Exhibit 4.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
IKON RECEIVABLES, LLC,
Issuer
SUNTRUST BANK,
Trustee
and
IOS CAPITAL, INC.,
Servicer
----------------------
INDENTURE
Dated as of June 1, 2001
----------------------
$595,200,000 in aggregate principal amount
of Lease-Backed Notes, consisting of:
$168,000,000 of 3.73375% Class A-1 Lease-Backed Notes
$41,000,000 of 4.16% Class A-2 Lease-Backed Notes
$260,000,000 of Class A-3 Lease-Backed Notes
$126,200,000 of Class A-4 Lease-Backed Notes
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ............ 3
SECTION 1.01. General Definitions. ....................................... 3
SECTION 1.02. Compliance Certificates and Opinions. ......................20
SECTION 1.03. Form of Documents Delivered to Trustee and Insurer. ........20
SECTION 1.04. Acts of Noteholders, etc. ..................................22
SECTION 1.05. Notices, etc., to Trustee, Servicer, Issuer, Insurer and
Rating Agencies. ..........................................23
SECTION 1.06. Notice to Noteholders; Waiver. .............................23
SECTION 1.07. Effect of Headings and Table of Contents. ..................24
SECTION 1.08. Successors and Assigns. ....................................24
SECTION 1.09. Benefits of Indenture. .....................................24
SECTION 1.10. Recording of Indenture. ....................................24
SECTION 1.11. GOVERNING LAW. .............................................25
SECTION 1.12. Legal Holidays. ............................................25
SECTION 1.13. Execution in Counterparts. .................................25
SECTION 1.14. Inspection. ................................................25
SECTION 1.15. Survival of Representations and Warranties. ................26
ARTICLE II THE NOTES .........................................................26
SECTION 2.01. General Provisions; Optional Redemption by Issuer. .........26
SECTION 2.02. Execution, Authentication, Delivery, and Dating. ...........28
SECTION 2.03. Transfer and Exchange. .....................................28
SECTION 2.04. Mutilated, Destroyed, Lost and Stolen Notes. ...............29
SECTION 2.05. Book-Entry Registration. ...................................30
SECTION 2.06. Notice to Clearing Agency Noteholders. .....................31
SECTION 2.07. Definitive Notes. ..........................................31
SECTION 2.08. Payment of Interest and Principal; Rights Preserved. .......32
SECTION 2.09. Persons Deemed Owners. .....................................32
SECTION 2.10. Cancellation. ..............................................32
SECTION 2.11. Noteholder Lists. ..........................................32
SECTION 2.12. Treasury Notes. ............................................33
SECTION 2.13. CUSIP Numbers. .............................................33
SECTION 2.14. Calculation of the LIBOR Rate. .............................33
ARTICLE III ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION AND APPLICATION OF
MONEYS; REPORTS .................................................34
SECTION 3.01. Transaction Accounts; Investments by Trustee. ..............34
SECTION 3.02. Collection of Moneys. ......................................36
SECTION 3.03. Collection Account; Payments. ..............................37
SECTION 3.04. The Reserve Account. .......................................39
i
SECTION 3.05. Reports by Trustee; Notices of Certain Payments. ...........40
SECTION 3.06. Trustee May Rely on Certain Information from Servicer. .....41
SECTION 3.07. Optional Deposits by the Insurer; Notice of Waivers. .......41
SECTION 3.08. The Security Deposit Account ...............................41
SECTION 3.09. Renewal Account. ...........................................42
ARTICLE IV THE POLICY ........................................................42
SECTION 4.01. Claims Under Policy. .......................................42
SECTION 4.02. Preference Claims. .........................................44
SECTION 4.03. Surrender of Policy. .......................................44
ARTICLE V RELEASE OF LEASES AND INTERESTS IN EQUIPMENT .......................44
SECTION 5.01. Release of Equipment. ......................................45
SECTION 5.02. Release of Leases Upon Final Lease Payment. ................45
SECTION 5.03. Execution of Documents. ....................................45
SECTION 5.04. Further Release of Collateral. .............................45
ARTICLE VI SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER ...................45
SECTION 6.01. Servicer Events of Default. ................................45
SECTION 6.02. Substitute Servicer. .......................................46
ARTICLE VII EVENTS OF DEFAULT; REMEDIES ......................................46
SECTION 7.01. Events of Default. .........................................46
SECTION 7.02. Acceleration of Maturity; Rescission and Annulment. ........48
SECTION 7.03. Remedies. ..................................................49
SECTION 7.04. Trustee Shall File Proofs of Claim. ........................49
SECTION 7.05. Trustee May Enforce Claims Without Possession of Notes. ....50
SECTION 7.06. Application of Money Collected. ............................50
SECTION 7.07. Limitation on Suits. .......................................52
SECTION 7.08. Unconditional Right of Noteholders to Receive Principal and
Interest. .................................................52
SECTION 7.09. Restoration of Rights and Remedies. ........................53
SECTION 7.10. Rights and Remedies Cumulative. ............................53
SECTION 7.11. Delay or Omission Not Waiver. ..............................53
SECTION 7.12. Control by Noteholders. ....................................53
SECTION 7.13. Undertaking for Costs. .....................................54
SECTION 7.14. Waiver of Stay or Extension Laws. ..........................54
SECTION 7.15. Sale of Asset Pool. ........................................54
ARTICLE VIII THE TRUSTEE .....................................................56
SECTION 8.01. Certain Duties and Responsibilities. .......................56
SECTION 8.02. Notice of Defaults or Events of Default. ...................57
SECTION 8.03. Certain Rights of Trustee. .................................57
SECTION 8.04. May Hold Notes. ............................................59
SECTION 8.05. Money Held in Trust. .......................................59
ii
SECTION 8.06. Compensation, Reimbursement, etc. ..........................59
SECTION 8.07. Corporate Trustee Required; Eligibility. ...................59
SECTION 8.08. Resignation and Removal; Appointment of Successor. .........60
SECTION 8.09. Acceptance of Appointment by Successor. ....................61
SECTION 8.10. Merger, Conversion, Consolidation or Succession to
Business. .................................................61
SECTION 8.11. Co-Trustees and Separate Trustees. .........................62
SECTION 8.12. Acceptance by Trustee. .....................................63
SECTION 8.13. Preferential Collection of Claims Against the Issuer. ......63
SECTION 8.14. Reports by Trustee to Noteholders. .........................63
SECTION 8.15. No Proceedings. ............................................64
SECTION 8.16. Appointment and Powers. ....................................64
SECTION 8.17. Performance of Duties. .....................................64
SECTION 8.18. Control by the Insurer. ....................................65
ARTICLE IX COVENANTS .........................................................65
SECTION 9.01. Payment of Principal and Interest. .........................65
SECTION 9.02. Maintenance of Office or Agency; Chief Executive Office. ...65
SECTION 9.03. Money for Payments to Noteholders to be Held in Trust. .....66
SECTION 9.04. Corporate Existence; Merger; Consolidation, etc. ...........67
SECTION 9.05. Protection of Asset Pool; Further Assurances. ..............67
SECTION 9.06. [Reserved]. ................................................68
SECTION 9.07. Performance of Obligations; Assignment and Servicing
Agreement. ................................................68
SECTION 9.08. Negative Covenants. ........................................68
SECTION 9.09. Information as to Issuer. ..................................69
SECTION 9.10. Taxes. .....................................................69
SECTION 9.11. Indemnification. ...........................................70
SECTION 9.12. Commission Reports; Reports to Trustee; Reports to
Noteholders. ..............................................70
SECTION 9.13. Insurer's Right with Respect to Subsequent Issuances. ......71
ARTICLE X SUPPLEMENTAL INDENTURES ............................................72
SECTION 10.01. Supplemental Indentures Without Consent of Noteholders. ....72
SECTION 10.02. Supplemental Indentures with Consent of Noteholders. .......72
SECTION 10.03. Execution of Supplemental Indentures. ......................73
SECTION 10.04. Effect of Supplemental Indentures. .........................73
SECTION 10.05. Reference in Notes to Supplemental Indentures. .............73
SECTION 10.06. Compliance with Trust Indenture Act. .......................74
ARTICLE XI SATISFACTION AND DISCHARGE ........................................74
SECTION 11.01. Satisfaction and Discharge of Indenture. ...................74
SECTION 11.02. Application of Trust Money. ................................75
iii
ARTICLE XII MISCELLANEOUS ....................................................75
SECTION 12.01. Trust Indenture Act Controls. ............................75
SECTION 12.02. Communication by Noteholders with Other Noteholders. .....75
SECTION 12.03. Location of Leases. ......................................76
SECTION 12.04. Officers' Certificate and Opinion of Counsel as to
Conditions Precedent. ...................................76
SECTION 12.05. Statements Required in Certificate or Opinion. ...........76
SECTION 12.06. Nonpetition. .............................................77
SECTION 12.07. Non-Recourse. ............................................77
SECTION 12.08. Subordination of Interest of Noteholders. ................77
SCHEDULES
SCHEDULE 1 Leases
EXHIBITS
EXHIBIT A Forms of Notes and Trustee's Certificate of Authentication
iv
IKON RECEIVABLES LLC
Reconciliation and Tie between the Indenture
dated as of June 1, 2001 and the
Trust Indenture Act of 1939, as amended
Trust Indenture Act Section Indenture Section
--------------------------- -----------------
(S) 310 (a)(1) .................... (S) 8.07
(a)(2) .................... 8.07
(a)(3) .................... Not Applicable
(a)(4) .................... Not Applicable
(b) ....................... 8.07; 8.08; 7.07; 1.05; 1.06
(c) ....................... Not Applicable
311 (a) ....................... 8.13
(b) ....................... 8.13
312 (a) ....................... 2.11
(b) ....................... 12.02
(c) ....................... 12.02
313 (a) ....................... 8.14
(b)(1) .................... Not Applicable
(b)(2) .................... 8.14
(c) ....................... 8.14; 1.06
(d) ....................... 8.14
314 (a) ....................... 9.12; 9.09; 1.06
(b) ....................... Not Applicable
(c)(1) .................... 12.04
(c)(2) .................... 12.04
(c)(3) .................... 12.01
(d) ....................... 12.01
(e) ....................... 12.05
(f) ....................... Not Applicable
315 (a) ....................... 8.01(a)
(b) ....................... 8.02; 1.06
(c) ....................... 8.01(b)
(d) ....................... 8.01(c)
(e) ....................... 7.13
316 (a) (last sentence) ....... 2.12
(a)(1)(A) ................. 7.12
(a)(1)(b) ................. 7.11
(a)(2) .................... Not Applicable
317 (a)(1) .................... 7.03(c)
(a)(2) .................... 7.04
(b) ....................... 9.03(c)
318 (a) ....................... 12.01, 12.02
(c) ....................... 12.01
v
INDENTURE
This INDENTURE dated as of June 1, 2001, is among IKON RECEIVABLES,
LLC, a Delaware limited liability company (herein called the "Issuer"), SUNTRUST
BANK, a Georgia banking corporation, as trustee (herein called the "Trustee"),
and IOS CAPITAL, INC., a Delaware corporation, as servicer (herein called the
"Servicer").
RECITALS
The Issuer has duly authorized the issuance of $595,200,000 in
aggregate principal amount of its Lease-Backed Notes, consisting of $168,000,000
aggregate principal amount of 3.73375% Class A-1 Lease-Backed Notes (the "Class
A-1 Notes"), $41,000,000 aggregate principal amount of 4.16% Class A-2
Lease-Backed Notes (the "Class A-2 Notes"), $260,000,000 aggregate principal
amount of Class A-3 Lease-Backed Notes (the "Class A-3 Notes") and $126,200,000
aggregate principal amount of Class A-4 Lease-Backed Notes (the "Class A-4
Notes", together with the Class A-1 Notes, Class A-2 Notes, and Class A-3 Notes,
the "Notes" or the "Class A Notes"), and to provide therefor the Issuer has duly
authorized the execution and delivery of this Indenture. The Notes shall be
entitled to payments of interest and principal as set forth herein.
Ambac Assurance Corporation, a Wisconsin stock insurance company (the
"Insurer"), has issued and delivered a financial guaranty insurance policy,
dated the Issuance Date (with endorsements, the "Policy"), pursuant to which the
Insurer guarantees Insured Payments, as defined in the Policy. The Insurer has
also issued and delivered the Swap Insurance Policy (as defined herein).
As an inducement to the Insurer to issue and deliver the Policy and
the Swap Insurance Policies, the Issuer and the Insurer have executed and
delivered the Insurance and Indemnity Agreement, dated as of June 28, 2001 (as
amended from time to time, the "Insurance Agreement") among IOS Capital, Inc.,
IKON Receivables-1, LLC, the Issuer and the Insurer.
As an additional inducement to the Insurer to issue the Policy and the
Swap Insurance Policies, and as security for the performance by the Issuer of
the Insurer Secured Obligations (as defined below) and as security for the
performance by the Issuer of the Trustee Secured Obligations, the Issuer has
agreed to assign the Asset Pool (as defined below) to the Trustee for the
benefit of the Issuer Secured Parties, as their respective interests may appear.
All things necessary to make the Notes, when executed by the Issuer
and authenticated and delivered hereunder, the valid obligations of the Issuer,
and to make this Indenture a valid agreement of the Issuer, in accordance with
its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the holders thereof, it is mutually covenanted and agreed, for the benefit of
all Noteholders, as follows:
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee on the Issuance Date, for the
benefit and security of the Issuer Secured Parties, all of the Issuer's right,
title and interest in and to (a) the Leases and all Lease Payments, Renewal
Payments, Casualty Payments, Retainable Deposits, Lease Purchase Amounts,
Termination Payments, Servicer Advances and other amounts now due or becoming
due with respect thereto since the Cut-Off Date (other than any prepayments of
rent required pursuant to the terms of any Lease at or before the commencement
of the Lease and any payments due before the Cut-Off Date) and all Additional
Leases and Substitute Leases and all Lease Payments, Renewal Payments, Casualty
Payments, Retainable Deposits, Lease Purchase Amounts, Termination Payments,
Servicer Advances and other amounts due or becoming due with respect thereto
since the effective date of their respective addition or substitution (other
than any prepayments of rent required by the terms of any Lease at or before the
commencement of the Lease and any payments due before the effective date of such
addition or substitution), (b) all rights to payment or performance under any
Lease Guaranty, (c) all rights and interests of the Issuer in any collateral
with respect to any Lease, including any security deposit (whether or not they
shall have become Retainable Deposits) and any security interest in any
Equipment securing the obligations of the related Lessees under the Leases, (d)
all interests of the Issuer in the Equipment (which, however, excludes any
ownership interests therein) at any time subject to any Lease, including the
security interest granted by the Seller to the Issuer pursuant to the Assignment
and Servicing Agreement in the Equipment, (e) all rights, remedies, claims,
powers and privileges of the Issuer under or with respect to the Swap and the
Swap Documents (including all rights or security interests with respect to any
collateral pledged to the Issuer thereunder), (f) all moneys or other property
(including all rights of the Issuer with respect to financial assets) from time
to time on deposit in, or credited to, any of the Transaction Accounts,
including all investments and income from the investment of such moneys, (g) all
rights of the Issuer under the Assignment and Servicing Agreement, and (h) all
proceeds of any of the foregoing, whether in cash or other property
(collectively, the "Asset Pool").
Such Grant is made in trust to the Trustee, for the benefit of the
Issuer Secured Parties.
The Grant of the Asset Pool effected by this Indenture shall include
all rights, powers, and options (but none of the obligations) of the Issuer with
respect thereto, including, without limitation, the immediate and continuing
right to claim for, collect, receive, and give receipts for Lease Payments in
respect of the Leases and all other moneys constituting part of the Asset Pool,
to give and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring judicial proceedings in
the name of the Issuer or otherwise, and generally to do
2
and receive anything that the Issuer is or may be entitled to do or receive
under the Leases or with respect to any part of the Asset Pool.
In addition, the Insurer shall cause the Policy to be issued to the
Trustee for the benefit of the Noteholders and shall cause the Swap Insurance
Policy to be issued.
The Trustee acknowledges such Grant, accepts the trusts hereunder in
accordance with the provisions hereof, and agrees to perform the duties herein
required to the best of its ability and to the end that the interests of the
Noteholders and the Insurer may be adequately and effectively protected as
hereinafter provided.
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01. General Definitions.
-------------------
Except as otherwise specified or as the context may otherwise require,
the following terms have the meanings set forth below for all purposes of this
Indenture, and the definitions of such terms are applicable to the singular as
well as to the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.
Acceleration Event: if: (i) a Servicer Event of Default has occurred
------------------
(regardless of whether the rights and obligations of the Servicer have been
terminated pursuant to Section 6.01) unless waived by the Insurer (so long as an
Insurer Default has not occurred and is not continuing); (ii) with respect to
any Payment Date, the Overcollateralization Balance is less than or equal to the
Overcollateralization Floor; (iii) for any three consecutive Due Periods, the
average of the Annualized Default Rates for those Due Periods is greater than
6.25%; or (iv) for any three consecutive Due Periods, the average of the
Delinquency Rates for those Due Periods is greater than 8.0%.
Act: with respect to any Noteholder, as defined in Section 1.04.
---
Additional Lease: as defined in Section 14 of the Assignment and
----------------
Servicing Agreement.
Additional Principal: with respect to each Payment Date equals the
--------------------
excess, if any, of (i)(A) the Outstanding Principal Amount of the Notes plus the
Overcollateralization Balance as of the immediately preceding Payment Date after
giving effect to payments on such Payment Date minus (B) the Discounted Present
Value of the Performing Leases as of the related Determination Date, over (ii)
the Class A Principal Payment to be paid on such Payment Date.
Affiliate: with respect to any specified Person, any other Person
---------
which directly or indirectly controls, or is controlled by, or is under common
control with, such
3
specified Person. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
Annualized Default Rate: for any Due Period, the sum as of the related
-----------------------
Determination Date of the Discounted Present Value of the Leases that became
Non-Performing Leases during such Due Period minus the sum of the recoveries on
Non-Performing Leases received during such Due Period, divided by the Discounted
Present Value of the Leases on the Determination Date immediately preceding that
Determination Date, multiplied by twelve.
Asset Pool: as defined in the Granting Clause hereof.
----------
Assignment and Servicing Agreement: the Assignment and Servicing
----------------------------------
Agreement dated as of June 1, 2001 among the Issuer, the Seller and IOS Capital,
as the same may be amended or modified from time to time in accordance with the
provisions hereof and thereof.
Authorized Officer: with respect to any matter, any officer of or
------------------
other Person representing the Issuer, IOS Capital or the Servicer, as the case
may be, who is authorized to act for the Issuer, IOS Capital or the Servicer, as
the case may be.
Available Funds: with respect to any Payment Date, the following
---------------
amounts on deposit in the Collection Account on the related Determination Date:
(a) Lease Payments (including Renewal Payments) due during the immediately
preceding or any prior Due Period, (b) recoveries from Non-Performing Leases
(including amounts received from the Seller pursuant to Section 5.05 of the
Assignment and Servicing Agreement) to the extent IOS Capital has not
substituted Substitute Leases for such Non-Performing Leases; (c) late charges
received on delinquent Lease Payments not advanced by the Servicer; (d) proceeds
from purchases by IOS Capital of Leases as a result of breaches of
representations and warranties to the extent IOS Capital has not substituted
Substitute Leases for such Leases; (e) proceeds from the investment of funds in
the Collection Account, the Renewal Account, the Reserve Account and the
Security Deposit Account; (f) Casualty Payments; (g) Retainable Deposits; (h)
Servicer Advances, if any, in respect of the related Due Period; (i) any amounts
paid by the Counterparty to the Issuer pursuant to the Swap Documents; (j)
Termination Payments to the extent the Issuer does not reinvest such Termination
Payments in Additional Leases; (k) proceeds received for redemption of the Notes
pursuant to Section 2.01(b); (l) payments received from the Insurer pursuant to
Section 3.07; (m) funds, if any, on deposit in the Renewal Account; and (n) to
the extent there occurs an Available Funds Shortfall, funds, if any, on deposit
in the Reserve Account after making any distribution in respect of such Payment
Date from the Reserve Account to the Collection Account on account of investment
earnings pursuant to the first sentence of Section 3.04(b).
Available Funds Shortfall: as defined in Section 3.04(b).
-------------------------
Available Reserve Amount: with respect to any Payment Date, the amount
------------------------
on deposit in the Reserve Account after making any distribution in respect of
4
such Payment Date from the Reserve Account to the Collection Account on account
of investment earnings pursuant to the first sentence of Section 3.04(b).
Benefit Plan: as defined in Section 2.03(a).
------------
Book-Entry Class A-1 Notes: the Class A-1 Notes, evidenced by one or
--------------------------
more global notes registered in the name of DTC or its nominee, the ownership
and transfers of which shall be made through book entries by DTC as described in
Section 2.05.
Book-Entry Class A-2 Notes: the Class A-2 Notes, evidenced by one or
--------------------------
more global notes registered in the name of DTC or its nominee, the ownership
and transfers of which shall be made through book entries by DTC as described in
Section 2.05.
Book-Entry Class A-3 Notes: the Class A-3 Notes, evidenced by one or
--------------------------
more global notes registered in the name of DTC or its nominee, the ownership
and transfers of which shall be made through book entries by DTC as described in
Section 2.05.
Book-Entry Class A-4 Notes: the Class A-4 Notes, evidenced by one or
--------------------------
more global notes registered in the name of DTC or its nominee, the ownership
and transfers of which shall be made through book entries by DTC as described in
Section 2.05.
Book-Entry Note: any Book-Entry Class A-1 Note, Book-Entry Class A-2
---------------
Note, Book-Entry Class A-3 or Book-Entry Class A-4 Note.
Business Day: any day that is not a Saturday, Sunday or other day on
------------
which commercial banking institutions in the cities in which the Corporate Trust
Office and the principal offices of the Insurer and the Servicer are located are
authorized or obligated by law or executive order to remain closed.
Casualty Payment: any payment pursuant to a Lease on account of the
----------------
loss, theft, condemnation, governmental taking, destruction, or damage beyond
repair of any item of Equipment subject thereto which results, in accordance
with the terms of the Lease, in a reduction in the number or amount of any
future Lease Payments due thereunder or in the termination of the Lessee's
obligation to make future Lease Payments thereunder.
Cede & Co.: the initial registered holder of the Notes, acting as
----------
nominee of The Depository Trust Company.
Class A Notes: as defined in the Recitals hereto.
-------------
Class A Percentage: 89.16570%%.
------------------
Class A Principal Payment: (a) while the Class A-1 Notes are
-------------------------
outstanding, (i) on all Payment Dates prior to the Payment Date in July 2002,
the lesser of
5
(1) the amount necessary to reduce the Outstanding Principal Amount on the Class
A-1 Notes to zero and (2) the difference between (A) the Discounted Present
Value of the Performing Leases as of the Determination Date for the preceding
Payment Date and (B) the Discounted Present Value of the Performing Leases as of
the related Determination Date, and (ii) on and after the Payment Date in July
2002, the entire Outstanding Principal Amount of the Class A-1 Notes, and (b)
after the Class A-1 Notes have been paid in full, the amount necessary to reduce
the aggregate Outstanding Principal Amount on the Class A Notes to the Class A
Target Investor Principal Amount.
Class A Target Investor Principal Amount: with respect to each Payment
----------------------------------------
Date, an amount equal to the lesser of (a) the product of (i) the Class A
Percentage and (ii) the Discounted Present Value of the Performing Leases as of
the related Determination Date, and (b) the Discounted Present Value of the
Performing Leases as of the related Determination Date minus the
Overcollateralization Floor.
Class A-1 Initial Principal Amount: $168,000,000.
----------------------------------
Class A-1 Note Interest Rate: the rate at which interest accrues on
----------------------------
the Class A-1 Notes, which rate shall be equal to 3.73375% per annum.
Class A-1 Note Owner: with respect to a Book-Entry Class A-1 Note, the
--------------------
Person who is the beneficial owner of such Book-Entry Class A-1 Note, as
reflected on the books of DTC, or on the books of a Person maintaining an
account with DTC (directly or as an indirect participant, in accordance with the
rules of DTC).
Class A-1 Noteholder: Cede & Co. or a holder of a Definitive Class A-1
--------------------
Note.
Class A-1 Notes: as defined in the Recitals hereto.
---------------
Class A-2 Initial Principal Amount: $41,000,000.
----------------------------------
Class A-2 Note Interest Rate: the rate at which interest accrues on
----------------------------
the Class A-2 Notes, which rate shall be equal to 4.16% per annum.
