall, at the direction of not less than a majority
of the Outstanding Principal Amount of all Notes, institute Proceedings for the
collection of the sums so due and unpaid, and prosecute such Proceeding to
judgment or final decree, and enforce the same against the Issuer and collect
the monies adjudged or decreed to be payable in the manner provided by law out
of the property of the Issuer, wherever situated.
If an Event of Default occurs and is continuing, the Indenture Trustee
shall, at the direction of MBIA, and if an MBIA Default has occurred the
Indenture Trustee may, and shall, at the direction of not less than a majority
of the Outstanding Principal Amount of all Notes, proceed to protect and enforce
its rights and the rights of MBIA by such appropriate Proceedings as the
Indenture Trustee, at the direction of MBIA, or if an MBIA Default has occurred,
at its discretion shall deem most effectual to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in the
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 6.04 REMEDIES.
If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall, at the direction of MBIA, and if an MBIA Default has
occurred, the Indenture Trustee may, and shall, at the direction of not less
than a majority of the Outstanding Principal Amount of all Notes, do one or more
of the following:
(a) institute Proceedings for the collection of all amounts then
due and payable on the Notes or under the Indenture, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer the monies adjudged due;
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(b) take possession of and sell the Trust Estate securing the
Notes or any portion thereof or rights or interest therein, at one or
more Sales called and conducted in any manner permitted by law;
(c) institute any Proceedings from time to time for the complete
or partial foreclosure of the lien created by the Indenture with respect
to the Trust Estate securing the Notes;
(d) during the continuance of a default under a Lease Contract,
exercise any of the rights of the lessor under such Lease Contract; and
(e) exercise any remedies of a secured party under the Uniform
Commercial Code or any applicable law and take any other appropriate
action to protect and enforce the rights and remedies of the Indenture
Trustee, MBIA or the Holders of the Notes hereunder;
provided, however, that without the consent of MBIA, or if an MBIA Default has
occurred, all the Holders of Outstanding Notes, the Indenture Trustee may not
sell or otherwise liquidate any portion of the Trust Estate unless the proceeds
of such Sale or liquidation distributable to the Noteholders are sufficient to
discharge in full the amounts then due and unpaid upon the Notes for principal
and interest together with any amounts owed to MBIA under the Insurance
Agreement.
SECTION 6.05 OPTIONAL PRESERVATION OF TRUST ESTATE.
If (i) an Event of Default shall have occurred and be continuing with
respect to the Notes and (ii) no Notes have been declared due and payable, or
such declaration and its consequences have been annulled and rescinded, the
Indenture Trustee shall, at the direction of MBIA. or if an MBIA Default has
occurred, the Indenture Trustee may in its sole discretion if it determines it
to be in the best interests of the Holders of the Notes and shall, upon request
from the Holders of a majority in Outstanding Principal Amount of all Notes,
elect, by giving written notice of such election to the Issuer, to take
possession of and retain the Trust Estate securing the Notes intact, collect or
cause the collection of the proceeds thereof and make and apply all payments and
deposits and maintain all accounts in respect of such Notes in accordance with
the provisions of Article Twelve of the Indenture. If the Indenture Trustee is
unable to or is stayed from giving such notice to the Issuer for any reason
whatsoever, such election shall be effective as of the time of such
determination or request, as the case may be, notwithstanding any failure to
give such notice, and the Indenture Trustee shall give such notice upon
the removal or cure of such inability or stay (but shall have no obligation to
effect such removal or cure). Any such election may be rescinded with respect to
any portion of the Trust Estate securing the Notes remaining at the time of such
rescission by written notice to the Indenture Trustee and the Issuer from MBIA
or, if an MBIA Default has occurred, from the Holders of a majority in
Outstanding Principal Amount of all Notes.
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SECTION 6.06 INDENTURE TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial Proceeding relating to the Issuer or any other obligor upon any of the
Notes or the property of the Issuer or of such other obligor or their creditors,
the Indenture Trustee (irrespective of whether the principal of any of the Notes
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Indenture Trustee shall have made any
demand on the Issuer for the payment of overdue principal or interest) shall be
entitled and empowered, to intervene in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of
the Notes issued hereunder and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its
agents and counsel and any other amounts due the Indenture Trustee under
Section 7.07 hereof) and of MBIA and the Noteholders allowed in such
judicial Proceeding, and
(ii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such judicial Proceeding is hereby authorized by MBIA
and each Noteholder to make such payments to the Indenture Trustee, and in the
event that the Indenture Trustee shall consent to the making of such payments
directly to MBIA or the Noteholders, to pay to the Indenture Trustee any amount
due to it for the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee, its agents and counsel, and any other amounts due the
Indenture Trustee under Section 7.07 hereof.
Nothing contained in the Indenture shall be deemed to authorize the
Indenture Trustee to authorize or consent to or accept or adopt on behalf of
MBIA or any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting MBIA or any of the Notes or the rights of any Holder
thereof, or to authorize the Indenture Trustee to vote in respect of the claim
of MBIA or any Noteholder in any such Proceeding.
SECTION 6.07 INDENTURE TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
NOTES.
(a) In all Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all of the Noteholders, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.
(b) All rights of actions and claims under the Indenture or any of
the Notes may be prosecuted and enforced by the Indenture Trustee without the
possession of any of the Notes or the
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production thereof in any Proceeding relating thereto, and any such Proceedings
instituted by the Indenture Trustee shall be brought in its own name as
Indenture Trustee of an express trust, and any recovery whether by judgment,
settlement or otherwise shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee, its
agents and counsel, be for MBIA and the ratable benefit of the Holders of the
Notes.
SECTION 6.08 APPLICATION OF MONEY COLLECTED.
If the Notes have been declared due and payable following an Event of
Default and such declaration has not been rescinded or annulled, any money
collected by the Indenture Trustee with respect to the Notes pursuant to this
Article Six or otherwise and any other money that may be held thereafter by the
Indenture Trustee as security for the Notes shall be applied in the following
order, at the date or dates fixed by the Indenture Trustee and, in case of the
distribution of such money on account of, principal or interest, upon
presentation of the Notes and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid; provided that proceeds
of a claim under an Note Insurance Policy will be used only to pay fees,
interest and principal on the applicable Series in the manner set forth in
clauses Fourth and Fifth below:
FIRST: To the payment of all amounts due the Servicer pursuant to
Section 3.09 of the Servicing Agreement and Section 12.02(d)(i) hereof and to
pay the Servicer the amount necessary to reimburse the Servicer for any other
unrecovered Servicer Advances;
SECOND: To the payment to the Indenture Trustee of the Trustee Fee then
due, to the payment to the Back-up Servicer of the Back-up Servicer Fee then
due;
THIRD: To the payment to MBIA of the MBIA Premium then due;
FOURTH: To the payment of the amounts then due and unpaid upon the Notes
of each Series for interest, with interest (to the extent such interest has been
collected by the Indenture Trustee or a sum sufficient therefor has been so
collected and payment thereof is legally enforceable at the respective rate or
rates prescribed therefor in the Notes) on overdue principal, in the proportion
in which the Outstanding Principal Amount of each Series represents of the
Outstanding Principal Amount of all Series, without preference or priority of
any kind, according to the amounts due and payable on the Notes for interest;
FIFTH: To the payments of the remaining Outstanding Principal Amount of
the Notes, in the proportion in which the Outstanding Principal Amount of each
Series represents of the Outstanding Principal Amount of all Series, without
preference or priority of any kind;
SIXTH: To the payment to MBIA of any amounts previously paid by MBIA
under any of the Note Insurance Policies and not theretofore repaid, together
with interest thereon and any other amounts due under the Insurance Agreement;
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SEVENTH: In the event an MBIA Default has occurred, to reimburse the
Noteholders for any costs or expenses incurred in connection with any
enforcement action with respect to the Indenture or the Notes;
EIGHTH: In the event an MBIA Default has occurred, to the payment of
any fees and expenses to a Warehouse Lender not paid pursuant to clause Fourth
above, and to the payment of any surplus to or at the written direction of the
Issuer or any other person legally entitled thereto;
NINTH: To the payment to the Servicer of any other amounts due the
Servicer as expressly provided herein and in the Servicing Agreement;
TENTH: To the payment to the Indenture Trustee and the Back-up
Servicer, any other amounts due to the Indenture Trustee or the Back-up Servicer
as expressly provided herein and in the Servicing Agreement;
ELEVENTH: To pay to MBIA any other amounts owing under the Insurance
Agreement;
TWELFTH: To reimburse MBIA and the Noteholders for any costs or
expenses incurred in connection with any enforcement action with respect to the
Indenture or the Notes;
THIRTEENTH: To the payment of any fees and expenses to a Warehouse
Lender not paid pursuant to clause Fourth above, and to the payment of any
surplus to or at the written direction of the Issuer or any other person legally
entitled thereto.
SECTION 6.09 LIMITATION ON SUITS.
No Holder of any Note shall have any right to institute any Proceeding,
judicial or otherwise, with respect to the Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder for so long as an MBIA
Default has not occurred, and if an MBIA Default has occurred, unless
(1) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(2) the Holders of not less than 66-2/3% in Outstanding Principal
Amount of all Notes shall have made written request to the Indenture
Trustee to institute Proceedings in respect of such Event of Default in
its own name as Indenture Trustee hereunder;
(3) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
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(4) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of security or indemnity has failed to
institute any such Proceedings; and
(5) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders
of 66-2/3% or more in Outstanding Principal Amount of all Notes; it
being understood and intended that no one or more Holders of Notes shall
have any right in any manner whatever by virtue of, or by availing of,
any provision of the Indenture to affect, disturb or prejudice the
rights of any other Holders of Notes, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right
under the Indenture, except in the manner herein provided and for the
equal and ratable benefit of all the Holders of Notes.
SECTION 6.10 UNCONDITIONAL RIGHT OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provision in the Indenture, the Holder of any
Note shall have the right, which is absolute and unconditional, to receive
payment of the principal, interest, and premium, if any, on such Note as such
principal, interest, and premium, if any, becomes due and payable and to
institute any Proceeding for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Holder.
SECTION 6.11 RESTORATION OF RIGHTS AND REMEDIES.
If the Indenture Trustee, MBIA or any Noteholder has instituted any
Proceeding to enforce any right or remedy under the Indenture and such
Proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Indenture Trustee, MBIA or to such Noteholder,
then, and in every case, the Issuer, the Indenture Trustee, MBIA and the
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Indenture Trustee, MBIA and the Noteholders shall
continue as though no such Proceeding had been instituted.
SECTION 6.12 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes in the last paragraph of Section
2.07 hereof, no right or remedy herein conferred upon or reserved to the
Indenture Trustee, MBIA or to the Noteholders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
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SECTION 6.13 DELAY OR OMISSION; NOT WAIVER.
No delay or omission of the Indenture Trustee, MBIA or of any Holder of
any Note to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or any acquiescence therein. Every right and remedy given by this
Article Six or by law to the Indenture Trustee, MBIA or to the Noteholders may
be exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee, MBIA or by the Noteholders, as the case may be, subject in
each case, however, to the right of MBIA to control any such right and remedy
except as provided in Section 13.14 hereof.
SECTION 6.14 CONTROL BY NOTEHOLDERS.
MBIA or, if an MBIA Default has occurred, the Holders of a majority in
Outstanding Principal Amount of all Notes, shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee or exercising any trust or power conferred on the
Indenture Trustee; provided that:
(1) such direction shall not be in conflict with any rule of law
or with the Indenture including, without limitation, any provision
hereof which expressly provides for approval by a greater percentage of
Outstanding Principal Amount of all Notes;
(2) any direction to the Indenture Trustee by the Noteholders to
undertake a private sale of the Trust Estate shall be by the Holders of
all Outstanding Notes, unless the condition set forth in Section
6.18(b)(ii) hereof is met;
(3) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee which is not inconsistent with such
direction; provided, however, that, subject to Section 7.01 hereof, the
Indenture Trustee need not take any action which a Responsible Officer
or Officers of the Indenture Trustee in good faith determines might
involve it in personal liability or be unjustly prejudicial to the
Noteholders not consenting; and
(4) the Indenture Trustee has been furnished reasonable
indemnity against costs, expenses and liabilities which it might incur
in connection therewith as provided in Section 7.01(f) hereof.
SECTION 6.15 WAIVER OF PAST DEFAULTS.
MBIA, or if an MBIA Default has occurred, the Holders of 66-2/3% in
Outstanding Principal Amount of all Notes, may on behalf of the Holders of all
the Notes waive any past Default hereunder and its consequences, except a
Default:
(1) in the payment of the principal of, or premium, if any, or
interest on any Note, or a Default described in Sections 6.01(4) and (5)
hereof, or
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(2) in respect of a covenant or provision hereof which under
Article Nine hereof cannot be modified or amended without the consent of
the Holder of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of the Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.16 UNDERTAKING FOR COSTS.
All parties to the Indenture agree, and each Holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
the Indenture, or in any suit against the Indenture Trustee for any action
taken, suffered or omitted by it as Indenture Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 6.16 shall not apply to any suit instituted
by the Indenture Trustee or MBIA, or to any suit instituted by any Noteholder or
group of Noteholders, holding in the aggregate more than 50% in Outstanding
Principal Amount of all Notes, or to any suit instituted by any Noteholder for
the enforcement of the payment of the principal of or interest on any Note on or
after the Stated Maturity expressed in such Note.
SECTION 6.17 WAIVER OF STAY OR EXTENSION LAWS.
The Issuer covenants (to the extent that it may lawfully do so) that it
will not, at any time, insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of the Indenture; and the Issuer (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 6.18 SALE OF TRUST ESTATE.
(a) The power to effect any sale (a "Sale") of any portion of the Trust
Estate pursuant to Section 6.04 hereof shall not be exhausted by any one or more
Sales as to any portion of the Trust Estate remaining unsold, but shall continue
unimpaired until the entire Trust Estate securing the Notes shall have been sold
or all amounts payable on the Notes and under the Indenture with respect thereto
shall have been paid. The Indenture Trustee may from time to time postpone any
Sale by public announcement made at the time and place of such Sale.
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(b) To the extent permitted by applicable law, the Indenture Trustee
shall not, in any private Sale, sell to a third party the Trust Estate, or any
portion thereof unless:
(i) MBIA, or if an MBIA Default has occurred the Holders of all
Outstanding Notes, consent to or direct the Indenture Trustee to make
such Sale; or
(ii) if an MBIA Default has occurred, the proceeds of such Sale
would not be less than the sum of all amounts due to the Indenture
Trustee hereunder and the Outstanding Principal Amount of all notes and
interest due or to become due thereon on the Payment Date next
succeeding such Sale together with any amounts owing to MBIA under the
Insurance Agreement.
(c) The Indenture Trustee, MBIA or the Noteholders may bid for and
acquire any portion of the Trust Estate in connection with a public Sale
thereof, and in lieu of paying cash therefor, any Noteholder may make settlement
for the purchase price by crediting against amounts owing on the Notes of such
Holder or other amounts owing to such Holder secured by the Indenture, that
portion of the net proceeds of such Sale to which such Holder would be entitled,
after deducting the reasonable costs, charges and expenses incurred by the
Indenture Trustee, MBIA or the Noteholders in connection with such Sale. The
Notes need not be produced in order to complete any such Sale, or in order for
the net proceeds of such Sale to be credited against the Notes. The Indenture
Trustee, MBIA or the Noteholders may hold, lease, operate, manage or otherwise
deal with any property so acquired in any manner permitted by law.
(d) The Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the Trust
Estate in connection with a Sale thereof. In addition, the Indenture Trustee is
hereby irrevocably appointed the agent and attorney-in-fact of the Issuer to
transfer and convey its interest in any portion of the Trust Estate in
connection with a Sale thereof, and to take all action necessary to effect such
Sale. No purchaser or transferee at such a sale shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any monies.
(e) The method, manner, time, place and terms of any Sale of all or
any portion of the Trust Estate shall be commercially reasonable.
SECTION 6.19 ACTION ON NOTES.
The Indenture Trustee's right to seek and recover judgment on the Notes
or under the Indenture shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to the Indenture. Neither
the lien of the Indenture nor any rights or remedies of the Indenture Trustee or
the Noteholders shall be impaired by the recovery of any judgment by the
Indenture Trustee against the Issuer or by the levy of any execution under such
judgment upon any portion of the Trust Estate or upon any of the assets of the
Issuer.
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ARTICLE SEVEN
THE INDENTURE TRUSTEE
SECTION 7.01 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default known to the
Indenture Trustee as provided in subsection (e) below:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in the Indenture, and no
implied covenants or obligations shall be read into the Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith or negligence on its part, the
Indenture Trustee may conclusively rely as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of the Indenture; but in the case of any
such certificates or opinions, which by any provision hereof are
specifically required to be furnished to the Indenture Trustee, the
Indenture Trustee shall be under a duty to examine the same and to
determine whether or not they conform to the requirements of the
Indenture.
(b) In case an Event of Default known to the Indenture Trustee as
provided in subsection (e) below has occurred and is continuing, the Indenture
Trustee shall exercise such of the rights and powers vested in it by the
Indenture, and shall use the same degree of care and skill in its exercise, as a
reasonable person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(c) No provision of the Indenture shall be construed to relieve the
Indenture Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct or bad faith, except that:
(i) this subsection (c) shall not be construed to limit the
effect of subsection (a) of this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Indenture
Trustee, unless it shall be proved that the Indenture Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Indenture Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of MBIA or the Holders of a majority (or
other such percentage as may be required by the terms hereof) in
Outstanding Principal Amount of all Notes in accordance with Section
6.14 hereof relating to the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee, or
exercising any trust
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or power conferred upon the Indenture Trustee, under the Indenture, the
Lease Acquisition Agreement or the Servicing Agreement; and
(iv) no provision of the Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it, provided
that nothing contained in the Indenture shall excuse the Indenture
Trustee for failure to perform its duties as Indenture Trustee under the
Indenture.
(d) Whether or not therein expressly so provided, every provision of the
Indenture relating to the conduct or affecting the liability of or affording
protection to the Indenture Trustee shall be subject to the provisions of this
Section 7.01.
(e) For all purposes under the Indenture, the Indenture Trustee shall
not be deemed to have notice of any Event of Default described in Section
6.01(4) or 6.01(5) hereof or any Default described in Section 6.01(3) hereof or
of any Trigger Event unless a Responsible Officer assigned to and working in the
Indenture Trustee's corporate trust department has actual knowledge thereof or
unless written notice of any event which is in fact such an Event of Default,
Default or Trigger Event is received by the Indenture Trustee at the Corporate
Trust Office, and such notice references any of the Notes generally, the Issuer,
the Trust Estate or the Indenture.