Class A-2 Note Owner: with respect to a Book-Entry Class A-2 Note, the
--------------------
Person who is the beneficial owner of such Book-Entry Class A-2 Note, as
reflected on the books of DTC, or on the books of a Person maintaining an
account with DTC (directly or as an indirect participant, in accordance with the
rules of DTC).
Class A-2 Noteholder: Cede & Co. or a holder of a Definitive Class A-2
--------------------
Note.
Class A-2 Notes: as defined in the Recitals hereto.
---------------
Class A-3 Initial Principal Amount: $260,000,000.
----------------------------------
Class A-3 Note Interest Rate: the rate at which interest accrues on
----------------------------
the Class A-3 Notes, which rate shall be equal to LIBOR plus 0.23% per annum.
6
Class A-3 Note Owner: with respect to a Book-Entry Class A-3 Note, the
--------------------
Person who is the beneficial owner of such Book-Entry Class A-3 Note, as
reflected on the books of DTC, or on the books of a Person maintaining an
account with DTC (directly or as an indirect participant, in accordance with the
rules of DTC).
Class A-3 Noteholder: Cede & Co. or a holder of a Definitive Class A-3
--------------------
Note.
Class A-3 Notes: as defined in the Recitals hereto.
---------------
Class A-4 Initial Principal Amount: $126,200,000.
----------------------------------
Class A-4 Note Interest Rate: the rate at which interest accrues on
----------------------------
the Class A-4 Notes, which rate shall be equal to LIBOR plus 0.26% per annum.
Class A-4 Note Owner: with respect to a Book-Entry Class A-4 Note, the
--------------------
Person who is the beneficial owner of such Book-Entry Class A-4 Note, as
reflected on the books of DTC, or on the books of a Person maintaining an
account with DTC (directly or as an indirect participant, in accordance with the
rules of DTC).
Class A-4 Noteholder: Cede & Co. or a holder of a Definitive Class A-4
--------------------
Note.
Class A-4 Notes: as defined in the Recitals hereto.
---------------
Clearstream: Clearstream Banking, societe anonyme.
-----------
Clearing Agency: an organization registered as a "clearing agency"
---------------
pursuant to Section 17A of the Exchange Act, or any successor provision thereof.
The initial Clearing Agency shall be DTC.
Clearing Agency Participant: a broker, dealer, bank, other financial
---------------------------
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
Code: as defined in Section 2.03(a).
----
Collection Account: the account or accounts by that name established
------------------
and maintained by the Trustee pursuant to Section 3.01(a).
Commission: the Securities and Exchange Commission.
----------
Corporate Trust Office: the principal corporate trust office of the
----------------------
Trustee located at ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn:
Corporate Trust Division, or at such other address as the Trustee may designate
from time to time by notice to the Noteholders, the Insurer, the Issuer and the
Servicer.
7
Counterparty: Deutsche Bank AG, New York Branch, a branch office of a
------------
foreign banking corporation organized under the laws of Germany, or its
permitted successors or assigns under the Swap Documents.
Cumulative Loss Amount: with respect to each Payment Date, an amount
----------------------
equal to the excess, if any, of (a) the total of (i) the Outstanding Principal
Amount of the Notes as of the immediately preceding Payment Date after giving
effect to all principal payments made on that day, plus (ii) the
Overcollateralization Balance as of the immediately preceding Payment Date,
minus (iii) the lesser of (A) the Discounted Present Value of the Performing
Leases as of the Determination Date relating to the immediately preceding
Payment Date minus the Discounted Present Value of the Performing Leases as of
the related Determination Date and (B) Available Funds remaining after the
payment of the Insurer Premium, amounts owing the Servicer, Interest Payments
and Reimbursement Amounts on such Payment Date, over (b) the Discounted Present
Value of the Performing Leases as of the related Determination Date.
Cut-Off Date: the close of business on May 31, 2001.
------------
Default: any occurrence that is, or with notice or the lapse of time
-------
or both would become, an Event of Default.
Deficiency Amount: (a) for any Payment Date, any shortfall in the sum
-----------------
of Available Funds (excluding amounts in the Reserve Account) plus amounts on
deposit in the Reserve Account to pay the related Interest Payments due on such
Payment Date, (b) on the Payment Date in July 2002, any shortfall in the sum of
Available Funds (excluding amounts in the Reserve Account) plus amounts on
deposit in the Reserve Account to pay the Outstanding Principal Amount of Class
A-1 Notes, (c) on the Payment Date in March 2004, any shortfall in the sum of
Available Funds (excluding amounts in the Reserve Account) plus amounts on
deposit in the Reserve Account to pay the Outstanding Principal Amount of the
Class A-2 Notes, (d) on the Payment Date in January 2006, any shortfall in the
sum of Available Funds (excluding amounts in the Reserve Account) plus amounts
on deposit in the Reserve Account to pay the Outstanding Principal Amount of the
Class A-3 Notes and (e) on the Payment Date in October 2008, any shortfall in
the sum of Available Funds (excluding amounts in the Reserve Account) plus
amounts on deposit in the Reserve Account to pay the Outstanding Principal
Amount of the Class A-4 Notes (in each case after taking into account all
payments to be made on such Payment Date, including payments resulting from the
application of funds in accordance with Section 3.07).
Definitive Note: a definitive, fully registered Note issued pursuant
---------------
to Section 2.07.
Delinquency Rate: for any Due Period, the sum as of the related
----------------
Determination Date of the Discounted Present Value of the Leases that are 61 or
more days delinquent, as of such Determination Date, divided by the Discounted
Present Value of the Leases on that Determination Date.
8
Delinquent Lease: as of any Determination Date, any Lease (other than
----------------
a Lease which became a Non-Performing Lease prior to such Determination Date)
with respect to which the Lessee has not paid all Lease Payments then due.
Depository Agreement: the letter of representations, between the
--------------------
Issuer and the Depository Trust Company, as Clearing Agency.
Determination Date: with respect to any Payment Date, the fifth
------------------
Business Day immediately preceding such Payment Date.
Discount Rate: with respect to any Determination Date, 5.97%.
-------------
Discounted Present Value: with respect to any Lease as of any date, an
------------------------
amount equal to the net present value of all remaining scheduled Lease Payments,
determined by discounting each such Lease Payment on a monthly basis (assuming a
calendar year consisting of twelve 30-day months), at a rate equal to the
Discount Rate, to the last day of the Due Period prior to the relevant
calculation date. In determining the Discounted Present Value of any Lease on
any date, it will be assumed that Lease Payments are due on the last day of the
calendar month immediately preceding the relevant calculation date and the
future remaining Lease Payments will be calculated after giving effect to any
payments received prior to the date of calculation to the extent such payments
relate to Lease Payments due and payable by the Lessee with respect to the
related Due Period and any prior Due Period.
Discounted Present Value of the Delinquent Leases: with respect to any
-------------------------------------------------
Payment Date or Determination Date, the Discounted Present Value of the Leases
that are Delinquent Leases and as to which a Lease Payment, or any portion
thereof, was 61 or more days overdue as of the last day of the Due Period
immediately preceding such Payment Date or Determination Date.
Discounted Present Value of the Performing Leases: the Discounted
-------------------------------------------------
Present Value of the Leases, reduced by the discounted present value of all
future remaining scheduled Lease Payments on the Non-Performing Leases,
discounted at the Discount Rate and otherwise determined in accordance with the
definition of "Discounted Present Value".
DTC: The Depository Trust Company.
---
Due Period: with respect to any Payment Date and the Determination
----------
Date with respect thereto, the period beginning on the first day and ending on
the last day of the calendar month prior to the month in which such Payment Date
and such Determination Date occur.
Eligible Account: either (a) an account maintained with a depository
----------------
institution or trust company acceptable to each of the Rating Agencies and (so
long as no Insurer Default has occurred and is continuing) the Insurer or (b) a
trust account or similar account acceptable to each of the Rating Agencies
maintained with a federal or state chartered depository institution, which may
be an account maintained with the Trustee.
9
Eligible Investments: any one or more of the following obligations or
--------------------
securities:
(a) direct non-callable obligations of, and non-callable obligations
fully guaranteed by, the United States of America, or any agency or
instrumentality of the United States of America the obligations of which
are backed by the full faith and credit of the United States of America;
(b) demand and time deposits in, certificates of deposits of, and
bankers' acceptances issued by, any depository institution or company
(including the Trustee acting in its commercial capacity) incorporated
under the laws of the United States of America or any state thereof, having
a combined capital and surplus of at least $100,000,000, and subject to
supervision and examination by federal and/or state banking authorities, so
long as at the time of such investment or contractual commitment providing
for such investment the commercial paper or other short-term debt
obligations of such depository institution or company (or, in the case of a
depository institution that is the principal subsidiary of a holding
company, the commercial paper or other short-term debt obligations of such
holding company) have the highest short-term credit ratings available from
Moody's and S&P;
(c) purchase obligations with respect to and collateralized by (i) any
security described in clause (a) above or (ii) any other security issued or
guaranteed by an agency or instrumentality of the United States of America,
in each case entered into with a depository institution or company (acting
as principal) of the type described in clause (b) above; provided that the
--------
Trustee has taken delivery of such security;
(d) commercial paper (including both non-interest bearing discount
obligations and interest-bearing obligations) payable on demand or on a
specified date not more than 270 days after the date of issuance thereof
having the highest short-term credit ratings from Moody's and S&P at the
time of such investment;
(e) money market funds that redeem their shares on demand and are
rated "P-1/Aaa" by Moody's and "AAAm" or "AAA-G" by S&P (including funds
for which the Trustee or any of its affiliates is investment manager or
advisor);
(f) demand notes payable on demand issued by an institution rated
"P-1" by Moody's and "A-1+" by S&P at the time of such investment;
(g) funding agreements or guaranteed investment contracts provided by
issuers rated "Aaa" or "P-1" by Moody's and "A-1+" by S&P which provide, by
their terms, for receipt by the Trustee on or prior to the next Payment
Date of a predetermined fixed dollar amount which cannot vary or change;
and
(h) such other investments as may be approved by the Rating Agencies
and, so long as no Insurer Default has occurred and is continuing, the
Insurer.
10
Equipment: each item of personal property, together with any
---------
replacement parts, additions, and repairs thereto, any replacements thereof, and
any accessories incorporated therein and/or affixed thereto, subject to a Lease
or, following expiration or termination of the Lease to which the same was
previously subject, remaining subject to the security interest granted by the
Seller to the Issuer pursuant to Section 1.02(b) of the Assignment and Servicing
Agreement.
ERISA: the Employee Retirement Income Security Act of 1974, as
-----
amended.
Euroclear: the Euroclear System.
---------
Event of Default: as defined in Section 7.01.
----------------
Exchange Act: the Securities Exchange Act of 1934, as amended.
------------
Excess Copy Charge: with respect to any Lease, means the amount owing
------------------
by such Lessee under such Lease reflecting usage of the related Equipment in
excess of a specified copy amount per month.
Financing Statement: as defined in Section 14 of the Assignment and
-------------------
Servicing Agreement.
Governmental Authority: any court or federal or state regulatory body,
----------------------
administrative agency or other tribunal or other governmental instrumentality.
Grant: grant, bargain, sell, convey, assign, transfer, mortgage,
-----
pledge, create and grant a security interest in and right of set-off against,
deposit, set over and confirm.
Holder: a holder of a Note.
------
Indemnified Party: as defined in Section 9.11.
-----------------
Indenture: this instrument as originally executed and as from time to
---------
time supplemented or amended pursuant to the applicable provisions hereof.
Initial Payment Date: July 16, 2001.
--------------------
Insurance Agreement: as defined in the Recitals hereto.
-------------------
Insured Payments: as defined in the Policy and any payments made by
----------------
the Insurer under the Swap Insurance Policy.
Insurer: as defined in the Recitals hereto.
-------
Insurer Default: the failure by the Insurer to make a payment required
---------------
under the Policy in accordance with the terms thereof.
11
Insurer Premium: any monthly premium fees due and payable to the
---------------
Insurer pursuant to the Insurance Agreement.
Insurer Secured Obligations: all amounts and obligations which may at
---------------------------
any time be owed to or on behalf of the Insurer (or any agents, accountants or
attorneys for the Insurer) under this Indenture, the Insurance Agreement or any
other Transaction Document.
Interest Accrual Period: means, with respect to the Class A-3 Notes
-----------------------
and the Class A-4 Notes, the period beginning on, and including, June 28, 2001
and ending on, but excluding, the first Payment Date and each subsequent period
beginning on, and including, the last day of the preceding Interest Accrual
Period and ending on, but excluding, the first day of the next following
Interest Accrual Period.
Interest Payments: as defined in Section 2.01(c).
-----------------
IOS Capital: IOS Capital, Inc., a Delaware corporation.
-----------
Issuance Date: June 28, 2001.
-------------
Issuer: the Person named as the "Issuer" in the first paragraph of
------
this instrument.
Issuer Order or Issuer Request: a written order or request delivered
------------------------------
to the Trustee and signed in the name of the Issuer by an Authorized Officer.
Issuer Secured Parties: each of the Trustee on behalf of the
----------------------
Noteholders, in respect of the Trustee Secured Obligations, and the Insurer, in
respect of the Insurer Secured Obligations.
Late Payment Rate: as defined in the Policy.
-----------------
Lease: collectively, (i) each lease agreement, conditional sale
-----
contract and other agreement creating a contractual obligation to which the
Originator is a party, to the extent that such lease agreement, conditional sale
contract or other agreement is described in Exhibit A to the Assignment and
Servicing Agreement (as such Exhibit A may be amended from time to time in
accordance with the Assignment and Servicing Agreement), including, without
limitations, each Additional Lease and Substitute Lease; (ii) each schedule or
supplement to each such lease agreement, conditional sale contract or other
agreement (and each master lease agreement insofar as it relates to any such
schedule or supplement); and (iii) any and all amendments or modifications from
time to time to each such lease agreement, conditional sale contract or other
agreement, or to any schedule or supplement, in accordance with the Assignment
and Servicing Agreement.
Lease Delinquency Payment: any payment made with respect to a Lease in
-------------------------
an amount equal to all or part of any specific Lease Payment due with respect to
such Lease (a) by the Servicer pursuant to Section 5.01 of the Assignment and
Servicing Agreement, (b) by a transfer from the Reserve Account pursuant to
Section 3.04, or (c) by the Issuer in its sole discretion.
12
Lease Guaranty: with respect to any Lease, any guaranty of payment or
--------------
performance of the whole or any part of the liabilities or obligations of the
Lessee under such Lease.
Lease Payment: the equipment financing portion of each fixed periodic
-------------
rental payment payable by a Lessee under a Lease. Casualty Payments, Retainable
Deposits, Termination Payments, prepayments of rent required pursuant to the
terms of a Lease, payments becoming due before the Cut-Off Date and supplemental
or additional payments required by the terms of a Lease with respect to taxes,
insurance, maintenance (including, without limitation, any Maintenance Charges),
security deposits or other specific charges (including, without limitation, any
Excess Copy Charges) shall not be Lease Payments hereunder and, in calculating
the Discounted Present Value of the Leases and the Discounted Present Value of
the Performing Leases, the amount thereof shall not be included.
Lease Purchase Amount: at any date of determination with respect to
---------------------
any Lease, means the sum of (i) the Discounted Present Value of the Lease as of
the beginning of the Due Period relating to such date of determination (plus any
amounts previously due and unpaid) and (ii) the product of (x) the amount
described in the foregoing clause (i) and (y) one-twelfth of the Discount Rate.
Lessee: with respect to any Lease, the lessee thereunder.
------
LIBOR: the London interbank offered rate for one-month Eurodollar
-----
deposits appearing on the Telerate Screen Page 3750, as determined in accordance
with Section 2.14.
LIBOR Business Day: any day other than (i) a Saturday or a Sunday or
------------------
(ii) a day on which banking institutions in the city of London, England are
required or authorized by law to be closed.
Lien: as defined in Section 14 of the Assignment and Servicing
----
Agreement.
Maintenance Charges: with respect to any Lease, the amount owing by
-------------------
the Lessee under the terms of the related Lease in respect of maintenance
services being provided in connection therewith.
Maturity: with respect to any installment of principal of or interest
--------
on any Note, the date on which such installment is due and payable as therein or
herein provided, whether at the Stated Maturity, by declaration of acceleration,
or otherwise.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. and any successors thereto.
-------
Non-Performing Lease: as of any Determination Date, any Lease with
--------------------
respect to which at any time following the Cut-Off Date or related Transfer
Date, as the case may be, either (a) a Lease Payment, or any portion thereof,
was 121 or more days overdue as of the last day of the Due Period with respect
to such Determination Date, unless on or before such Determination Date such
Lease Payment (or portion thereof) has
13
been paid or (b) the Servicer has accelerated the remaining payments or (c) the
Servicer has determined such Lease to be uncollectible in accordance with the
Servicer's customary practices prior to the last day of the Due Period with
respect to such Determination Date.
Noteholder: at any time, any Person in whose name a Note is registered
----------
in the Note Register.
Note Interest Rate: the Class A-1 Note Interest Rate, the Class A-2
------------------
Note Interest Rate, the Class A-3 Note Interest Rate or the Class A-4 Note
Interest Rate, as the case may be.
Note Owner: the beneficial owner of a Note issued hereunder.
----------
Note Register: as defined in Section 2.03(a).
-------------
Note Registrar: as defined in Section 2.03(a)
--------------
Notes: any notes authorized by, and authenticated and delivered under,
-----
this Indenture.
Notice of Claim: as defined in the Policy.
---------------
Officers' Certificate: with respect to the Issuer, the Seller or the
---------------------
Servicer, a certificate signed by the Chairman, the President or a Vice
President of the Issuer, the Seller or the Servicer, as the case may be, and by
another Vice President, the Treasurer, and Assistant Treasurer, the Secretary,
or an Assistant Secretary of the Issuer, the Seller or the Servicer, as the case
may be, who is not the same Person as the other officer signing such
certificate.
Opinion of Counsel: a written opinion, which shall be satisfactory in
------------------
form and substance to the Trustee and the Insurer, of counsel who may, except as
otherwise expressly provided in this Indenture, be inside or outside counsel for
the Issuer and who shall be satisfactory to the Trustee and the Insurer.
Other Lease Payments: all payments on or in respect of Leases which
--------------------
are not Lease Payments, Lease Delinquency Payments, Casualty Payments,
Retainable Deposits or Termination Payments, including Maintenance Charges and
Excess Copy Charges.
Outstanding: with respect to the Notes, as of any date of
-----------
determination, all Notes theretofore authenticated and delivered under this
Indenture except:
(a) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes or portions thereof for whose payment money in the necessary
amount has been theretofore irrevocably deposited with the Trustee in trust
for the holders of such Notes; and
14
(c) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Trustee is presented that any such Notes are held by a
Person in whose hands the Note is a valid obligation;
provided, however, that Notes which have been paid with proceeds of the Policy
-------- -------
shall continue to remain Outstanding for purposes of this Indenture until the
Insurer has been paid as subrogee hereunder or reimbursed as to such payment
pursuant to the Insurance Agreement as evidenced by a written notice from the
Insurer delivered to the Trustee, and the Insurer shall be deemed to be the
Holder thereof to the extent of any payments thereon made by the Insurer and,
provided further, that in determining whether the holders of the requisite
-------- -------
percentage of the Outstanding Principal Amount of the Notes have given any
request, demand, authorization, direction, notice, consent, or waiver hereunder,
Notes owned by the Issuer or any Affiliate of the Issuer shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent, or waiver, only Notes that a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Notes so owned by the Issuer or any Affiliate of the Issuer that
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Notes and that the pledgee is not the Issuer, any other
obligor upon the Notes, IOS Capital, the Seller or any Affiliate of any of the
foregoing Persons.
Outstanding Class A Principal Amount: The aggregate principal amount
------------------------------------
of the Class A Notes Outstanding at any time.
Outstanding Class A-1 Principal Amount: the aggregate principal amount
--------------------------------------
of the Class A-1 Notes Outstanding at any time.
Outstanding Class A-2 Principal Amount: the aggregate principal amount
--------------------------------------
of the Class A-2 Notes Outstanding at any time.
Outstanding Class A-3 Principal Amount: the aggregate principal amount
--------------------------------------
of the Class A-3 Notes Outstanding at any time.
Outstanding Class A-4 Principal Amount: the aggregate principal amount
--------------------------------------
of the Class A-4 Notes Outstanding at any time.
Outstanding Principal Amount: the aggregate unpaid principal amount of
----------------------------
the Notes Outstanding at any time.
Overcollateralization Balance: with respect to each Payment Date is an
-----------------------------
amount equal to the excess, if any, of (a) the Discounted Present Value of
Performing Leases as of the related Determination Date over (b) the Outstanding
Principal Amount of the Notes as of such Payment Date after giving effect to all
principal payments made on that day.
Overcollateralization Floor: with respect to any Payment Date, (a)
---------------------------
2.5% of the Discounted Present Value of the Leases as of the Cut-Off Date, plus
(b) the
15
Cumulative Loss Amount with respect to such Payment Date, minus (c) the amount
on deposit in the Reserve Account (after giving effect to withdrawals to be made
on account of such Payment Date).
Paying Agent: each agent of the Issuer appointed for the purpose of
------------
making payments on the Notes, including the Trustee.
Payment Date: the 15th day of each month (or the next Business Day
------------
thereafter if such day is not a Business Day), commencing on the Initial Payment
Date, and ending on the latest Stated Maturity.
Person: any individual, corporation, partnership, joint venture,
------
association, limited liability company, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
Policy: the financial guaranty insurance policy No. AB0473BE with
------
respect to the Notes, dated June 28, 2001, including any endorsements thereto,
issued by the Insurer to the Trustee for the benefit of the Noteholders.
Preference Amounts: as defined in the Policy.
------------------
Principal Payments: as defined in Section 2.01(b).
------------------
Preference Claim: as defined in Section 4.02(b).
----------------
Rating Agency: each of S&P and Moody's.
-------------
Record Date: with respect to any Payment Date, the last Business Day
-----------
immediately preceding such Payment Date so long as the Notes are Book-Entry
Notes. In the event any of the Notes are Definitive Notes, the Record Date with
respect to such Notes shall be the last Business Day of the month preceding each
Payment Date.
Reference Bank Rate: as defined in Section 2.14.
-------------------
Registration Statement: the Registration Statement (File No.
----------------------
333-91599), as amended and supplemented from time to time, relating to the
offering from time to time of up to $2,000,000,000 aggregate principal amount of
the Issuer's Lease-Backed Notes, the first such issuance having been the
Issuer's Lease-Backed Notes, Series 2000-1, the second such issuance having been
the Issuer's Lease-Backed Notes, Series 2000-2, and which contemplates that the
Issuer's Lease-Backed Notes, Series 1999-1 and Series 1999-2 will remain
outstanding and that subsequent series of the Issuer's Lease-Backed Notes will
be issued, subject to Section 9.13 hereof.
Reimbursement Amount: as of any date, the sum of (x) (i) all Insured
--------------------
Payments paid by the Insurer, but for which the Insurer has not been reimbursed
prior to such date pursuant to Section 3.03(b) or 7.06 hereof, plus (ii)
----
interest accrued thereon, calculated at the Late Payment Rate from the date the
Trustee received the related Insured Payments, or the date such Insured Payments
were made, in the case of Insured Payments
16
consisting of Preference Amounts not made to the Trustee or in the case of
Insured Payments made under the Swap Insurance Policy, and (y) without
duplication (i) any amounts then due and owing to the Insurer under the
Insurance Agreement plus (ii) interest on such amounts at the Late Payment Rate
----
from the date such amounts were due.
Renewal: the renewal of a Lease on a month-to-month or
-------
quarter-to-quarter basis as provided for in the related Lease.
Renewal Payment: any of the monthly payments (or, in the case of
---------------
quarterly Leases, the quarterly payments) received from a Lessee in connection
with a Renewal.
Renewal Account: the account by that name established and maintained
---------------
by the Trustee pursuant to Section 3.01
Renewal Account Deposit Period: the period from the Payment Date on
------------------------------
which a Renewal Trigger Event has occurred until the Payment Date succeeding
such Payment Date on which no Renewal Trigger Event exists.
Renewal Trigger Event: will occur when the Renewal Trigger Ratio is
---------------------
less than 20%.
Renewal Trigger Ratio: with respect to any Payment Date, an amount
---------------------
equal to (i) the aggregate number of Leases of which the obligors thereunder
have elected to extend the term of such Leases upon the expiration thereof
during the three preceding Due Periods, divided by (ii) the aggregate number of
Leases which have reached their stated expiration date during the three
preceding Due Periods.
Required Deposit Date: as defined in Section 3.03(a).
---------------------
Required Payments: as defined in Section 3.04(b).
-----------------
Required Renewal Amount: an amount equal to the lesser of (a) 2% of
-----------------------
the Discounted Present Value of the Leases as of the Cut-off Date and (b) the
then Outstanding Principal Amount of the Notes less the Available Reserve
Amount.
Required Reserve Amount: as of any time, the lesser of (a) 1.00% of
-----------------------
the initial Discounted Present Value of the Leases as of the Cut-Off Date and
(b) the then Outstanding Principal Amount of the Notes.
Reserve Account: the account by that name established and maintained
---------------
by the Trustee pursuant to Section 3.01.
Responsible Officer: with respect to the Trustee, any officer assigned
-------------------
to the Corporate Trust Office of the Trustee, including any managing director,
vice president, assistant vice president, assistant treasurer, assistant
secretary or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Indenture, and also, with
respect to a particular matter, any other officer, to whom
17
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject.
Retainable Deposits: any security or other similar deposit which the
-------------------
Servicer has determined in accordance with its customary servicing practices is
not refundable to the related Lessee.
S&P: Standard & Poor's Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
---
Companies Inc. and any successor thereto.
Securities Act: the Securities Act of 1933, as amended.
--------------
Security Deposit Account: the account by that name established and
------------------------
maintained by the Trustee pursuant to Section 3.01.
Seller: IKON Receivables-1, LLC, a Delaware limited liability company.
------
Servicer: IOS Capital and any successor Servicer appointed pursuant to
--------
the terms hereof and of the Assignment and Servicing Agreement and, to the
extent that it at any time is performing the functions of the Servicer, the
Trustee, subject to the terms of Section 5.01 hereof.
Servicer Advance: as defined in Section 5.01 of the Assignment and
----------------
Servicing Agreement.
Servicer Event of Default: as defined in Section 10.01 of the
-------------------------
Assignment and Servicing Agreement.
Servicer Order: a written order or request delivered to the Trustee
--------------
and signed in the name of the Servicer by an Authorized Officer.
Servicing Fee: the Servicing Fee payable pursuant to the Assignment
-------------
and Servicing Agreement.
Servicing Report: as defined in Section 6.01(b) of the Assignment and
----------------
Servicing Agreement.
Specified Subsequent Notes: as defined in Section 9.13.
--------------------------
Stated Maturity: The stated maturity date with respect to the Class
---------------
A-1 Notes is the Payment Date in July 2002 (the "Class A-1 Stated Maturity
Date"), the stated maturity date with respect to the Class A-2 Notes is the
Payment Date in March 2004 (the "Class A-2 Stated Maturity Date"), the stated
maturity date with respect to the Class A-3 Notes is the Payment Date in January
2006 (the "Class A-3 Stated Maturity Date"), and the stated maturity date with
respect to the Class A-4 Notes is the Payment Date in October 2008 (the "Class
A-4 Stated Maturity Date" and, together with the Class A-1 Stated Maturity Date,
the Class A-2 Stated Maturity Date and the Class A-3 Stated Maturity Date, the
"Stated Maturity Dates").
18
Substitute Lease: as defined in Section 11.01(a) of the Assignment and
----------------
Servicing Agreement.
Swap: that certain interest rate swap transaction governed by the Swap
----
Documents.
Swap Documents: The ISDA Master Agreement dated as of June 28, 2001
--------------
between the Issuer and the Counterparty, including the schedule thereto, the
related credit support annex and the two separate confirmations thereunder, as
the same may be amended from time to time as permitted therein and herein, in
each case to the extent relating to the Swap.
Swap Insurance Policies: the financial guaranty insurance policies
-----------------------
Nos. SF0458BE and SF0460BE, each dated June 28, 2001 with respect to the
Issuer's obligations under the Swap Documents, including any endorsements
thereto, issued by the Insurer to the Counterparty.
Telerate Screen Page 3750: means the display designated as page 3750
-------------------------
on the Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks).
Termination Payment: a payment payable by a Lessee under a Lease upon
-------------------
the early termination of such Lease (but not on account of a casualty or a Lease
default) which may be agreed upon by the Servicer, acting in the name of the
Issuer, and the Lessee in accordance with the provisions of Section 5.02 of the
Assignment and Servicing Agreement.
Transaction Accounts: the Collection Account, the Renewal Account, the
--------------------
Reserve Account and the Security Deposit Account.
Transaction Documents: this Indenture, the Assignment and Servicing
---------------------
Agreement and the Insurance Agreement.
Transaction Payment Amount: for each Required Deposit Date, the amount
--------------------------
of all Lease Payments (including Renewal Payments), Lease Delinquency Payments,
Lease Purchase Amounts, recoveries relating to Non-Performing Leases, Casualty
Payments, Retainable Deposits, Termination Payments and other payments on or in
respect of a Lease received by the Servicer required to be deposited in the
Collection Account pursuant to Section 3.03(a) and required to be reported by
the Servicer for such Required Deposit Date in accordance with Section 6.01(c)
of the Assignment and Servicing Agreement.
Transfer Date: With respect to any Substitute Lease or Additional
-------------
Lease, the date of transfer thereof to the Issuer pursuant to the Assignment and
Servicing Agreement.
Trustee: the Person named as the "Trustee" in the first paragraph of
-------
this instrument until a successor Person shall have become the Trustee pursuant
to the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean such
19
successor Person; provided, that the provisions of Section 7.06, 8.07 and
--------
Section 8.10, as applicable to any Person at any time serving as Trustee
hereunder, shall survive the termination of such Person's status as Trustee
hereunder and the succession of any other Person to such status.
Trustee Secured Obligations: all amounts and obligations which the
---------------------------
Issuer or the Servicer, as the case may be, may at any time owe to or on behalf
of itself or of the Trustee for the benefit of the Noteholders under this
Indenture or the Notes.
Trust Indenture Act: the Trust Indenture Act of 1939, as amended, as
-------------------
in effect on the date on which this Indenture is qualified under the Trust
Indenture Act, except as provided in Section 10.06 or 12.01 hereof.
Underwriting Agreement: the Underwriting Agreement dated as of June
----------------------
20, 2001, among the Issuer, IOS Capital and the several underwriters named
therein relating to the issuance of the Notes.
Uniform Commercial Code: with respect to a particular jurisdiction,
-----------------------
the Uniform Commercial Code, as in effect from time to time in such
jurisdiction, or any successor statute thereto.
Warranty Lease: a Lease subject to purchase by IOS Capital as a result
--------------
of a breach of a representation or warranty in accordance with the provisions of
Section 5.04 of the Assignment and Servicing Agreement.
SECTION 1.02. Compliance Certificates and Opinions.
------------------------------------
Upon any written application or request by the Issuer to the Trustee
to take any action under any provision of this Indenture, other than any request
that (a) the Trustee authenticate the Notes specified in such request, (b) the
Trustee invest moneys in any of the Transaction Accounts pursuant to the written
directions specified in such request, or (c) the Trustee pay moneys due and
payable to the Issuer hereunder to the Issuer's assignee specified in such
request, the Trustee shall require the Issuer to furnish to the Trustee and, so
long as no Insurer Default has occurred and is continuing, the Insurer, an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and that the request otherwise is in accordance with the terms of the Indenture,
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such requested action as to which other evidence of satisfaction of the
conditions precedent thereto is specifically required by any provision of this
Indenture, no additional certificate or opinion need be furnished.
SECTION 1.03. Form of Documents Delivered to Trustee and Insurer.
--------------------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an
20
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Issuer delivered to
the Trustee or the Insurer may be based, insofar as it relates to legal matters,
upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon which
his certificate or opinion is based are erroneous. Any such Officers'
Certificate or opinion and any Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations
by, an officer or officers of the Issuer as to such factual matters unless such
officer or counsel knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such matters
are erroneous. Any Opinion of Counsel may be based on the written opinion of
other counsel, in which event such Opinion of Counsel shall be accompanied by a
copy of such other counsel's opinion and shall include a statement to the effect
that such counsel believes that such counsel and the Trustee and the Insurer may
reasonably rely upon the opinion of such other counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Wherever in this Indenture, the Assignment and Servicing Agreement or
the Insurance Agreement, in connection with any application or certificate or
report to the Trustee or the Insurer, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of compliance with any term hereof, it is intended that the truth and
accuracy, at the time of the granting of such application or at the effective
date of such certificate or report (as the case may be), of the facts and
opinions stated in such document shall in such case be conditions precedent to
the right of the Issuer to have such application granted or to the sufficiency
of such certificate or report. The foregoing shall not, however, be construed to
affect the Trustee's or the Insurer's right to rely upon the truth and accuracy
of any statement or opinion contained in any such document as provided in
Section 8.01(a)(ii).
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default or Servicer Event
of Default or Insurer Default is a condition precedent to the taking of any
action by the Trustee or the Insurer at the request or direction of the Issuer,
then, notwithstanding that the satisfaction of such condition is a condition
precedent to the Issuer's right to make such request or direction, the Trustee
and the Insurer shall be fully protected in acting in accordance with such
request or direction if it does not have knowledge of the occurrence and
continuation of such Default or Event of Default or Servicer Event of Default or
Insurer Default. For all purposes of this Indenture, neither the Trustee nor the
Insurer shall be deemed to have knowledge of any Insurer Default, Servicer Event
of Default, Default or Event of Default nor shall the Trustee or the Insurer
have any duty to monitor or investigate to determine whether such default has
occurred (other than an Event of
21
Default of the kind described in Section 7.01(a) or 7.01(b)) unless, in the case
of the Trustee, a Responsible Officer of the Trustee shall have knowledge
thereof or shall have been notified in writing thereof by the Issuer, the
Servicer, the Insurer or any Noteholder.
SECTION 1.04. Acts of Noteholders, etc.
------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this 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 agents
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Issuer and/or the Insurer. 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 this Indenture and (subject to Section 8.01)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Section 1.04.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the written affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the holder of any Note shall bind every future holder of
the same Note and the holder of every Note issued upon the registration of
transfer thereof or in exchange therefore or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Issuer in
reliance thereon, whether or not notation of such action is made upon such Note.
(d) By accepting the Notes issued pursuant to this Indenture, each
Noteholder irrevocably appoints the Trustee hereunder as the special
attorney-in-fact for such Noteholder vested with full power on behalf of such
Noteholder to effect and enforce the rights of such Noteholder and the revisions
pursuant hereto for the benefit of such Noteholder; provided that nothing
--------
contained in this Section 1.04(d) shall be deemed to confer upon the Trustee any
duty or power to vote on behalf of the Noteholders with respect to any matter on
which the Noteholders have a right to vote pursuant to the terms of this
Indenture.
22
SECTION 1.05. Notices, etc., to Trustee, Servicer, Issuer, Insurer and
--------------------------------------------------------
Rating Agencies.
---------------
Any request, demand, authorization, direction, notice, consent,
waiver, Act of Noteholders, or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with, the Trustee,
the Issuer, the Insurer or the Servicer shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid or certified mail return receipt requested, or sent
by private courier or confirmed telecopy. Unless otherwise specifically provided
herein, no such request, demand, authorization, direction, notice, consent,
waiver, Act of Noteholders or other document shall be effective until received
and any provision hereof requiring the making, giving, furnishing, or filing of
the same on any date shall be interpreted as requiring the same to be sent or
delivered in such fashion that it will be received on such date. Any such
request, demand, authorization, direction, notice, consent, waiver, Act of
Noteholders, or other document shall be sent or delivered to the following
addresses:
(a) if to the Trustee, at the Corporate Trust Office (Number for
telecopy (▇▇▇) ▇▇▇-▇▇▇▇), or at any other address previously furnished in
writing to the Issuer, the Insurer and the Servicer by the Trustee; or
(b) if to the Issuer, at IKON Receivables, LLC, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇ (Number for telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇), with a copy to, General Counsel, IKON Office Solutions, Inc.,
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at any other address previously
furnished in writing to the Trustee, the Insurer and the Servicer by the Issuer;
or
(c) if to the Servicer, at IOS Capital, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇
▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President -
Finance, with a copy to the General Counsel, (Number for telecopy: (912)
471-2375), with a copy to, General Counsel, IKON Office Solutions, Inc., ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at any other address previously
furnished in writing to the Trustee, the Insurer and the Servicer; or
(d) if to the Rating Agencies: to Standard and Poor's, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Structured Finance Ratings, and to
▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ABS Monitoring Department; or
(e) if to the Insurer: to Ambac Assurance Corporation, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Structured Asset Backed
Securities Department Head (Number for telecopy: (▇▇▇) ▇▇▇-▇▇▇▇).
SECTION 1.06. Notice to Noteholders; Waiver.
-----------------------------
(a) Where this Indenture provides for notice to Noteholders of any
event, or the mailing of any report to Noteholders, such notice or report shall
be sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid or certified mail return receipt
requested, or sent by private
23
courier or confirmed telecopy to each Noteholder affected by such event or to
whom such report is required to be mailed, at its address as it appears in the
Note Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice or the mailing of such report. In
any case where a notice or report to Noteholders is mailed, neither the failure
to mail such notice or report, nor any defect in any notice or report so mailed,
to any particular Noteholder shall affect the sufficiency of such notice or
report with respect to other Noteholders. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the 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 Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
(b) In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to mail or send notice to
Noteholders, in accordance with Section 1.06(a), of any event or any report to
Noteholders when such notice or report is required to be delivered pursuant to
any provision of this Indenture, then such notification or delivery as shall be
made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.
SECTION 1.07. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 1.08. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Issuer or the
Trustee shall bind its respective successors and permitted assigns, whether so
expressed or not.
SECTION 1.09. Benefits of Indenture.
---------------------
The Insurer and its successors and assigns shall be a third-party
beneficiary to the provisions of this Indenture, and shall be entitled to rely
upon and directly to enforce the provisions of this Indenture so long as no
Insurer Default has occurred and is continuing. Nothing in this Indenture or in
the Notes, express or implied, shall give to any other Person, other than the
parties hereto and their successors hereunder and the Noteholders, and any other
party secured hereunder, and any other Person with an ownership interest in any
part of the Asset Pool, any benefit or any legal or equitable right, remedy or
claim under this Indenture. The Insurer may disclaim any of its rights and
powers under this Indenture, but not its duties and obligations under the Policy
or the Swap Insurance Policy, upon delivery of a written notice to the Trustee.
SECTION 1.10. Recording of Indenture.
----------------------
If this Indenture is subject to recording in any appropriate public
recording offices, such recording is to be effected by the Issuer and at its
expense accompanied by an Opinion of Counsel (which may be counsel to the
Trustee or any other counsel reasonably acceptable to the Trustee and the
Insurer) to the effect that such recording is
24
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Trustee under this Indenture.
SECTION 1.11. GOVERNING LAW.
-------------
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THIS INDENTURE IS SUBJECT TO
THE TRUST INDENTURE ACT OF 1939, AS AMENDED, AND SHALL BE GOVERNED THEREBY AND
CONSTRUED IN ACCORDANCE THEREWITH.
SECTION 1.12. Legal Holidays.
--------------
In any case where any Payment Date or the Stated Maturity or any other
date on which principal of or interest on any Note is proposed to be paid shall
not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Notes) such payment 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 such Payment Date, Stated Maturity, or other date on which principal of
or interest on any Note is proposed to be paid; provided that no interest shall
--------
accrue for the period from and after such Payment Date, Stated Maturity, or any
other date on which principal of or interest on any Note is proposed to be paid,
as the case may be, until such next succeeding Business Day.
SECTION 1.13. Execution in Counterparts.
-------------------------
This 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.
SECTION 1.14. Inspection.
----------
The Issuer agrees that, on reasonable prior notice, it will permit the
representatives of the Trustee or the Insurer or any Noteholder holding Notes,
or a beneficial interest therein, evidencing at least 25% of the Outstanding
Principal Amount of the Notes, during the Issuer's normal business hours, to
examine all of the books of account, records, reports and other papers of the
Issuer, to make copies thereof and extracts therefrom, to cause such books to be
audited by independent accountants selected by the Issuer and reasonably
acceptable to the Trustee and the Insurer or such Noteholder, as the case may
be, and to discuss the Issuer's affairs, finances and accounts with its
officers, employees and independent accountants (and by this provision the
Issuer hereby authorizes its accountants to discuss with such representatives
such affairs, finances and accounts), all at such reasonable times and as often
as may be reasonably requested for the purpose of reviewing or evaluating the
financial condition or affairs of the Issuer or the performance of and
compliance with the covenants and undertakings of the Issuer in this Indenture,
the Assignment and Servicing Agreement or any of the other documents referred to
herein or therein. Any expense incident to the exercise by the Trustee or the
Insurer at any time or any Noteholder during the continuance of any
25
Default or Event of Default, of any right under this Section 1.14 shall be borne
by the Issuer.
SECTION 1.15. Survival of Representations and Warranties.
------------------------------------------
The representations, warranties and certifications of the Issuer made
in this Indenture or in any certificate or other writing delivered by the Issuer
pursuant hereto shall survive the authentication and delivery of the Notes
hereunder.
ARTICLE II
THE NOTES
SECTION 2.01. General Provisions; Optional Redemption by Issuer.
-------------------------------------------------
(a) The Notes shall consist of $168,000,000 principal amount of Class
A-1 Notes, $41,000,000 principal amount of Class A-2 Notes, $260,000,000
principal amount of Class A-3 Notes, $126,200,000 principal amount of Class A-4
Notes and the forms thereof and of the Trustee's certificate of authentication
shall be in substantially the forms set forth in Exhibit A hereto, with such
appropriate insertions, omissions, substitutions, and other variations as are
required or permitted by this Indenture.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $595,200,000 of Notes, except for
Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes pursuant to Section 2.03, 2.04, or
10.05. The Notes shall be issuable only in registered form and only in minimum
denominations of at least $1,000; provided that the foregoing shall not restrict
--------
or prevent the transfer in accordance with Section 2.03 of any Note having a
remaining Outstanding Principal Amount of other than an integral multiple of
$1,000, or the issuance of a single Note of each Class, with a denomination less
than $1,000.
(b) For each Payment Date, payments of principal (the "Principal
Payments") on the Notes will be made in accordance with Sections 3.03(b), or
7.06, as applicable. Except as otherwise provided in Section 7.02, no part of
the principal of any Note shall be paid prior to the Payment Date on which such
principal is due in accordance with the preceding provisions of this Section
2.01(b), except that the Issuer may redeem the Notes in their entirety
(including any unpaid interest due), without premium, as of any Payment Date on
which the Discounted Present Value of the Performing Leases is less than or
equal to ten percent (10%) of the aggregate Discounted Present Value of the
Leases as of the Cut-Off Date (after giving effect to all Principal Payments on
such Payment Date). The Issuer will give written notice of any such redemption
to the Trustee and the Trustee shall give written notice to the Noteholders at
least 30 days before the Payment Date fixed for such prepayment by certified
mail return receipt requested, hand delivery or overnight courier. Notice of
such prepayment having been so given, the remaining unpaid principal as of the
Payment Date fixed for
26
prepayment together with all interest accrued and unpaid to such Payment Date,
shall become due and payable on such Payment Date.
(c) For each Payment Date, the interest due and payable (the "Interest
Payments") with respect to the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes
and Class A-4 Notes will be the interest that has accrued on the respective
Notes since the last Payment Date or, in the case of the first Payment Date,
since the Issuance Date, at the Class A-1 Note Interest Rate, Class A-2 Note
Interest Rate, Class A-3 Note Interest Rate and Class A-4 Note Interest Rate,
respectively, applied to the then Outstanding Principal Amounts of the Class A-1
Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes, respectively, on
the preceding Payment Date. With respect to the Class A-1 Notes, the Class A-3
Notes and the Class A-4 Notes, the interest will be calculated on the basis of a
year of 360 days and the actual number of days in the related interest accrual
period. With respect to the Class A-2 Notes, the interest will be calculated on
the basis of a year of 360 days comprised of twelve 30-day months. Interest
Payments will be made in accordance with Sections 3.03(b), 3.04(b) and 7.06, as
applicable.
(d) All payments made with respect to any Note shall be made 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 and shall be applied first
to the interest then due and payable on such Notes, then to the principal
thereof, and finally to premium, if any.
(e) All Class A-1 Notes issued under this Indenture shall be in all
respects equally and ratably entitled to the benefits hereof without preference,
priority or distinction on account of the actual time or times of authentication
and delivery, all in accordance with the terms and provisions of this Indenture.
Payments of principal and interest on the Class A-1 Notes shall be made pro rata
among all Outstanding Class A-1 Notes, without preference or priority of any
kind.
(f) All Class A-2 Notes issued under this Indenture shall be in all
respects equally and ratably entitled to the benefits hereof without preference,
priority or distinction on account of the actual time or times of authentication
and delivery, all in accordance with the terms and provisions of this Indenture.
Payments of principal and interest on the Class A-2 Notes shall be made pro rata
among all Outstanding Class A-2 Notes, without preference or priority of any
kind.
(g) All Class A-3 Notes issued under this Indenture shall be in all
respects equally and ratably entitled to the benefits hereof without preference,
priority or distinction on account of the actual time or times of authentication
and delivery, all in accordance with the terms and provisions of this Indenture.
Payments of principal and interest on the Class A-3 Notes shall be made pro rata
among all Outstanding Class A-3 Notes, without preference or priority of any
kind.
(h) All Class A-4 Notes issued under this Indenture shall be in all
respects equally and ratably entitled to the benefits hereof without preference,
priority or distinction on account of the actual time or times of authentication
and delivery, all in accordance with the terms and provisions of this Indenture.
Payments of principal and
27
interest on the Class A-4 Notes shall be made pro rata among all Outstanding
Class A-4 Notes, without preference or priority of any kind.
SECTION 2.02. Execution, Authentication, Delivery, and Dating.
-----------------------------------------------
(a) The Notes shall be manually executed by the Issuer.
(b) Any Note bearing the signature of an individual who was at the
time of execution thereof a proper officer of the Issuer shall bind the Issuer,
notwithstanding that such individual ceases to hold such office prior to the
authentication and delivery of such Note or did not hold such office at the date
of such Note.
(c) No Note shall be entitled to any benefit under this 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 Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder. Each Note shall be dated the date of
its authentication.
(d) The Notes may from time to time be executed by the Issuer and
delivered to the Trustee for authentication together with an Issuer Request to
the Trustee directing the authentication and delivery of such Notes and
thereupon the same shall be authenticated and delivered by the Trustee in
accordance with such Issuer Request.
SECTION 2.03. Transfer and Exchange.
---------------------
(a) The Trustee is hereby appointed "Note Registrar" for the purpose
of registering Notes and transfers of Notes as herein provided. The Note
Registrar shall cause to be kept at the Corporate Trust Office a register (the
"Note Register") in which, subject to such reasonable regulations as the Trustee
may prescribe, the Issuer shall provide for the registration of Notes and of
transfers of Notes.
The Trustee shall not register the transfer of any Note (other than
the transfer of a Note to the nominee of the Clearing Agency) unless the
transferee has executed and delivered to the Trustee a certification to the
effect that either (i) the transferee is not (A) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA or (b) a plan (as defined in Section 4975(e)(1) of the Internal Revenue
Code of 1986, as amended (the "Code")) that is subject to Section 4975 of the
Code (each of the foregoing, a "Benefit Plan"), and is not acting on behalf of
or investing the assets of a benefit Plan, or (ii) the transferee's acquisition
and continued holding of the Note will be covered by a U.S. Department of Labor
Prohibited Transaction Class Exemption. Each transferee of a Book-Entry Note
shall be deemed to make one of the foregoing representations.
(b) Subject to Section 2.03(a), upon surrender for registration of
transfer of any Note at the office designated pursuant to Section 9.02 for such
purpose, the Issuer shall execute and the Trustee upon written request 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 original principal amount. The
28
Trustee shall make a notation on any such new Note of the amount of principal,
if any, that has been paid on the Note.
(c) 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 this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
(d) Every Note presented or surrendered for registration of transfer
or for exchange shall (if so required by the Issuer or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed, by the holder thereof
or his attorney duly authorized in writing.
(e) No service charge shall be made for any registration of transfer
or exchange of Notes, but the Issuer or the Trustee may require payment by the
transferor 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 10.05 not involving any
transfer.
SECTION 2.04. Mutilated, Destroyed, Lost and Stolen Notes.
-------------------------------------------
(a) If any mutilated Note is surrendered to the Trustee, the Issuer
shall execute and the Trustee shall authenticate and deliver in exchange
therefore a replacement Note of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
(b) If (i) there shall be delivered to the Issuer and the Trustee
evidence to their satisfaction of the destruction, loss or theft of any Note and
(ii) there is delivered to the Issuer, the Trustee and (unless an Insurer
Default has occurred and is continuing) the Insurer such security or indemnity
as may be required by them to save each of them and any agent of either of them
harmless, then, in the absence of actual notice to the Issuer or the Trustee
that such Note has been acquired by a bona fide purchaser, the Issuer shall
execute and upon its written request the Trustee shall authenticate and deliver,
in lieu of any such destroyed, lost or stolen Note, a replacement Note of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
(c) In case the final installment of principal on any such mutilated,
destroyed, lost or stolen Note has become or will at the next Payment Date
become due and payable, the Issuer in its discretion may, instead of issuing a
replacement Note, pay such Note.