(f) The Indenture Trustee shall be under no obligation to institute any
suit, or to take any remedial proceeding under the Indenture, or to enter any
appearance or in any way defend in any suit in which it may be made defendant,
or to take any steps in the execution of the trusts hereby created or in the
enforcement of any rights and powers hereunder until it shall be indemnified to
its satisfaction against any and all costs and expenses, outlays and counsel
fees and other reasonable disbursements and against all liability, except
liability that is adjudicated, in connection with any action so taken.
(g) Notwithstanding any extinguishment of All right, title and interest
of the Issuer in and to the Trust Estate following an Event of Default and a
consequent declaration of acceleration of the maturity of any of the Notes,
whether such extinguishment occurs through a Sale of the Trust Estate to another
person, the acquisition of the Trust Estate by the Indenture Trustee with
respect to the Trust Estate (or the proceeds thereof) and the Noteholders and
the rights of the Noteholders shall continue to be governed by the terms of the
Indenture.
(h) Notwithstanding anything to the contrary contained herein, the
provisions of subsections (e) through (g), inclusive, of this Section 7.01 shall
be subject to the provisions of subsections (a) through (c), inclusive, of this
Section 7.01.
(j) The Indenture Trustee shall provide the reports and accountings as
required pursuant to Section 12.04 hereof.
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SECTION 7.02 NOTICE OF DEFAULT AND TRIGGER EVENTS.
Promptly after the occurrence of any Default or Trigger Event known to
the Indenture Trustee (within the meaning of Section 7.01 (e) hereof) which is
continuing, within one Business Day of obtaining such knowledge, the Indenture
Trustee shall transmit by telephonic or telegraphic communication confirmed by
mail to MBIA and the Issuer and by mail to all Holders of Notes, as their names
and addresses appear on the Note Register, notice of such Default or Trigger
Event hereunder known to the Indenture Trustee, unless in the case of notice of
Default to Noteholders, such Default shall have been promptly cured or waived.
SECTION 7.03 CERTAIN RIGHTS OF INDENTURE TRUSTEE.
Except as otherwise provided in Section 7.01,
(a) the Indenture Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note or other
obligation, paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by a Issuer Request or Issuer Order and any resolution of
the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of the Indenture the Indenture
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Indenture Trustee
(unless other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate;
(d) the Indenture Trustee may consult with counsel and the written
advice of such counsel selected by the Indenture Trustee with due care or any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon;
(e) the Indenture Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by the Indenture at the request or
direction of any of the Noteholders pursuant to the Indenture, unless such
Noteholders shall have offered to the Indenture Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;
(f) the Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
note or other paper or document, but the Indenture Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Indenture Trustee shall determine to make such further
inquiry or investigation, it shall
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be entitled to examine the books, records and premises of the Issuer, upon
reasonable notice and at reasonable times personally or by agent or attorney;
and
(g) the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys.
SECTION 7.04 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF NOTES.
(a) The recitals contained in the Indenture and in the Notes, except the
certificates of authentication on the Notes, shall be taken as the statements
of the Issuer, and the Indenture Trustee assumes no responsibility for their
correctness. The Indenture Trustee makes no representations as to the validity
or condition of the Trust Estate or any part thereof, or as to the title of the
Issuer thereto or as to the security afforded thereby or hereby, or as to the
validity or genuineness of any securities at any time pledged and deposited with
the Indenture Trustee hereunder or as to the validity or sufficiency of the
Indenture or any of the Notes. The Indenture Trustee shall not be accountable
for the use or application by the Issuer of any of the Notes or the proceeds
thereof or of any money paid to the Issuer or upon Issuer Order under any
provisions hereof
(b) Except as otherwise expressly provided herein and without limiting
the generality of the foregoing, the Indenture Trustee shall have no
responsibility or liability for or with respect to the existence or validity of
any Equipment or Lease Contract, the perfection of any security interest
(whether as of the date hereof or at any future time), the maintenance of or the
taking of any action to maintain such perfection, the validity of the assignment
of any portion of the Trust Estate to the Indenture Trustee or of any
intervening assignment, the review of any Lease Contract (it being understood
that the Indenture Trustee has not reviewed and does not intend to review the
substance or form of any such Lease Contract), the performance or enforcement of
any Lease Contract, the validity and sufficiency of the Note Insurance Policies,
the compliance by the Issuer or the Servicer with any covenant or the breach by
the Issuer or the Servicer of any warranty or representation made hereunder or
in any related document or the accuracy of any such warranty or representation,
any investment of monies in the Collection Account or any loss resulting
therefrom, the acts or omissions of the Issuer, the Servicer, MBIA or any
Customer, any action of the Servicer taken in the name of the Indenture Trustee,
or the validity of the Servicing Agreement or the Lease Acquisition Agreement.
(c) The Indenture Trustee shall not have any obligation or liability
under any Lease Contract by reason of or arising out of the Indenture or the
granting of a security interest in such Lease Contract hereunder or the receipt
by the Indenture Trustee of any payment relating to any Lease Contract pursuant
hereto, nor shall the Indenture Trustee be required or obligated in any manner
to perform or fulfill any of the obligations of the Issuer under or pursuant to
any Lease Contract, or to make any payment, or to make any inquiry as to the
nature or the sufficiency of any payment received by it, or the sufficiency of
any performance by any party, under any Lease Contract.
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SECTION 7.05 MAY HOLD NOTES.
The Indenture Trustee, the Servicer, any Paying Agent, the Note
Registrar, any Authenticating Agent or any other agent of the Issuer, in its
individual or any other capacity, may become the owner or pledgee of Notes, and
if operative, may otherwise deal with the Issuer with the same rights it would
have if it were not Indenture Trustee, Servicer, Paying Agent, Note Registrar,
Authenticating Agent or such other agent.
SECTION 7.06 MONEY HELD IN TRUST.
Money and investments held in trust by the Indenture Trustee or any
Paying Agent hereunder shall be held in one or more trust accounts hereunder but
need not be segregated from other funds except to the extent required in the
Indenture or required by law. The Indenture Trustee or any Paying Agent shall
be under no liability for interest on any money received by it hereunder except
as otherwise agreed with the Issuer or otherwise specifically provided in the
Indenture.
SECTION 7.07 COMPENSATION AND REIMBURSEMENT.
The Issuer agrees:
(i) to pay the Indenture Trustee monthly its fee for all services
rendered by it hereunder as Indenture Trustee, in the amount of the
Trustee Fee (which compensation shall not otherwise be limited by any
provision of law in regard to the compensation of a trustee of an
express trust), and to pay to the Back-up Servicer its fee for all
services rendered hereunder and under the Servicing Agreement as Back-up
Servicer, in the amount of the Back-up Servicer Fee;
(ii) except as otherwise expressly provided herein or in the
Specific Indenture Terms, to reimburse the Indenture Trustee or the
Back-up Servicer upon its request for all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by the Indenture
Trustee or the Back-up Servicer in accordance with any provision of the
Indenture or Servicing Agreement (including the reasonable compensation
and the expenses and disbursements of the Indenture Trustee's and
Back-up Servicer's agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(iii) to indemnify and hold harmless the Trust and the Indenture
Trustee from and against any loss, liability, expense, damage or injury
(other than those attributable to a Noteholder in its capacity as an
investor in any of the Notes) sustained or suffered pursuant to the
Indenture by reason of any acts, omissions or alleged acts or omissions
arising out of activities of the Trust or the Indenture Trustee
(including without limitation any violation of any applicable laws by
the Issuer as a result of the transactions contemplated by the
Indenture), including, but not limited to, any judgment, award,
settlement, reasonable attorneys' fees and other expenses incurred in
connection with the defense of any actual or threatened action,
proceeding
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or claim; provided that the Issuer shall not indemnify the Indenture
Trustee if such loss, liability, expense, damage or injury is due to the
Indenture Trustee's gross negligence or willful misconduct, willful
misfeasance or bad faith in the performance of duties. Any
indemnification pursuant to this Section shall only be payable from the
assets of the Issuer and shall not be payable from the assets of the
Trust. The provisions of this indemnity shall run directly to and be
enforceable by an injured person subject to the limitations hereof and
this indemnification agreement shall survive the termination of the
Indenture.
Upon the occurrence of an Event of Default resulting in an acceleration
of maturity of the Notes that has not been rescinded and annulled, the
Indenture Trustee shall have, as security for the performance of the Issuer
under this Section 7.07, a lien ranking senior to the lien of the Notes with
respect to which any claim of the Indenture Trustee under this Section 7.07
arose upon all property and funds held or collected as part of the Trust Estate
by the Indenture Trustee in its capacity as such except the Indenture Trustee
shall have no liens on the amounts paid under any of the Note Insurance
Policies. The Indenture Trustee shall not institute any Proceeding seeking the
enforcement of such lien against any Trust Estate unless directed to do so by
MBIA and (i) such Proceeding is in connection with a proceeding in accordance
with Article Six hereof for enforcement of the lien of the Indenture for the
benefit of the Holders of the Notes secured by such Trust Estate after the
occurrence of an Event of Default (other than an Event of Default due solely to
a breach of this Section 7.07) and a resulting declaration of acceleration of
maturity of such Notes that has not been rescinded and annulled, or (ii) such
Proceeding does not result in or cause a Sale or other disposition of such Trust
Estate. All monies so collected by the Indenture Trustee shall be applied in
accordance with Section 6.08 hereof.
SECTION 7.08 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a trustee hereunder which shall be a
corporation or association organized and doing business under the laws of the
United States of America or of any state, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$100,000,000, subject to supervision or examination by Federal or state
authority and having an office within the United States of America, and which
shall have a commercial paper or other short-term rating of the highest short
term rating categories by the Rating Agencies, or a long term rating of Baa3 or
higher or otherwise acceptable to the Rating Agencies. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Indenture Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
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SECTION 7.09 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Indenture
Trustee under Section 7.10 hereof.
(b) The Indenture Trustee may resign at any time by giving 30 days'
written notice thereof to the Issuer, ▇▇▇▇ and to each Noteholder. If an
instrument of acceptance by a successor Indenture Trustee shall not have been
delivered to the Indenture Trustee within 30 days after the giving of such
notice of resignation, the resigning Indenture Trustee may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor Indenture Trustee.
(c) The Indenture Trustee may be removed by MBIA, or if an MBIA
Default has occurred, by the Holders of 66-2/3% in Outstanding Principal Amount
of all Notes, at any time if one of the following events have occurred:
(i) the Indenture Trustee shall cease to be eligible under
Section 7.08 hereof and shall fail to resign after written request
therefor by the Issuer, MBIA or by any Noteholder, or
(ii) the Indenture Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Indenture
Trustee or of its property shall be appointed or any public officer
shall take charge or control of the Indenture Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or
liquidation, or
(iii) the Indenture Trustee has failed to perform its duties in
the Indenture or has breached any representation of warranty made in
the Indenture.
(d) If the Indenture Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Indenture
Trustee for any cause with respect to any of the Notes, the Issuer by a Board
Resolution, shall promptly appoint a successor Indenture Trustee reasonably
satisfactory to MBIA. If no successor Indenture Trustee shall have been so
appointed by the Issuer within 30 days of notice of removal or resignation and
shall have accepted appointment in the manner hereinafter provided, then MBIA
may appoint a successor Indenture Trustee. If MBIA shall fail to appoint a
successor Indenture Trustee within 90 days, then 66-2/3% in Outstanding
Principal Amount of all Notes may petition any court of competent jurisdiction
for the appointment of a successor Indenture Trustee with respect to the Notes.
(e) The Issuer shall give notice in the manner provided in Section
13.04 hereof of each resignation and each removal of the Indenture Trustee and
each appointment of a successor Indenture Trustee with respect to the Notes and
notice shall be provided in the manner provided in Section
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separate Indenture Trustee that has so resigned or been removed may be appointed
in the manner provided in this Section;
(iv) no co-Indenture Trustee or separate Indenture Trustee
hereunder shall be personally liable by reason of any act or omission of
the Indenture Trustee or any other such Indenture Trustee hereunder nor
shall the Indenture Trustee be liable by reason of any act or omission
of any co-Indenture Trustee or separate Indenture Trustee selected by
the Indenture Trustee with due care or appointed in accordance with
directions to the Indenture Trustee pursuant to Section 6.14; and
(v) any Act of Noteholders delivered to the Indenture Trustee
shall be deemed to have been delivered to each such co-Indenture Trustee
and separate Indenture Trustee.
SECTION 7.13 RIGHTS WITH RESPECT TO THE SERVICER.
The Indenture Trustee's rights and obligations with respect to the
Servicer and the Back-up Servicer shall be governed by the Servicing Agreement.
SECTION 7.14 APPOINTMENT OF AUTHENTICATING AGENT.
The Indenture Trustee may appoint an Authenticating Agent or Agents with
respect to the Notes which shall be authorized to act on behalf of the Indenture
Trustee to authenticate Notes issued upon original issue or upon exchange,
registration of transfer or pursuant to Section 2.05 hereof, and Notes so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Indenture
Trustee hereunder. Wherever reference is made in the Indenture to the
authentication and delivery of Notes by the Indenture Trustee or the Indenture
Trustee's certificate of authentication or the delivery of Notes to the
Indenture Trustee for authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Indenture Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Indenture Trustee by an Authenticating Agent and delivery of the Notes to
the Authenticating Agent on behalf of the Indenture Trustee. Each Authenticating
Agent shall be acceptable to the Issuer, MBIA and the Noteholders and shall
at all times be a corporation having a combined capital and surplus of not less
than the equivalent of $50,000,000 and subject to supervision or examination
by Federal or state authority or the equivalent foreign authority, in the case
of an Authenticating Agent who is not organized and doing business under the
laws of the United States of America, any state thereof or the District of
Columbia. It such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
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Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Indenture Trustee or such Authenticating Agent; provided,
such corporation shall be otherwise eligible under this Section.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Indenture Trustee, MBIA and to the Issuer. The Indenture Trustee
may at any time terminate the agency of an Authenticating Agent by giving
written notice thereof to such Authenticating Agent, MBIA and to the Issuer.
Upon receiving such a notice of resignation or upon such a termination, or in
case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Indenture Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the Issuer
and MBIA and shall mail written notice of such appointment by first-class mail,
postage prepaid, to all Holders of Notes, if any, with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the Note
Register. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Indenture Trustee may pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section; provided,
however, the Indenture Trustee shall not be entitled to be reimbursed for such
payments.
If an appointment is made pursuant to this Section, the Notes may have
endorsed thereon, in addition to the Indenture Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
This is one of the Notes described in the within-mentioned Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
As Indenture Trustee
By:______________________________
As Authenticating Agent
By:______________________________
Authorized Officer
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SECTION 7.15 INDENTURE TRUSTEE TO HOLD LEASE CONTRACTS.
The Indenture Trustee hereby acknowledges receipt (subject to any
exceptions as may be noted by the Indenture Trustee to the Servicer and MBIA
within 10 days of the related Delivery Date) of and shall hold each Lease
Contract together with any documents relating thereto that may from time to time
be delivered to the Indenture Trustee, until such time as such Lease Contract is
released from the lien of the Indenture pursuant to the terms of the Indenture.
The Indenture Trustee shall be under no duty or obligation to inspect,
review or examine the Lease Contracts and other documents to determine that the
same are genuine, enforceable or appropriate for the represented purpose or
that they have actually been recorded or that they are other than what they
purport to be on their face.
SECTION 7.16 MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.
The Indenture Trustee shall execute and deliver, and if there is any
Paying Agent other than the Indenture Trustee, the Issuer will cause each Paying
Agent other than the Indenture Trustee to execute and deliver to the Indenture
Trustee and MBIA an instrument in which such Paying Agent shall agree with the
Indenture Trustee that, subject to the provisions of this Section, such Paying
Agent will:
(i) hold all sums held by it for the payment of principal or interest on
Notes in trust for the benefit of the Noteholders entitled thereto and
MBIA until such sums shall be paid to such Persons or otherwise disposed
of as herein provided;
(ii) give the Indenture Trustee, MBIA and the Noteholders notice of any
Default by the Issuer (or any other obligor upon the Notes) in the
making of any payment of principal or interest; and
(iii) at any time during the continuance of any such Default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of the Indenture or for any other purpose, pay, or by
Issuer Order direct any Paying Agent to pay, to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which such sums were held by such
Paying Agent; and, upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Indenture Trustee or any Paying Agent in
trust for the payment of the principal or interest on any Note and remaining
unclaimed for three years after such principal or interest has become due and
payable shall be paid to the Issuer on Issuer Request or to MBIA (upon its
written request) if such payment had been made by MBIA; and the Holder of such
Note shall thereafter, as an unsecured general creditor, and subject to any
applicable statute of
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limitations, look only to the Issuer for payment thereof, and all liability of
the Indenture Trustee, such Paying Agent or MBIA with respect to such trust
money or the related Note, shall thereupon cease; PROVIDED, HOWEVER, that the
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Issuer cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the city in which the Corporate Trust
Office is located, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Issuer, and provided, further, that any amounts held that are
proceeds of a claim made under an Note Insurance Policy shall be returned to
MBIA, and the Noteholders shall look only to MBIA for such payments. The
Indenture Trustee may also adopt and employ, at the expense of the Issuer, any
other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Noteholders whose right to or
interest in monies due and payable but not claimed is determinable from the
records of any Paying Agent, at the last address as shown on the Note Register
for each such Noteholder).
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ARTICLE EIGHT
THE NOTE INSURANCE POLICIES
SECTION 8.01 PAYMENTS UNDER THE NOTE INSURANCE POLICIES.
If on the close of business on the second Business Day prior to any
Payment Date, the funds on deposit in the Collection Account are not sufficient
to make the payment of any fees due to a Warehouse Lender under a Series of
Warehouse Notes or interest due on the Outstanding Notes of the applicable
Series on such Payment Date, in each case in accordance with Section
12.02(d)(vi) hereof, the Indenture Trustee shall, no later than 10:00 a.m. New
York time, on the Business Day immediately preceding such Payment Date make a
claim under the applicable Note Insurance Policy in an amount equal to such
insufficiency. In addition, if on the close of business on the second Business
Day immediately prior to any Stated Maturity the funds on deposit in the
Collection Account are not sufficient to pay the entire Outstanding Principal
Amount of all Notes of the applicable Series (after giving effect to the
application of funds available to pay the Pro Rata Share of the Principal
Distribution Amount of each Outstanding Series in accordance with Section
12.02(d)(vii) hereof), the Indenture Trustee shall, no later than 10:00 a.m. New
York time, on the Business Day immediately preceding such Payment Date, make a
claim under the applicable Note Insurance Policy in an amount equal to such
insufficiency. Proceeds of claims on the Note Insurance Policies shall be
deposited in the Collection Account or the Redemption Account, as applicable,
and used solely to pay amounts due in respect of interest on the applicable
Notes on each Payment Date and principal of the applicable Notes at the Stated
Maturity.