(d) Upon the issuance of any replacement Note under this Section, the
Issuer or the Trustee may require the payment by the Noteholder of a sum
sufficient to cover any tax or other governmental charge that may be imposed as
a result of the issuance of such replacement Note.
(e) Every replacement Note issued pursuant to this Section 2.04 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
29
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder.
(f) The provisions of this Section 2.04 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 2.05. Book-Entry Registration.
-----------------------
Each of the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and
Class A-4 Notes, upon original issuance, shall be issued in the form attached as
Exhibit A and delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. Each of the Class A-1 Notes, Class A-2
Notes, Class A-3 Notes and Class A-4 Notes shall initially be registered on the
Note Register in the name of Cede & Co., the nominee of The Depository Trust
Company, as the initial Clearing Agency, and no Class A-1 Note Owner, Class A-2
Note Owner, Class A-3 Note Owner or Class A-4 Note Owner will receive a
definitive note representing such Note Owner's interest, except as provided in
Section 2.07. Unless and until Definitive Class A-1 Notes, Definitive Class A-2
Notes, Definitive Class A-3 Notes and/or Definitive Class A-4 Notes ("Definitive
Notes") have been issued to the applicable Note Owners pursuant to Section 2.07:
(a) the provisions of this Section 2.05 shall be in full force and
effect with respect to the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes or
the Class A-4 Notes, as the case may be;
(b) the Issuer, the Servicer and the Trustee, and their officers,
directors, employees and agents, may deal with the Clearing Agency and the
Clearing Agency Participants for all purposes with respect to the Class A-1
Notes, Class A-2 Notes, Class A-3 Notes or Class A-4 Notes, as the case may be
(including the making of distributions on the Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes and Class A-4 Notes, as the case may be), as the authorized
representatives of the respective Note Owners;
(c) to the extent that the provisions of this Section 2.05 conflict
with any other provisions of this Indenture, the provisions of this Section 2.05
shall control; and
(d) the rights of the respective Note Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and shall be
limited to those established by law and agreements between such respective Note
Owners and the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Depository Agreement, unless and until Definitive Notes are issued
pursuant to Section 2.07, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the related Class A-1 Notes, Class
A-2 Notes, Class A-3 Notes and Class A-4 Notes, as the case may be, to such
Clearing Agency Participants.
30
For purposes of any provision of this Indenture requiring or
permitting actions with the consent of, or at the direction of, holders of Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes or Class A-4 Notes, as the case may
be, evidencing a specified percentage of the Outstanding Principal Amount of the
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes or the Class A-4 Notes,
respectively, such direction or consent may be given by Note Owners (acting
through the Clearing Agency and the Clearing Agency Participants) owning Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes or Class A-4 Notes evidencing the
requisite percentage of the Outstanding Principal Amount of such Notes,
respectively.
SECTION 2.06. Notice to Clearing Agency Noteholders.
-------------------------------------
Whenever notice or other communication to the Class A-1 Noteholders,
Class A-2 Noteholders, Class A-3 Noteholders or Class A-4 Noteholders is
required under this Agreement, unless and until Definitive Notes shall have been
issued to the related Note Owners pursuant to Section 2.07, the Trustee shall
give all such notices and communications specified herein to be given to such
Noteholders to the applicable Clearing Agency which shall give such notices and
communications to the related Class A-1 Note Owners, Class A-2 Note Owners,
Class A-3 Note Owners or Class A-4 Note Owners in accordance with its applicable
rules, regulations and procedures.
SECTION 2.07. Definitive Notes.
----------------
(a) If (a) (i) the Servicer advises the Issuer in writing that DTC is
no longer willing or able to properly discharge its responsibilities under the
Depository Agreement with respect to the Notes and (ii) the Issuer is unable to
locate a qualified successor, (b) the Servicer, at its option, advises the
Issuer in writing that it elects to terminate the book-entry system with respect
to the Notes or (c) after the occurrence of an "Event of Default" under this
Indenture or a default by the Servicer under the Assignment and Servicing
Agreement, Noteholders evidencing not less than a majority of the aggregate
unpaid Outstanding Principal Amount of the Notes advise the Issuer in writing
that the continuation of a book-entry system with respect to the Notes is no
longer in the best interests of the Note Owners, then the Issuer shall notify
the Trustee and all Note Owners through the Clearing Agency, of the occurrence
of any such event and of the availability of Definitive Notes. Upon surrender by
DTC of the Notes, accompanied by registration and transfer instructions from DTC
for registration, the Issuer shall reissue such Notes as Definitive Notes to the
Noteholders. The Issuer shall not be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Notes, as the case may be,
all references herein to obligations imposed upon or to be performed by DTC
shall be deemed to be imposed upon and performed by the Issuer, to the extent
applicable with respect to such Definitive Notes, and the Issuer shall recognize
the holders of the relevant Definitive Notes as Noteholders hereunder.
(b) Definitive Notes will not be eligible for clearing or settlement
through DTC, Euroclear or Clearstream.
31
SECTION 2.08. Payment of Interest and Principal; Rights Preserved.
---------------------------------------------------
(a) Any installment of interest or principal, payable on any Note that
is punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall be paid to the Person in whose name such Note was registered at the
close of business on the Record Date for such Payment Date by wire transfer of
federal funds to the account and number specified in the Note Register on such
Record Date for such Person or, if no such account or number is so specified,
then by check mailed to such Person's address as it appears in the Note Register
on such Record Date.
(b) 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 holders of such Note and of any Note issued upon the registration of
transfer thereof or in exchange therefore or in lieu thereof, whether or not
such payment is noted on such Note. All payments on the Notes shall be paid
without any requirement of presentment but each holder of any Note shall be
deemed to agree, by its acceptance of the same, to surrender such Note at the
Corporate Trust Office against payment of the final installment of principal of
such Note.
SECTION 2.09. Persons Deemed Owners.
---------------------
Prior to due presentment of a Note for registration of transfer, the
Issuer, the Trustee, the Insurer, and any agent of the Issuer, the Trustee or
the Insurer may treat the registered Noteholder as the owner of such Note for
the purpose of receiving payment 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, the Trustee, the Insurer nor any agent of the Issuer, the
Trustee or the Insurer shall be affected by notice to the contrary.
SECTION 2.10. Cancellation.
------------
All Notes surrendered for registration of transfer or exchange or
following final payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The
Issuer may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
cancelled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. Subject to the next sentence, all
cancelled Notes held by the Trustee may be disposed of in the normal course of
its business or as directed by an Issuer Order. Promptly following the date on
which all principal of and interest on the Notes has been paid in full and the
Notes have been surrendered to the Trustee, the Trustee shall, if the Insurer
has paid any amount in respect of the Notes under the Policy or otherwise which
has not been reimbursed to it, deliver such surrendered Notes to the Insurer.
SECTION 2.11. Noteholder Lists.
----------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders and shall
32
otherwise comply with Section 312(a) of the Trust Indenture Act. In the event
the Trustee no longer serves as the Note Registrar, the Issuer (or any other
obligor upon the Notes) shall furnish to the Trustee at least five Business Days
before each interest payment date (and in all events in intervals of not more
than 6 months) and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Noteholders, and the Issuer shall otherwise comply
with Section 312(a) of the Trust Indenture Act.
SECTION 2.12. Treasury Notes.
--------------
In determining whether the Noteholders of the required Outstanding
Principal Amount of the Notes have concurred in any direction, waiver or
consent, Notes owned by the Issuer, any other obligor upon the Notes or an
Affiliate of the Issuer shall be considered as though not Outstanding, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes which a Responsible
Officer actually knows are so owned shall be so disregarded.
SECTION 2.13. CUSIP Numbers.
-------------
The Issuer in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall indicate the "CUSIP" numbers of
the Notes in notices of redemption and related materials as a convenience to
Noteholders; provided that any such notice may state that no representation is
--------
made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of redemption and related materials.
SECTION 2.14. Calculation of the LIBOR Rate.
-----------------------------
With respect to each Payment Date, LIBOR for the Class A-3 Notes and
the Class A-4 Notes shall be established by the Trustee and as to any Interest
Accrual Period, LIBOR will equal the London interbank offered rate for
Eurodollar deposits for one month which appears on the Telerate Screen page 3750
as of 11:00 A.M., London time, on the second LIBOR Business Day prior to the
first day of such Interest Accrual Period (with respect to the First Payment
Date, LIBOR has been set as of June 26, 2001). If such rate does not appear on
such page (or such other page as may replace that page on that service, or if
such service is no longer offered, such other service for displaying LIBOR as
may be selected by the Trustee), the rate will be the Reference Bank Rate. The
"Reference Bank Rate" will be determined on the basis of the rates at which
deposits in U.S. Dollars are offered by the reference banks (which shall be
three major banks that are engaged in transactions in the London interbank
market, selected by the Trustee) as of 11:00 A.M., London time, on the day that
is two LIBOR Business Days prior to the immediately preceding Payment Date to
prime banks in the London interbank market for a period of one month in amounts
approximately equal to the principal amount of the Class A-3 Notes and the Class
A-4 Notes then outstanding (or an appropriate standard size amount). The Trustee
will request the principal London office of each of the reference banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate will be the arithmetic mean of the quotations. If on such date fewer
33
than two quotations are provided as requested, the rate will be the arithmetic
mean of the rates quoted by two or more major banks in New York City, selected
by the Trustee, as of 11:00 A.M., New York City time, on the first day of the
relevant Interest Accrual Period date for loans in U.S. Dollars to leading
European banks for a period of one month in amounts approximately equal to the
principal amount of the Class A-3 Notes and the Class A-4 Notes then
outstanding. If no such quotations can be obtained, the rate will be LIBOR for
the prior Payment Date. The Trustee shall provide the Counterparty with notice
as to the calculation of the LIBOR rate for each Interest Accrual Period.
ARTICLE III
ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
AND APPLICATION OF MONEYS; REPORTS
SECTION 3.01. Transaction Accounts; Investments by Trustee.
--------------------------------------------
(a) On or before the Issuance Date, the Trustee shall establish in the
name of the Trustee for the benefit of the Noteholders and the Insurer to the
extent of their interests therein as provided in this Indenture the following
accounts, which accounts shall be Eligible Accounts maintained at the Corporate
Trust Office:
(i) Collection Account;
(ii) Renewal Account
(iii) Reserve Account; and
(iv) Security Deposit Account.
Subject to the further provisions of this Section 3.01(a), the Trustee shall,
upon receipt or upon transfer from another account, as the case may be, deposit
into such accounts all amounts received by it which are required to be deposited
therein in accordance with the provisions of this Indenture. All such amounts
and all investments made with such amounts, including all income and other gain
from such investments, shall be held by the Trustee in such accounts as part of
the Asset Pool as herein provided, subject to withdrawal by the Trustee in
accordance with, and for the purposes specified in the provisions of, this
Indenture and the other Transaction Documents.
(b) The Trustee shall hold in trust but shall not be required to
deposit in any account specified in Section 3.01(a) any payment received by it
until such time as the Trustee shall have identified to its reasonable
satisfaction the nature of such payment and, on the basis thereof, the proper
account or accounts into which such payment is to be deposited. In determining
into which of the accounts, if any, referred to above any amount received by the
Trustee is to be deposited, the Trustee may conclusively rely (in the absence of
bad faith on the part of the Trustee) on the advice of the Servicer. Unless the
Trustee is advised differently in writing by the Lessee making the payment or by
the Servicer in writing (with the Servicer's instruction controlling), the
Trustee shall assume that any amount remitted to it by such Lessee is to be
deposited into the Collection
34
Account pursuant to Section 3.03. The Trustee may establish from time to time
such deadline or deadlines as it shall determine are reasonable or necessary in
the administration of the Asset Pool after which all amounts received or
collected by the Trustee on any day shall not be deemed to have been received or
collected until the next succeeding Business Day.
(c) Neither the Servicer nor the Trustee shall have any right of
set-off with respect to the Collection Account, the Renewal Account, the Reserve
Account or the Security Deposit Account or any investment therein.
(d) So long as no Event of Default has occurred and is continuing, all
or a portion of the amounts in the Transaction Accounts, shall be invested and
reinvested by the Trustee pursuant to a Servicer Order in one or more Eligible
Investments. Subject to the restrictions on the maturity of investments set
forth in Section 3.01(f), each such Servicer Order may authorize the Trustee to
make the specific Eligible Investments set forth therein, to make Eligible
Investments from time to time consistent with the general instructions set forth
therein, or to make specific Eligible Investments pursuant to instructions
received in writing or by telegraph or facsimile transmission from the employees
or agents of the Servicer, identified therein, in each case in such amounts as
such Servicer Order shall specify. The Issuer agrees to report as income for
financial reporting and tax purposes (to the extent reportable) all investment
earnings on amounts in the Collection Account, the Renewal Account, the Reserve
Account or the Security Deposit Account. The Servicer agrees to give appropriate
and timely written investment directions to the Trustee so that there will not
be more than two Business Days in any one calendar year at the end of which
funds in the Transaction Accounts are not invested, directly or indirectly,
pursuant to a Servicer Order in Eligible Investments that mature on or after the
opening of business on the next Business Day.
(e) In the event that either (i) the Servicer, shall have failed to
give written investment directions to the Trustee by 9:30 A.M., New York City
time on any Business Day on which there may be uninvested cash or (ii) an Event
of Default shall be continuing, the Trustee shall promptly invest and reinvest
the funds then in the Collection Account, the Renewal Account, the Reserve
Account or the Security Deposit Account, as the case may be, to the fullest
extent practicable in Eligible Investments specified in clause (e) of the
definition thereof. All investments made by the Trustee shall be payable on
demand or mature no later than the maturity date therefore permitted by Section
3.01(f) unless the Trustee shall have received written confirmation from each
Rating Agency, that the liquidation of such Eligible Investments prior to their
respective maturity dates, will not result in the reduction or withdrawal of
such Rating Agency's then-current rating of the Notes.
(f) Unless payable on demand, no investment of any amount held in the
Collection Account, the Reserve Account or the Security Deposit Account shall
mature later than the Business Day immediately preceding the Payment Date which
is scheduled to occur immediately following the date of investment. All income
or other gains (net of losses) from the investment of moneys deposited in the
Collection Account, the Reserve Account or the Security Deposit Account shall be
deposited by the Trustee in such account immediately upon receipt.
35
(g) Any investment of any funds in the Transaction Accounts and any
sale of any investment held in such accounts, shall be made under the following
terms and conditions:
(i) each such investment shall be made in the name of the Trustee or
in the name of a nominee of the Trustee, in each case in such manner as shall be
necessary to maintain the identity of such investments as assets of the Asset
Pool;
(ii) any certificate or other instrument evidencing such investment
shall be delivered directly to the Trustee or its agent and the Trustee shall
have sole possession or control of such instrument, and all income on such
investment; and
(iii) the proceeds of any sale of an investment shall be remitted by
the purchaser thereof directly to the Trustee for deposit in the account in
which such investment was held.
(h) If any amounts are needed for disbursement from the Transaction
Accounts and sufficient uninvested funds are not collected and available therein
to make such disbursement, in the absence of a Servicer Order for the
liquidation of investments held therein in an amount sufficient to provide the
required funds, the Trustee shall select and cause to be sold or otherwise
converted to cash a sufficient amount of the investments in such accounts.
(i) The Trustee shall not in any way be held liable by reason of any
insufficiency in the Transaction Accounts resulting from losses on investments
made in accordance with the provisions of this Section 3.01 (but the institution
serving as Trustee shall at all times remain liable for its own debt
obligations, if any, constituting part of such investments) or losses incurred
in respect of the liquidation of any Eligible Investment prior to its stated
maturity. The Trustee shall not be liable for the selection of any Eligible
Investment or any investment made by it in accordance with this Section 3.01 on
the grounds that it could have made a more favorable investment or a more
favorable selection for sale of an investment.
SECTION 3.02. Collection of Moneys.
--------------------
(a) On or before the Issuance Date, the Servicer shall designate a
lockbox for the receipt directly from Lessees of all payments under the Leases
and for the receipt from IOS Capital or the Lessees of security deposits in
respect of any of the Leases. Amounts so received shall be deposited in the
Collection Account in accordance with the provisions of Section 3.03(a) or, in
the case of security deposits, in the Security Deposit Account in accordance
with Section 3.08(a).
(b) The Trustee shall from time to time, in accordance with the
written instructions of the Servicer, withdraw from the Collection Account and
pay to the Servicer for appropriate application by the Servicer any amounts in
the Collection Account which the Servicer advises the Trustee in writing are
Other Lease Payments. Prior to such payment, the Trustee shall have rights to
and an interest in such amounts to the extent (but only to the extent) it is
determined that such amounts actually constitute Transaction Payment Amounts.
36
(c) If at any time the Issuer shall receive any amount referred to in
Section 3.03(a), it shall hold such payment in trust for the benefit of the
Trustee, the holders of the Notes and the Insurer, shall segregate such payment
from the other property of the Issuer, and shall, promptly (but in no event
later than the next following Business Day) upon receipt, deliver such payment
in the form received to the Trustee.
SECTION 3.03. Collection Account; Payments.
----------------------------
(a) The Servicer shall within two Business Days of receipt (a
"Required Deposit Date") deposit the following funds, as received, into the
Collection Account:
(i) Lease Payments (including Renewal Payments);
(ii) recoveries from Non-Performing Leases to the extent IOS Capital
has not substituted Substitute Leases for such Non-Performing Leases;
(iii) late charges received on delinquent Lease Payments not advanced
by the Servicer;
(iv) proceeds from purchases by IOS Capital of Leases as a result of
breaches of representations and warranties of IOS Capital pursuant to Section
5.04 of the Assignment and Servicing Agreement to the extent IOS Capital has not
substituted Substitute Leases for such Leases;
(v) proceeds, if any, from investment of funds in the Collection
Account, the Reserve Account and the Renewal Account;
(vi) Casualty Payments;
(vii) Servicer Advances, if any;
(viii) any amounts paid by the Counterparty to the Issuer pursuant to
the Swap Documents;
(ix) Retainable Deposits;
(x) Termination Payments to the extent the Issuer does not reinvest
such Termination Payments in Additional Leases; and
(xi) proceeds for redemption of the Notes in the event the Issuer
exercises its right to redeem the Notes in accordance with Section 2.01(b).
(b) Unless the Notes have been declared due and payable pursuant to
Section 7.02 and moneys collected by the Trustee are being applied in accordance
with Section 7.06, Available Funds on deposit in the Collection Account
(including the amounts, if any, deposited into the Collection Account from the
Reserve Account, the Security Deposit Account and the Renewal Account in
accordance with the provisions of Sections 3.04, 3.08 and 3.09) shall be
withdrawn by the Trustee as directed by the
37
Servicer in the related Servicing Report on or before each Payment Date from the
Collection Account, in the amounts required, for application in the following
order of priority, to make the following Required Payments (all in accordance
with the applicable Servicing Report):
(i) to pay the Insurer the amounts then due and owing in respect of
the Insurer Premium;
(ii) to pay the Counterparty any amount due pursuant to the Swap
Documents;
(iii) to pay the Servicing Fee;
(iv) to reimburse unreimbursed Servicer Advances in respect of a prior
Payment Date;
(v) concurrently and pro rata: (a) to make Interest Payments on the
Class A-1 Notes; (b) to make Interest Payments on the Class A-2 Notes; (c) to
make Interest Payments on the Class A-3 Notes; and (d) to make Interest Payments
on the Class A-4 Notes;
(vi) to pay the Insurer any Reimbursement Amounts due under the terms
of the Insurance Agreement;
(vii) to make the Class A Principal Payment (i) to the Class A-1
Noteholders only, until the Outstanding Principal Amount on the Class A-1 Notes
is reduced to zero, then (ii) to the Class A-2 Noteholders only, until the
Outstanding Principal Amount on the Class A-2 Notes is reduced to zero, then
(iii) to the Class A-3 Noteholders only, until the Outstanding Principal Amount
on the Class A-3 Notes has been reduced to zero, and finally, (iv) to the Class
A-4 Noteholders until the Outstanding Principal Amount on the Class A-4 Notes is
reduced to zero;
(viii) if an Acceleration Event has occurred, to pay the Additional
Principal, if any, as an additional reduction of principal, to the Class A
Noteholders then receiving the Class A Principal Payment, in the order
established in clause (vii) above, until the Outstanding Principal Amount on all
of the Class A Notes has been reduced to zero;
(ix) to make a deposit to the Reserve Account in an amount equal to
the excess of the Required Reserve Amount over the Available Reserve Amount;
(x) during a Renewal Account Deposit Period, to make a deposit to the
Renewal Account in an amount equal to the excess of the Required Renewal Amount
over the amount on deposit in the Renewal Account but not in excess of the
amount of Renewal Payments for the preceding Due Period; and
(xi) to pay the Issuer, the balance, if any.
38
(c) Notwithstanding the foregoing, on any Payment Date the Servicer
shall instruct the Trustee to retain, and the Trustee shall retain, in the
Collection Account an amount equal to all Lease Payments received that were due
after the prior Due Period, and all Casualty Payments, and Termination Payments
received or realized after the Determination Date for such Payment Date and
shall not distribute any such amounts on such Payment Date. If at any time any
amount or portion thereof previously distributed pursuant to this Section
3.03(c) shall have been recovered, or shall be subject to recovery, in any
proceeding with respect to the Issuer or otherwise, then for purposes of
determining future distributions pursuant to this Section 3.03(c) such amount or
portion thereof shall be deemed to have not been previously so distributed.
(d) The Servicer shall submit with the Servicing Report a certificate
(i) setting forth any amounts to be withdrawn (on an item-by-item basis) from
the Collection Account other than as provided in Section 3.03(b), (ii) stating
that none of such amounts are all or part of any amounts required to be retained
in the Collection Account pursuant to this Section 3.03 and (iii) identifying
the Lease or Leases to which such amounts relate.
SECTION 3.04. The Reserve Account.
-------------------
(a) On the Issuance Date, the Issuer has made an initial deposit of
$6,471,079.93 into the Reserve Account. On each Payment Date, the Trustee shall
transfer to the Collection Account from the Reserve Account such amounts as
shall be required by Section 3.04(b).
(b) Prior to each Payment Date the Trustee shall transfer from the
Reserve Account to the Collection Account the amount specified by the Servicer
in the related Servicing Report representing investment earnings on amounts held
in the Reserve Account as of the related Determination Date. If by 12:00 noon,
New York City time, on the Business Day preceding any Payment Date, Available
Funds less the Available Reserve Amount are insufficient to permit on such
Payment Date all distributions required by Section 3.03(b)(i) through
3.03(b)(vii) (such payments, the "Required Payments" and such shortfall, an
"Available Funds Shortfall"), then, to the extent of the Available Reserve
Amount, the Trustee shall transfer, not later than the end of such Business Day,
from the Reserve Account to the Collection Account such amount to the extent
available as shall be necessary to make on such Payment Date all Required
Payments.
(c) In the event that after giving effect to all the disbursements
required to be made on any Payment Date, the Available Reserve Amount exceeds
the Required Reserve Amount, the Trustee shall transfer, not later than the end
of business on such Payment Date, an amount equal to such excess to the Issuer.
(d) Upon the satisfaction and discharge of this Indenture, any balance
remaining in the Reserve Account, after all obligations to the Noteholders
hereunder have been fully satisfied, shall be paid to reimburse the Trustee for
any amounts owing to it arising from the performance of its obligations under
this Indenture and, then, to the Issuer.
39
SECTION 3.05. Reports by Trustee; Notices of Certain Payments.
-----------------------------------------------
(a) The Trustee shall within two Business Days after the request of
the Issuer, the Servicer, the Insurer, the Counterparty or any Noteholder,
deliver to the requesting Person a written report setting forth the amounts on
deposit in the Collection Account, the Reserve Account and the Security Deposit
Account and identifying the investments included therein.