In addition, on any day that the Indenture Trustee has actual knowledge
or receives notice that any amount previously paid to a Noteholder has been
subsequently recovered from such Noteholder pursuant to a final order of a
court of competent jurisdiction that such payment constitutes an avoidable
preference within the meaning of any applicable bankruptcy law to such
Noteholder (a "Preference Claim"), the Indenture Trustee shall make a claim
within one Business Day upon the relevant Note Insurance Policy for the full
amount of such Preference Claim in accordance with the terms of such Note
Insurance Policy. Any proceeds of any such Preference Claim received by the
Indenture Trustee shall be paid to the related Noteholders.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
The Issuer, the Servicer, the Back-up Servicer and the Indenture
Trustee, with the consent of MBIA but without the consent of the Holders of any
Notes, at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Indenture Trustee, for any of
the following purposes, provided that any such amendment, as evidenced by an
Opinion of Counsel if requested by the Indenture Trustee, will not have a
material adverse affect on Noteholders:
(1) to correct or amplify the description of any property at any
time subject to the lien of the Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required
to be subjected to the lien of the Indenture, or to subject to the lien
of the Indenture additional property; or
(2) to evidence the succession of another Person to the Issuer,
and the assumption by such successor of the covenants of the Issuer
herein and in the Notes contained, in accordance with Section 11.02(p)
hereof; or
(3) to add to the covenants of the Issuer, for the benefit of
MBIA or the Holders of all Notes, or to surrender any right or power
herein conferred upon the Issuer; or
(4) to convey, transfer, assign, mortgage or pledge any property
to or with the Indenture Trustee; or
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provisions
with respect to matters or questions arising under the Indenture, which
shall not be inconsistent with the provisions of the Indenture, provided
that such action shall not adversely affect the interests of the
Holders of the Notes; or
(6) to evidence the succession of the Indenture Trustee pursuant
to Article Seven hereof; or
(7) to add to any Events of Default;
(8) to substitute one or more Lease Contracts in accordance with
Section 4.04 hereof and to add Lease Contracts pursuant to Warehouse
Fundings;
(9) to amend the definition of "Concentration Limits"; and
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(10) modify any of the provisions of this Section 9.02, except to
increase the percentage of Holders required for any modification or
waiver or to provide that certain other provisions of the Indenture
cannot be modified or waived without the consent of each Holder of each
Outstanding Note affected thereby; or
(11) permit the creation of any lien ranking prior to or on a
parity with the lien of the Indenture with respect to any part of the
Trust Estate or terminate the lien of the Indenture on any property at
any time subject hereto or deprive the Holder of any Note of the
security afforded by the lien of the Indenture; or
(12) modify any of Sections 6.01(1) or (2), 6.02, 6.03, 6.18, or
12.02(d) hereof.
(b) With the consent of MBIA and the Holders of not less than 66-2/3% in
Outstanding Principal Amount of a Series of Warehouse Notes, by Act of said
Holders delivered to the Issuer and the Indenture Trustee, the Issuer, the
Servicer, the Back-up Servicer and the Indenture Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
Article Three hereof, provided that any such amendment does not modify the
Indenture in a manner described in clauses (1) through (8) of paragraph (a) of
this Section 9.02.
(c) The Indenture Trustee is hereby authorized to join in the execution
of any supplemental indenture pursuant to clause (a) or (b) above and to make
any further appropriate agreements and stipulations that may be therein
contained, but the Indenture Trustee shall not be obligated to enter into any
such supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under the Indenture. It shall not be necessary
for any Act of Noteholders under this Section to approve the particular form of
any proposed supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof. Promptly after the execution by the Issuer,
the Servicer, the Back-up Servicer and the Indenture Trustee of any supplemental
indenture pursuant to this Section, the Issuer shall mail to the Holders of the
Notes and the Rating Agencies a copy of such supplemental indenture.
SECTION 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by the Indenture, the Indenture
Trustee shall be entitled to receive upon request, and (subject to Section 7.01
hereof) shall be fully protected in relying in good faith upon, an Opinion of
Counsel reasonably acceptable to the Indenture Trustee stating that the
execution of such supplemental indenture is authorized or permitted by the
Indenture. The Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture which affects the Indenture Trustee's own duties
or immunities under the Indenture or otherwise.
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SECTION 9.04 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article, the
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of the Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 9.05 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Issuer shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE TEN
REDEMPTION OF NOTES
SECTION 10.01 REDEMPTION AT THE OPTION OF THE ISSUER; ELECTION TO
REDEEM.
The Issuer shall have the option to redeem (a) at any time except as may
be otherwise specified in the related Supplement, all of the Outstanding Notes
of a Series of Warehouse Notes and (b) all of the Outstanding Notes of any
Series of Term Notes at any time after the Outstanding Principal Amount of the
Notes in such Series is less than 10% (or such other percentage as may be
specified in the Specific Indenture Terms) of the original Outstanding Principal
Amount of such Series of Term Notes as of the related Delivery Date, in each
case at the applicable Redemption Price plus any fees due hereunder and all
amounts due to MBIA under the Insurance Agreement. With respect to any
redemption permitted by clause (b) above, MBIA shall have the same option to
redeem any such Series of Notes in the absence of the exercise thereof by the
Issuer. With respect to any Series of Warehouse Notes, MBIA shall have the
option to redeem all of the Outstanding Notes of such Series at any time after
the Outstanding Principal Amount of the Notes in such Series is less than 10%
(or such other percentage as may be specified in the Specific Indenture Terms)
of the Series Initial IPB at the time of redemption.
The Issuer shall set the Redemption Date and the Redemption Record Date
for a Series of Notes and give notice thereof to the Indenture Trustee pursuant
to Section 10.02 hereof.
Installments of interest and principal that are due regarding a Series
of Notes on or prior to the related Redemption Date shall continue to be payable
to the Holders of such Notes called for redemption as of the relevant Record
Dates according to their terms and the provisions of Section 2.08 hereof. The
election of the Issuer or MBIA to redeem any Notes pursuant to this Section
shall be evidenced by a Board Resolution or written notice from MBIA,
respectively, directing the Indenture Trustee to make the payment of the
Redemption Price on all of the Notes to be redeemed from monies deposited with
the Indenture Trustee pursuant to Section 10.04 hereof.
SECTION 10.02 NOTICE TO INDENTURE TRUSTEE; DEPOSIT OF REDEMPTION PRICE.
In the case of any redemption pursuant to Section 10.01 hereof, the
Issuer or MBIA, as applicable, shall, at least 15 days prior to the related
Redemption Date, notify the Indenture Trustee of such Redemption Date and shall
deposit into the Redemption Account on such notification date an amount equal to
the Redemption Price of all Notes to be redeemed on such Redemption Date plus
any fees due hereunder and all amounts due to MBIA under the Insurance
Agreement; provided, however, that in the case of a redemption of a Series of
Warehouse Notes to be funded through the issuance of a Series of Term Notes, the
Issuer need not deposit the applicable Redemption Price into the Redemption
Account prior to the provision of the notice of redemption, but rather, on the
related Delivery Date, the Issuer shall deposit into the Redemption Account such
portion of the proceeds of the issuance of such new Series of Term Notes as is
necessary to redeem the applicable Series of Warehouse Notes on the related
Redemption Date at the applicable Redemption Price.
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SECTION 10.03 NOTICE OF REDEMPTION BY THE ISSUER.
Upon receipt of such notice and such deposit set forth in Section 10.02
above, the Indenture Trustee shall provide notice of redemption pursuant to
Section 10.01 hereof by first-class mail, postage prepaid, mailed no later than
the Business Day following the date on which such deposit was made to each
Holder of Notes whose Notes are to be redeemed, at his address in the Note
Register.
All notices of redemption shall state:
(1) the applicable Redemption Date;
(2) the applicable Redemption Price; and
(3) that on such Redemption Date, the Redemption Price will become
due and payable upon each such Note in the related Series, and that interest
thereon shall cease to accrue on such date.
Notice of redemption of a Series of Notes shall be given by the
Indenture Trustee in the name and at the expense of the Issuer or MBIA, as
applicable. Failure to give notice of redemption, or any defect therein, to any
Holder of any Note selected for redemption shall not impair or affect the
validity of the redemption of any other Note.
SECTION 10.04 NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as provided in Section 10.03
hereof, the Series of Notes to be redeemed shall, on the applicable Redemption
Date, become due and payable at the Redemption Price and on such Redemption Date
(unless the Issuer or MBIA, as applicable, shall default in the payment of the
Redemption Price) such Notes shall cease to bear interest. The Holders of such
Notes shall be paid the Redemption Price by the Paying Agent on behalf of the
Issuer; provided, however, that installments of principal and interest that are
due regarding such Series of Notes on or prior to such Redemption Date shall be
payable to the Holders of such Notes registered as such on the relevant Record
Dates according to their terms and the provisions of Section 2.08 hereof.
If the Holders of any Note called for redemption shall not be so paid,
the principal and premium on such Series of Notes, if any, shall, until paid,
bear interest from the applicable Redemption Date at the related Note Interest
Rate.
SECTION 10.05 RELEASE OF SERIES LEASE CONTRACTS.
In connection with any redemption permitted under this Article Ten, the
Issuer shall be permitted to obtain a release of the related Series Lease
Contracts to the extent that (a) after giving effect to such release, the sum of
(i) the amount of funds then held in the Cash Collateral Account
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and (ii) the Aggregate IPB is equal to or exceeds the Required Collateralization
Amount plus the Outstanding Principal Amount of all Series of Notes (after
giving effect to such redemption and the issuance of any new Series of Notes)
and (b) the applicable Redemption Price shall have been deposited into the
Redemption Account as required by Section 10.02.
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ARTICLE ELEVEN
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 11.01 REPRESENTATIONS AND WARRANTIES. Except as otherwise
provided in the Specific Indenture Terms, the issuer hereby makes the following
representations and warranties for the benefit of the Indenture Trustee, MBIA
and the Noteholders on which the Indenture Trustee relies in accepting the Trust
Estate in rust and in authenticating the Notes. Such representations and
warranties are made as of the Initial Delivery Date and each additional Delivery
Date, and shall survive the transfer, grant and assignment of the Trust Estate
to the Indenture Trustee.
(a) ORGANIZATION AND GOOD STANDING. The Issuer is a corporation duly
organized, validly existing and in good standing under the law of the Issuer
State of incorporation and each other State where the nature of its business
requires it to qualify, except to the extent that the failure to so qualify
would not in the aggregate materially adversely affect the ability of the Issuer
to perform its obligations under the Transaction Documents;
(b) AUTHORIZATION. The Issuer has the power, authority and legal right
to execute, deliver and perform under the terms of the Transaction Documents and
the execution, delivery and performance of the Transaction Documents have been
duly authorized by the Issuer by all necessary corporate action;
(c) BINDING OBLIGATION. Each of (i) the Indenture, assuming due
authorization, execution and delivery by the Indenture Trustee, the Back-up
Servicer and the Servicer, (ii) the Insurance Agreement, assuming due
authorization, execution and delivery by MBIA, the Indenture Trustee and the
Servicer, (iii) the Servicing Agreement, assuming due authorization, execution
and delivery by the Issuer, the Servicer, the Indenture Trustee and the Servicer
and (iv) the Lease Acquisition Agreement, assuming due authorization, execution
and delivery by the Company, constitutes a legal, valid and binding obligation
of the Issuer, enforceable again the Issuer in accordance with its terms except
that (A) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws (whether statutory, regulatory
or decisional) now or hereafter in effect relating to creditors' rights
generally and (B) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to certain equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought,
whether a proceeding at law or in equity;
(d) NO VIOLATION. The consummation of the, transactions contemplated by
the fulfillment of the terms of the Transaction Documents will not conflict
with, result in any breach of any of the terms and provisions of or constitute
(with or without notice, lapse of time or both) a default under the
organizational documents or bylaws of the Issuer, or any material indenture,
agreement, mortgage, deed of trust or other instrument to which the Issuer is a
party or by which it is bound, or in the creation or imposition of any Lion upon
any of its properties pursuant to the terms of such indenture, agreement,
mortgage, deed of trust or other such instrument, other than any Lien created or
imposed pursuant to the terms of the Transaction Documents, or violate any law
or, to the best
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of the Issuer's knowledge, any material order, rule or regulation applicable to
the Issuer of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Issuer or any of its properties.
(e) NO PROCEEDINGS. There are no Proceedings or investigations to which
the Issuer, or any of the Issuer's Affiliates, is a party pending, or, to the
knowledge of Issuer, threatened, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality (A)
asserting the invalidity of the Transaction Documents, (B) seeking to prevent
the issuance of any of the Notes or the consummation of any of the transactions
contemplated by the Transaction Documents or (C) seeking any determination or
ruling that would materially and adversely affect the performance by the Issuer
of its obligations under, or the validity or enforceability of, the Transaction
Documents.
(f) APPROVALS. All approvals, authorizations, consents, orders or other
action's of any Person, or of any court, governmental agency or body or
official, required in connection with the execution and delivery of the
Transaction Documents and with the valid and proper authorization, issuance and
sale of the Notes pursuant to the Indenture (except approvals of State
securities officials under the Blue Sky Laws), have been or will be taken or
obtained on or prior to the applicable Delivery Date.
(g) PLACE OF BUSINESS. The Issuer's principal place of business and
chief executive office is located at the address specified in the Specific
Indenture Terms.
(h) TRANSFER AND ASSIGNMENT. Upon the delivery to the Indenture Trustee
of the Lease Contracts and the filing of the financing statements described in
Sections 4.01(f) and 4.02(b)(vi) hereof, the Indenture Trustee for the benefit
of the Noteholders shall have a first priority perfected security interest in
the Lease Receivables, the Lease Contracts, the Equipment (to the extent owned
by the Issuer) initially located in the Enumerated States, and in the proceeds
thereof, except for Liens permitted under Section 11.02(a) and limited to the
extent set forth in Section 9-306 of the UCC as in effect in the applicable
jurisdiction and provided, that, the security interest of the Indenture Trustee
for the benefit of the Noteholders with respect to the Equipment will not be a
perfected security interest with respect to any Equipment located initially in
any States other than the Enumerated States and with respect to Equipment
underlying Loan Contracts. All filings (including, without limitation, UCC
filings) as are necessary in any jurisdiction to perfect the ownership or other
interest of the Indenture Trustee in the Trust Estate (other than that Equipment
in such other States or Equipment underlying Loan Contracts), including the
transfer of the Lease Contracts and the payments to become due thereunder, have
been made.
(i) PARENT OF THE ISSUE. The Company is the registered owner of all of
the issued and outstanding common stock of the Issuer, all of which common stock
has been validly issued, is fully paid and nonassessable and is owned of record,
free and clear of all mortgages, assignments, pledges, security interests,
warrants, options and rights to purchase.
(j) LEASE ACQUISITION AGREEMENT. As of the Initial Delivery Date the
Issuer has entered into the Lease Acquisition Agreement with the Company
relating to its acquisition of the Lease
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Contracts, the Lease Receivables and the Equipment, and the representations and
warranties made by the Company relating to the Lease Contracts, Lease
Receivables and the Equipment have been validly assigned to and are for the
benefit of the Issuer, the Indenture Trustee, MBIA and the Noteholders and such
representations and warranties are true and correct in all material respects.
(k) BULK TRANSFER LAWS. The transfer, assignment and conveyance of the
Lease Contracts, the Equipment and the Lease Receivables by the Company to the
Issuer pursuant to the Lease Acquisition Agreement or by the Issuer pursuant to
the Indenture is not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
(1) THE LEASE CONTRACTS. The Issuer hereby restates and makes each of
the representations and warranties with respect to the Lease Contracts, the
Lease Receivables and the Equipment that. are made by the Company in
Section 3.01 of the Lease Acquisition Agreement.
SECTION 11.02 COVENANTS. The Issuer hereby makes the following covenants
for the benefit of the Indenture Trustee, MBIA and the Noteholders, on which the
Indenture Trustee relies in accepting the Trust Estate in trust and in
authenticating the Notes. Such covenants are made as of the Initial Delivery
Date, but shall survive the transfer, grant and assignment of the Trust Estate
to the Indenture Trustee.
(a) NO LIENS. Except for the conveyances and grant of security interests
hereunder, the Issuer will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on any Trust
Estate now existing or hereafter created, or any interest therein prior to the
termination of the Indenture pursuant to Section 5.01 hereof, the Issuer will
notify the Indenture Trustee of the existence of any Lien on any Trust Estate
immediately upon discovery thereof, and the Issuer shall defend the right, title
and interest of the Indenture Trustee in, to and under the Trust Estate now
existing or hereafter created, against all claims of third parties claiming
through or under the Issuer; PROVIDED, HOWEVER, that nothing in this Section
11.02(a) shall prevent or be deemed to prohibit the Issuer from suffering to
exist upon any of the Trust Estate any Liens for municipal or other local taxes
and other governmental charges if such taxes or governmental charges shall not
at the time be due and payable or if the Issuer shall currently be contesting
the validity thereof in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves with respect thereto.
(b) DELIVERY OF COLLECTIONS. The Issuer agrees to hold in trust and
promptly pay to the Servicer all amounts received by the Issuer in respect of
the Trust Estate (other than amounts distributed to or for the benefit of the
Issuer pursuant to Article Twelve hereof).
(c) OBLIGATIONS WITH RESPECT TO LEASE CONTRACTS. The Issuer will duly
fulfill all obligations on its part to be fulfilled under or in connection with
each Lease Contract and will do nothing to impair the rights of the Indenture
Trustee (for the benefit of the Noteholders and MBIA) in the Lease Receivables,
the Lease Contracts and any other Trust Estate. As long as there is no event of
default under the applicable Lease Contract, the Issuer will not disturb the
Customer's quiet and peaceful possession of the related Equipment and the
Customer's unrestricted use thereof for its intended purpose.