(b) On or prior to each Payment Date, the Servicer shall provide to
the Trustee and the Trustee shall forward to the Insurer, each Rating Agency and
each Noteholder of record a statement setting forth at least the following
information as to the Notes to the extent applicable:
(i) the amount of Interest Payments and payments in reduction of
principal paid on such Payment Date with respect to all Class A-1 Notes, Class
A-2 Notes, Class A-3 Notes and Class A-4 Notes, respectively;
(ii) the aggregate Outstanding Principal Amount of all Outstanding
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes,
respectively and the Pool Factor for each such Class after giving effect to all
payments reported under (i) above;
(iii) the amount of the Servicing Fee and unreimbursed Servicer
Advances paid on such Payment Date pursuant to Section 3.03(b)(iii) and Section
3.03(b)(iv);
(iv) the amount on deposit in the Collection Account, the Renewal
Account, the Reserve Account and the Security Deposit Account, in each case
after giving effect to all of the withdrawals and applications or transfers
required on or before such Payment Date pursuant to Sections 3.02, 3.03, 3.04
and 3.08;
(v) the Discounted Present Value of Performing Leases and the
Discounted Present Value of Non-Performing Leases as of the last day of the
related Due Period; and
(vi) the aggregate Lease Purchase Amounts for Leases purchased by the
Originator pursuant to Section 5.04 of the Assignment and Servicing Agreement
during the related Due Period.
(c) With each report of the Trustee furnished pursuant to this Section
3.05 following any Payment Date, the Trustee shall enclose a copy of the
relevant Servicing Report.
(d) Upon the request of a Noteholder, the Trustee will provide
information as to the Outstanding Principal Amount of each Class of Notes to
such Noteholder.
40
SECTION 3.06. Trustee May Rely on Certain Information from Servicer.
-----------------------------------------------------
Pursuant to Sections 5.01, 6.01 and 6.02 of the Assignment and
Servicing Agreement and Sections 3.02 through 3.05 hereof, the Servicer is
required to furnish to the Trustee and/or the Insurer from time to time certain
information and make various calculations which are relevant to the performance
of the Trustee's duties in this Article III and in Article IV of this Indenture.
The Trustee and the Insurer shall be entitled to conclusively rely in good faith
on such information or calculations unless and until the Insurer or a
Responsible Officer of the Trustee, as the case may be, has knowledge, or is
advised by any Noteholder or the Insurer (in writing), that such information or
calculations is or are incorrect.
SECTION 3.07. Optional Deposits by the Insurer; Notice of Waivers.
---------------------------------------------------
(a) The Insurer shall at any time, and from time to time, with respect
to a Payment Date, have the option (but shall not be required, except as
provided in Article IV) to deliver amounts to the Trustee for deposit into the
Collection Account for any of the following purposes: (i) to provide funds in
respect of the payment of fees or expenses of any provider of services to the
Issuer with respect to such Payment Date, or (ii) to include such amount as part
of the Available Funds for such Payment Date to the extent that without such
amount a draw would be required to be made on the Policy. Any amounts so
delivered by the Insurer shall be included in Reimbursement Amounts.
(b) If the Insurer waives any event that might trigger an event of
default under the Insurance Agreement and so notifies the Trustee in writing,
the Trustee shall notify the Rating Agencies of such waiver.
SECTION 3.08. The Security Deposit Account
----------------------------
(a) On the Issuance Date, the Issuer has made an initial deposit into
the Security Deposit Account of $9,028.21 representing security deposits in
respect of the Leases as of the Issuance Date. The Servicer on behalf of the
Issuer shall within two Business Days of receipt thereof deposit into the
Security Deposit Account all additional security deposits received in respect of
the Leases from time to time in the Asset Pool.
(b) Prior to each Payment Date, the Trustee shall transfer from the
Security Deposit Account to the Collection Account the amounts specified by the
Servicer in the related Servicing Report representing (a) investment earnings on
amounts held in the Security Deposit Account as of the related Determination
Date and (b) Retainable Deposits.
(c) The Servicer shall be responsible for the payment of all amounts
held from time to time in the Security Deposit Account not required to be
transferred to the Collection Account in accordance with Section 3.08(b) to the
Lessees or other Persons entitled thereto in accordance with the related Lease
documentation. From time to time, upon written request of the Servicer, the
Trustee shall release from the Security Deposit Account and from the Lien of
this Indenture such amounts as the Servicer shall
41
determine to be necessary for application as provided in the immediately
preceding sentence.
SECTION 3.09. Renewal Account.
---------------
(a) On or before the Issuance Date, the Trustee shall establish the
Renewal Account in accordance with Section 3.01(a) hereof.
(b) The Servicer shall deposit all Renewal Payments into the
Collection Account. Prior to each Payment Date, the Trustee shall transfer from
the Renewal Account to the Collection Account the amount specified by the
Servicer in the related Servicing Report representing investment earnings on
amounts held in the Renewal Account. During a Renewal Account Deposit Period,
Available Funds remaining after the payment of the Required Payments and amounts
required to be deposited into the Reserve Account shall be deposited into the
Renewal Account to the extent the amount on deposit in the Renewal Account is
less than the Required Renewal Amount, but not in excess of the amount of
Renewal Payments for the preceding Due Period. Any amounts on deposit in the
Renewal Account in excess of the Required Renewal Amount will be deposited into
the Collection Account.
(c) In the event that Available Funds (exclusive of amounts on deposit
in the Reserve Account and the Renewal Account) are insufficient to pay the
Required Payments and amounts required to be deposited in the Reserve Account on
any Payment Date, the Trustee shall transfer from the Renewal Account to the
Collection Account an amount equal to the lesser of the funds on deposit in the
Renewal Account and the amount of such deficiency.
(d) Upon the satisfaction and discharge of this Indenture, any balance
remaining in the Renewal Account, after all obligations to the Noteholders
hereunder have been fully satisfied, shall be paid to reimburse the Trustee for
any amounts owing to it arising from the performance of its obligations under
this Indenture and then, to the Issuer.
ARTICLE IV
THE POLICY
SECTION 4.01. Claims Under Policy.
-------------------
(a) On each Determination Date, the Trustee shall determine from the
related Servicer Report with respect to the immediately following Payment Date
the Deficiency Amount, if any. If the Trustee determines that a Deficiency
Amount would exist, the Trustee shall complete a Notice in the form of Exhibit A
to the Policy and submit such Notice to the Insurer no later than 12:00 noon New
York City time on the third Business Day preceding such Payment Date as a claim
for payment in an amount equal to the Deficiency Amount. Amounts paid by the
Insurer pursuant to a claim submitted under this Section 4.01, shall be
deposited by the Trustee into the Collection
42
Account for payment to Noteholders on the related Payment Date pursuant to
Section 3.03(b).
(b) Any notice delivered by the Trustee to the Insurer pursuant to
Section 4.01(a) shall specify the Deficiency Amount claimed under the Policy and
shall constitute a "Notice" (as defined in the Policy) under the Policy. In
accordance with the provisions of the Policy, the Insurer is required to pay to
the Trustee the Deficiency Amount properly claimed thereunder by 12:00 noon, New
York City time, on the later of (i) the third Business Day (as defined in the
Policy) following receipt on a Business Day of the Notice of Claim, and (ii) the
applicable Payment Date. Except as otherwise provided in Section 3.07(a), any
payment made under the Policy by the Insurer shall be applied solely to the
payment of the Notes as set forth in the Policy, and for no other purpose.
(c) The Trustee shall (i) receive as attorney-in-fact of each
Noteholder any Deficiency Amount from the Insurer and (ii) deposit the same in
the Collection Account for payment to Noteholders as provided in Section
3.03(b). For the purposes of clause (d) below, any Deficiency Amount disbursed
by the Trustee from claims made under the Policy shall not be considered payment
by the Issuer with respect to such Notes, and shall not discharge the
obligations of the Issuer with respect thereto. The Insurer shall be entitled to
receive the related Reimbursement Amount pursuant to Section 3.03(b) with
respect to each Insured Payment made by the Insurer.
(d) The Insurer shall, to the extent it makes any payment with respect
to the Notes, become subrogated to the rights of the recipients of such payments
to the extent of such payments. Subject to and conditioned upon any payment with
respect to the Notes by or on behalf of the Insurer, the Trustee and the
Noteholders shall assign to the Insurer all rights to the payment of interest or
principal with respect to the Notes which are then due for payment to the extent
of all payments made by the Insurer, and the Insurer may exercise any option,
vote, right, power or the like with respect to the Notes to the extent that it
has made payment pursuant to the Policy. To evidence such subrogation, the Note
Registrar (as defined in this Indenture) shall note the Insurer's rights as
subrogee upon the register of Noteholders upon receipt from the Insurer of proof
of payment by the Insurer of any Insured Payment (as defined in the Policy). The
foregoing subrogation shall in all cases be subject to the rights of the
Noteholders to receive all Insured Payments (as defined in the Policy) in
respect of the Notes.
(e) The Trustee shall keep a complete and accurate record of all
Policy proceeds deposited into the Collection Account and the allocation of such
funds to payment of interest on and principal paid in respect of any Note. The
Insurer shall have the right to inspect such records at reasonable times upon
one Business Day's prior notice to the Trustee.
(f) The Trustee shall be entitled to enforce on behalf of the
Noteholders the obligations of the Insurer under the Policy. Notwithstanding any
other provision of this Indenture or any Transaction Documents, the Noteholders
are not entitled to make any claims under the Policy or institute proceedings
directly against the Insurer.
43
SECTION 4.02. Preference Claims.
-----------------
(a) In the event that the Trustee has received a certified copy of an
order of the appropriate court that any amount previously distributed to a
Noteholder in respect of any Note has been avoided in whole or in part as a
preference payment under applicable bankruptcy law, the Trustee shall so notify
the Insurer, shall comply with the provisions of the Policy to obtain payment by
the Insurer of such avoided payment, and shall, at the time it provides notice
to the Insurer, notify Holders of the Notes by mail that, in the event that any
Noteholder's payment is so recoverable, such Noteholder will be entitled to
payment pursuant to the terms of the Policy. The Trustee shall furnish to the
Insurer its records evidencing the payments of principal of and interest on the
Notes, if any, which have been made by the Trustee and subsequently recovered
from Noteholders, and the dates on which such payments were made. Pursuant to
the terms of the Policy, the Insurer will make such payment on behalf of the
Noteholder to the receiver or trustee in bankruptcy named in the final order of
the court exercising jurisdiction on behalf of the Noteholder and not to any
Noteholder directly (unless a Noteholder has returned principal or interest on
the Notes to such receiver or trustee in bankruptcy, in which case the Insurer
will make such payment to the Trustee for payment to such Noteholder upon proof
of such payment reasonably satisfactory to the Insurer).
(b) The Trustee shall promptly notify the Insurer of any proceeding or
the institution of any action (of which the Trustee has knowledge) seeking the
avoidance as a preferential transfer under applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (a "Preference Claim") of any
payment made with respect to the Notes. Each Holder, by its purchase of Notes,
and the Trustee hereby agrees that so long as an Insurer Default shall not have
occurred and be continuing, the Insurer may at any time during the continuation
of any proceeding relating to a Preference Claim direct all matters relating to
such Preference Claim, including, without limitation, (i) the direction of any
appeal of any order relating to any Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal. In addition,
and without limitation of the foregoing, as set forth in Section 4.01(d), the
Insurer shall be subrogated to, and each Noteholder and the Trustee hereby
delegate and assign, to the fullest extent permitted by law, the rights of the
Trustee and each Noteholder in the conduct of any proceeding with respect to a
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.
SECTION 4.03. Surrender of Policy.
-------------------
The Trustee shall surrender the Policy to the Insurer for cancellation
upon the expiration of the Policy in accordance with the terms thereof.
ARTICLE V
RELEASE OF LEASES AND INTERESTS IN EQUIPMENT
44
SECTION 5.01. Release of Equipment.
--------------------
Subject to the satisfaction of the provisions of Section 5.02, the
Trustee shall release the Trustee's security interest in the Issuer's interest
in the Equipment from the Lien of the Indenture upon receipt from the Servicer
of written certification of the occurrence of: (a) the sale of such Equipment
pursuant to Section 4.03(b) of the Assignment and Servicing Agreement, or (b)
the release of the related Lease from the Lien of this Indenture.
SECTION 5.02. Release of Leases Upon Final Lease Payment.
------------------------------------------
In the event that the Trustee shall have received notice (either in
writing or orally with prompt written or telecopied confirmation) from the
Servicer that the Trustee has received with respect to any Lease (i) the final
Lease Payment (including Renewal Payments) due and payable under such Lease,
(ii) a Termination Payment in respect of such Lease, (iii) a Lease Purchase
Amount in respect of such Lease, (iv) a Casualty Payment under such Lease (and,
following such final Lease Payment, Casualty Payment, Lease Purchase Amount or
Termination Payment, no further payments (other than Other Lease Payments) on or
in respect of such Lease are or will be due and payable), or (iv) the full
amount of any recoveries with respect to any such Lease that is a Non-Performing
Lease, such Lease shall be released from the lien of this Indenture and returned
to the Issuer.
SECTION 5.03. Execution of Documents.
----------------------
The Trustee shall promptly execute and deliver such documents,
including without limitation partial releases and termination statements (which
shall be furnished to the Trustee by the Issuer), and take such other actions as
the Issuer, by Issuer Request, may reasonably request (including the return of
any Lease which has been released) to fully effectuate the release from this
Indenture of any Lease and interests in the related Equipment required to be so
released pursuant to Sections 5.01 or 5.02.
SECTION 5.04. Further Release of Collateral.
-----------------------------
Notwithstanding any provision of this Indenture to the contrary, any
amounts properly retained by the Servicer pursuant to Section 4.03, 4.04 and
4.05 of the Assignment and Servicing Agreement are, without further action by
the Trustee released from the Lien of this Indenture.
ARTICLE VI
SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER
SECTION 6.01. Servicer Events of Default.
--------------------------
If a Servicer Event of Default has occurred and is continuing, the
Trustee shall, upon the written request of the Insurer (so long as no Insurer
Default has occurred and is continuing ) or the holders of 66-2/3% of the then
Outstanding Principal Amount
45
of the Notes (if an Insurer Default has occurred and is continuing), give notice
in writing to the Servicer of the termination of all of the rights and
obligations of the Servicer under the Assignment and Servicing Agreement (but
none of IOS Capital's obligations pursuant to Section 5 of the Assignment and
Servicing Agreement, which shall survive such termination). On and after the
giving of such written notice, all rights and obligations of the Servicer under
the Assignment and Servicing Agreement, including, without limitation, the
Servicer's right thereunder to receive the Servicing Fee, but none of the
Servicer obligations pursuant to Section 4 thereof, shall pass to, be vested in,
and be assumed by the Trustee, and the Trustee shall be authorized to, and
shall, execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
termination and of such passing, vesting, and assumption; provided that in
--------
performing the duties of the Servicer under the Assignment and Servicing
Agreement the Trustee shall at all times be deemed to be acting as the Trustee
hereunder and shall be entitled to the full benefit of all the protections,
benefits, immunities and indemnities provided in this Indenture for or with
respect to the Trustee, including without limitation those set forth in Article
VIII hereof.
SECTION 6.02. Substitute Servicer.
-------------------
Notwithstanding the provisions of Section 6.01, the Trustee may, if it
shall be unwilling to continue to act as the successor to the Servicer in
accordance with Section 6.01, or shall, if it is unable to continue to so act or
is so instructed in writing by the Insurer (if no Insurer Default has occurred
and is continuing) or the holders of 66-2/3% of the then Outstanding Principal
Amount of the Notes (if an Insurer Default has occurred and is continuing),
appoint a successor to the Servicer in accordance with the provisions of Section
10.03 of the Assignment and Servicing Agreement.
ARTICLE VII
EVENTS OF DEFAULT; REMEDIES
SECTION 7.01. Events of Default.
-----------------
"Event of Default," wherever used herein, means any one of the
following (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any Interest Payment on any Note when
the same becomes due and payable; or
(b) default in the payment of the principal of the Notes at Stated
Maturity; or
(c) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a
46
default in the observance or performance of which is elsewhere in this Section
specifically dealt with), or any representation or warranty of the Issuer made
in this Indenture proving to have been incorrect in any material respect as of
the time when the same shall have been made, and such default shall continue or
not be cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been eliminated or
otherwise cured, for a period of 30 days (or for such longer period, not in
excess of 90 days, as may be reasonably necessary to remedy such default if the
Servicer delivers an Officers' Certificate to the Trustee to the effect that the
Issuer has commenced, or will promptly commence and diligently pursue, all
reasonable efforts to remedy such default and such default can be remedied in 90
days or less) after there shall have been given, by registered or certified
mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the
Holders of at least 25% of the Outstanding Principal Amount of the Notes, a
written notice specifying such default or incorrect representation or warranty
and requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(d) an involuntary petition or proceeding shall be filed (i) in
respect of the Issuer under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or (ii) seeking a decree or
order adjudging the Issuer a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, or composition of or in respect of the Issuer under any
applicable federal or state law, or the appointment of a custodian, receiver,
liquidator, assignee, trustee, sequestrator, or other similar official of the
Issuer or of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and either (1) such petition shall not have been
dismissed within a period of 60 consecutive days or (2) any such order for
relief or decree shall be entered in any such proceeding or any such receiver,
liquidator, assignee, trustee, sequestrator or other "similar official" shall be
appointed; or
(e) the commencement by the Issuer of a voluntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization, or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Issuer in an involuntary case or proceeding under
any applicable federal or state bankruptcy, insolvency, reorganization, or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable federal or state law, or
the consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator, or similar official of the Issuer or of any substantial part of
its property, or the making by it of an assignment for the benefit of creditors,
or the Issuer's failure to pay its debts generally as they become due, or the
taking of corporate action by the Issuer in furtherance of any such action; or
(f) the occurrence and continuance of a Servicer Event of Default.
The Issuer shall deliver to the Trustee and the Insurer and the Rating
Agencies, within three days after obtaining knowledge of the occurrence thereof,
written notice in the form of an Officers' Certificate of any event which with
the giving of notice
47
and the lapse of time would become an Event of Default under (c), (d), (e) or
(f) above, its status and what action the Issuer is taking or proposes to take
with respect thereto.
SECTION 7.02. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
(a) If an Event of Default occurs and is continuing, then, subject to
the provisions of Section 7.02(c) below, and in every such case, the Trustee
may, and (if so directed in writing by holders of 66-2/3% of the then
Outstanding Principal Amount of the Notes) shall, declare the unpaid principal
amount of the Notes to be immediately due and payable at par together with all
accrued and unpaid interest thereon, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Issuer.
(b) Subject to Section 7.02(c) below, the holders of 66-2/3% of the
then Outstanding Principal Amount of the Notes may direct in writing the time,
method and place of conducting any proceedings for any remedy available to the
Trustee or of exercising any trust or power conferred on it.
(c) Subject only to provisions hereof expressly stated to be
applicable notwithstanding this Section 7.02 and notwithstanding any other
contrary provision of this Indenture, so long as the Policy remains in effect
and no Insurer Default has occurred and is continuing, and irrespective of any
contrary instruction from the holders of any Notes but subject to any further
conditions or requirements of this Indenture, the Trustee (i) shall not declare
the Notes to be immediately due and payable or waive any Event of Default or
exercise any remedies upon the occurrence of an Event of Default, except at the
written direction of the Insurer, (ii) shall upon the occurrence of an Event of
Default declare the Notes to be immediately due and payable or waive any such
Event of Default upon the written direction of the Insurer, and (iii) shall upon
the occurrence and continuance of an Event of Default, exercise or refrain from
exercising available remedies in accordance with the written direction and
control of the Insurer.
(d) At any time after such an Event of Default has occurred and before
a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this Article provided, the Insurer (if no Insurer
Default has occurred and is continuing) or the holders of Notes evidencing
66-2/3% of the then Outstanding Principal Amount of the Notes (if an Insurer
Default has occurred and is continuing) by written notice to the Issuer and the
Trustee, may rescind and annul such declaration and its consequences if the
Issuer has paid or deposited with the Trustee a sum sufficient to pay:
(i) all Principal Payments on any Class A Notes which have become due
otherwise than by such declaration of acceleration and interest thereon
from the date when the same first became due until the date of payment or
deposit at the appropriate Note Interest Rate,
(ii) all Interest Payments due with respect to any Class A Notes and,
to the extent that payment of such interest is lawful, interest upon
overdue interest from the date when the same first became due until the
date of payment or deposit at a rate per annum equal to the appropriate
Note Interest Rates, and
48
(iii) all sums paid or otherwise advanced by the Trustee hereunder and
all sums due to the Insurer and the reasonable compensation, expenses,
disbursements, and advances of the Trustee and the Insurer and their
respective agents and counsel;
No such rescission shall affect any subsequent Event of Default or impair any
right consequent thereon.
SECTION 7.03. Remedies.
--------
(a) If an Event of Default occurs and is continuing of which a
Responsible Officer has knowledge, the Trustee shall immediately give notice to
each Noteholder and the Rating Agencies as set forth in Section 8.02.
(b) Following any acceleration of the Notes, the Trustee shall have
all of the rights, powers and remedies with respect to the Asset Pool as are
available to secured parties under the Uniform Commercial Code or other
applicable law. Such rights, powers and remedies may be exercised by the Trustee
in its own name as trustee of an express trust.
(c) If an Event of Default specified in Section 7.01(a) or 7.01(b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Issuer for the whole
amount of principal and interest remaining unpaid.
(d) In exercising its rights and obligations under this Section 7.03,
the Trustee may sell the assets in the Asset Pool; provided that, if the Event
--------
of Default involves other than non-payment of principal or interest on the
Notes, then such sale must be for an amount greater than or equal to amounts due
under clauses first through fourth in Section 7.06 unless directed otherwise by
----- ------
the Insurer (if no Insurer Default has occurred and is continuing) or the
holders of 66-2/3% of the then Outstanding Principal Amount of the Notes (if an
Insurer Default has occurred and is continuing). None of the Trustee, the
Insurer nor any Noteholder shall have any rights against the Issuer other than
to enforce the Lien of this Indenture and to sell the assets in the Asset Pool.
SECTION 7.04. Trustee Shall File Proofs of Claim.
----------------------------------
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition,
or other judicial proceeding relative to the Issuer, the Seller, IOS Capital,
the Servicer or any other obligor upon the Notes or the other obligations
secured hereby or relating to the property of the Issuer, the Seller, IOS
Capital, the Servicer or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Issuer, the Seller, IOS
Capital or the Servicer for the payment of overdue principal or interest or any
such other obligation) shall by intervention in such proceeding or otherwise,
49
(i) file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Notes and any other obligation
secured hereby and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee, the Insurer (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee and the Insurer and their respective agents and counsel) and the
Noteholders allowed in such judicial proceeding, provided, however, that the
-------- -------
Trustee shall file such proof of claim on behalf of the Insurer only upon the
Insurer's written direction and on behalf of the Noteholders only at the written
direction of the holders of not less than 66-2/3% of the then Outstanding
Principal Amount of the Notes; and
(ii) collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or
other similar official in any such judicial proceeding is hereby authorized by
each Noteholder and the Insurer to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Noteholders to pay to the Trustee and the Insurer any amount due them for
the reasonable compensation, expenses, disbursements and advances of the Trustee
and the Insurer and their respective agents and counsel, and any other amounts
due the Trustee under Section 7.06.
(b) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Noteholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any holder thereof or to authorize the Trustee to vote in
respect of the claim of any Noteholder in any such proceeding.
SECTION 7.05. Trustee May Enforce Claims Without Possession of Notes.
------------------------------------------------------
All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the holders
of the Notes and the Insurer.
SECTION 7.06. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article following
an Event of Default, and any moneys that may then be held or thereafter received
by the Trustee shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of the entire amount due
on account of principal or interest, upon presentation of the Notes and
surrender thereof:
first to the payment of all costs and expenses of collection incurred
-----
by the Trustee, the Insurer and the Noteholders (including the reasonable
50
fees and expenses of any counsel to the Trustee, the Insurer and the
Noteholders) and all fees and expenses (including legal fees and expenses)
owed to the Trustee not in excess of $250,000 under this Indenture and the
Assignment and Servicing Agreement;
second to pay the Counterparty any amount due pursuant to the Swap
------
Documents;
third to the Servicer under the Assignment and Servicing Agreement
-----
(irrespective of whether IOS Capital or an Affiliate of IOS Capital is then
acting as servicer), to the payment of all Servicing Fees and unreimbursed
Servicer Advances then due to such Person;
fourth first, pro rata to the payment of all accrued and unpaid
------
interest on the Outstanding Class A-1 Principal Amount, Outstanding Class
A-2 Principal Amount, Outstanding Class A-3 Principal Amount and
Outstanding Class A-4 Principal Amount, respectively, to the date of
payment thereof, including (to the extent permitted by applicable law)
interest on any overdue installment of interest and principal from the
maturity of such installment to the date of payment thereof at the rate per
annum equal to the Class A-1 Note Interest Rate, Class A-2 Note Interest
Rate and Class A-3 Note Interest Rate and Class A-4 Note Interest Rate,
respectively, second, to the payment of the Outstanding Class A-1 Principal
Amount, third, to the payment of the Outstanding Class A-2 Principal
Amount, fourth, to the pro rata payment of the Outstanding Class A-3
Principal Amount and fifth, to the payment of the Outstanding Class A-4
Principal Amount; provided, that the Noteholders may allocate such payments
--------
for interest, principal and premium at their own discretion, except that no
such allocation shall affect the allocation of such amounts or future
payments received by any other Noteholder;
fifth to the payment of amounts then due the Insurer under this
-----
Indenture, including the Insurer Premium (other than amounts referred to in
clause sixth below);
-----
sixth to the payment to the Insurer of any Reimbursement Amounts;
-----
seventh to the payment of any fees and expenses (including legal fees
-------
and expenses) in excess of $250,000 owed to the Trustee, owed to any
successor trustee, co-trustee or separate trustee under this Indenture and
the Assignment and Servicing Agreement;
eighth to the payment of the remainder, if any, to the Issuer or any
------
other Person legally entitled thereto.
51
SECTION 7.07. Limitation on Suits.
-------------------
None of the Noteholders nor the Insurer shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(i) such Noteholder or the Insurer, as the case may be, has previously
given written notice to the Trustee of a continuing Event of Default;
(ii) the holders of not less than 66-2/3% of the then Outstanding
Principal Amount of the Notes or the Insurer, as the case may be, shall have
made written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(iii) such Noteholder or Noteholders or the Insurer, as the case may
be, have offered to the Trustee indemnity satisfactory to it against the costs,
expenses and liabilities to be incurred in compliance with such request;
(iv) the Trustee for 30 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding;
(v) so long as any of the Notes remain Outstanding, no direction
inconsistent with such written request has been given to the Trustee during such
30-day period by the holders of 66-2/3% of the then Outstanding Principal Amount
of the Notes or the Insurer, as the case may be; and
(vi) in the case of any proceeding instituted by any Noteholder
without the written consent of the Insurer, an Insurer Default has occurred and
is continuing;
it being understood and intended that no one or more Noteholders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb, or prejudice the rights of any other
Noteholders, or to obtain or to seek to obtain priority or preference over any
other Noteholders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Noteholders. It is further understood and intended that so long as any portion
of the Notes remains Outstanding, IOS Capital shall not have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture
(other than for the enforcement of Sections 3.03(b), 3.04(b), 3.05, 3.06, 4.01
and 4.02 hereof) or for the appointment of a receiver or trustee (including,
without limitation, a proceeding under the Bankruptcy Code), or for any other
remedy hereunder. Nothing in this Section 7.07 shall be construed as limiting
the rights of otherwise qualified Noteholders to petition a court for the
removal of a Trustee pursuant to Section 8.08(h) hereof.
SECTION 7.08. Unconditional Right of Noteholders to Receive Principal
-------------------------------------------------------
and Interest.
------------
Notwithstanding any other provision in this Indenture, other than the
provisions hereof limiting the right to recover amounts due on the Notes to
recoveries from the property of the Asset Pool, the holder of any Note shall
have the absolute and
52
unconditional right to receive payment of the principal of and interest on such
Note on the Maturities for such payments, including the Stated Maturity, and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Noteholder.
SECTION 7.09. Restoration of Rights and Remedies.
----------------------------------
If the Trustee, the Insurer or any Noteholder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee, the Insurer or to such Noteholder, then and
in every such case, subject to any determination in such proceeding, the Issuer,
the Trustee, the Insurer and the Noteholders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee, the Insurer and the Noteholders continue as though no
such proceeding had been instituted.
SECTION 7.10. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost, or stolen Notes in Section 2.04 (f), no
right or remedy herein conferred upon or reserved to the Insurer 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.
SECTION 7.11. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee, the Insurer 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 an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee, the Insurer or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee, the Insurer or by the Noteholders, as the case may be.
SECTION 7.12. Control by Noteholders.
----------------------
Except as may otherwise be provided in this Indenture regarding
control by the Insurer, until such time as the conditions specified in Section
11.01(a)(i) have been satisfied in full, the holders of 66-2/3% of the then
Outstanding Principal Amount of the Notes shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee.
Notwithstanding the foregoing,
(i) no such direction shall be in conflict with any rule of law or
with this Indenture;
53
(ii) the Trustee shall not be required to follow any such direction
which the Trustee reasonably believes might result in any personal liability on
the part of the Trustee for which the Trustee is not indemnified to its
satisfaction; and
(iii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with any such direction; provided that the
--------
Trustee shall give notice of any such action to each Noteholder.
SECTION 7.13. Undertaking for Costs.
---------------------
All parties to this Indenture agree (and each holder of any Note by
its acceptance thereof shall be deemed to have agreed) that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the Trustee
or the Insurer, to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate more than 10% of the then Outstanding
Principal Amount of the 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 Maturities for such payments, including the Stated Maturity as
applicable.
SECTION 7.14. 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 this 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 Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 7.15. Sale of Asset Pool.
------------------
(a) The power to effect any sale of any portion of the Asset Pool
described pursuant to Section 7.03 shall not be exhausted by any one or more
sales as to any portion of the Asset Pool remaining unsold, but shall continue
unimpaired until the entire Asset Pool shall have been sold or all amounts
referred to in clauses first through fifth in Section 7.06 shall have been paid.
----- -----
The Trustee may from time to time, upon written directions in accordance with
Section 7.12, postpone any public sale by public announcement made at the time
and place of such sale. For any public sale of the Asset Pool, the Trustee shall
have provided each Noteholder with notice of such sale at least two weeks in
advance of such sale which notice shall specify the date, time and location of
such sale.
54
(b) To the extent permitted by applicable law, the Trustee shall not
in any private sale sell to a third party the Asset Pool, or any portion thereof
unless,
(i) until such time as the conditions specified in Section 11.01 have
been satisfied in full, the Insurer (if no Insurer Default has occurred and is
continuing) or the holders of not less than 66-2/3% of the then Outstanding
Principal Amount of the Notes (if an Insurer Default has occurred and is
continuing) consent to or direct the Trustee in writing to make such sale; or
(ii) the proceeds of such sale would be not less than the sum of all
amounts due to the Trustee hereunder and all amounts referred to in clause first
-----
through third of Section 7.06 on the Payment Date next succeeding the date of
-----
such sale.
The foregoing provisions shall not preclude or limit the ability of the Trustee
to purchase all or any portion of the Asset Pool at a private sale.
(c) In connection with a sale of all or any portion of the Asset Pool:
(i) any one or more Noteholders or the Insurer may bid for and
purchase the property offered for sale, and upon compliance with the terms of
sale may hold, retain, and possess and dispose of such property, without further
accountability, and any Noteholder or the Insurer, as the case may be, may, in
paying the purchase money therefore, deliver in lieu of cash any Outstanding
Notes or claims for interest thereon (or, in the case of the Insurer, surrender
the Insurer's subrogation rights with respect to such Outstanding Notes or
claims for interest thereon) for credit in the amount that shall, upon
distribution of the net proceeds of such sale, be payable thereon, and the
Notes, in case the amounts so payable thereon shall be less than the amount due
thereon, shall be returned to the Noteholders after being appropriately stamped
to show such partial payment;
(ii) the Trustee shall execute and deliver an appropriate instrument
of conveyance transferring its interest, without representation, warranty or
recourse, in any portion of the Asset Pool in connection with a sale thereof;
(iii) the 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 Asset Pool in connection with a sale thereof, and to take all
action necessary to effect such sale; and
(iv) no purchaser or transferee at such a sale shall be bound to
ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(d) The method, manner, time, place and terms of any sale of all or
any portion of the Asset Pool shall be commercially reasonable.
(e) The provisions of this Section 7.15 shall not be construed to
restrict the ability of the Trustee to exercise any rights and powers against
the Issuer or the Asset Pool that are vested in the Trustee by this Indenture,
including, without limitation, the power of the Trustee to proceed against the
collateral subject to the lien of
55
this Indenture and to institute judicial proceedings for the collection of any
deficiency remaining thereafter.
(f) The purchase price received by the Trustee in respect of any sale
made in accordance with this Section 7.15 shall be deemed conclusive and binding
on the parties hereto, the Insurer and the Noteholders.
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of Default known to the
Trustee:
(i) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and the other Transaction
Documents to which it is a party, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Indenture.
(b) In case an Event of Default has occurred and is continuing to the
knowledge of a Responsible Officer of the Trustee, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own grossly
negligent failure to act, or its own willful misconduct, except that:
(i) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be determined that the
Trustee was grossly negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the Noteholders
56
in accordance with Section 7.12 relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture; and
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial or other 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 indemnity satisfactory to it, against such risk or
liability is not assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 8.02. Notice of Defaults or Events of Default.
---------------------------------------
Within two Business Days after a Responsible Officer obtaining
knowledge of the occurrence of any Default or Event of Default hereunder, the
Trustee shall transmit, by certified mail return receipt requested, hand
delivery or overnight courier (in each case, such delivery to be at the expense
of the Servicer), to (a) all Noteholders, as their names and addresses appear in
the Note Register, (b) the Insurer and (c) the Rating Agencies, notice of such
Default or Event of Default hereunder known to the Trustee, unless the Trustee
has knowledge that such Default or Event of Default shall have been cured or
waived.
SECTION 8.03. Certain Rights of Trustee.
-------------------------
(a) Subject to the provisions of Section 8.01:
(i) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, note,
debenture, other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed or presented by the proper party or
parties (and the Trustee need not investigate any fact or matter stated in the
document);
(ii) any request or direction or action of the Issuer mentioned herein
shall be sufficiently evidenced by an Issuer Order;
(iii) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;
(iv) the Trustee may consult with counsel as to legal matters and the
advice of any such counsel selected by the Trustee 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;
57
(v) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Noteholders or the Insurer pursuant to this Indenture, unless such
request or direction is in writing and such Noteholders or the Insurer shall
have offered to the Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(vi) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, note, debenture,
other evidence of indebtedness, or other paper or document, unless requested in
writing to do so by the Insurer (so long as no Insurer Default has occurred and
is continuing) and having been indemnified to its satisfaction by the Insurer
against the costs, expenses and liabilities that it may incur in making such
investigation, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Issuer, personally
or by agent or attorney;
(vii) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys,
custodians or nominees and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, attorney, custodian or
nominee appointed with due care by it hereunder;
(viii) the Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers;
(ix) the Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder;
(x) the Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the part
of the Issuer;
(xi) the permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty and the Trustee shall not be
answerable for other than its gross negligence or willful default; and
(xii) in the event that the Trustee is also acting as paying agent or
transfer agent and registrar hereunder, the rights and protections afforded to
the Trustee pursuant to this Article VIII shall also be afforded to such paying
agent or transfer agent or registrar.
(b) The recitals contained herein and in the Notes, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Issuer, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture, the other Transaction Documents, the Asset Pool, or of the Notes,
except to the extent provided by the Trustee's
58
certificate of authentication on the Notes. The Trustee shall not be accountable
for the use or application by the Issuer of the proceeds of the Notes or funds
withdrawn from the Transaction Accounts in accordance with the provisions of the
Transaction Documents.
SECTION 8.04. May Hold Notes.
--------------
The Trustee, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with the Issuer with the same
rights it would have if it were not Trustee subject to the Trust Indenture Act.
SECTION 8.05. Money Held in Trust.
-------------------
Money and investments held by the Trustee shall be held in trust in
one or more trust accounts hereunder, but need not be segregated from other
funds except to the extent required by law.
SECTION 8.06. Compensation, Reimbursement, etc.
--------------------------------
The Servicer agrees:
(a) to pay to the Trustee from time to time such compensation for all
services rendered by it hereunder as the Issuer and the Trustee may agree in
writing (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and
(b) to reimburse the Trustee upon its request, for all reasonable
expenses, disbursements, and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement, or advance as may be attributable to its
negligence or bad faith.
SECTION 8.07. Corporate Trustee Required; Eligibility.
---------------------------------------
(a) There shall at all times be a Trustee hereunder which shall (a) be
a corporation organized and doing business under the laws of the United States
of America, any state thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers; (b) have a combined capital and surplus
of at least $50,000,000; (c) be subject to supervision or examination by federal
or state authority; and (d) at the time of appointment, shall have long-term
debt obligations (or, if the Trustee does not have outstanding long-term debt
obligations and is a subsidiary of a holding company, which holding company
shall have long-term obligations) having a credit rating of at least "A-" from
S&P and "Baa3" from ▇▇▇▇▇'▇.
(b) If such corporation 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 corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in
59
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
(c) This Indenture shall always have a Trustee who satisfies the
requirements of Section 310(a)(1) of the Trust Indenture Act. The Trustee is
subject to the provisions of Section 310(b) of the Trust Indenture Act regarding
disqualification of a trustee upon acquiring any conflicting interest. In the
event that the Trustee is disqualified pursuant to Section 3.10(b) of the Trust
Indenture Act, the Trustee shall promptly resign in accordance with Section
8.08.
SECTION 8.08. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 8.09.
(b) The Trustee may resign at any time by giving written notice
thereof to the Issuer, the Insurer (if no Insurer Default has occurred and is
continuing) and, if an Insurer Default has occurred and is continuing, the
Noteholders, by mailing notice of resignation by first-class mail, postage
prepaid, to the Issuer or the Insurer at their respective addresses set forth in
the Assignment and Servicing Agreement and to Noteholders at their addresses
appearing on the Note Register.
(c) The Trustee may be removed at any time upon prior written notice
of the Insurer (if no Insurer Default has occurred and is continuing) or the
holders of not less than 66-2/3% of the then Outstanding Principal Amount of the
Notes (if an Insurer Default has occurred and is continuing) delivered to the
Trustee and the Issuer.
(d) If the Trustee shall resign, be removed, or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Issuer, with the consent of the Insurer (if no Insurer Default has occurred and
is continuing) or the holders of 66-2/3% of the then Outstanding Principal
Amount of the Notes (if an Insurer Default has occurred and is continuing), by
an act of the Issuer, shall promptly appoint a successor Trustee.
(e) If no successor Trustee shall have been so appointed as
hereinbefore provided and accepted appointment in the manner hereinafter
provided within 30 days (or within 15 days in the event that the Trustee is
disqualified pursuant to Section 8.07(c)) after any such resignation or removal,
existence of incapability, or occurrence of such vacancy, the Trustee, the
Insurer (if no Insurer Default has occurred and is continuing) or any Noteholder
(if an Insurer Default has occurred and is continuing) may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Issuer shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Insurer at its
address set forth in the Assignment and Servicing Agreement and to all
Noteholders as their names and
60
addresses appear in the Note Register and to each Rating Agency. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
(g) The Issuer may remove the Trustee if the Trustee fails to comply
with Section 8.07 of this Indenture.
(h) If the Trustee after written request by any Noteholder who has
been a Noteholder for at least six months fails to comply with Section 310(b) of
the Trust Indenture Act, such Noteholder may petition any court of competent
jurisdiction, for the removal of the Trustee and the appointment of a successor
Trustee acceptable to the Insurer.
(i) The Issuer (with the consent of the Insurer, if no Insurer Default
has occurred and is continuing) may and shall at the direction of the Insurer
(if no Insurer Default has occurred and is continuing) or the Noteholders
evidencing more than 25% of the aggregate Outstanding Principal Amount of the
Notes (if an Insurer Default has occurred and is continuing), remove the Trustee
if the Trustee ceases to be eligible to continue as such under this Indenture
and fails to resign after written request therefor.
SECTION 8.09. Acceptance of Appointment by Successor.
--------------------------------------
(a) Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the Issuer
or the successor Trustee, such retiring Trustee shall, upon payment of its
charges and expenses, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver (at the expense of the Servicer) to such
successor Trustee, all property and money held by such retiring Trustee
hereunder. Upon request of any such successor Trustee, the Issuer shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts.
(b) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 8.10. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
--------
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such Person
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Notes shall have been authenticated, but not
61
delivered, by the Trustee then in office, any successor by merger, conversion,
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Notes so authenticated with the same effect as if such successor
Trustee had itself authenticated such Notes. The Trustee shall provide prompt
written notice to each Rating Agency of any event referenced in this Section
8.10.
SECTION 8.11. Co-Trustees and Separate Trustees.
---------------------------------
(a) At any time or times, if the Issuer, the Trustee or any Noteholder
determines that it is necessary for the purpose of meeting the legal
requirements of any jurisdiction in which any of the Asset Pool may at the time
be located, the Issuer and the Trustee (with the written consent of the Insurer,
if no Insurer Default has occurred and is continuing) shall have power to
appoint, and, upon the written request of the Trustee or the Insurer (if no
Insurer Default has occurred and is continuing) or the holders of a majority of
the then Outstanding Principal Amount of the Notes (if an Insurer Default has
occurred and is continuing), the Issuer shall for such purpose join with the
Trustee in the execution, delivery, and performance of all instruments and
agreements necessary or proper to appoint, one or more Persons either to act as
co-trustee, jointly with the Trustee, of all or any part of such Asset Pool, or
to act as separate trustee of any such property, in either case with such powers
as may be provided in the instrument of appointment, and to vest in such Person
or Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section. If the
Issuer does not join in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default has occurred and is
continuing, the Trustee (if no Insurer Default has occurred and is continuing),
or the holders of a majority of the then Outstanding Principal Amount of the
Notes (if an Insurer Default has occurred and is continuing), alone shall have
power to make such appointment. Any fees or expenses payable to such co-trustee
or separate trustee shall be paid by the Servicer and shall be in addition to
any fees and expenses payable to the Trustee.
(b) Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Issuer.
(i) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms:
(ii) The Notes shall be authenticated and delivered and all rights,
powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised, solely by
the Trustee.
(iii) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by such appointment
shall be conferred or imposed upon and exercised or performed by the Trustee or
by the Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate trustee,
except to the extent that, under
62
any law of any jurisdiction in which any particular act is to be performed, the
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(iv) The Trustee at any time, by an instrument in writing executed by
it, with the concurrence of the Issuer evidenced by an Issuer Order and the
written concurrence of the Insurer (if no Insurer Default has occurred and is
continuing), may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, in case an Event of Default has
occurred and is continuing, the Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without the
concurrence of the Issuer (if no Insurer Default has occurred and is
continuing). Upon the written request of the Trustee, the Issuer shall join with
the Trustee in the execution, delivery and performance of all instruments and
agreements necessary or proper to effectuate such resignation or removal. A
successor to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(v) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Trustee or any other such trustee
hereunder and the Trustee shall not be personally liable by reason of any act or
omission of any co-trustee or other such separate trustee hereunder selected by
the Trustee with due care or appointed in accordance with directions to the
Trustee pursuant to this Section 8.11.
(vi) Any Act of Noteholders delivered to the Trustee shall be deemed
to have been delivered to each such co-trustee and separate trustee.
SECTION 8.12. Acceptance by Trustee.
---------------------
The Trustee hereby acknowledges the conveyance of the Asset Pool and
the receipt of the Leases and the other assets in the Asset Pool granted by the
Issuer hereunder and declares that the Trustee, through a custodian, will hold
such Leases and other Asset Pool conveyed by the Issuer in trust, for the use
and benefit of all Noteholders and the Insurer subject to the terms and
provisions hereof.
SECTION 8.13. Preferential Collection of Claims Against the Issuer.
----------------------------------------------------
The Trustee is subject to Trust Indenture Act Section 311(a),
excluding any creditor relationship listed in Trust Indenture Act Section
311(b). A Person who has resigned or been removed as Trustee shall be subject to
Trust Indenture Act Section 311(a) to the extent indicated therein.
SECTION 8.14. Reports by Trustee to Noteholders.
---------------------------------
To the extent required by the Trust Indenture Act, within 60 days
after each October 15, following the date of this Indenture, the Trustee shall
mail to the Insurer and to Noteholders a brief report dated as of such reporting
date that complies with Trust Indenture Act Section 313(a), if such a report is
required pursuant to Trust Indenture Act Section 313(a). The Trustee also shall
comply with Trust Indenture Act Section 313(b).
63
The Trustee shall also transmit by mail all reports as required by Trust
Indenture Act Section 313(c).
A copy of each such report required under Trust Indenture Act Section
313 shall, at the time of such transmission to Noteholders be filed with the
Commission and with each stock exchange or other market system on which the
Notes are listed. The Issuer or any other obligor upon the Notes shall notify
the Trustee in writing if the Notes become listed on any stock exchange or
market trading system.
SECTION 8.15. No Proceedings.
--------------
The Trustee hereby agrees that it will not, with respect to its fees
and expenses, directly or indirectly institute, or cause to be instituted,
against the Issuer any proceeding of the type referred to in Section 7.01(d) or
(e) so long as there shall not have elapsed one year plus one day since the
latest maturing Notes have been paid in full in cash, provided, however that
nothing herein shall prohibit the Trustee from filing proofs of claim or
otherwise participating in any such proceeding.
SECTION 8.16. Appointment and Powers.
----------------------
Subject to the terms and conditions hereof, each of the Issuer Secured
Parties hereby appoints SunTrust Bank as the Trustee with respect to the Asset
Pool and as initial Paying Agent, and SunTrust Bank hereby accepts such
appointment and agrees to act as Trustee with respect to the Asset Pool for the
Issuer Secured Parties, to maintain custody and possession of the assets in the
Asset Pool (except as otherwise provided herein and in the Assignment and
Servicing Agreement) and to perform the other duties of the Trustee in
accordance with the provisions of this Indenture and the Assignment and
Servicing Agreement. Each Issuer Secured Party hereby authorizes the Trustee to
take such action on its behalf, and to exercise such rights, remedies, powers
and privileges hereunder, as the Insurer (if no Insurer Default has occurred and
is continuing) or the holders of not less than 66 2/3% of the then Outstanding
Principal Amount of the Notes (if an Insurer Default has occurred and is
continuing) may direct in writing and as are specifically authorized to be
exercised by the Trustee by the terms hereof, together with such actions,
rights, remedies, powers and privileges as are reasonably incidental thereto.
The Trustee shall act upon and in compliance with the written instructions of
the Insurer or the Noteholders given in accordance with the provisions of this
Indenture promptly following receipt of such written instructions; provided that
the Trustee shall not act in accordance with any instructions (i) which are not
authorized by, or in violation of the provisions of, this Indenture, (ii) which
are in violation of any applicable law, rule or regulation or (iii) for which
the Trustee has not received indemnity satisfactory to it. Receipt of such
instructions shall not be a condition to the exercise by the Trustee of its
express duties hereunder, except where this Indenture provides that the Trustee
is permitted to act only following and in accordance with such instructions.
SECTION 8.17. Performance of Duties.
---------------------
(a) The Trustee shall have no duties or responsibilities except those
expressly set forth in this Indenture and the other Transaction Documents to
which the
64
Trustee is a party or as directed in writing by the Insurer or the Noteholders
in accordance with this Indenture. The Trustee shall not be required to take any
discretionary action hereunder except at the written direction of the Insurer
(if no Insurer Default has occurred and is continuing) or if an Insurer Default
has occurred and is continuing, the holders of 66 2/3 of the then Outstanding
Principal Amount of the Notes and as provided in Section 7.12. The Trustee
shall, and hereby agrees that it will, perform all of the duties and obligations
required of it under this Indenture and the other Transaction Documents to which
it is a party.
(b) It is expressly understood and agreed by the parties hereto that
(i) this Indenture is executed and delivered by SunTrust Bank, not individually
or personally but solely as Trustee under this Indenture, in the exercise of the
powers and authority conferred upon and vested in it and (ii) under no
circumstances shall SunTrust Bank be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Issuer under this Indenture.
SECTION 8.18. Control by the Insurer.
----------------------
The Trustee shall comply with notices and instructions given by the
Issuer only if accompanied by the written consent of the Insurer, except that if
any Event of Default has occurred and is continuing, the Trustee shall act upon
and comply with notices and instructions given by the Insurer alone in the place
and stead of the Issuer.
ARTICLE IX
COVENANTS
SECTION 9.01. Payment of Principal and Interest.
---------------------------------
The Issuer will duly and punctually pay the principal of and interest
on the Notes in accordance with the terms of the Notes and this Indenture.
SECTION 9.02. Maintenance of Office or Agency; Chief Executive Office.
-------------------------------------------------------
(a) The Issuer will maintain at the Corporate Trust Office an office
or agency where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Issuer in respect of the
Notes and this Indenture may be served. The Issuer hereby appoints the Trustee
as its agent to receive all such presentations, surrenders, notices and demands.