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(d) COMPLIANCE WITH LAW. The Issuer will comply, in all material
respects, with all acts, rules, regulations, orders, decrees and directions of
any governmental authority applicable to the Lease Contracts or any part
thereof; provided, however, that the Issuer may contest any act, regulation,
order, decree or direction in any reasonable manner which shall not materially
and adversely affect the rights of the Indenture Trustee (for the benefit of the
Noteholders and MBIA) in the Lease Receivables, the Lease Contracts and the
related Equipment. The Issuer will comply, in all material respects, with all
requirements of law applicable to the Issuer.
(e) PRESERVATION OF SECURITY INTEREST. The Issuer shall execute and file
such continuation statements and any other documents which may be required by
law to fully preserve and protect the interest of the Indenture Trustee (for the
benefit of the Noteholders and MBIA) in the Trust Estate; PROVIDED, that the
Issuer shall not be required to file financing statements or any related
agreements or documentation with respect to any Equipment not initially located
in the Enumerated States or with respect to any Equipment underlying Loan
Contracts.
(f) MAINTENANCE OF OFFICE, ETC. The Issuer will not, without providing
30 days notice to the Indenture Trustee and MBIA and without filing such
amendments to any previously filed financing statements as the Indenture Trustee
or MBIA may require or as may be required in order to maintain the Indenture
Trustee's perfected security interest in the Trust Estate (other than Equipment
underlying Loan Contracts), (a) change the location of its principal executive
office, or (b) change its name, identity or corporate structure in any manner
which would make any financing statement or continuation statement filed by the
Issuer in accordance with the Servicing Agreement or the Indenture seriously
misleading within the meaning of Article 9-402(7) of any applicable enactment of
the UCC.
(g) FURTHER ASSURANCES. Except as set forth in Section 11.02(e), the
Issuer will make, execute or endorse, acknowledge, and file or deliver to the
Indenture Trustee from time to time such schedules, confirmatory assignments
conveyances, transfer endorsements, powers of attorney, certificates, reports
and other assurances or instruments and take such further steps relating to the
Trust Estate, as the Indenture Trustee may request and reasonably require.
(h) NOTICE OF LIENS. The Issuer shall notify the Indenture Trustee and
MBIA promptly after becoming aware of any Lien on any Trust Estate, except for
any liens for municipal of other local taxes if such taxes shall not at the time
be due or payable without penalty or if the Issuer shall currently be contesting
the validity thereof in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves with respect thereto.
(i) ACTIVITIES OF THE ISSUER. The Issuer (a) shall engage in only (1)
the acquisition, ownership, leasing, selling and pledging of the property
acquired by the Issuer pursuant to the Lease Acquisition Agreement, and causing
the issuance of, receiving and selling the Notes issued pursuant to the
Indenture and (2) the exercise of any powers permitted to corporations under the
corporate law of the applicable Issuer State of Incorporation which are
incidental to the foregoing or necessary to accomplish the foregoing and the
Issuer shall incur no debt other than trade payables and expense accruals in
connection with its operations in the normal course of business; (b) will (1)
maintain its
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books and records separate From the books and records of any other entity, (2)
maintain separate bank accounts and no funds of the Issuer shall be commingled
with funds of any other entity, (3) keep in full effect its existence, rights
and franchises as a corporation under the laws of the applicable Issuer State of
Incorporation, and will obtain and preserve its qualification to do business as
a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of the Indenture;
and (c) will not (1) dissolve or liquidate in whole or in part, (2) own any
subsidiary or lend or advance any moneys to, or make an investment in, any
Person, (3) make any capital expenditures, (4)(A) commence any case, proceeding
or other action under any existing or future bankruptcy, insolvency or similar
law seeking to have an order for relief entered with respect to it, or seeking
reorganization, arrangement adjustment wind-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, (B) seek
appointment of a receiver, trustee, custodian or other similar official for it
or any part of its assets, (C) make a general assignment for the benefit of
creditors, or (D) take any action in furtherance of, or consenting or
acquiescing in, any of the foregoing, (5) guarantee (directly or indirectly),
endorse or otherwise become contingently liable (directly or indirectly) for the
obligations of, or own or purchase any stock, obligations or securities of or
any other interest in, or make any. capital contribution to, any other Person,
(6) merge or consolidate with any other Person, (7) engage in any other action
that bears on whether the separate legal identity of the Issuer will be
respected, including without limitation (A) holding itself out as being liable
for the debts of any other party or (B) acting other than in its corporate name
and through its duly authorized officers or agents, or (8) create, incur,
assume, or in any manner become liable in respect of any indebtedness other than
trade payables and expense accruals incurred in the ordinary course of business
and which are incidental to its business purpose; provided, however, that the
Issuer may take any action prohibited by this clause (8) if (y) the Issuer shall
cause, prior to the taking of such action, an Opinion of Counsel experienced in
federal bankruptcy matters, in substance satisfactory to the Indenture Trustee,
the Noteholders, MBIA and the Rating Agencies, to be delivered to the Indenture
Trustee, the Noteholders, MBIA and the Rating Agencies and (z) the Rating
Agencies shall indicate in writing that the taking of such action will not
affect the then current rating of any Series of Notes. The Issuer shall not
amend any article in its Certificate of Incorporation that deals with any matter
discussed above without the prior written consent of MBIA. On or before each
April 15, so long as any of the Notes are Outstanding, the Issuer shall furnish
to each Noteholder, the Indenture Trustee and MBIA, an Officer's Certificate
confirming that the Issuer has complied with its obligations under this
Section 11.02(i).
(j) DIRECTORS. The Issuer agrees that at all times, at least two of the
directors and one of the executive officers of the Issuer (or two persons, one
of whom is serving as both a director and an executive officer) will not be a
director, officer or employee of any direct or ultimate parent, or Affiliate of
the parent or of the Issuer; provided, however, that such independent directors
and officers may serve in similar capacities for other "special purpose
corporations" formed by the Company and its Affiliates. The Issuer's Certificate
of Incorporation shall at all times provide that such independent directors
shall have a fiduciary duty to the Holders of the Notes.
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(k) CONSOLIDATED RETURN. The Issuer and the Company are members of an
affiliated group within the meaning of section 1504 of the Code which will file,
a consolidated return for federal income tax purposes at all times until the
termination of the Indenture.
(1) PRESERVATION OF THE EQUIPMENT. The Issuer warrants that it is the
lawful owner and possessor of the Equipment (except with respect to Equipment in
which it has a valid security interest) and that it will warrant and defend such
Equipment against all Persons, claims and demands whatsoever. The Issuer shall
not assign, sell, pledge, or exchange, or in any way encumber or otherwise
dispose of the Equipment, except as permitted under the Indenture.
(m) TAXABLE INCOME FROM THE LEASE CONTRACTS. The Issuer shall treat the
Notes issued by it as debt and shall treat the Lease Contracts as owned by it
for Federal, state and local income tax purposes, and the affiliated group of
which the Issuer is a member within the meaning of section 1504 of the Code
shall treat the Notes issued by the Issuer as debt of the Issuer and shall treat
the Lease Contracts as owned by the Issuer for federal, state and local income
tax purposes, and the Issuer and such affiliated group shall report and include
in the computation of the Issuer's gross income for such tax purposes the rental
and other income from the Lease Contracts, and shall deduct the interest paid or
accrued with respect to the Notes in accordance with its applicable method of
accounting for such purposes.
(n) MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain an office
or agency within the United States of America where Notes may be presented or
surrendered for payment, where Notes may be surrendered for registration of
transfer or exchange and where notices and demand to or upon the Issuer in
respect of the Notes and the Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee as the Paying Agent and its Corporate
Trust Office as the office for each of said purposes. The Issuer will give 30
days prior written notice to the Indenture Trustee, MBIA and the Noteholders
of any change in the identity of the Paying Agent or the location, of any such
office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Indenture Trustee, and the Issuer hereby appoints the Indenture
Trustee its agent to receive all such presentations, surrenders, notices and
demands.
(o) ENFORCEMENT OF SERVICING AGREEMENT AND LEASE ACQUISITION AGREEMENT.
The Issuer will take all actions necessary, and diligently pursue all remedies
available to it, to the extent commercially reasonable, to enforce the
obligations of the Servicer under the Servicing Agreement and the Company under
the Lease Acquisition Agreement and to secure its rights thereunder.
(p) ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The Issuer
shall not consolidate or merge with or into any other Person or convey or
transfer its properties and assets substantially as an entirety to any Person,
unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger or which acquires by conveyance or transfer
the properties and
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assets of the Issuer substantially as an entirety shall be a Person
organized and existing as a limited purpose corporation under the laws
of the United States of America or any State thereof and shall have
expressly assumed, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee and MBIA, in form and substance
reasonably satisfactory to the Indenture Trustee and MBIA, the
obligation to make due and punctual payments of the principal of and
interest on all of the Notes and to perform every covenant of the
Indenture on the part of the Issuer to be performed or observed; and
(ii) the Issuer shall have caused the Indenture Trustee to
have received a letter from the Rating Agencies to the effect that the
rating issued with respect to the Notes is confirmed, notwithstanding
the consummation of such merger, consolidation, transfer or conveyance
together with the consent of MBIA to such merger, consolidation transfer
or conveyance; and
(iii) immediately after giving effect to such transaction, no
Event of Default or Default shall have occurred and be continuing; and
(iv) the Issuer shall have delivered to the Indenture Trustee
and MBIA an Officer's Certificate and an Opinion of Counsel each stating
that such consolidation, merger, conveyance or transfer and such
Supplement comply with this Article Eleven and that all conditions
precedent herein provided for relating to such transaction have been
complied with;
(v) such consolidation, merger, conveyance or transfer shall
be on such terms as shall fully preserve the lien and security of the
Indenture, the perfection and priority thereof and the rights and powers
of the Indenture Trustee, MBIA and the Holders of the Notes under the
Indenture; and
(vi) the surviving corporation shall be a "special purpose
corporation"; i.e., shall have an organizational charter substantially
similar to the Certificate of Incorporation of the Issuer including
specific limitations on the business purposes, and provisions for
independent directors; and
(vii) MBIA shall have given its prior written consent, which
consent shall not be unreasonably Withheld or delayed.
(q) SUCCESSOR SUBSTITUTED. Upon any consolidation or merger, or any
conveyance or transfer of the properties and assets of the Issuer substantially
as an entirety in accordance with Section 11.02(p) hereof, the Person formed by
or surviving such consolidation or merger (if other than the Issuer) or the
Person to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under the
Indenture with the same effect as if such Person had been named as the Issuer
herein. In the event of any such conveyance or transfer, the Person named as the
"Issuer" in the first paragraph of the Specific Indenture Terms or any successor
which shall theretofore have become such in the manner prescribed in this
Article shall be released from its liabilities as obligor and maker on all the
Notes
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and from its obligations under the Indenture and may be dissolved, wound-up and
liquidated at any time thereafter.
(r) USE OF PROCEEDS. The proceeds from the sale of the Notes will be
used by the Issuer (i) to pay the Existing Indebtedness, (ii) to pay the
expenses associated with this transaction, and (iii) for general corporate
purposes, including the cost of funding additional Lease Contracts. None of the
transactions contemplated in the Indenture, the Lease Acquisition Agreement or
the Servicing Agreement (including the use of the proceeds from the sale of the
Notes) will result in a violation of Section 7 of the Securities and Exchange
Act of 1934, as amended, or any regulations issued pursuant thereto, including
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II. The Issuer does not own or intend to carry or
purchase any "margin security" within the meaning of said Regulation G,
including margin securities originally issued by it or any "margin stock" within
the meaning of said Regulation U.
(s) NOTICE OF TRIGGER EVENTS. Upon the Issuer's obtaining knowledge of
the occurrence of any Trigger Event, the Issuer shall within one Business Day of
obtaining such knowledge notify MBIA and the Noteholders of such occurrence.
SECTION 11.03 OTHER MATTERS AS TO THE ISSUER.
(a) LIMITATION ON LIABILITY OF DIRECTORS, OFFICERS OR EMPLOYEES OF THE
ISSUER. The directors, officers, or employees of the Issuer shall not be under
any liability to the Trust, MBIA, the Indenture Trustee, the Noteholders, the
Company, the Servicer, the Back-up Servicer or any other Person hereunder or
pursuant to any document delivered hereunder, it being expressly understood that
all such liability is expressly waived and released as a condition of, and as
consideration for, the execution of the Indenture and the issuance of the Notes.
(b) PARTIES WILL NOT INSTITUTE PROCEEDINGS. So long as the Indenture is
in effect, none of the parties hereto or any Affiliate thereof will file any
involuntary petition or otherwise institute any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceeding under any
federal or state bankruptcy or similar law against the Issuer.
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ARTICLE TWELVE
ACCOUNTS AND ACCOUNTINGS
SECTION 12.01 COLLECTION OF MONEY.
Except as otherwise expressly provided herein, the Indenture Trustee may
demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all money and other property payable to or receivable by the Indenture Trustee
pursuant to the Indenture. The Indenture Trustee shall, upon request from the
Servicer, provide the Servicer with sufficient information regarding the amount
of collections with respect to the Lease Contracts received by the Indenture
Trustee in the ACH Account (if such account is held by the Indenture Trustee)
and the other accounts held in the name of the Indenture Trustee to permit the
Servicer to perform its duties under the Servicing Agreement. The Indenture
Trustee shall hold all such money and property so received by it as part of the
Trust Estate and shall apply it as provided in the Indenture. If any lease
Contract becomes a Defaulted Lease Contract, the Indenture Trustee, upon Issuer
or Servicer request may, and upon the request of MBIA or the Holders of a
majority in Outstanding Principal Amount of all Notes shall, take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under the
Indenture and to proceed thereafter as provided in Article Six hereof.
SECTION 12.02 COLLECTION ACCOUNT; ADVANCE PAYMENT ACCOUNT; ACH ACCOUNT;
REDEMPTION ACCOUNT.
(a) Prior to the Initial Delivery Date, the Indenture Trustee shall open
and maintain a trust account at its Corporate Trust Office (the "Collection
Account") in the name of the Indenture Trustee for the benefit of the
Noteholders and MBIA, for the receipt of (i) if applicable, payments remitted to
the Indenture Trustee by the Servicer and, if applicable, the ACH Bank pursuant
to Section 3.03(a) and (b) and Section 3.04 of the Standard Servicing Terms,
(ii) amounts transferred from the Advance Payment Account in accordance with
Section 3.03(c) of the Standard Servicing Terms and from the Cash Collateral
Account in accordance with Section 12.03(d)(i) and (iii) hereof, (iii) proceeds
of claims made under any of the Note Insurance Policies, in accordance with
Article Eight hereof, upon receipt, (iv) with respect to the first Payment Date
for any Series of Term Notes, an initial deposit by the Issuer equal to the
number of days' interest on such Series of Term Notes as may be specified in the
applicable Supplement and (v) any Reinvestment Income. Funds in the Collection
Account shall not be commingled with any other monies. All payments to be made
from time to time by the Issuer to the Noteholders out of funds in the
Collection Account pursuant to the Indenture shall be made by the Indenture
Trustee or the Paying Agent of the Issuer. All monies deposited from time to
time in the Collection Account pursuant to the Indenture shall be held by the
Indenture Trustee as part of the Trust Estate as herein provided.
(b) Upon Issuer Order, the Indenture Trustee shall invest the funds in
the Collection Account in Eligible Investments; provided, however, that all
monies on deposit in the Collection
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Account pursuant to Section 12.02(a)(iii) hereof shall remain uninvested. The
Issuer Order shall specify the Eligible Investments in which the Indenture
Trustee shall invest, shall state that the same are Eligible Investments and
shall further specify the percentage of funds to be invested in each Eligible
Investment. No such Eligible Investment shall mature later than the second
Business Day preceding the next following Payment Date and shall not be sold or
disposed of prior to its maturity; provided that, Eligible Investments of the
type described in clause (i) of the definition of Eligible Investments may
mature on such Payment Date. In the absence of a Issuer Order, the Indenture
Trustee shall invest funds in the Collection Account in Eligible Investments
described in clause (vii) of the definition thereof. Eligible Investments shall
be made in the name of the Indenture Trustee for the benefit of the Noteholders
and MBIA. The Indenture Trustee shall provide to the Servicer and MBIA monthly
written confirmation of such investments, describing the Eligible Investments in
which such amounts have been invested. Any funds not so invested must be insured
by the Federal Deposit Insurance Corporation.
(c) Any income or other gain from investments in Eligible Investments as
outlined in (b) above shall be credited to the Collection Account and any loss
resulting from such investments shall be charged to such account; provided,
however, that the Issuer shall make or cause to be made no later than the
applicable Payment Date a deposit to the Collection Account to the extent of any
losses therein caused as a result of the Issuer's investment instructions
provided for herein. The Indenture Trustee shall riot be liable for any loss
incurred on any funds invested in Eligible Investments pursuant to the
provisions of this Section 12.02 (other than in its capacity as obligor under
any Eligible Investment).