(b) The chief executive office of each of the Issuer, the Seller and
the Servicer, and the office at which each of the Issuer, the Seller and the
Servicer maintains its records with respect to the Leases, its interests in the
Equipment, and the transactions contemplated hereby, is currently located in
Macon, Georgia. None of the Issuer, the Seller or the Servicer will change the
location of such offices or their jurisdiction of
65
organization without giving the Trustee and the Insurer at least 30 days prior
written notice thereof.
SECTION 9.03. Money for Payments to Noteholders to be Held in Trust.
-----------------------------------------------------
(a) All payments of amounts due and payable with respect to any Notes
that are to be made from amounts withdrawn from the Collection Account pursuant
to Section 3.03(b) or Section 7.06 shall be made on behalf of the Issuer by the
Trustee, and no amounts so withdrawn from the Collection Account for payments of
Notes shall be paid over to the Issuer under any circumstances except as
provided in this Section 9.03 or in Section 3.03(b), Section 3.04(b) or Section
7.06.
(b) In making payments hereunder, the Trustee will:
(i) allocate all sums received for payment to the Noteholders on each
Payment Date among such Noteholders pursuant to Section 3.03(b) or Section 7.06,
as applicable, in accordance with the information known to the Trustee;
(ii) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein provided; and
(iii) comply with all requirements of the Code (or any successor
statutes), and all regulations thereunder, with respect to the withholding from
any payments made by it on any Notes of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in connection
therewith.
Whenever the Issuer shall have one or more Paying Agents, it will,
prior to each due date of the principal of or interest on any Notes, deposit
with a Paying Agent a sum sufficient to pay the principal or interest so
becoming due, such sum to be held in trust for the benefit of the Noteholders
entitled to such principal or interest, and (unless such Paying Agent is the
Trustee) the Issuer will promptly notify the Trustee in writing of its action or
failure so to act.
The Issuer will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of or
interest on Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and
(2) give the Trustee written notice of any default by the Issuer (or
any other obligor upon the Notes) in the making of any payment of principal
or interest.
66
(c) Except as required by applicable law, any money held by the
Trustee in trust for the payment of any amount due with respect to any Note and
remaining unclaimed for three years after such amount has become due and payable
to the Noteholder shall be discharged from such trust and, subject to applicable
escheat laws, paid to the Issuer upon request; and such Noteholder shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Trustee with respect to such trust money shall
thereupon cease.
SECTION 9.04. Corporate Existence; Merger; Consolidation, etc.
-----------------------------------------------
(a) The Issuer will keep in full effect its existence and rights as a
limited liability company under the laws of the State of Delaware.
(b) The Issuer shall at all times observe and comply in all material
respects with (i) all laws applicable to it, (ii) all requisite and appropriate
organizational and other formalities in the management of its business and
affairs and the conduct of the transactions contemplated hereby and by the
Underwriting Agreement and the Assignment and Servicing Agreement.
(c) The Issuer shall not (i) consolidate or merge with or into any
other Person or convey or transfer its properties and assets substantially as an
entirety to any other Person or (ii) commingle its assets with those of any
other Person except temporarily as permitted by Section 4.01(a) of the
Assignment and Servicing Agreement.
SECTION 9.05. Protection of Asset Pool; Further Assurances.
--------------------------------------------
The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such Financing Statements,
continuation statements, instruments of further assurance, and other
instruments, and will take such other action as may be necessary or advisable
to:
(i) Grant more effectively all or any portion of the Asset Pool;
(ii) maintain or preserve the Lien of this Indenture or carry out
more effectively the purposes hereof;
(iii) publish notice of, or protect the validity of, any Grant made or
to be made by this Indenture and perfect the security interest contemplated
hereby in favor of the Trustee in each of the Leases, and all other property
included in the Asset Pool;
(iv) enforce or cause the Servicer to enforce any of the Leases; or
(v) preserve and defend title to the Leases (including the right to
receive all payments due or to become due thereunder), the interests in the
Equipment, or other property included in the Asset Pool and preserve and defend
the rights of the Trustee and the Noteholders in such Leases (including the
right to receive all payments due or to become due thereunder), interests in the
Equipment and other property against the claims of all Persons and parties.
67
The Issuer, upon the Issuer's failure to do so, hereby designates the Trustee
its agent and attorney-in-fact to execute any Financing Statement or
continuation statement required pursuant to this Section 9.05; provided,
--------
however, that such designation shall not be deemed to create a duty in the
-------
Trustee to monitor the compliance of the Issuer with the foregoing covenants;
and provided, further, that the duty of the Trustee to execute any instrument
-------- -------
required pursuant to this Section 9.05 shall arise only if a Responsible Officer
of the Trustee has knowledge of any failure of the Issuer to comply with the
provisions of this Section 9.05.
SECTION 9.06. [Reserved].
----------
SECTION 9.07. Performance of Obligations; Assignment and Servicing
----------------------------------------------------
Agreement.
---------
(a) The Issuer will punctually perform and observe all of its
obligations and agreements contained in the Notes and the Transaction Documents.
(b) The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any Lease or any other instrument included in the
Asset Pool, or which would result in the amendment, hypothecation,
subordination, termination, or discharge of, or impair the validity or
effectiveness of, any Lease or such other instrument, except as expressly
provided in this Indenture or the Assignment and Servicing Agreement.
(c) If any Authorized Officer shall have knowledge of the occurrence
of a default under the Assignment and Servicing Agreement, the Issuer shall
promptly notify the Trustee and the Noteholders in writing thereof, and shall
specify in such notice the action, if any, the Issuer is taking in respect of
such default. Unless consented to in writing by the Insurer (if no Insurer
Default has occurred and is continuing) or the holders of 66 2/3% of the then
Outstanding Principal Amount of the Notes (if an Insurer Default has occurred
and is continuing), the Issuer may not waive any default under or amend the
Assignment and Servicing Agreement.
SECTION 9.08. Negative Covenants.
------------------
The Issuer will not:
(a) sell, transfer, exchange or otherwise dispose of any portion of
the Asset Pool except as expressly permitted by this Indenture;
(b) claim any credit on, or make any deduction from, the principal of,
or interest on, any of the Notes by reason of the payment of any taxes levied or
assessed upon any portion of the Asset Pool;
(c) engage in any business or activity other than in connection with,
or relating to the ownership of, the Leases and the interests in the Equipment
(and other leases to which the Originator is a party and the interests in the
equipment subject thereto assigned to the Issuer by the Seller in connection
with the issuance of other series of the Issuer's Lease-Backed Notes as
contemplated by the Registration Statement), the issuance
68
of the Notes (and other series of the Issuer's Lease-Backed Notes as
contemplated by the Registration Statement), and the specific transactions
contemplated by the Transaction Documents;
(d) become liable for, issue, incur, assume, or allow to remain
outstanding any indebtedness, or guaranty any indebtedness of any Person, other
than the Notes, except as contemplated by this Indenture, the Registration
Statement and the Assignment and Servicing Agreement, subject to Section 9.13
hereof;
(e) seek dissolution or liquidation in whole or in part or
reorganization of its business or affairs;
(f) (i) permit the validity or effectiveness of this Indenture or any
Grant hereby to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations under this Indenture, except as may
be expressly permitted hereby, (ii) permit any Lien to be created on or to
extend to or otherwise arise upon or burden the Asset Pool or any part thereof
or any interest therein or the proceeds thereof other than the lien of this
Indenture, or (iii) subject to Section 4.01(c) of the Assignment and Servicing
Agreement, permit the lien of this Indenture not to constitute a valid first
priority security interest in the Asset Pool; or
(g) make any loan or advance to any Affiliate of the Issuer or to any
other Person.
SECTION 9.09. Information as to Issuer.
------------------------
The Issuer shall deliver to the Trustee and the Insurer and, the
Trustee shall deliver to each Rating Agency and to each holder of Outstanding
Notes (and, upon the written request of any Noteholder, to any prospective
transferee of any Notes):
(a) Notice of Event of Default - immediately upon becoming aware of
the existence of any condition or event which constitutes a Default or an Event
of Default, a written notice describing its nature and period of existence and
what action the Issuer is taking or proposes to take with respect thereto; and
(b) Report on Proceedings - promptly upon the Issuer's becoming aware
of (i) any proposed or pending investigation of it by any Governmental Authority
or agency, or (ii) any pending or proposed court or administrative proceeding
which involves or may involve the possibility of materially and adversely
affecting the properties, business, prospects, profits or condition (financial
or otherwise) of the Issuer, a written notice specifying the nature of such
investigation or proceeding and what action the Issuer is taking or proposes to
take with respect thereto and evaluating its merits.
SECTION 9.10. Taxes.
-----
(a) The Issuer shall pay all taxes when due and payable or levied
against its assets, properties or income, including any property that is part of
the Asset Pool.
69
(b) The parties hereto agree that it is their mutual intent that, for
all applicable tax purposes, the Notes will constitute indebtedness. Further,
each party hereto and each Noteholder (by accepting and holding a Note) hereby
covenants to every other party hereto and to every other Noteholder to treat the
Notes as indebtedness for all applicable tax purposes in all tax filings,
reports and returns and otherwise, and further covenants that neither it nor any
of its Affiliates will take, or participate in the taking of or permit to be
taken, any action that is inconsistent with the treatment of the Notes as
indebtedness for tax purposes. All successors and assignees of the parties
hereto shall be bound by the provisions hereof.
SECTION 9.11. Indemnification.
---------------
The Issuer agrees to indemnify and hold harmless the Trustee (and its
officers, directors, employees and agents), the Insurer and each Noteholder
(each an "Indemnified Party") against any and all liabilities, losses, damages,
penalties, costs and expenses (including costs of defense and legal fees and
expenses) which may be incurred or suffered by such Indemnified Party without
gross negligence or willful misconduct on the part of the Indemnified Party or
as a result of claims, actions, suits or judgments asserted or imposed against
it and arising out of the transactions contemplated hereby or by the Assignment
and Servicing Agreement, including without limitation, any claims resulting from
any use, operation, maintenance, repair, storage or transportation of any item
of Equipment, whether or not in the Issuer's possession or under its control,
and any tort claims and any fines or penalties arising from any violation of the
laws or regulations of any Governmental Authority; provided that, all amounts
--------
payable pursuant to this Section 9.11 shall be fully subordinated to amounts
payable under the Notes, shall be without recourse to the Issuer except to the
extent that all amounts otherwise due and payable under the terms of this
Indenture have been fully paid and shall not, to the extent that such amounts
are unpaid, constitute a claim against the Issuer except to the extent that all
amounts otherwise due and payable under the terms of this Indenture have been
fully paid. This section shall survive the termination of this Indenture and the
earlier removal or resignation of the Trustee.
SECTION 9.12. Commission Reports; Reports to Trustee; Reports to
--------------------------------------------------
Noteholders.
-----------
To the extent it has not satisfied the following requirements by
reporting under Section 9.09 hereof, the Issuer shall:
(a) file with the Trustee and the Insurer, within 15 days after the
Issuer is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports which the Issuer may
be required to file with the Commission pursuant to Section 13 or Section 15(d)
of the Exchange Act (or copies of such portions thereof as may be prescribed by
rules and regulations of the Commission); or, if the Issuer is not required to
file with the Commission information, documents or reports pursuant to either
Section 13 or Section 15(d) of the Exchange Act, then the Issuer will file with
the Trustee and with the Commission, in accordance with rules and regulations
prescribed by the Commission, such of the supplementary and periodic
information, documents and reports required pursuant to Section 13 of the
70
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed in such rules and regulations;
(b) file with the Trustee, the Insurer and with the Commission, in
accordance with the rules and regulations prescribed by the Commission, such
additional information, documents and reports with respect to compliance by the
Issuer with the conditions and covenants provided for in this Indenture as may
be required by such rules and regulations; and
(c) furnish to the Insurer and to the Trustee for distribution to the
Noteholders, as the names and addresses of such Noteholders appear in the Note
Register, in the manner and to the extent provided in Section 8.14 hereof, such
summaries of any information, documents and reports required to be filed with
the Trustee pursuant to the provisions of Subsections (a) and (b) of this
Section 9.12 as may be required to be provided to such Noteholders by the rules
and regulations of the Commission under the provisions of the Trust Indenture
Act.
SECTION 9.13. Insurer's Right with Respect to Subsequent Issuances.
----------------------------------------------------
Unless consented to by the Insurer (which such consent shall not be
unreasonably withheld), in the event the Issuer issues any subsequent series of
the Issuer's Lease-Backed Notes as contemplated by the Registration Statement
and such notes are not insured by the Insurer (such issuances, the "Specified
Subsequent Notes"):
(a) the indenture in connection with each such series of Specified
Subsequent Notes shall contain provisions substantially similar to Sections
12.06, 12.07 and 12.08 hereof;
(b) the indenture in connection with each such series of Specified
Subsequent Notes shall provide that such series shall have separate transaction
accounts;
(c) the indenture in connection with each such series of Specified
Subsequent Notes shall provide that each such series shall provide for its own
trustee and servicing fees; and
(d) So long as the Policy remains in effect and no Insurer Default has
occurred and is continuing, (i) the Insurer has received confirmation from S&P
that the risk secured by the Policy has not been reduced below a "BBB" risk by
S&P and the rating assigned to the Notes has not been reduced below "AAA" by S&P
(or "A-1+" + by S&P in the case of the Class A-1 Notes, if still outstanding) as
a result of the proposed issuance of the Specified Subsequent Notes and (ii)
▇▇▇▇▇'▇ has been notified of the issuance of the Specified Subsequent Notes, and
the Insurer has not been notified by ▇▇▇▇▇'▇ that A) the risk secured by the
Policy has been reduced below a "Baa2" risk by ▇▇▇▇▇'▇ or B) the rating assigned
to the Notes has been reduced below "Aaa" by ▇▇▇▇▇'▇ (or "P-1" by ▇▇▇▇▇'▇ in the
case of the Class A-1 Notes, if still outstanding) as a result of the proposed
issuance of the Specified Subsequent Notes.
71
ARTICLE X
SUPPLEMENTAL INDENTURES
SECTION 10.01. Supplemental Indentures Without Consent of Noteholders.
------------------------------------------------------
(a) Without the consent of any Noteholders, the Issuer, by an Issuer
Order, and the Trustee, at any time and from time to time, may, with the written
consent of the Insurer (if no Insurer Default has occurred and is continuing)
enter into one or more indentures supplemental hereto, for any of the following
purposes:
(i) to add to the covenants of the Issuer for the benefit of the
Noteholders, or to surrender any right or power herein conferred upon the
Issuer;
(ii) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein; or
(iii) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or to better assure, convey and
confirm unto the Trustee any property subject or required to be subjected to the
lien of this Indenture; provided such action pursuant to this Section 10.01(a)
--------
shall not adversely affect the interests of the Noteholders in any respect or in
the reduction or withdrawal of the then current ratings of the Outstanding
Notes.
(b) The Trustee shall promptly deliver to each Noteholder and each
Rating Agency, a copy of any supplemental indenture entered into pursuant to
Section 10.01(a).
SECTION 10.02. Supplemental Indentures with Consent of Noteholders.
---------------------------------------------------
(a) With the written consent of the Insurer (if no Insurer Default has
occurred and is continuing) or the holders of not less than 66-2/3% of the then
Outstanding Principal Amount of the Notes and by Act of said Noteholders
delivered to the Issuer and the Trustee (if an Insurer Default has occurred and
is continuing), the Issuer, by an Issuer Order, and the 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
this Indenture or of modifying in any manner the rights of the Noteholders under
this Indenture; provided, that, subject to the express rights of the Insurer
--------
under the Transaction Documents, no supplemental indenture shall be entered into
if it would result in the reduction or withdrawal of the then current ratings of
the Outstanding Notes and no supplemental indenture shall, without the written
consent of the holder of each Outstanding Note affected thereby:
(i) change the Stated Maturity of any Note or the Principal Payments
or Interest Payments due or to become due on any Payment Date with respect to
any Note, or change the priority of payment thereof as set forth herein, or
reduce the principal amount thereof or the Note Interest Rate thereon, or change
the place of payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the
72
right to institute suit for the enforcement of any such payment on or after the
Maturity thereof;
(ii) reduce the percentage of the Outstanding Principal Amount of the
Notes the consent of whose Noteholders is required for any such supplemental
indenture, for any waiver of compliance with provisions of this Indenture or
Events of Default and their consequences, or for any Act of Noteholders;
(iii) modify any of the provisions of this Section except to increase
any percentage or fraction set forth therein or to provide that certain other
provisions of this Indenture cannot be modified or waived without the written
consent of the holder of each Outstanding Note affected thereby;
(iv) modify or alter the provisions of the proviso to the definition
of the term "Outstanding"; or
(v) permit the creation of any Lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Asset Pool or,
except as provided in Sections 5.01 or 5.02, terminate the lien of this
Indenture on any property at any time subject hereto or deprive any Noteholder
of the security afforded by the lien of this Indenture.
(b) The Trustee shall promptly deliver to the Insurer and each
Noteholder and each Rating Agency, a copy of any supplemental indenture entered
into pursuant to this Section 10.02.
SECTION 10.03. Execution of Supplemental Indentures.
------------------------------------
In executing any supplemental indenture or any amendment, modification
or supplement to any other Transaction Document the Trustee and the Insurer
shall be entitled to receive, and (subject to Section 8.01) shall be, protected
in relying upon, an Opinion of Counsel stating that the execution of such
instrument is authorized or permitted by this Indenture or such applicable
Transaction Document. The Trustee may, but shall not be obligated to, enter into
any supplemental indenture which affects the Trustee's own rights, duties,
obligations, immunities or indemnities under this Indenture or otherwise.
SECTION 10.04. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes, and every
Noteholder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 10.05. Reference in Notes to Supplemental Indentures.
---------------------------------------------
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such
73
supplemental indenture. If the Issuer shall so determine, new Notes so modified
as to conform, in the opinion of the Issuer, to any such supplemental indenture
may be prepared and executed by the Issuer and authenticated and delivered by
the Trustee in exchange for Outstanding Notes.
SECTION 10.06. Compliance with Trust Indenture Act.
-----------------------------------
Every amendment, supplement or waiver to this Indenture or the Notes
shall comply with the Trust Indenture Act as then in effect.
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. Satisfaction and Discharge of Indenture.
---------------------------------------
(a) This Indenture shall cease to be of further effect (except as to
any surviving rights of indemnification, registration, transfer or exchange of
Notes herein expressly provided for), and the Trustee, on demand of and at the
expense of the Issuer, shall execute proper instruments provided to it
acknowledging satisfaction and discharge of this Indenture, when
(i) 100 days shall have elapsed since either
(A) all Notes theretofore authenticated and delivered (other than
(1) Notes which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.04 and (2) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section
9.03(c)) have been delivered to the Trustee for cancellation; or
(B) the final installments of principal on all such Notes not
theretofore delivered to the Trustee for cancellation
(1) have become due and payable, or
(2) will become due and payable at their Stated Maturity, as
applicable, within one year,
and the Issuer has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on such Notes
not theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case of
Notes which have become due and payable) or to the Stated Maturity
thereof;
74
(ii) the Issuer has paid or caused to be paid all Insurer Secured
Obligations and all Trustee Secured Obligations; and
(iii) the Issuer has delivered to the Trustee and the Insurer an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
At such time, the Trustee shall deliver to the Issuer or, upon an Issuer Order,
its assignee, all cash, securities and other property held by it as part of the
Asset Pool other than funds deposited with the Trustee pursuant to Section
11.01(a)(i)(B), for the payment and discharge of the Notes.
(b) Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Issuer to the Trustee under Sections 8.06 and 9.11, and,
if money shall have been deposited with the Trustee pursuant to Section
11.01(a)(i)(B), the obligations of the Trustee under Section 11.02 and Section
9.03(c), shall survive.
(c) The Trustee shall provide prompt written notice to each Rating
Agency of any satisfaction and discharge of this Indenture pursuant to this
Article 11.
SECTION 11.02. Application of Trust Money.
--------------------------
Subject to the provisions of Section 9.03(c), all money deposited with
the Trustee pursuant to Sections 11.01 and 9.03 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment to the Persons entitled thereto, of the principal and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by operation of Trust Indenture Act Section 318(a), the
duties imposed by Section 318(c) shall control.
SECTION 12.02. Communication by Noteholders with Other Noteholders.
---------------------------------------------------
Noteholders may communicate, pursuant to Trust Indenture Act Section
312(b), with other Noteholders with respect to their rights under this Indenture
or the Notes. The Issuer, the Trustee, the Note Registrar and all other parties
shall have the protection of Trust Indenture Act Section 312(c).
75
SECTION 12.03. Location of Leases.
------------------
Subject to the provisions of Section 1.04(e) of the Assignment and
Servicing Agreement, the Servicer shall maintain the Leases at its office in
Macon, Georgia or at such other offices of the Servicer as shall from time to
time be identified by prior written notice to the Trustee and the Insurer.
Subject to the foregoing, the Servicer may temporarily move individual Leases or
any portion thereof without notice as necessary to conduct collection and other
servicing activities.
SECTION 12.04. Officers' Certificate and Opinion of Counsel as to
--------------------------------------------------
Conditions Precedent.
--------------------
Upon any request or application by the Issuer (or any other obligor
upon the Notes) to the Trustee to take any action under this Indenture or the
other Transaction Documents, the Issuer (or such other Obligor) shall furnish to
the Trustee and the Insurer:
(a) an Officers' Certificate (which shall include the statements set
forth in Section 12.05) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel (which shall include the statements set
forth in Section 12.05) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.
SECTION 12.05. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(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 such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
76
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
SECTION 12.06. Nonpetition.
-----------
The Trustee (or any successor trustee, co-trustee or separate trustee)
shall not petition or otherwise invoke the process of any Governmental Authority
for the purpose of commencing or sustaining a case against the Issuer under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its respective property, or ordering
the winding up or liquidation of the affairs of the Issuer during the period
ending one year and one day after satisfaction and discharge of this Indenture;
provided, however, that nothing herein shall prohibit the Trustee (or any
-------- -------
successor trustee, co-trustee or separate trustee) from filing proofs of claim
or otherwise participating in any such proceedings instituted by any other
Person.
In addition, each Noteholder, by accepting a Note, and the Trustee, by
entering into this Indenture, hereby covenants and agrees that no claim may be
brought against the Issuer, its directors, officers or shareholders, with
respect to any assets collateralizing any other debt obligation of the Issuer.
SECTION 12.07. Non-Recourse.
------------
Except as otherwise provided in Section 7.06, the Noteholders shall
not at any time have any recourse on the Notes or under this Indenture against
the Issuer other than against the Asset Pool including, but not limited to,
amounts deposited into the Collection Account pursuant to Section 3.03.
SECTION 12.08. Subordination of Interest of Noteholders.
----------------------------------------
Notwithstanding any term of this Indenture, but except as provided in
Section 7.06 hereof, the Issuer and the Trustee agree and, by its holding of a
Note, each Noteholder will be deemed to agree that, to the extent the
Noteholders are deemed to have any interest or claim to any assets of the Issuer
other than the Asset Pool including, but not limited to, amounts deposited into
the Collection Account pursuant to Section 3.03, such Noteholder's claim or
interest shall be subordinate to the claims or rights (including any rights with
respect to post-petition interest) of such other debtholders to those assets. In
addition, each Noteholder agrees that this agreement to subordinate its claim or
interest constitutes a subordination agreement for purposes of Section 510(a) of
the Bankruptcy Code.
77
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
IKON RECEIVABLES, LLC,
as Issuer
By: IKON RECEIVABLES FUNDING, INC.,
its Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
SUNTRUST BANK,
not in its individual capacity but solely
as Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Trust Officer
IOS CAPITAL, INC., as Servicer
By: /s/ ▇.▇. ▇▇▇▇▇
-----------------------------------------------
Name: ▇.▇. ▇▇▇▇▇
Title: Treasurer
78
CLASS A-1 NOTE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
IKON RECEIVABLES, LLC
3.73375% CLASS A-1 LEASE-BACKED NOTE, SERIES 2001-1
CUSIP NO. _______________
No. R-1 $____________
IKON Receivables, LLC, a limited liability company duly organized and
existing under the laws of Delaware (herein called the "Issuer", which term
includes any successor Person under the Indenture referred to herein), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of _________________ ($_________), payable in monthly installments
beginning July 16, 2001, in accordance with the Indenture. Interest will accrue
on the unpaid principal hereof from the date of issuance, at the rate of
3.73375% per annum, until the full amount of principal hereof is otherwise paid
or made available for payment and shall be computed on the basis of a year of
360 days and the actual number of days in the period since the last Payment Date
or, with respect to the July 16, 2001 Payment Date, since June 28, 2001.