(d) On each Payment Date if either no Default or Event of Default shall
have occurred and be continuing or a Default or Event of Default shall have
occurred and be continuing but the entire Outstanding Principal Amount of all
Notes shall not have been declared due and payable pursuant to Section 6.02
hereof, then on such Payment Date, after making all transfers and deposits to
the Collection Account pursuant to Section 12.02(a) hereof, the Indenture
Trustee shall withdraw from the Collection Account (other than amounts
representing payments of Lease Receivables due after the Calculation Date
immediately preceding such Payment Date) including the Reinvestment Income
therein, and shall make the following disbursements in the following order in
accordance with the provisions of and instructions on the Monthly Servicer's
Report; provided, however, that W the proceeds of claims. under any of the Note
Insurance Policies shall be used solely to pay the amounts due under paragraphs
(vi) and (vii) of this Section 12.02(d) in accordance with the terms of the
applicable Note Insurance Policy; (y) the Indenture Trustee shall withdraw from
the Collection Account and make interest payments based on the Outstanding
Principal Amount of each Series of Notes even if it shall not have received the
Monthly Servicer's Report; and (z) if there are insufficient funds to make the
payments specified in clause (vi) or (vii) below, then the amount available to
be paid pursuant to such clause will be allocated to each Series of Notes based
on the applicable Pro Rata Share, provided, however, that proceeds of a claim
under an Note Insurance Policy to pay any Outstanding Principal Amount upon the
Stated Maturity of a Series of Notes shall be used solely to pay such
Outstanding Principal Amount after giving effect to the application of funds
available to pay the Pro Rata Share of the Principal Distribution Amount of
each Outstanding Series:
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(i) to pay to the Servicer: (A) the Servicer Fee then due for
all Notes; (B) the Reinvestment Income (except to the extent previously
remitted to the Servicer); (C) the amounts necessary to reimburse the
Servicer and any successor Servicer and subservicer as provided in
Section 3.09(a) of the Standard Servicing Terms for reasonable costs and
expenses incurred by the Servicer (including reasonable attorney's fees
and out-of-pocket expenses) in connection with the realization,
attempted realization or enforcement of rights and remedies upon
Defaulted Lease Contracts, from amounts received as Recoveries from any
Defaulted Lease Contracts; (D) any amounts received from customers to
pay the taxes described in Section 3.07 of the Standard Servicing
Terms, to the extent deposited in the Collection Account; (E) all
amounts received in respect of Lease Receivables as to which the
Servicer has made an unrecovered Servicer Advance, to the extent of such
Servicer Advance; and (F) the amount necessary to reimburse the Servicer
for any Nonrecoverable Advance;
(ii) to pay to the Indenture Trustee the Trustee Fee then due
for all Notes,
(iii) to pay to the Back-up Servicer the Back-up Servicer Fee
then due for all Notes;
(iv) to pay to MBIA the MBIA Premium then due for all Notes;
(v) [reserved)
(vi) to pay the interest due on that Payment Date on all
Series of Outstanding Notes and any overdue interest, to be applied as
provided in Section 2.08 hereof;
(vii) to pay the Principal Distribution Amount on all Series of
Outstanding Notes, to be applied to the payment of Note principal as
provided in Section 2.08 hereof;
(viii) if so specified in the Specific Indenture Terms, to pay
any premiums due under any Insurance Policies maintained by the Issuer
or the Servicer with respect to the Lease Assets and with respect to
which the Indenture Trustee shall have received notice of nonpayment,
and then, unless a Trigger Event has occurred, to deposit into the Cash
Collateral Account an amount necessary to bring the balance therein to
an amount equal to the Cash Collateral Account Required Balance;
(ix) to pay to MBIA, any amounts previously paid by MBIA under
any, Note Insurance Policy and not heretofore repaid, together with
interest thereon in accordance with the Insurance Agreement;
(x) to pay to a successor Servicer after a successor ▇▇▇▇▇▇▇▇
has been appointed pursuant to Section 6.02 of the Standard Servicing
Terms, the Additional
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Servicer Fee, if any, and to pay any successor Servicer, MBIA or the
Indenture Trustee, any Transition Costs incurred by any successor
Servicer, MBIA (solely pursuant to Section 6.02(d) of the Standard
Servicing Terms) or the Indenture Trustee and not previously reimbursed;
(xi) on and after the Payment Date following a Trigger Event,
apply any remaining funds to the payment of Note principal on all Series
of Outstanding Notes, in the proportion in which the Outstanding
Principal Amount of each Series represents of the Outstanding Principal
Amount of all Series;
(xii) to pay to the Servicer, any other amounts due the
Servicer as expressly provided herein and in the Servicing Agreement;
(xiii) to pay to MBIA, any other amounts due under the
Insurance, Agreement;
(xiv) to pay to the Indenture Trustee and the Back-up Servicer,
any other amounts due to the Indenture Trustee or the Back-up Servicer
as expressly provided herein and in the Servicing Agreement; and
(xv) to pay any additional fees and expenses payable to a
Warehouse Lender pursuant to a Supplement or the Warehouse Funding
Agreement for a Series of Warehouse Notes; and to remit any excess funds
to or at the direction of the Issuer in accordance with the instructions
on the Monthly Servicer's Report.
(e) Prior to the Initial Delivery Date, the Issuer shall cause the
Indenture Trustee to open and maintain a trust account at the Corporate Trust
Office (the "Advance Payment Account") in the name of the Indenture Trustee for
the benefit of Noteholders and MBIA, for the receipt and withdrawal of Advance
Payments in accordance with Section 3.03(c) of the Standard Servicing Terms. The
Indenture Trustee shall transfer moneys from the Advance Payment Account to the
Collection Account on the applicable Determination Date in accordance with
Section 3.03(c) of the Standard Servicing Terms. Moneys in the Advance Payment
Account shall be invested in Eligible Investments in the name of the Indenture
Trustee that mature no later dm the relevant Determination Date.
(f) If payments on the Lease Contracts are made by means of
electronic transfers from a Customer bank account, the Servicer shall either
remit such payments to the Collection Account in accordance with Section 3.03(a)
of the Standard. Servicing Terms, or prior to the Delivery Date the Issuer shall
cause the Indenture Trustee to open and maintain a trust account in the
corporate trust department of the ACH Bank (the "ACH Account") in the name of
the Indenture Trustee for the benefit of Noteholders and MBIA for the receipt of
such collections in accordance with the Servicing Agreement. The Issuer shall
make an initial deposit into the ACH Account (the "Initial ACH Deposit") in the
amount specified in the Specific Indenture Terms. The Indenture Trustee shall
transfer moneys from the ACH Account to the Collection Account on the applicable
Determination Date in order to comply with Section 3.03(b) of the Standard
Servicing Terms.
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Moneys in the ACH Account shall be invested in Eligible Investments that mature
no later than the relevant Determination Date. Eligible Investments shall be
made in the name of the Indenture Trustee for the benefit of the Noteholders and
MBIA.
(g) Prior to the Initial Delivery Date, the Issuer shall cause the
Indenture Trustee to open and maintain a trust account at the Corporate Trust
Office (the "Redemption Account") in the name of the Indenture Trustee for the
benefit of Noteholders and MBIA, for the receipt of the Redemption Price of any
Notes to be redeemed in accordance with Article Ten hereof. On any Redemption
Date, the Indenture Trustee shall withdraw the applicable Redemption Price from,
the Redemption Account and the Paying Agent shall remit the Redemption Price to
the applicable Noteholders in accordance with Section 10.04 hereof. Moneys in
the Redemption Account shall be invested in Eligible Investments that mature no
later than two Business Days prior to the relevant Redemption Date. Eligible
Investments shall be made in the name of the Indenture Trustee for the benefit
of the Noteholders and MBIA. Any monies deposited in the Redemption Account for
purposes of redeeming Notes pursuant to Article Ten hereof shall, subject to
Section 7.16 hereof, remain in the Redemption Account until used to redeem such
Notes.
SECTION 12.03 CASH COLLATERAL ACCOUNT.
(a) Prior to the initial Delivery Date, the Issuer shall cause the
Indenture Trustee to open and maintain a trust account at the Corporate Trust
Office (the "Cash Collateral Account") in the name of the Indenture Trustee for
the benefit of the Noteholders and MBIA, for the receipt of (i) any Cash
Collateral Account Deposits required to be made with respect to a Series of
Notes, (ii) deposits pursuant to Section 12.02(d)(viii), and (iii) any other
deposits required under an Indenture Supplement or the Specific Indenture Terms.
Monies received in the Cash Collateral Account will be invested at the written
direction of the Issuer in Eligible Investments during the term of the
Indenture, and any income or other gain realized from such investment, shall be
held by the Indenture Trustee in the Cash Collateral Account as part of the
Trust Estate as security for the Notes subject to disbursement and withdrawal as
herein provided. Eligible Investments shall be made in the name of the Indenture
Trustee for the benefit of the Noteholders and MBIA. Monies shall be subject to
withdrawal in accordance with Section 12.03(d) hereof.
(b) Upon Issuer Order all or a portion of the Cash Collateral Account
shall be invested and reinvested at the Issuer's written direction in one or
more Eligible Investments. In the absence of a Issuer Order, the Indenture
Trustee shall invest funds in the Cash Collateral Account in Eligible
Investments described in clause (vii) of the definition thereof. Eligible
Investments shall be made in the name of the Indenture Trustee for the benefit
of the Noteholders an MBIA. All income or other gain from such investments shall
be credited to such Cash Collateral Account and any loss resulting from such
investments shall be charged to such Cash Collateral Account; provided, however,
that the Issuer shall make or cause to be made on any Determination Date a
deposit to the Cash Collateral Account to the extent of any losses therein
caused as a result of the Issuer's investment instructions. No Eligible
Investment shall mature later than the Business Day preceding the next following
Determination Date and shall not be sold or disposed of prior to its maturity.
Eligible Investments shall be made in the name of the Indenture Trustee for the
benefit of the
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Noteholders and MBIA. The Indenture Trustee shall provide to the Servicer and
MBIA monthly written confirmation of such investments, describing the Eligible
Investments in which such amounts have been invested. Any funds not so invested
must be insured by the Federal Deposit Insurance Corporation.
(c) If any amounts invested as provided in Section 12.03(b) hereof
shall be needed for disbursement from the Cash Collateral Account as set forth
in Section 12.03(d) hereof, the Indenture Trustee shall cause such investments
of such Cash Collateral Account to be sold or otherwise converted to cash to the
credit of such Cash Collateral Account. The Indenture Trustee shall not be
liable for any investment loss resulting from investment of money in the Cash
Collateral Account in any Eligible Investment in accordance with the terms
hereof (other than in its capacity as obligor under any Eligible Investment).
(d) Disbursements from the Cash Collateral Account shall be made, to
the extent funds therefor are available, only as follows:
(i) in the event that the amount in the Collection Account at
10:00 a.m. Minneapolis time on the Determination Date immediately
preceding any Payment Date (other than amounts representing payments of
Lease Receivables due after the Calculation Date immediately preceding
such Payment Date) is less than the sum of the amounts required to be
paid from the Collection Account on such Payment Date pursuant to
clauses (i) through (vi) of Section 12.02(d) hereof plus the Principal
Distribution Amount determined in accordance with clauses (a)(i) and (b)
of the definition thereof, the Indenture Trustee shall withdraw funds
from the Cash Collateral Account on or prior to 4:00 p.m. New York time
on such Determination Date to the extent necessary to make such payments
on such Payment Date and deposit such funds into the Collection Account;
(ii) subject to subparagraph (iii) of this Section 12.03(d),
in the event that on any Payment Date the balance in the Cash Collateral
Account equals an amount greater than the Cash Collateral Account
Required Balance (after giving effect to the distributions listed in
Section 12.02(d)(i) through (xiv) hereof on such Payment Date), the
Indenture Trustee shall withdraw funds in the Cash Collateral Account in
such amount so that the remaining amount in the Cash Collateral Account
after such withdrawal will equal the Cash Collateral Account Required
Balance, and disburse such amounts to or at the direction of the Issuer
pursuant to instructions on the Monthly Servicer's Report;
(iii) in the event that on any Payment Date a Trigger Event has
occurred, the Indenture, Trustee shall withdraw all funds from the Cash
Collateral Account and deposit such funds into the Collection Account
for disbursement in accordance with the provisions of Section 12.02(d)
hereof; and
(iv) subject to subparagraph (iii) of this Section 12.03(d),
in the event that on any Warehouse Funding Date the balance in the Cash
Collateral Account, after
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giving effect to any Warehouse Funding occurring on such Warehouse
Funding Date, equals an amount greater than the Cash Collateral Account
Required Balance, the Indenture Trustee shall withdraw funds in the Cash
Collateral Account in such amount so that the remaining amount in the
Cash Collateral Account after such withdrawal will equal the Cash
Collateral Account Required Balance, and disburse such amounts to or at
the direction of the Issuer.
SECTION 12.04 REPORTS BY INDENTURE TRUSTEE TO, MBIA AND NOTEHOLDERS.
(a) On each Payment Date the Indenture Trustee shall account to each
Holder of Notes on which payments of principal and interest are then being made
the amount which represents principal and the amount which represents interest,
and shall contemporaneously advise the Issuer and MBIA of all such payments.
The Indenture Trustee may satisfy its Notes under this Section 12.04 by
delivering the Monthly Servicer's Report to each such Holder of the Notes, MBIA
and the Issuer. On or before the 15th day prior to any final Payment Date the
Indenture Trustee shall provide notice to MBIA and the Holders of the applicable
Series of Notes of the Final Payment Date for such Notes. Such notice shall
include (1) a statement that interest shall cease to accrue as of the last day
preceding the date on which the Final Payment Date occurs, and (2) shall specify
the place or places at which presentation and surrender may be made.
(b) The Indenture Trustee shall, on a monthly basis beginning on the
first Calculation Date, confirm the credit rating or, if more than one credit
rating has been assigned, each such credit rating, of each institution in which
funds are invested pursuant to clause (vi) of the definition of Eligible
Investments and shall promptly notify the Noteholders and MBIA if any such
credit rating has been lowered.
(c) At least annually, or as otherwise required by law, the Indenture
Trustee shall distribute to Noteholders any information returns or other tax
information or statements as are required by applicable tax law to be
distributed to the Noteholders. The Servicer shall prepare or cause to be
prepared all such information for distribution by the Indenture Trustee to the
Noteholders.
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ARTICLE THIRTEEN
PROVISIONS OF GENERAL APPLICATION
SECTION 13.01 GENERAL PROVISIONS.
All of the provisions of this Article shall apply to the Standard
Indenture Terms and each Specific Indenture Terms.
SECTION 13.02 ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by the Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of the Indenture and (subject to Section 7.01 hereof) conclusive
in favor of the Indenture Trustee and the Issuer, if made in the manner provided
in this Section 13.02.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind the Holder of every
Note issued upon the registration of transfer thereof or in exchange therefor in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 13.03 NOTICES, ETC., TO INDENTURE TRUSTEE, MBIA, ISSUER AND
SERVICER.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other document provided or permitted by the Indenture
to be made upon, given or furnished to, or filed with any party hereto shall be
sufficient for every purpose hereunder if in writing and telecopied or mailed,
first-class postage prepaid and addressed to the appropriate address below:
(a) to the Indenture Trustee at the address specified in the Specific
Indenture Terms, or at any other address previously furnished in writing to the
Issuer, MBIA, the Noteholders and the Servicer; or
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(b) to MBIA at Municipal Bond Investors Assurance Corporation, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Structured Finance Surveillance
Department, or at any other address previously furnished in writing by MBIA to
the Indenture Trustee, the Noteholders, the Servicer and the Issuer; or
(c) to the Issuer at the address specified in the Specific Indenture
Terms, or at any other address previously furnished in writing to the Indenture
Trustee, MBIA, the Noteholders and the Servicer by the Issuer; or
(d) to the Servicer at the address specified in the Specific Indenture
Terms, or at any other address previously furnished in writing to the Indenture
Trustee, MBIA, the Noteholders and the Issuer.
(e) to each of (i) Standard & Poors, Attention: Asset Backed
Surveillance Group, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and (ii) ▇▇▇▇▇'▇ Investor
Service, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
SECTION 13.04 NOTICES TO NOTEHOLDERS; WAIVER.
Where the Indenture provides for notice to Noteholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Noteholder affected by such event, at his address as it appears on the Note
Register not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case in which notice to
Noteholders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice
which is mailed in the manner herein provided shall conclusively be presumed to
have been duly given.
Where the Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of the Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
SECTION 13.05 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
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SECTION 13.06 SUCCESSORS AND ASSIGNS.
All covenants and agreements in the Indenture by the Issuer shall bind
its successors and assigns, whether so expressed or not. There shall be no
assignment hereof, except in accordance with the provisions of Section 7.10
hereof.
SECTION 13.07 SEPARABILITY.
In case any provision in the Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 13.08 BENEFITS OF INDENTURE.
Nothing in the Indenture or in the Notes, express or implied, shall give
to any Person, other than the parties hereto, the Noteholders, and any Paying
Agent which may be appointed pursuant to the provisions hereof, and any of their
successors hereunder, any benefit or any legal or equitable right, remedy or
claim under the Indenture or under the Notes, except that MBIA is an express
third part), beneficiary to the Indenture.
SECTION 13.09 LEGAL HOLIDAYS.
In any case in which the date of any Payment Date or the Stated Maturity
of any Note shall not be a Business Day, then (notwithstanding any other
provision of a Note or the Indenture) payment of principal, interest, or
premium, if any, need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the nominal
date of any such Stated Maturity or Payment Date and, assuming such payment is
actually made on such subsequent Business Day, no additional interest shall
accrue on the amount so paid for the period from and after any such nominal
date.
SECTION 13.10 GOVERNING LAW.
The Indenture and each Note shall be construed in accordance with and
governed by the internal laws of the State of New York applicable to agreements
made and to be performed therein, without regard to the conflict of laws
provisions of any State.
SECTION 13.11 COUNTERPARTS.
The Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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SECTION 13.12 CORPORATE OBLIGATION.
No recourse may be taken, directly or indirectly, against any
incorporation, subscriber to the capital stock, stockholder, employee, officer
or director of the Issuer or of any predecessor or successor of the Issuer with
respect to the Issuees obligations on the Notes or under the Indenture or any
certificate or other writing delivered in connection herewith.
SECTION 13.13 COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application, order or request by the Issuer or the Servicer to
the Indenture Trustee to take any action under any provision of the Indenture
for which a specific request is required under the Indenture, the Issuer or the
Servicer, as applicable, shall furnish to the Indenture Trustee an Officer's
Certificate of the Issuer or the Servicer, as applicable, stating that all
conditions precedent, if any, provided for in the Indenture relating to the
proposed action have been complied with, except that in the case of any such
application or request as to which the furnishing of a different certificate is
specifically required by any provision of the Indenture relating to such
particular application or request, no additional certificate need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in the Indenture shall include:
(a) a statement that each individual signing such certificate or opinion
has read or has caused to be read such covenant or condition and the definitions
herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, such
individual has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 13.14 MBIA DEFAULT.
If an MBIA Default occurs, MBIA's right to consent hereunder and under
any other Transaction Document and to direct the Indenture Trustee shall be void
and, in such event, in all provisions of this Agreement wherein MBIA's consent
or direction is required or permitted, the consent or direction of the Holders
of not less than a majority in Outstanding Principal Amount of all Notes shall
be required or permitted. In addition, if an MBIA Default occurs, at the
direction of the Holders of not less than a majority in Outstanding Principal
Amount of all Notes, the amount of the fee that would have otherwise been paid
as the MBIA Premium shall be applied in the order
97
101
of priority set forth in Section 12.02(d) to either (a) procure an alternative
third party credit enhancement for all Series of. Outstanding Notes, (b) make
payments of premiums to the Noteholders of each Series in the proportion in
which the Outstanding Principal Amount of each Series represents of the
Outstanding Principal Amount of all Series or (c) any combination of the
foregoing. Notice of an MBIA Default shall be provided to Moody's in the manner
specified in Section 13.03(e).
98
102
EXHIBIT A
FORM OF INVESTMENT LETTER
BLT FINANCE CORP. III
7.33% LEASE-BACKED NOTES, SERIES 1994-A
BLT Finance Corp. III (the "Company")
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Norwest Bank Minnesota, National Association,
as Trustee
Norwest Center
6th Street & Marquette Avenue
Minneapolis, Minnesota 55479-0069
The undersigned hereby certifies on behalf of the purchaser named below (the
"Purchaser") as follows:
1. I __________________, am the chief financial officer, a person
fulfilling an equivalent function or other executive officer of the Purchaser.
[2. I am familiar with the provisions of Rule 144A ("Rule 144A") under the
Securities Act of 1933 (the "1933 Act").
a. The Purchaser is a "qualified institutional buyer," as defined in
Rule 144A.
b. The Purchaser is aware that the Company may rely on the exemption
from the registration requirements of the 1933 Act provided by Rule 144A.
c. The Purchaser acknowledges that the Purchaser has (i) received such
information regarding the 1994-A Notes as the Purchaser may require pursuant to
Rule 144A or (ii) the Purchaser has determined not to request such information.]
[2. I am familiar with the provisions of Regulation D under the Securities
Act of 1933 (the "1933 Act").
a. The Purchaser is an "accredited investor" within the meaning of Rule
501 of Regulation D under the 1933 Act.
b. In the normal course of the Purchaser's business the Purchaser
invests in or purchases securities similar to the 1994-A Notes, has such
knowledge and experience in financial and business matters that the Purchaser is
capable of evaluating the merits and risks of its investment in the 1994-A
Notes.
c. The Purchaser is capable of bearing the economic risks of an
investment in the 1994-A Notes.]
103
3. The Purchaser is acquiring the 1994-A Notes for its own account and the
account of its affiliated entities for the purpose of investment or resale under
Rule 144A or any other exemption from registration available under the 1933 Act
and not with a view to the distribution thereof.
4. The Purchaser understands that it is the expressed intent of the Company
that the 1994-A Notes are being issued only in transactions not involving any
public offering within the meaning of the 1933 Act and that the 1994-A Notes
will bear a legend substantially as set forth in the form of 1994-A included in
the Indenture.
5. The Purchaser has no present intention of selling, negotiating or
otherwise disposing of the 1994-A Notes; provided, however it is understood that
the disposition of the Purchaser's property shall at all times be and remain
within its control and without prejudice, however, to its right at all times to
sell or otherwise dispose of all or any part of the 1994-A Notes in accordance
with the Indenture under a registration statement under the 1933 Act, or under
the exemption from such registration available under the 1933 Act.
6. The Purchaser [is not a benefit plan investor as defined in 29 C.F.R.
ss. 2510.3-101 nor a Person who is directly or indirectly using assets of or
acting as fiduciary or trustee of any such benefit plan investor] / [is using
funds to purchase the 1994-A Notes that are held in a general account and all of
the assets in such general account are from the receipt of premiums for the
purchase of annuity contracts that provide for a benefit that is guaranteed
throughout the term of the contract] / [specify other applicable statutory or
regulatory exemption].
7. The Purchaser acknowledges that transfer of a 1994-A Note can only be
effected in accordance with the Indenture.
The representations and warranties contained herein shall be binding upon the
heirs, executors, administrators and other successors of the undersigned. If
there is more than one signatory hereto, the obligations, representations,
warranties and agreements of the undersigned are made jointly and severally.
Executed at ____________________, ______________________, this ___ day of
_______________, 199_.
_________________________________
_________________________________
Purchaser's Name and Title (Print) Signature of Purchaser
_________________________________
Address of Purchaser
_________________________________
Purchaser's Taxpayer
Identification or Social
Security Number
104
EXHIBIT B
FORM OF SUPPLEMENT TO INDENTURE FOR GRANT OF SUBSTITUTE LEASE
CONTRACTS
Pursuant to Section 4.03(e) of the Standard Terms and Conditions of
Indenture dated as of November 1, 1994 (the "Standard Indenture Terms", which
together with the Specific Terms and Conditions of Indenture dated as of
November 1, 1994 (the "Specific Indenture Terms") constitute the Indenture),
among [BLT Finance Corp. III] (the "Issuer"), [▇▇▇▇▇ Leasing Technologies, Inc.
(the "Servicer") and Norwest Bank Minnesota, National Association, as Indenture
Trustee and Back-up Servicer, attached hereto is a supplement to Schedule A of
the Specific Indenture Terms, which includes information regarding certain Lease
Contracts, Lease Receivables and Equipment that is hereby Granted by the Issuer
to the Trustee in accordance with the Indenture. For purposes of this
Supplement, all defined terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Indenture.
Dated: ___________________
By:________________________________
Name:
Title:
[BLT FINANCE CORP. III]
By:________________________________
Name:
Title:
105
SCHEDULE A
SUPPLEMENT FOR SUBSTITUTE LEASE CONTRACTS
106
EXHIBIT C
[FORM OF INDENTURE SUPPLEMENT FOR EACH SERIES OF NOTES]
SUPPLEMENT TO INDENTURE, [TERM] [WAREHOUSE] NOTES, SERIES 199_-_
This INDENTURE SUPPLEMENT, dated as of ____________, is entered
into by and among BLT Finance Corp. III, a Massachusetts corporation (the
"Issuer"), ▇▇▇▇▇ Leasing Technologies, Inc., a Massachusetts corporation, (the
"Servicer"), Norwest Bank Minnesota, National Association, a national banking
association, (the "Back-up Servicer") and Norwest Bank Minnesota, National
Association, a national banking association, as trustee (the "Indenture
Trustee").
This Indenture Supplement incorporates by reference all of the
provisions of the Standard Terms and Conditions of Indenture and the Specific
Indenture Terms, which together are intended to form the Indenture (the
"Indenture") entered into in connection with the financing described below.
The Issuer has duly authorized the execution and delivery of this
Indenture Supplement to provide for the issuance of the Issuer's % Lease-Backed
[Term/Warehouse] Notes, Series (the "Series -- Notes") in a (maximum] aggregate
principal amount of issuable as provided in the Indenture. The Series Lease
Schedule listing the Lease Assets granted to the Indenture Trustee in connection
with the issuance of the Series -- Notes is attached hereto as Schedule A and
the Targeted Balance Schedule with respect to the Series -- Notes is attached
hereto as Schedule B. Pursuant to Section 2.02 of the Standard Terms and
Conditions of Indenture, this Indenture Supplement sets forth the following
additional terms applicable to the Series --- Notes, which series is hereby
designated as [Term/ Warehouse Notes]:
"Accrual Date": shall initially mean --.
"Cut-off Date": shall initially mean --.
"Delivery Date": shall mean --.
["Fixed Interest Rate": shall mean --.]
["Floating Interest Rate": shall mean --.]
"Initial Cash Deposit": shall be $---.
"Initial Payment Date": shall be --.
107
["LIBOR Rate": ]
["LIBOR Rate Reserve Percentage": ]
["Maximum Warehouse Note Rate": ]
"MBIA Premium": shall mean --.
"MBIA Premium Rate": shall mean .
["Note Interest Rate": shall mean --.]
"Obligation Insurance Policy": shall have the MBIA Policy Number ---.
["Private Placement Memorandum" or "Final Private Placement Memorandum":
shall refer to the Private Placement Memorandum dated --.]
"Stated Maturity": shall mean --.
"Transaction Documents Date": shall mean --.
["Warehouse Funding Termination Date": shall mean --.]
["Warehouse Expected Termination Date": shall mean --.]
["Warehouse Lender": shall mean --.]
["Warehouse Note Limit": shall mean " $---.]
108
IN WITNESS WHEREOF, the Issuer, the Servicer, the Back-up Servicer and
the Indenture Trustee have caused this Indenture Supplement to be duly executed
by their respective officers thereunto duly authorized as of the date and year
first above written.
BLT FINANCE CORP. III
By:_________________________________
Name:
Title:
▇▇▇▇▇ LEASING TECHNOLOGIES, INC.
as Servicer
By:_________________________________
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Back-Up Servicer
By:_________________________________
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Indenture Trustee
By:_________________________________
Name:
Title:
109
SCHEDULE A
LEASE SCHEDULE
110
SCHEDULE B
TARGETED BALANCE SCHEDULE
SERIES ---
111
SCHEDULE C
[Form of Warehouse Funding Report, if applicable]
112
Exhibit D-1
[MBIA LOGO]
FORM OF TERM NOTE
NOTE GUARANTY INSURANCE POLICY
OBLIGATIONS: $18,885,370.15 POLICY NUMBER: 604260
BLT Finance Corp. III
7.33% Lease-Backed Note, Series 1994-A
Municipal Bond Investors Assurance Corporation (the "Insurer"), in
consideration of the payment of the premium and subject to the terms of this
Note Guaranty Insurance Policy (this "Policy"), hereby unconditionally and
irrevocably guarantees to any Owner that an amount equal to each full and
complete Insured Payment will be received by Norwest Bank Minnesota, National
Association, as indenture trustee for the Owners (the "Indenture Trustee"), on
behalf of the Owners, for distribution by the Indenture Trustee to each Owner of
each Owner's proportionate share of the Insured Payment. The Insurer's
obligations hereunder with respect to a particular Insured Payment shall be
discharged to the extent funds equal to the applicable Insured Payment are
received by the Indenture Trustee, whether or not such funds are properly
applied by the Indenture Trustee. Insured Payments shall be made only at the
time set forth in this Policy, and no accelerated Insured Payments shall be made
regardless of any acceleration of the Obligations, unless such acceleration is
at the sole option of the Insurer.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust Estate or the
Indenture Trustee for withholding taxes, if any (including interest and
penalties in respect of any such liability).
The Insurer will pay any Insured Payment that is a Preference Amount on
the Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) of (i) a certified copy of the order requiring the return of
such Preference Amount, (ii) an opinion of counsel satisfactory to the Insurer
that such order is final and not subject to appeal, (iii) an assignment in such
form as is reasonably required by the Insurer, irrevocably assigning to the
Insurer all rights and claims of the Owner relating to or arising under the
Obligations against the debtor which made such preference payment or otherwise
with respect to such preference payment and (iv) appropriate instruments to
effect the appointment of the Insurer as agent for such Owner in any legal
proceeding related to such preference payment, such instruments being in a form
satisfactory to the Insurer, provided that if such documents are received after
12:00 noon, New York City time, on such Business Day, they will be deemed to be
received on the following Business Day. Such payments shall be disbursed to
the receiver or trustee in bankruptcy named in the final order of the court
exercising jurisdiction on behalf of the Owner and not to any Owner directly
unless such Owner has returned principal or interest paid on the Obligations to
such receiver or trustee in bankruptcy, in which case such payment shall be
disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than
12:00 noon, New York City time, on the later of the Payment Date on which the
related Deficiency Amount is due or the Business Day following receipt in New
York, New York on a Business Day by State Street Bank and Trust Company, N.A.,
as Fiscal Agent for the Insurer or any successor fiscal agent appointed by the
Insurer (the "Fiscal Agent") of a Notice (as described below); provided that if
such Notice is received after 12:00 noon, New York City time, on such Business
Day, it will be deemed to be received on the following Business Day. If any such
Notice received by the Fiscal Agent is not in proper form or is otherwise
insufficient for the purpose of making claim hereunder, it shall be deemed not
to have been received by the Fiscal Agent for purposes of this paragraph, and
the Insurer or the Fiscal Agent, as the case may be, shall promptly so advise
the Indenture Trustee and the Indenture Trustee may submit an amended Notice.
113
[MBIA LOGO]
Insured Payments due hereunder, unless otherwise stated herein will be
disbursed by the Fiscal Agent to the Indenture Trustee on behalf of the Owners
by wire transfer of immediately available funds in the amount of the Insured
Payment less, in respect of Insured Payments related to Preference Amounts, any
amount held by the Indenture Trustee for the payment of such Insured Payment and
legally available therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds to
make payments due under this Policy.
Subject to the terms of the Agreement, the Insurer shall be subrogated
to the rights of each Owner to receive payments under the Obligations to the
extent of any payment by the Insurer hereunder.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Indenture dated as of November 1, 1994, among BLT
Finance Corp. III, as Issuer, ▇▇▇▇▇ Leasing Technologies, Inc., as Servicer, and
Norwest Bank Minnesota, National Association, as Back-up Servicer and Indenture
Trustee, without regard to any amendment or supplement thereto.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City or in the city in which the
corporate trust office of the Indenture Trustee under the Agreement is located
are authorized or obligated by law or executive order to close.
"Deficiency Amount" means (a) for any Payment Date, any shortfall in
amounts available in the Collection Account to pay the interest due on the
Obligations after giving effect to the transfers from the Cash Collateral
Account pursuant to Section 12.03(d)(i) of the Agreement and after payment of
all amounts payable pursuant to Section 12.02(d)(i) through (iv) of the
Agreement, plus (b) on the Stated Maturity, any shortfall in amounts available
in the Collection Account to pay the Principal Distribution Amount after giving
effect to the transfers from the Cash Collateral Account pursuant to
Section 12.03(d)(i) of the Agreement and after the payment of all amounts
payable pursuant to Section 12.02(d)(i) through (vi) of the Agreement.
"Insured Payment" means (i) as of any Payment Date, any Deficiency
Amount and (ii) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly confirmed
in writing by telecopy substantially in the form of Exhibit A attached hereto,
the original of which is subsequently delivered by registered or certified mail,
from the Indenture Trustee specifying the Insured Payment which shall be due and
owing on the applicable Payment Date.
"Owner" means each Noteholder (as defined in the Agreement) who, on the
applicable Payment Date, is entitled under the terms of the applicable Notes to
payment under the Policy.
"Preference Amount" means any amount previously distributed to an Owner
on the Obligations that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set
114
[MBIA LOGO]
forth in the Agreement as of the date of execution of this Policy, without
giving effect to any subsequent amendment to or modification of the Agreement
unless such amendment or modification has been approved in writing by the
Insurer.
Any notice hereunder or service of process on the Fiscal Agent of the
Insurer may be made at the address listed below for the Fiscal Agent of the
Insurer or such other address as the insurer shall specify in writing to the
Indenture Trustee.
The notice address of the Fiscal Agent is ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Indenture Trustee in
writing.
This Policy is being issued under and pursuant to, and shall be
construed under, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this Policy
is not refundable for any reason including payment, or provision being made for
payment, prior to maturity of the Obligations.
IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed
and attested this 16th day of November, 1994.
MUNICIPAL BOND INVESTORS
ASSURANCE CORPORATION
By /s/ [Illegible]
------------------------
Assistant Secretary
115
[MBIA LOGO]
EXHIBIT A
TO NOTE GUARANTY INSURANCE POLICY
NUMBER: 604260
NOTICE UNDER NOTE GUARANTY
INSURANCE POLICY NUMBER: 604260
State Street Bank and Trust Company, N.A., as Fiscal Agent
for Municipal Bond Investors
Assurance Corporation
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Municipal Registrar and
Paying Agency
Municipal Bond Investors
Assurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The undersigned, a duly authorized officer of Norwest Bank Minnesota,
National Association, as indenture trustee (the "Indenture Trustee"), hereby
certifies to State Street Bank, and Trust Company, N.A. (the "Fiscal Agent") and
Municipal Bond Investors Assurance Corporation (the "Insurer"), with reference
to Note Guaranty Insurance Policy Number: 604260 (the "Policy") issued by the
Insurer in respect of the Rothschild Asset-Backed Finance Conduit V, 7.33%
Lease-Backed Note, Series 1994-A (the "Obligations"), that:
(i) the Indenture Trustee is the indenture trustee under the Indenture
dated as of November 1. 1994, among BLT Finance Corp. III, as Issuer, ▇▇▇▇▇
Leasing Technologies, Inc., as Servicer, and Norwest Bank Minnesota,
National Association, as Back-up Servicer and Indenture Trustee;
(ii) the amount due under clause (a) of the definition of Deficiency
Amount for the Payment Date occurring on (the "Applicable Payment Date") is
$ ;
(iii) the amount due under clause (b) of the definition of Deficiency
Amount for the Applicable Payment Date is $ ;
(iv) the sum of the amounts listed in paragraphs (ii) and (iii) above
is $ (the "Deficiency Amount");
(v) the amount of previously distributed payments on the Obligations
that is recoverable and sought to be recovered as a voidable preference by
a trustee in bankruptcy pursuant to the Bankruptcy Code in accordance with
a final nonappealable order of a court having competent jurisdiction is
$____ (the "Preference Amount");
(vi) the total Insured Payment due is $ , which amount equals the
sum of the Deficiency
116
[MBIA LOGO]
Amount and the Preference Amount;
(vii) the Indenture Trustee is making a claim under and pursuant to
the terms of the Policy for the dollar amount of the Insured Payment set
forth in (iv) above to be applied to the payment on the Obligations for the
Applicable Payment Date in accordance with the Agreement and for the dollar
amount of the Insured Payment set forth in (v) above to be applied to the
payment of any Preference Amount; and
(viii) the Indenture Trustee directs that payment of the Insured
Payment be made to the following account by bank wire transfer of federal
or other immediately available funds in accordance with the terms of the
Policy: [INDENTURE TRUSTEE'S ACCOUNT].
Any capitalized term used in this Notice and not otherwise defined herein
shall have the meaning assigned thereto in the Policy.
Any person who knowingly and with intent to defraud any insurance company
or other person files a statement of claim containing any materially false
information, or conceals for the purpose of misleading, information concerning
any fact material thereto, commits a fraudulent insurance act, which is a crime.
IN WITNESS WHEREOF, the Indenture Trustee has executed and delivered this
Notice under the Policy as of the day of , .
as Indenture Trustee
By ________________________________________
Title _____________________________________
117
Exhibit-D-2
DRAFT
▇▇▇▇▇ ▇▇▇▇
11/09/94
FORM OF TERM NOTE
NOTE GUARANTY INSURANCE POLICY
OBLIGATIONS: $[ ] POLICY NUMBER:
BLT Finance Corp. III
[ ]% Lease-Backed Note, Series 1994-A
Municipal Bond Investors Assurance Corporation (the "Insurer"), in
consideration of the payment of the premium and subject to the terms of this
Note Guaranty Insurance Policy (this "Policy"), hereby unconditionally and
irrevocably guarantees to any Owner that an amount equal to each full and
complete Insured Payment will be received by Norwest Bank Minnesota, National
Association, as indenture trustee for the Owners (the "Indenture Trustee"), on
behalf of the Owners, for distribution by the Indenture Trustee to each Owner of
each Owner's proportionate share of the Insured Payment. The Insurer's
obligations hereunder with respect to a particular Insured Payment shall be
discharged to the extent funds equal to the applicable Insured Payment are
received by the Indenture Trustee, whether or not such funds are properly
applied by the Indenture Trustee. Insured Payments shall be made only at the
time set forth in this Policy, and no accelerated Insured Payments shall be made
regardless of any acceleration of the Obligations, unless such acceleration is
at the sole option of the Insurer.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust Estate or the
Indenture Trustee for withholding taxes, if any (including interest and
penalties in respect of any such liability).