Principal and interest on this Class A-1 Note shall be paid on the
15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing July 16, 2001, either by check to the
registered address of the Holder of this Class A-1 Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and surrender of
this Note at the Corporate Trust Office of the Trustee or at the principal
office of any Paying Agent appointed pursuant to the Indenture.
This Class A-1 Note is one of a duly authorized issue of Class A Notes
of the Issuer designated as its 3.73375% Class A-1 Lease-Backed Notes, Series
2001-1" (herein called the "Class A-1 Notes") limited in aggregate principal
amount to $168,000,000, issued under the Indenture, dated as of June 1, 2001
(herein called the "Indenture"), among the Issuer, IOS Capital Inc. as Servicer,
and SunTrust Bank, as Trustee (herein called the "Trustee", which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Issuer, the Trustee and the Holders and of the terms upon which the Class
A-1 Notes are authenticated and delivered. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings set forth in the
Indenture.
The Class A-1 Notes are entitled to the benefits of a financial
guarantee insurance policy issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class A-1 Notes on each
Payment Date, all as more fully set forth in the Indenture.
The Stated Maturity of the Class A-1 Notes is the Payment Date in July
2002 on which date the Outstanding Principal Amount of the Class A-1 Notes shall
be due and payable.
The Class A-1 Notes are subject to redemption, without premium, at the
option of the Issuer as of any Payment Date on which the Discounted Present
Value of the Performing Leases is less than or equal to ten percent (10%) of the
aggregate Discounted Present Value of the Leases as of the Cut-Off Date after
giving effect to all principal Payment on such Payment Date.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Class
A-1 Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
This Class A-1 Note will be secured by the pledge to the Trustee of
the Asset Pool.
If an Event of Default under the Indenture occurs, the Trustee shall,
at the written direction of the Insurer (if no Insurer Default has occurred and
is continuing) or of Holders of not less than 66 2/3% of the aggregate principal
amount of the Notes at the time Outstanding (if an Insurer Default has occurred
and is continuing), and, if an Insurer Default has occurred and is continuing,
may, declare due and payable in the manner and with the effect provided in the
Indenture, the principal of all the Class A-1 Notes (but not less than all the
Class A-1 Notes). Notice of such declaration will be given by mail to Holders,
as their names and addresses appear in the Note Register, as provided in the
Indenture. Upon payment of such principal amount together with all accrued
interest, the
A-1-2
obligations of the Issuer with respect to the payment of principal and interest
on this Class A-1 Note shall terminate.
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 under the Indenture at any time by the
Issuer and the Trustee with the written consent of the Insurer (with or without
the written consent of any Holder of the Notes if no Insurer Default has
occurred and is continuing) or the Holders of not less than 66-2/3% in aggregate
principal amount of the Notes at the time Outstanding (if an Insurer Default has
occurred and is continuing). The Indenture also contains provisions permitting
the Insurer (with or without the written consent of any Holder of the Notes if
no Insurer Default has occurred and is continuing) or the Holders of not less
than 66-2/3% in aggregate principal amount of the Notes at the time Outstanding
(if an Insurer Default has occurred and is continuing), on behalf of all the
Holders, 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 Insurer (with or without the consent of any
Holder of the Notes if no Insurer Default has occurred and is continuing) or the
Holder of this Class A-1 Note (if an Insurer Default has occurred and is
continuing) shall be conclusive and binding upon such Holder and upon all future
Holders of this Class A-1 Note and of any Class A-1 Note issued upon the
registration of transfer hereof or in exchange here for or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Class A-1
Note or any Class A-1 Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class A-1 Note is registrable in the
Note Register, upon surrender of this Class A-1 Note for registration of
transfer at the office or agency of the Trustee in the City of Atlanta, Georgia
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class A-1
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Class A-1 Notes are issuable only in registered form without
coupons in minimum denominations of $1,000,000. As provided in the Indenture and
subject to certain limitations therein set forth, Class A-1 Notes are
exchangeable for a like aggregate principal amount of Class A-1 Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Issuer, the Trustee, the Insurer and any agent of the Issuer, the
Trustee or the Insurer may treat the Person in whose name this Class A-1 Note is
registered as the owner hereof for all purposes, whether or not this Class A-1
Note may be overdue, and
A-1-3
neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
Each Noteholder, by acceptance of this Note, covenants and agrees to
treat the Notes as indebtedness for purposes of federal income, state and local
income and franchise and any other income taxes.
The Indenture and this Class A-1 Note shall be deemed to be contracts
made under the laws of the State of New York and shall for all purposes be
governed by, and construed in accordance with, the laws of the State of New
York.
A-1-4
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated: June 28, 2001
IKON RECEIVABLES, LLC
By: IKON RECEIVABLES FUNDING, INC., its Manager
By:___________________________________________________
Authorized Officer
Trustee's Certificate of Authentication
---------------------------------------
This is one of the Class A-1 Notes referred to in the within mentioned
Indenture.
SUNTRUST BANK,
not in its individual capacity but solely
as Trustee
By:__________________________________________________
Authorized Officer
A-1-5
ASSIGNMENT FORM
---------------
If you the holder want to assign this Class A-1 Note, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Class A-1 Note to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ____________, agent to transfer this Class A-1 Note on
the books of the Issuer. The agent may substitute another to act for him.
Dated: ________________ Signed:_______________________________
_______________________________
(sign exactly as the name appears
on the other side of this Class
A-1 Note)
Signature Guarantee ____________________________________________________________
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Class A-1 Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank. Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class A-1 Note and the signed "power of attorney" in separate
envelopes. For added protection, use certified or registered mail for a Class
A-1 Note.
A-1-6
CLASS A-2 NOTE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
IKON RECEIVABLES, LLC
4.16% CLASS A-2 LEASE-BACKED NOTE, SERIES 2001-1
CUSIP NO. _______________
No. R-1 $____________
IKON Receivables, LLC, a limited liability company duly organized and
existing under the laws of Delaware (herein called the "Issuer", which term
includes any successor Person under the Indenture referred to herein), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of _________________________ ($__________), payable in monthly
installments beginning on July 16, 2001, in accordance with the Indenture.
Interest will accrue on the unpaid principal hereof from the date of issuance,
at the rate of 4.16% per annum, until the full amount of principal hereof is
otherwise paid or made available for payment and shall be computed on the basis
of a year of 360 days comprised of twelve thirty day months or, with respect to
the July 16, 2001 Payment Date, since June 28, 2001.
Principal and interest on this Class A-2 Note shall be paid on the
15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing July 16, 2001, either by check to the
registered address of the Holder of this Class A-2 Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
--------
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and surrender of
this Note at the Corporate Trust Office of the Trustee or at the principal
office of any Paying Agent appointed pursuant to the Indenture.
This Class A-2 Note is one of a duly authorized issue of Class A Notes
of the Issuer designated as its "4.16% Class A-2 Lease-Backed Notes, Series
2001-1" (herein called the "Class A-2 Notes") limited in aggregate principal
amount to $41,000,000 issued under the Indenture, dated as of June 1, 2001
(herein called the "Indenture"), among the Issuer, IOS Capital Inc. as Servicer,
and SunTrust Bank, as Trustee (herein called the "Trustee", which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Issuer, the Trustee and the Holders and of the terms upon which the Class
A-2 Notes are authenticated and delivered. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings set forth in the
Indenture.
The Class A-2 Notes are entitled to the benefits of a financial
guarantee insurance policy issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class A-2 Notes on each
Payment Date, all as more fully set forth in the Indenture.
The Stated Maturity of the Class A-2 Notes is the Payment Date in
March 2004 on which date the Outstanding Principal Amount of the Class A-2 Notes
shall be due and payable.
The Class A-2 Notes are subject to redemption, without premium, at the
option of the Issuer as of any Payment Date on which the Discounted Present
Value of the Performing Leases is less than or equal to ten percent (10%) of the
aggregate Discounted Present Value of the Leases as of the Cut-Off Date after
giving effect to all principal Payment on such Payment Date.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Class
A-2 Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
This Class A-2 Note will be secured by the pledge to the Trustee of
the Asset Pool.
If an Event of Default under the Indenture occurs, the Trustee shall,
at the written direction of the Insurer (if no Insurer Default has occurred and
is continuing) or of Holders of not less than 66-2/3% of the aggregate principal
amount of the Notes at the time Outstanding (if an Insurer Default has occurred
and is continuing), and, if an Insurer Default has occurred and is continuing,
may, declare due and payable in the manner and with the effect provided in the
Indenture, the principal of all the Class A-2 Notes (but not less than all the
Class A-2 Notes). Notice of such declaration will be given by mail to Holders,
as their names and addresses appear in the Note Register, as provided in the
Indenture. Upon payment of such principal amount together with all accrued
interest, the
A-2-2
obligations of the Issuer with respect to the payment of principal and interest
on this Class A-2 Note shall terminate.
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 under the Indenture at any time by the
Issuer and the Trustee with the written consent of the Insurer (with or without
the written consent of any Holder of the Notes if no Insurer Default has
occurred and is continuing) or the Holders of not less than 66-2/3% in aggregate
principal amount of the Notes at the time Outstanding (if an Insurer Default has
occurred and is continuing). The Indenture also contains provisions permitting
the Insurer (with or without the written consent of any Holder of the Notes if
no Insurer Default has occurred and is continuing) or the Holders of not less
than 66-2/3% in aggregate principal amount of the Notes at the time Outstanding
(if an Insurer Default has occurred and is continuing), on behalf of all the
Holders, 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 Insurer (with or without the consent of any
Holder of the Notes if no Insurer Default has occurred and is continuing) or the
Holder of this Class A-2 Note (if an Insurer Default has occurred and is
continuing) shall be conclusive and binding upon such Holder and upon all future
Holders of this Class A-2 Note and of any Class A-2 Note issued upon the
registration of transfer hereof or in exchange here for or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Class A-2
Note or any Class A-2 Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class A-2 Note is registrable in the
Note Register, upon surrender of this Class A-2 Note for registration of
transfer at the office or agency of the Trustee in the City of Atlanta, Georgia
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class A-2
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Class A-2 Notes are issuable only in registered form without
coupons in minimum denominations of $1,000,000. As provided in the Indenture and
subject to certain limitations therein set forth, Class A-2 Notes are
exchangeable for a like aggregate principal amount of Class A-2 Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Issuer, the Trustee, the Insurer and any agent of the Issuer, the
Trustee or the Insurer may treat the Person in whose name this Class A-2 Note is
registered as the owner hereof for all purposes, whether or not this Class A-2
Note may be overdue, and
A-2-3
neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
Each Noteholder, by acceptance of this Note, covenants and agrees to
treat the Notes as indebtedness for purposes of federal income, state and local
income and franchise and any other income taxes.
The Indenture and this Class A-2 Note shall be deemed to be contracts
made under the laws of the State of New York and shall for all purposes be
governed by, and construed in accordance with, the laws of the State of New
York.
A-2-4
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated: June 28, 2001
IKON RECEIVABLES, LLC
By: IKON RECEIVABLES FUNDING,
INC., its Manager
By:__________________________________________________
Authorized Officer
Trustee's Certificate of Authentication
---------------------------------------
This is one of the Class A-2 Notes referred to in the within mentioned
Indenture.
SUNTRUST BANK, not in its individual
capacity but solely as Trustee
By:_________________________________________________
Authorized Officer
A-2-5
ASSIGNMENT FORM
---------------
If you the holder want to assign this Class A-2 Note, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Class A-2 Note to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ____________, agent to transfer this Class A-2 Note on
the books of the Issuer. The agent may substitute another to act for him.
Dated: ________________ Signed:_____________________________
_____________________________
(sign exactly as the name
appears on the other side
of this Class A-2 Note)
Signature Guarantee_____________________________________________________________
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Class A-2 Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank. Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class A-2 Note and the signed "power of attorney" in separate
envelopes. For added protection, use certified or registered mail for a Class
A-2 Note.
A-2-6
Class A-3 Note
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
IKON RECEIVABLES, LLC
CLASS A-3 LEASE-BACKED NOTE, SERIES 2001-1
CUSIP NO. _______________
No. R-1 $____________
IKON Receivables, LLC, a limited liability company duly organized and
existing under the laws of Delaware (herein called the "Issuer", which term
includes any successor Person under the Indenture referred to herein), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of _____________________ ($___________), payable in monthly
installments on each Payment Date, in accordance with the Indenture. Interest
will accrue on the unpaid principal hereof from the date of issuance, for each
Interest Accrual Period at the rate per annum equal to the sum of 0.23% and
LIBOR for that Interest Accrual Period, until the full amount of principal
hereof is otherwise paid or made available for payment and shall be computed on
the basis of a year of 360 days and the actual number of days in that Interest
Accrual Period. Interest accruing as provided above for each Interest Accrual
Period will be payable on the Payment Date corresponding to that Interest
Accrual Period.
Principal and interest on this Class A-3 Note shall be paid on the
15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing July 16, 2001, either by check to the
registered address of the Holder of this Class A-3 Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
--------
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and surrender of
this Note at
the Corporate Trust Office of the Trustee or at the principal office of any
Paying Agent appointed pursuant to the Indenture.
This Class A-3 Note is one of a duly authorized issue of Class A Notes
of the Issuer designated as its "Class A-3 Lease-Backed Notes, Series 2001-1"
(herein called the "Class A-3 Notes") limited in aggregate principal amount to
$126,200,000, issued under the Indenture, dated as of June 1, 2001 (herein
called the "Indenture"), among the Issuer, IOS Capital Inc. as Servicer, and
SunTrust Bank, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Issuer,
the Trustee and the Holders and of the terms upon which the Class A-3 Notes are
authenticated and delivered. Unless otherwise defined herein, all capitalized
terms used herein shall have the meanings set forth in the Indenture.
The Class A-3 Notes are entitled to the benefits of a financial
guarantee insurance policy issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class A-3 Notes on each
Payment Date, all as more fully set forth in the Indenture.
The Stated Maturity of the Class A-3 Notes is the Payment Date in
January 2006, on which date the Outstanding Principal Amount of the Class A-3
Notes shall be due and payable.
The Class A-3 Notes are subject to redemption, without premium, at the
option of the Issuer as of any Payment Date on which the Discounted Present
Value of the Performing Leases is less than or equal to ten percent (10%) of the
aggregate Discounted Present Value of the Leases as of the Cut-Off Date after
giving effect to all principal Payment on such Payment Date.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Class
A-3 Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
This Class A-3 Note will be secured by the pledge to the Trustee of
the Asset Pool.
If an Event of Default under the Indenture occurs, the Trustee shall,
at the written direction of the Insurer (if no Insurer Default has occurred and
is continuing) or of Holders of not less than 66-2/3% of the aggregate principal
amount of the Notes at the time Outstanding (if an Insurer Default has occurred
and is continuing), and, if an Insurer Default has occurred and is continuing,
may, declare due and payable in the manner and with the effect provided in the
Indenture, the principal of all the Class A-3 Notes (but not less than all the
Class A-3 Notes). Notice of such declaration will be given by mail to Holders,
as their names and addresses appear in the Note Register, as provided in the
A-3-2
Indenture. Upon payment of such principal amount together with all accrued
interest, the obligations of the Issuer with respect to the payment of principal
and interest on this Class A-3 Note shall terminate.
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 under the Indenture at any time by the
Issuer and the Trustee with the written consent of the Insurer (with or without
the written consent of any Holder of the Notes if no Insurer Default has
occurred and is continuing) or the Holders of not less than 66-2/3% in aggregate
principal amount of the Notes at the time Outstanding (if an Insurer Default has
occurred and is continuing). The Indenture also contains provisions permitting
the Insurer (with or without the written consent of any Holder of the Notes if
no Insurer Default has occurred and is continuing) or the Holders of not less
than 66-2/3 in aggregate principal amount of the Notes at the time Outstanding
(if an Insurer Default has occurred and is continuing), on behalf of all the
Holders, 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 Insurer (with or without the consent of any
Holder of the Notes if no Insurer Default has occurred and is continuing) or the
Holder of this Class A-3 Note (if an Insurer Default has occurred and is
continuing) shall be conclusive and binding upon such Holder and upon all future
Holders of this Class A-3 Note and of any Class A-3 Note issued upon the
registration of transfer hereof or in exchange here for or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Class A-3
Note or any Class A-3 Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class A-3 Note is registrable in the
Note Register, upon surrender of this Class A-3 Note for registration of
transfer at the office or agency of the Trustee in the City of Atlanta, Georgia
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class A-3
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Class A-3 Notes are issuable only in registered form without
coupons in minimum denominations of $1,000,000. As provided in the Indenture and
subject to certain limitations therein set forth, Class A-3 Notes are
exchangeable for a like aggregate principal amount of Class A-3 Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Issuer, the Trustee, the Insurer and any agent of the Issuer, the
Trustee or the Insurer may treat the Person in whose name this Class A-3 Note is
registered as the
A-3-3
owner hereof for all purposes, whether or not this Class A-3 Note may be
overdue, and neither the Issuer, the Trustee nor any such agent shall be
affected by notice to the contrary.
Each Noteholder, by acceptance of this Note, covenants and agrees to
treat the Notes as indebtedness for purposes of federal income, state and local
income and franchise and any other income taxes.
The Indenture and this Class A-3 Note shall be deemed to be contracts
made under the laws of the State of New York and shall for all purposes be
governed by, and construed in accordance with, the laws of the State of New
York.
A-3-4
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated: June 28, 2001
IKON RECEIVABLES, LLC
By: IKON RECEIVABLES FUNDING, INC., its Manager
By:
---------------------------------------
Authorized Officer
Trustee's Certificate of Authentication
---------------------------------------
This is one of the Class A-3 Notes referred to in the within mentioned
Indenture.
SUNTRUST BANK, not in its individual
capacity but solely as Trustee
By:
---------------------------------------
Authorized Officer
A-3-5
ASSIGNMENT FORM
---------------
If you the holder want to assign this Class A-3 Note, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Class A-3 Note to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ____________, agent to transfer this Class A-3 Note on
the books of the Issuer. The agent may substitute another to act for him.
Dated: Signed:
-------------------------- --------------------------
--------------------------
(sign exactly as the name
appears on the other side
of this Class A-3 Note)
Signature Guarantee
-----------------------------------------------------------
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Class A-3 Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank. Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class A-3 Note and the signed "power of attorney" in separate
envelopes. For added protection, use certified or registered mail for a Class
A-3 Note.
A-3-6
CLASS A-4 NOTE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
IKON RECEIVABLES, LLC
CLASS A-4 LEASE-BACKED NOTE, SERIES 2001-1
CUSIP NO. _______________
No. R-1 $____________
IKON Receivables, LLC, a limited liability company duly organized and
existing under the laws of Delaware (herein called the "Issuer", which term
includes any successor Person under the Indenture referred to herein), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of ___________________________ ($_________), payable in monthly
installments beginning on July 16, 2001, in accordance with the Indenture.
Interest will accrue on the unpaid principal hereof from the date of issuance,
at the rate per annum equal to the sum of 0.26% and LIBOR for that Interest
Accrual Period, until the full amount of principal hereof is otherwise paid or
made available for payment and shall be computed on the basis of a year of 360
days and the actual number of days in that Interest Accrual Period. Interest
accruing as provided above for each Interest Accrual Period will be payable on
the Payment date corresponding to that Interest Accrual Period.
Principal and interest on this Class A-4 Note shall be paid on the
15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing July 16, 2001, either by check to the
registered address of the Holder of this Class A-4 Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
--------
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and surrender of
this Note at
the Corporate Trust Office of the Trustee or at the principal office of any
Paying Agent appointed pursuant to the Indenture.
This Class A-4 Note is one of a duly authorized issue of Class A Notes
of the Issuer designated as its "Class A-4 Lease-Backed Notes, Series 2001-1"
(herein called the "Class A-4 Notes") limited in aggregate principal amount to
$[__________], issued under the Indenture, dated as of June 1, 2001 (herein
called the "Indenture"), among the Issuer, IOS Capital Inc. as Servicer, and
SunTrust Bank, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Issuer,
the Trustee and the Holders and of the terms upon which the Class A-4 Notes are
authenticated and delivered. Unless otherwise defined herein, all capitalized
terms used herein shall have the meanings set forth in the Indenture.
The Class A-4 Notes are entitled to the benefits of a financial
guarantee insurance policy issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class A-4 Notes on each
Payment Date, all as more fully set forth in the Indenture.
The Stated Maturity of the Class A-4 Notes is the Payment Date in
October 2008, on which date the Outstanding Principal Amount of the Class A-4
Notes shall be due and payable.
The Class A-4 Notes are subject to redemption, without premium, at the
option of the Issuer as of any Payment Date on which the Discounted Present
Value of the Performing Leases is less than or equal to ten percent (10%) of the
aggregate Discounted Present Value of the Leases as of the Cut-Off Date after
giving effect to all principal Payment on such Payment Date.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Class
A-4 Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
This Class A-4 Note will be secured by the pledge to the Trustee of
the Asset Pool.
If an Event of Default under the Indenture occurs, the Trustee shall,
at the written direction of the Insurer (if no Insurer Default has occurred and
is continuing) or of Holders of not less than 66-2/3% of the aggregate principal
amount of the Notes at the time Outstanding (if an Insurer Default has occurred
and is continuing), and, if an Insurer Default has occurred and is continuing,
may, declare due and payable in the manner and with the effect provided in the
Indenture, the principal of all the Class A-4 Notes (but not less than all the
Class A-4 Notes). Notice of such declaration will be given by mail to Holders,
as their names and addresses appear in the Note Register, as provided in the
A-4-2
Indenture. Upon payment of such principal amount together with all accrued
interest, the obligations of the Issuer with respect to the payment of principal
and interest on this Class A-4 Note shall terminate.
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 under the Indenture at any time by the
Issuer and the Trustee with the written consent of the Insurer (with or without
the written consent of any Holder of the Notes if no Insurer Default has
occurred and is continuing) or the Holders of not less than 66-2/3% in aggregate
principal amount of the Notes at the time Outstanding (if an Insurer Default has
occurred and is continuing). The Indenture also contains provisions permitting
the Insurer (with or without the written consent of any Holder of the Notes if
no Insurer Default has occurred and is continuing) or the Holders of not less
than 66-2/3% in aggregate principal amount of the Notes at the time Outstanding
(if an Insurer Default has occurred and is continuing), on behalf of all the
Holders, 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 Insurer (with or without the consent of any
Holder of the Notes if no Insurer Default has occurred and is continuing) or the
Holder of this Class A-4 Note (if an Insurer Default has occurred and is
continuing) shall be conclusive and binding upon such Holder and upon all future
Holders of this Class A-4 Note and of any Class A-4 Note issued upon the
registration of transfer hereof or in exchange here for or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Class A-4
Note or any Class A-4 Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class A-4 Note is registrable in the
Note Register, upon surrender of this Class A-4 Note for registration of
transfer at the office or agency of the Trustee in the City of Atlanta, Georgia
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class A-4
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Class A-4 Notes are issuable only in registered form without
coupons in minimum denominations of $1,000,000. As provided in the Indenture and
subject to certain limitations therein set forth, Class A-4 Notes are
exchangeable for a like aggregate principal amount of Class A-4 Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Issuer, the Trustee, the Insurer and any agent of the Issuer, the
Trustee or the Insurer may treat the Person in whose name this Class A-4 Note is
registered as the
A-4-3
owner hereof for all purposes, whether or not this Class A-4 Note may be
overdue, and neither the Issuer, the Trustee nor any such agent shall be
affected by notice to the contrary.
Each Noteholder, by acceptance of this Note, covenants and agrees to
treat the Notes as indebtedness for purposes of federal income, state and local
income and franchise and any other income taxes.
The Indenture and this Class A-4 Note shall be deemed to be contracts
made under the laws of the State of New York and shall for all purposes be
governed by, and construed in accordance with, the laws of the State of New
York.
A-4-4
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated: June 28, 2001
IKON RECEIVABLES, LLC
By: IKON RECEIVABLES FUNDING, INC., its Manager
By:_________________________________________________
Authorized Officer
Trustee's Certificate of Authentication
---------------------------------------
This is one of the Class A-4 Notes referred to in the within mentioned
Indenture.
SUNTRUST BANK, not in its individual capacity
but solely as Trustee
By:_________________________________________________
Authorized Officer
A-4-5
ASSIGNMENT FORM
---------------
If you the holder want to assign this Class A-4 Note, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Class A-4 Note to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ____________, agent to transfer this Class A-4 Note on
the books of the Issuer. The agent may substitute another to act for him.
Dated: ________________ Signed:____________________________
____________________________
(sign exactly as the name
appears on the other side
of this Class A-4 Note)
Signature Guarantee_____________________________________________________________
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Class A-4 Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank. Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class A-4 Note and the signed "power of attorney" in separate
envelopes. For added protection, use certified or registered mail for a Class
A-4 Note.
A-4-6