The Insurer will pay any Insured Payment that is a Preference Amount on the
Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) of (i) a certified copy of the order requiring the return of
such Preference Amount, (ii) an opinion of counsel satisfactory to the Insurer
that such order is final and not subject to appeal, (iii) an assignment in such
form as is reasonably required by the Insurer irrevocably assigning to the
Insurer all rights and claims of the Owner relating to or arising under the
Obligations against the debtor which made such preference payment or otherwise
with respect to such preference payment and (iv) appropriate instruments to
effect the appointment of the Insurer as agent for such Owner in any legal
proceeding related to such preference payment, such instruments being in a form
satisfactory to the Insurer, provided that if such documents are received after
12:00 noon, New York City time, on such Business Day, they will be deemed to be
received on the following Business Day. Such payments shall be disbursed to the
receiver or trustee in bankruptcy named in the final order of the court
exercising jurisdiction on behalf of the Owner and not to any Owner directly
unless such Owner has returned principal or interest paid on the Obligations to
such receiver or trustee in bankruptcy, in which case such payment shall be
disbursed to such Owner.
118
The Insurer will pay any other amount payable hereunder no later than 12:00
noon, New York City time, on the later of the Payment Date on which the related
Deficiency Amount is due or the Business Day following receipt in New York, New
York on a Business Day by State Street Bank and Trust Company, N.A., as Fiscal
Agent for the Insurer or any successor fiscal agent appointed by the Insurer
(the Fiscal Agent) of a Notice (as described below); provided that if such
Notice is received after 12:00 noon, New York City time, on such Business Day,
it will be deemed to be received on the following Business Day. If any such
Notice received by the Fiscal Agent is not in proper form or is otherwise
insufficient for the purpose of making claim hereunder, it shall be deemed not
to have been received by the Fiscal Agent for purposes of this paragraph, and
the Insurer or the Fiscal Agent, as the case may be, shall promptly so advise
the Indenture Trustee and the Indenture Trustee may submit an amended Notice.
Insured Payments due hereunder, unless otherwise stated herein, will be
disbursed by the Fiscal Agent to the Indenture Trustee on behalf of the Owners
by wire transfer of immediately available funds in the amount of the Insured
Payment less, in respect of Insured Payments related to Preference Amounts, any
amount held by the Indenture Trustee for the payment of such Insured Payment and
legally available therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds to
make payments due under this Policy.
Subject to the terms of the Agreement, the Insurer shall be subrogated to
the rights of each Owner to receive payments under the Obligations to the extent
of any payment by the Insurer hereunder.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Indenture dated as of November 1, 1994, among BLT
Finance Corp. III, as Issuer, ▇▇▇▇▇ Leasing Technologies, Inc., as Servicer, and
Norwest Bank Minnesota, National Association, as Back-up Servicer and Indenture
Trustee, without regard to any amendment or supplement thereto.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City or in the city in which the
corporate trust office of the Indenture Trustee under, the Agreement is located
are authorized or obligated by law or executive order to close.
"Deficiency Amount" means (a) for any Payment Date, any shortfall in
amounts available in the Collection Account to pay the interest due on the
Obligations after giving effect to the transfers from the Cash Collateral
Account pursuant to Section 12.03(d)(i) of the Agreement and after payment of
all amounts payable pursuant to Section 12.02(d)(i) through (iv) of the
Agreement, plus (b) on the Stated Maturity, any shortfall in amounts available
in the Collection
2
119
Account to pay the Principal Distribution Amount after giving effect to the
transfers from the Cash Collateral Account pursuant to Section 12.03(d)(i) of
the Agreement and after the payment of all amounts payable pursuant to
Section 12.02(d)(i) through (vi) of the Agreement.
"Insured Payment" means (i) as of any Payment Date, any Deficiency Amount
and (ii) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly confirmed
in writing by telecopy substantially in the form of Exhibit A attached hereto,
the original of which is subsequently delivered by registered or certified mail,
from the Indenture Trustee specifying the Insured Payment which shall be due and
owing on the applicable Payment Date.
"Owner" means each Noteholder (as defined in the Agreement) who, on the
applicable Payment Date, is entitled under the terms of the applicable Notes to
payment under the Policy.
"Preference Amount" means any amount previously distributed to an Owner on
the Obligations that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Agreement as of the date of execution
of this Policy, without giving effect to any subsequent amendment to or
modification of the Agreement unless such amendment or modification has been
approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent of the
Insurer may be made at the address listed below for the Fiscal Agent of the
Insurer or such other address as the Insurer shall specify in writing to the
Indenture Trustee.
The notice address of the Fiscal Agent is ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Indenture Trustee in
writing.
This Policy is being issued under and pursuant to, and shall be construed
under, the laws of the State of New York, without giving effect to the conflict
of laws principles thereof.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason the premium on this Policy is
not refundable for any reason including payment, or provision being made for
payment, prior to maturity of the Obligations.
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IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed and
this day of November, 1994.
MUNICIPAL BOND INVESTORS
ASSURANCE CORPORATION
By _________________________________
Attest:
BY __________________________
Secretary
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EXHIBIT A
TO NOTE GUARANTY INSURANCE POLICY
NUMBER: [ ]
NOTICE UNDER NOTE GUARANTY
INSURANCE POLICY NUMBER: [ ]
State Street Bank and Trust Company, N.A., as Fiscal Agent
for Municipal Bond Investors
Assurance Corporation
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Municipal Registrar and Paying Agency
Municipal Bond Investors
Assurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The undersigned, a duly authorized officer of , as indenture trustee (the
"Indenture Trustee"), hereby certifies to State Street Bank and Trust Company,
N.A. (the "Fiscal Agent") and Municipal Bond Investors Assurance Corporation
(the "Insurer"), with reference to Note Guaranty Insurance Policy Number: (the
"Policy") issued by the Insurer in respect of the Rothschild Asset-Backed
Finance Conduit V, [ ]% Lease-Backed Note, Series 1994 (the "Obligations"),
that:
(i) the Indenture Trustee is the indenture trustee under the Indenture
dated as of November 1, 1994, among BLT Finance Corp. III, as Issuer, ▇▇▇▇▇
Leasing Technologies, Inc., as Servicer, and Norwest Bank Minnesota,
National Association, as Back-up Servicer and Indenture Trustee;
(ii) the amount due under clause (a) of the definition of Deficiency
Amount for the Payment Date occurring on (the "Applicable Payment
Date") is $ ;
(iii) the amount due under clause (b) of the definition of Deficiency
Amount for the Applicable Payment Date is $ ;
(iv) the sum of the amounts listed in paragraphs (ii) and (iii) above
is $ (the "Deficiency Amount");
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(v) the amount of previously distributed payments on the Obligations
that is recoverable and sought to be recovered as a voidable preference by
a trustee in bankruptcy pursuant to the Bankruptcy Code in accordance with
a final nonappealable order of a court having competent jurisdiction is
$ (the "Preference Amount");
(vi) the total Insured Payment due is $ which amount equals the
sum of the Deficiency Amount and the Preference Amount;
(vii) the Indenture Trustee is making a claim under and pursuant to
the terms of the Policy for the dollar amount of the Insured Payment set
forth in (iv) above to be applied to the payment on the Obligations for the
Applicable Payment Date in accordance with the Agreement and for the dollar
amount of the Insured Payment set forth in (y) above to be applied to the
payment of any Preference Amount; and
(viii) the Trustee directs that payment of the Insured Payment be made
to the following account by bank wire transfer of federal or other
immediately available funds in accordance with the terms of the Policy:
[INDENTURE TRUSTEE'S ACCOUNT].
Any capitalized term used in this Notice and not otherwise defined herein
shall have the, meaning assigned thereto in the Policy.
Any person who knowingly and with intent to defraud any insurance company
or other person files a statement of claim containing any materially false
information, or conceals for the purpose of misleading, information concerning
any fact material thereto commits a fraudulent insurance act, which is a crime.
IN WITNESS WHEREOF, the Indenture Trustee has executed and delivered this
Notice under the Policy as of the day of , .
as Indenture Trustee
By __________________________________
Title _______________________________
A-2
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EXHIBIT E-1
FORM OF TERM NOTE
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS, AND MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT IN
COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THE
TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN RESTRICTIONS AND CONDITIONS SET
FORTH IN THE INDENTURE UNDER WHICH THIS NOTE IS ISSUED (A COPY OF WHICH IS
AVAILABLE FROM THE, INDENTURE TRUSTEE UPON REQUEST).
DUE TO THE PROVISIONS FOR THE PAYMENT OF PRINCIPAL CONTAINED HEREIN, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE MAY BE LESS THAN THE AMOUNT SHOWN ON
THE FACE HEREOF. ANYONE PURCHASING THIS NOTE MAY ASCERTAIN THE OUTSTANDING
PRINCIPAL AMOUNT HEREOF BY INQUIRY OF THE INDENTURE TRUSTEE.
No. ______________________ $_______________
BLT FINANCE CORP. III
7.33% LEASE-BACKED NOTE, SERIES 1994-A
DELIVERY DATE: November 16,1994 STATED MATURITY: December 16,1998
BLT Finance Corp. 111, a corporation duly organized and existing under the
laws of the Commonwealth of Massachusetts (the "Issuer", which term includes any
successor entity under the Indenture referred to below), for value received,
hereby promises to pay to , or its registered assigns, the principal
gum of Dollars ($ ) in monthly
installments beginning on December 16, 1994, and to pay interest monthly in
arrears on the unpaid portion of said principal sum (and, to the extent that the
payment of such interest shall be legally enforceable, on any overdue
installment of interest on this Note) on the sixteenth day of each calendar
month or, if such sixteenth day is not a Business Day, the Business Day
immediately following (each, a "Payment Date"), for the period from and
including the Delivery Date set forth above through , 1994, and
thereafter, monthly from and including the most recent Payment Date through the
day immediately preceding the applicable Payment Date, until the last day
preceding the Final Payment Date, at the rate of 7.33% per annum (calculated on
the basis of a 360-day year consisting of 12 months of 30 days each). Each
monthly installment of principal payable on this Note shall be an amount equal
to the Pro Rata share of the Principal Distribution Amount plus any Additional
Principal Amount, as such term is defined in the Indenture described herein. Any
remaining unpaid portion of the principal amount of this Note shall
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be due and payable no later than the Stated Maturity referred to above. The
interest and principal so payable on any Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Note is registered on the
Record Date for such Payment Date, which shall be the close of business on the
last day of the month prior to such Payment Date (whether or not a Business
Day).
The principal and interest on this Note are payable by check mailed by
first-class mail to the Person whose name appears as the Registered Holder of
this Note on the Note Register at the address of such Person as it appears on
the Note Register, or by wire transfer in immediately available funds to the
account specified in writing to the Indenture Trustee by the Person whose name
appears as the Registered Holder of this Note on the Note Register received at
least five Business Days prior to the Record Date for the Payment Date on which
wire transfers Will commence, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. Funds represented by checks returned undelivered will be held for
payment to the Person entitled thereto, subject to the terms of the Indenture,
at the office or agency in the United States of America designated as such by
the Issuer for such purpose pursuant to the Indenture.
This Note is one of a duly authorized issue of Notes of the Issuer
designated as its 7.33% Lease-Backed Notes, Series 1994-A Due December 16,1998
(herein called the "Notes") issued and to be issued under the Specific Terms and
Conditions of Indenture dated November 1, 1994, and the Standard Terms and
Conditions of Indenture dated November 1, 1994, appended thereto and
incorporated therein (herein called the "Indenture"), among the Issuer, ▇▇▇▇▇
Leasing Technologies, Inc., as Servicer, and Norwest Bank Minnesota, National
Association, as Indenture Trustee (the "Indenture Trustee", which term includes
any successor Indenture Trustee under the Indenture), to which the Indenture,
and all indentures supplemental thereto, reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes, and the terms upon which the Notes are,
and am to be, authenticated and delivered. All terms used in this Note which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
The Notes are secured by certain Lease Receivables and by certain other
Collateral described in the Indenture and the Note Guaranty Insurance Policy
issued by MBIA. The Trust Estate secures the Notes equally and ratably without
prejudice, priority or distinction between, Any Note and any other Note by
reason of time of issue or otherwise, and also secures the payment of certain
other amounts and certain other obligations as described in the Indenture.
Unless earlier declared due and payable by reason of an Event of Default,
Notes are payable only at the time and in the manner provided in the Indenture
and are not redeemable or prepayable at the option of the Issuer before such
time, except that the Notes shall be redeemable at the option of the Issuer, and
in the absence of the exercise thereof, by MBIA in whole but not in part, at any
time after the Outstanding Principal Amount of Notes declines to 10% or less of
the original principal amount of the Notes at a redemption price equal to the
Outstanding Principal Amount thereof plus accrued interest thereon to the date
of redemption. If an Event of Default as defined in the Indenture shall occur
and be continuing, the principal of all the Notes may become or be
2
125
declared due and payable in the manner said with the effect, provided in the
indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note may be registered on the Note Register of the
Issuer upon surrender of this Note for registration of transfer at the office or
agency of the Issuer in the United States of America maintained for such
purpose, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Issuer and the Indenture Trustee and duly executed by
the holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Notes of the same Stated Maturity of authorized denominations and
for the same initial aggregate principal amount will be issued to the designated
transferees.
Prior to due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment as herein provided and for all other
purposes whether or not this Note be overdue, and neither the Issuer, the
Indenture Trustee, nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer, the Indenture Trustee, the Back-up Servicer, the Servicer
and MBIA with the consent of the Holders of 66-2/3% in aggregate principal
amount of Notes at the time Outstanding. The Indenture also contains provisions
permitting MBIA or the Holders of specified percentages in aggregate principal
amount of the Notes at the time Outstanding with the prior written consent of
MBIA, on behalf of the Holders of all Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note.
The Notes are issuable only in registered form without coupons in such
authorized denominations as provided in the Indenture and subject to certain
limitations therein set forth.
This Note and the Indenture shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
conflicts of laws principles.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note,
but solely from the Collateral pledged to the Indenture Trustee under the
Indenture and the Policy at the times, place and rate, and in the coin or
currency, herein prescribed. Notwithstanding anything else to the contrary
contained in this Note or the Indenture, the obligation of the Issuer to pay the
principal of and interest on this Note is not a general obligation of the
Issuer, nor its officers or directors, but is limited solely to the Collateral
pledged under the Indenture.
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STATEMENT OF INSURANCE
Municipal Bond Investors Assurance Corporation ("MBIA") has issued a Note
Guaranty Insurance Policy (the "Policy") containing the following provisions,
such Policy being on file at the offices of the Indenture Trustee at 6th Street
and Marquette Avenue, Minneapolis, Minnesota 55479-0069.
MBIA, in consideration of the payment of the premium and subject to the
terms of the Policy, thereby unconditionally and irrevocably guarantees to any
Owner that an amount equal to each full and complete Insured Payment will be
received by the Indenture Trustee, as Indenture Trustee for the Owners, on
behalf of the Owners, for distribution by the Indenture Trustee to each Owner of
each Owner's proportionate share of the Insured Payment. MBIA's obligations
under the Policy with respect to a particular Insured Payment shall be
discharged to the extent funds equal to the applicable Insured Payment are
received by the Indenture Trustee whether or not such funds are properly applied
by the Indenture Trustee. Insured Payments shall be made only at the time set
forth in the Policy, and no accelerated Insured Payments shall be made
regardless of any acceleration of the Obligations, unless such acceleration is
at the sole option of MBIA. "Obligations" shall mean:
$
BLT Finance Corp. III
7.33% Lease-Backed Term Note, Series 1994-A
Notwithstanding the foregoing paragraph, the Policy does not cover
shortfalls, if any, attributable to the liability of the Trust Estate or the
Indenture Trustee for withholding taxes, if any (including interest and
penalties in respect of any such liability).
MBIA will pay any Insured Payment that is a Preference Amount on the
Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) Of (i) a certified copy of the order requiring the return of
such Preference Amount, (ii) an opinion of counsel satisfactory to MBIA that
such order is final and not subject to appeal, (iii) an assignment in such form
as is reasonably required by MBIA, irrevocably assigning to MBIA all rights and
claims of the Owner relating to or arising under the Obligations against the
debtor which made such preference payment or otherwise with respect to such
preference payment and (iv) appropriate instruments to effect the appointment
of MBIA as agent for such Owner in any legal proceeding related to such
preference payment, such instruments being in a form satisfactory TO MBIA,
provided that if such documents are received after 12:00 noon, New York City
time, on such Business Day, they will be deemed to be received on the following
Business Day. Such payments shall, be disbursed to the receiver or trustee in
bankruptcy named in the final order of the court exercising jurisdiction on
behalf of the Owner and not to the Owner directly unless such Owner has returned
principal or interest paid on the Obligations to such receiver or trustee in
bankruptcy, in which case such payment shall be
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127
disbursed to such Owner.
MBIA will pay any other amount payable under the Policy no later than 12:00
noon, New York City time, on the later of the Payment Date on which the related
Deficiency Amount is due or the Business Day following receipt in New York, New
York on a Business Day by State Street Bank and Trust Company, N.A. as Fiscal
Agent for MBIA or any successor fiscal agent appointed by ▇▇▇▇ (the "Fiscal
Agent") of a Notice (as described below); provided that if such Notice is
received after 12:00 noon, New York City time, on such Business Day, it will be
deemed to be received on the following Business Day. If any such Notice received
by the MW Agent is NOT in proper form or is otherwise insufficient for the
purpose of making claim under the Policy, it shall be deemed not to have been
received by the Fiscal Agent for purposes of this paragraph, and MBIA or the
Fiscal Agent, as the case may be, shall promptly so advise the Indenture
Trustee, and the Indenture Trustee may submit an amended Notice.
Insured Payments due under the Policy, unless otherwise stated therein will
be disbursed by the Fiscal Agent to the Indenture Trustee on behalf of the Owner
by wire transfer of immediately available funds in the amount of the Insured
Payment less, in respect of Insured Payments related to Preference Amounts, any
amount held by the Indenture Trustee for the payment of such Insured Payment and
legally available therefor.
The Fiscal Agent is the agent of MBIA only and the Fiscal Agent shall in no
event be liable to Owners for any acts of the Fiscal Agent or any failure of
MBIA to deposit, or cause to be deposited, sufficient funds to make payments due
under the Policy,
Subject to the terms of the Agreement, MBIA shall be subrogated to the
rights of each Owner to receive payments under the Obligations to the extent of
any payment by MBIA under the Policy.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Indenture dated as of November 1, 1994, among BLT
Finance Corp. III as Issuer, ▇▇▇▇▇ Leasing Technologies, Inc., as Servicer, and
Norwest Bank Minnesota, National Association, as Back-up Servicer and Indenture
Trustee, without regard to any amendment or supplement thereto.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City or in the city in which the
corporate trust office of the Indenture Trustee under the Agreement is located
are authorized or obligated by law or executive order to close.
"Deficiency Amount" means (a) for any Payment Date, any shortfall in
amounts available in the Collection Account to pay the interest due on the
Obligations after giving effect to the transfers from the Cash Collateral
Account pursuant to Section 12.03(d)(i) of the Agreement and after payment of
all amounts payable pursuant to Section 12.02(d)(i) through (iv) of the
Agreement,
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128
plus (b), on the Stated Maturity any shortfall in amounts available in the
Collection Account to pay the Principal Distribution Amount after giving effect
to the transfers from the Cash Collection Account pursuant to
Section 12.03(d)(i) of the Agreement and after the payment of all amounts
payable pursuant to Section 12.02(d)(i) through (vi) of the Agreement.
"Insured Payment" means (i) as of any Payment Date, any Deficiency Amount
and (ii) any Preference Amount,
"Notice" means the telephonic or telegraphic notice, promptly confirmed in
writing by telecopy substantially in the form of Exhibit A attached to the
Policy, the original of which is subsequently delivered by registered or
certified mail, from the Indenture Trustee specifying the Insured Payment which
shall be due and owing on the applicable Payment Date.
"Owner" means each Noteholder (as defined in the Agreement) who, on the
applicable Payment Date, is entitled under the terms of the applicable Notes to
payment under the Policy.
"Preference Amount" means any amount previously distributed to an Owner on
the Obligations that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
Capitalized. terms used in the Policy and not otherwise defined therein
shall have the respective meanings set forth in the Agreement as of the date of
execution of the Policy, without giving effect to any subsequent amendment to or
modification of the Agreement unless such amendment or modification has been
approved in writing by MBIA.
Any notice under the Policy or service of process on the Fiscal Agent of
MBIA may be made at the address listed below for the Fiscal Agent of MBIA or
such other address as MBIA shall specify in writing to the Indenture Trustee.
The notice address of the Fiscal Agent is ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: Municipal Registrar and Paying Agency or such
other address as the Fiscal Agent and MBIA shall specify to the Indenture
Trustee in writing.
The Policy is being issued under and pursuant to, and shall be construed
under the laws of the State of New York, without giving effect to the conflict
of laws principles thereof
The insurance provided by the Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
The Policy is not cancelable for any reason. The premium on the Policy is
not refundable for any reason including payment, or provision being made for
payment, prior to final payment of the Obligations.
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Unless the certificate of authentication hereon has been executed by the
Indenture Trustee by manual signature, this Note shall not be entitled to any
benefit under the Indenture or be valid obligatory for any purpose.
IN WITNESS WHEREOF, BLT Finance Corp. III has caused this instrument to be
signed, manually, by its President or a Vice President.
By: ___________________________________
[Vice] President
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130
[FORM OF INDENTURE TRUSTEE'S
CERTIFICATE OF AUTHENTICATION]
This is one of the Notes described in the within-mentioned Indenture.
Dated:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By: __________________________________
Authorized Signatory
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Exhibit E-2
FORM OF WAREHOUSE NOTE
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS, AND MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT IN
COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THE
TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN RESTRICTIONS AND CONDITIONS SET
FORTH IN THE INDENTURE UNDER WHICH THIS NOTE IS ISSUED (A COPY OF WHICH IS
AVAILABLE FROM THE INDENTURE TRUSTEE UPON REQUEST).
DUE TO THE PROVISIONS FOR THE PAYMENT AND REBORROWING OF PRINCIPAL CONTAINED
HEREIN, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. ANYONE PURCHASING THIS NOTE MAY ASCERTAIN THE
OUTSTANDING PRINCIPAL AMOUNT HEREOF BY INQUIRY OF THE INDENTURE TRUSTEE.
No. __________________ $ ______________
BLT FINANCE CORP. III
LEASE-BACKED WAREHOUSE NOTE, SERIES 1994-B
DELIVERY DATE: November 16, 1994 STATED MATURITY: May 16, 2001
BLT Finance Corp. III, a corporation duly organized and existing under the
laws of the Commonwealth of Massachusetts (the "Issuer", which term includes any
successor entity under the Indenture referred to below), for value received,
hereby promises to pay to , or its registered assigns (the
"Warehouse Lender"), on the Stated Maturity set forth above, the principal sum
of Dollars ($ ), or, if less, the
sum of all Warehouse Fundings made under this Note, less the amount of all
principal payments previously made by the Issuer to the Warehouse Lender (the
"Outstanding Principal Amount"), and to pay interest monthly in arrears on the
unpaid portion of said Outstanding Principal Amount (and, to the extent that the
payment of such interest shall be legally enforceable, on any overdue
installment of interest on this Note) on the sixteenth day of each calendar
month or, if such sixteenth day is not a Business Day, the Business Day
immediately following (each, a "Payment Date"), monthly from and including the
most recent Payment Date through the day immediately preceding the applicable
Payment Date, until the last day preceding the Final Payment Date, at the
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132
then applicable Floating Interest Rate or Fixed Interest Rate, determined as set
forth in the Indenture described herein. Principal and interest shall be paid in
monthly installments beginning on , 1994, and each
installment of principal shall be in an amount equal to the Pro Rata Share of
the Principal Distribution Amount plus any Additional Principal Amount, as such
terms are defined in the Indenture described herein. The interest and principal
so payable on any Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Note is registered on the Record Date for such
Payment Date, which shall be the close of business on the last day of the month
prior to such Payment Date (whether or not a Business Day). (Interest shall be
calculated on the basis of a 360-day year consisting of 12 months of 30 days
each.)
The Warehouse Fundings made by the Warehouse Lender to the Issuer shall be
evidenced by this Note and the Warehouse Lender shall endorse on the grid
annexed hereto, the date and amount of each Warehouse Funding made by it to the
Issuer and the amount of each payment of principal made by the Issuer with
respect thereto. The Warehouse Lender is irrevocably authorized by the Issuer to
endorse this Note and the Warehouse Lender's records shall be effective only if
such records are in agreement with the related Warehouse Funding Reports
delivered pursuant to the Indenture; PROVIDED, HOWEVER that the failure of the
Warehouse Lender to make, or an error in making, a notation thereon with respect
to any Warehouse Funding shall not limit or otherwise affect the obligations of
the Issuer hereunder or under the Indenture.
The principal and interest on this Note are payable by check mailed by
first-class mail to the Person whose name appears as the Registered Holder of
this Note on the Note Register at the address of such Person as it appears on
the Note Register, or by wire transfer in immediately available funds to the
account specified in writing to the Indenture Trustee by the Person whose name
appears as the Registered Holder of this Note on the Note Register received at
least five Business Days prior to the Record Date for the Payment Date on which
wire transfers will commence, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. Funds represented by checks returned undelivered will be held for
payment to the Person entitled thereto, subject to the terms of the Indenture,
at the office or agency in the United States of America designated as such by
the Issuer for such purpose pursuant to the Indenture.
This Note is one of a duly authorized issue of Notes of the Issuer
designated as its Lease-Backed Warehouse Notes, Series 1994-B, Due May 16, 2001
(herein called the "Notes") issued and to be issued under the Specific Terms and
Conditions of Indenture dated as of November 1, 1994, and the Standard Terms and
Conditions of Indenture dated as of November 1, 1994, and the Supplement to
Indenture, Warehouse Notes, Series 1994-B, appended thereto and incorporated
therein (herein collectively called the "Indenture"), among the Issuer, ▇▇▇▇▇
Leasing Technologies, Inc., as Servicer, and Norwest Bank Minnesota, National
Association, as Indenture Trustee (the "Indenture Trustee", which term includes
any successor Indenture Trustee under the Indenture), to which the Indenture,
and all indentures supplemental thereto, reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes, and the terms upon which the Notes are,
and are to be, authenticated and delivered. All
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133
terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
The Notes are secured by certain Lease Receivables and by certain other
Collateral described in the Indenture and the Note Guaranty Insurance Policy
issued by MBIA. The Trust Estate secures the Notes equally and ratably with all
other Series of notes issued by the Issuer pursuant to the Indenture without
prejudice, priority or distinction between any Note and any other Note by reason
of time of issue or otherwise, and also secures the payment of certain other
amounts and certain other obligations as described in the Indenture.
Unless earlier declared due and payable by reason of an Event of Default,
Notes are payable only at the time and in the manner provided in the Indenture,
except that the Notes may be redeemed in full at the option of the Issuer at any
time and in the absence of the exercise thereof, by MBIA in whole but not in
part at any time after the Outstanding Principal Amount of the Notes declines to
10% or less of the Series Initial IPB, at a redemption price equal to the
Outstanding Principal Amount thereof plus accrued interest thereon to the date
of redemption. If an Event of Default as defined in the Indenture shall occur
and be continuing, the principal of all the Notes may become or be declared due
and payable in the manner and with the effect provided in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note may be registered on the Note Register of the
Issuer upon surrender of this Note for registration of transfer at the office or
agency of the Issuer in the United States of America maintained for such
purpose, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Issuer and the Indenture Trustee and duly executed by
the holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Notes of the same Stated Maturity of authorized denominations and
for the same initial aggregate principal amount will be issued to the designated
transferees.
Prior to due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment as herein provided and for all other
purposes whether or not this Note be overdue, and neither the Issuer, the
Indenture Trustee, nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer, the Indenture Trustee, the Back-up Servicer, the Servicer
and MBIA with the consent of the Holders of 66-2/3% in aggregate principal
amount of Notes and all other notes issued under the Indenture at the time
Outstanding. The Indenture also contains provisions permitting MBIA or the
Holders of specified percentages in aggregate principal amount of the Notes and
all other notes issued under the Indenture at the time Outstanding with the
prior written consent of MBIA, on behalf of the Holders of all Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and
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binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note.
The Notes are issuable only in registered form without coupons in such
authorized denominations as provided in the Indenture and subject to certain
limitations therein set forth.
This Note and the Indenture shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
conflicts of laws principles.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal. of and interest on this Note,
but solely from the Collateral pledged to the Indenture Trustee under the
Indenture and the Obligation Insurance Policy at the times, place and rate, and
in the coin or currency, herein prescribed. Notwithstanding anything else to the
contrary contained in this Note or the Indenture, the obligation of the Issuer
to pay the principal of and interest on this Note is not a general obligation of
the Issuer, nor its officers or directors, but is limited solely to the
Collateral pledged under the Indenture.
STATEMENT OF INSURANCE
Municipal Bond Investors Assurance Corporation ("MBIA") has issued a Note
Guaranty Insurance Policy (the "Policy") containing the following provisions,
such Policy being on file at the offices of the Indenture Trustee at 6th Street
and Marquette Avenue, Minneapolis, Minnesota 55479-0069.
MBIA, in consideration of the payment of the premium and subject to the
terms of the Policy, thereby unconditionally and irrevocably guarantees to any
Owner that an amount equal to each full and complete Insured Payment will be
received by the Indenture Trustee, as Indenture Trustee for the Owners, on
behalf of the Owners, for distribution by the Indenture Trustee of such Insured
Payment to each Owner of each Owner's proportionate share of the Insured
Payment. MBIA's obligations under the Policy with respect to a particular
Insured Payment shall be discharged to the extent funds equal to the applicable
Insured Payment are received by the Indenture Trustee whether or not such funds
are properly applied by the Indenture Trustee. Insured Payments shall be made
only at the time set forth in the Policy, and no accelerated Insured Payments
shall be made regardless of any acceleration of the Obligations, unless such
acceleration is at the sole option of MBIA. "Obligations" shall mean:
Not to Exceed $25,000,000.00
BLT Finance Corp. III
Warehouse Note, Series 1994-B
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Notwithstanding the foregoing paragraph, the Policy does not cover
shortfalls, if any, attributable to the liability of the Trust Estate or the
Indenture Trustee for withholding taxes, if any (including interest and
penalties in respect of any such liability).
MBIA will pay any Insured Payment that is a Preference Amount following
receipt on a Business Day by the Fiscal Agent (as described below) of (i) a
certified copy of the order requiring the return of such Preference Amount,
(ii) an opinion of counsel satisfactory to MBIA that such order is final and not
subject to appeal, (iii) an assignment in such form as is reasonably required by
MBIA, irrevocably assigning to MBIA all rights and claims of the Owner relating
to or arising under the Obligations against the debtor which made such
preference payment or otherwise with respect to such preference payment and
(iv) appropriate instruments to effect the appointment of MBIA as agent for such
Owner in any legal proceeding related to such preference payment, such
instruments being in a form satisfactory to MBIA, provided that if such
documents are received after 12:00 noon, New York City time, on such Business
Day, they will be deemed to be received on the following Business Day. Such
payments shall be disbursed to the receiver or trustee in bankruptcy named in
the final order of the court exercising jurisdiction on behalf of the Owner and
not to any Owner directly unless such Owner has returned principal or interest
paid on the Obligations to such receiver or trustee in bankruptcy, in which case
such payment shall be disbursed to such Owner.
MBIA will pay any other amount payable under the Policy no later than 12:00
noon, New York City time, on the later of the Payment Date on which the related
Deficiency Amount is due or the Business Day following receipt in New York, New
York on a Business Day by State Street Bank and Trust Company, N.A. as Fiscal
Agent for MBIA or any successor fiscal agent appointed by ▇▇▇▇ (the "Fiscal
Agent") of a Notice (as described below), provided that if such Notice is
received after 12:00 noon, New York City time, on such Business Day, it will be
deemed to be received on the following Business Day. If any such Notice received
by the Fiscal Agent is not in proper form or is otherwise insufficient for the
purpose of making claim under the Policy, it shall be deemed not to have been
received by the Fiscal Agent for purposes of this paragraph, and MBIA or the
Fiscal Agent, as the case may be, shall promptly so advise the Indenture
Trustee, and the Indenture Trustee may submit an amended Notice.
Insured Payments due under the Policy unless otherwise stated therein will
be disbursed by the Fiscal Agent to the Indenture Trustee on behalf of the Owner
by wire transfer of immediately available funds in the amount of the Insured
Payment less, in respect Insured Payments, related to Preference Amounts, any
amount held by the Indenture Trustee for the payment of such Insured Payment and
legally available therefor.
The Fiscal Agent is the agent of MBIA only and the Fiscal Agent shall in no
event be liable to Owner for any acts of the Fiscal Agent or any failure of MBIA
to deposit, or cause to be deposited, sufficient funds to make payments due
under the Policy.
Subject to the terms of the Agreement, MBIA shall be subrogated to the
rights of each Owner to receive payments under the Obligations to the extent of
any payment by MBIA under the Policy.
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As used herein, the following terms shall have the following meanings.:
"Agreement" means the Indenture dated as of November 1, 1994, among BLT
Finance Corp. III as Issuer, ▇▇▇▇▇ Leasing Technologies, Inc., as Servicer, and
Norwest Bank Minnesota, National Association, as Back-up Servicer and Indenture
Trustee, without regard to any amendment or supplement thereto.
"Business Day" means any day other than a Saturday, a Sunday or day on
which banking institutions in New York City or in the city in which the
corporate trust office of the Indenture Trustee under the Agreement is located
are authorized or obligated by law or executive order to close.
"Deficiency Amount" means (a) for any Payment Date, any shortfall in
amounts available in the Collection Account to pay the interest due on the
Obligations after giving effect to the transfers from the Cash Collateral
Account pursuant to Section 12.03(d)(i) of the Agreement and after payment of
all amounts payable pursuant to Section 12.02(d)(i) through (iv) of the
Agreement, plus (b), on the Stated Maturity, any shortfall in amounts available
in the Collection Account to pay the Principal Distribution Amount after giving
affect to the transfers from the Cash Collateral Account pursuant to Section
12.03(d)(i) of the Agreement and after the payment of all amounts payable
pursuant to Section 12.02(d)(i) through (vi) of the Agreement.
"Insured Payment" means (i) as of any Payment Date, any Deficiency Amount
and (ii) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly confirmed in
writing by telecopy substantially in the form of Exhibit A attached to the
Policy, the original of which is subsequently delivered by registered or
certified mail, from the Indenture Trustee specifying the Insured Payment which
shall be due and owing on the applicable Payment Date.
"Owner" means each Holder (as defined in the Agreement) who, on the
applicable Payment Date, is entitled under the terms of the applicable Notes to
payment under the Policy.
"Preference Amount" means any amount previously distributed to an Owner on
the Notes that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
Capitalized terms used in the Policy and not otherwise defined therein
shall have the respective meanings set forth in the Agreement as of the date of
execution of the Policy, without giving effect to any subsequent amendment to or
modification of the Agreement unless such amendment or modification has been
approved in writing by MBIA.
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Any notice under the Policy or service of proms on the Fiscal Agent of MBIA
may be made at the address listed below for the Fiscal Agent of MBIA or such
other address as MBIA shall specify in writing to the Indenture Trustee.
The notice address of the Fiscal Agent is ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: Municipal Registrar and Paying Agency or such
other address as the Fiscal Agent and MBIA shall specify to the Indenture
Trustee in writing.
The Policy is being issued under and pursuant to, and shall be construed
under the laws of the State of New York, without giving effect to the conflicts
of laws principles thereof.
The insurance provided by the Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
The Policy is not cancelable for any reason. The premium on the Policy is
not refundable for any reason including payment, or provision being made for
payment, prior to final payment of the Obligations.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee by manual signature, this Note shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, BLT Finance Corp. III has caused this instrument to be
signed, manually, by its President or a Vice President.
By: __________________________________
[Vice] President
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CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-mentioned Indenture.
Dated:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By: _________________________________
Authorized Signatory
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GRID TO WAREHOUSE NOTE
Disbursement Amount
Date of of Principal
Warehouse Warehouse Payment &
Funding Funding Date Paid
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