INDENTURE
by and among
ABFS EQUIPMENT CONTRACT TRUST 1998-A,
as Issuer,
AMERICAN BUSINESS LEASING, INC.,
as Servicer,
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee and as Back-up Servicer
Dated as of June 1, 1998
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS......................................................................... 1
SECTION 1.01............................................................................Definitions 1
SECTION 1.02..................................Incorporation by Reference of the Trust Indenture Act 1
SECTION 1.03........................................................General Interpretive Principles 1
SECTION 1.04......................................................................Conflict with TIA 2
ARTICLE II PLEDGE OF INITIAL PLEDGED PROPERTY; ORIGINAL ISSUANCE OF NOTES;
CONVEYANCE OF SUBSEQUENT CONTRACTS.................................................. 2
SECTION 2.01.............................................................Pledge of Pledged Property 2
SECTION 2.02..................................................Indenture Trustee to Act as Custodian 3
SECTION 2.03..................................................................Conditions to Closing 3
SECTION 2.04........................................................Acceptance by Indenture Trustee 5
SECTION 2.05......................................Conveyance and Acceptance of Subsequent Contracts 5
SECTION 2.06............Liabilities of the Trust and Parties to this Indenture; Limitations Thereon 6
SECTION 2.07..........................................................Intended Tax Characterization 7
SECTION 2.08...............................................Originators or Affiliates as Noteholders 8
ARTICLE III ACCOUNTS; ALLOCATION AND APPLICATION OF THE TRUST PROPERTY......................... 8
SECTION 3.01..................Collection Account; Pre-Funding Account; Capitalized Interest Account 8
SECTION 3.02.................................Investment of Monies Held in the Accounts; Subaccounts 11
SECTION 3.03..............................................................The Note Insurance Policy 11
SECTION 3.04..................................................Disbursements From Collection Account 13
SECTION 3.05..............................................................Statements to Noteholders 16
SECTION 3.06...............................................Compliance With Withholding Requirements 19
ARTICLE IV REMOVAL OF NON-CONFORMING PLEDGED PROPERTY; SUBSTITUTION OF CONTRACTS............... 19
SECTION 4.01.............................................Removal of Non-Conforming Pledged Property 19
SECTION 4.02..............................................................Substitution of Contracts 19
SECTION 4.03..............................................................Release of Trust Property 20
ARTICLE V THE NOTES........................................................................... 21
SECTION 5.01..............................................................................The Notes 21
SECTION 5.02..............................................................Initial Issuance of Notes 23
SECTION 5.03.........................................Registration of Transfer and Exchange of Notes 23
SECTION 5.04.............................................Mutilated, Destroyed, Lost or Stolen Notes 24
SECTION 5.05..................................................................Persons Deemed Owners 25
SECTION 5.06.....................................Access to List of Noteholders' Names and Addresses 25
SECTION 5.07....................................................................Acts of Noteholders 25
SECTION 5.08.........................................................................No Proceedings 25
ARTICLE VI THE TRUST......................................................................... 26
SECTION 6.01.................................................................Liability of the Trust 26
SECTION 6.02...................................................Limitation on Liability of the Trust 26
SECTION 6.03.........................................................Indemnity for Liability Claims 26
SECTION 6.04............................................................................Liabilities 26
SECTION 6.05............................................................................[Reserved]. 27
SECTION 6.06......................................................Annual Statement as to Compliance 27
SECTION 6.07......................................................Payment of Principal and Interest 27
SECTION 6.08........................................................Maintenance of Office or Agency 27
SECTION 6.09.................................................Money for Payments to be Held in Trust 27
SECTION 6.10..............................................................................Existence 29
SECTION 6.11...........................................................Protection of Trust Property 29
SECTION 6.12...................................Performance of Obligations; Servicing of Receivables 30
SECTION 6.13.....................................................................Negative Covenants 30
SECTION 6.14......................................Trust May Consolidate, Etc. Only on Certain Terms 31
SECTION 6.15................................................................Successor or Transferee 33
ii
SECTION 6.16......................................................................No Other Business 33
SECTION 6.17...........................................................................No Borrowing 33
SECTION 6.18......................................Guarantees, Loans, Advances and Other Liabilities 33
SECTION 6.19...................................................................Capital Expenditures 33
SECTION 6.20...................................................................Compliance with Laws 33
SECTION 6.21...........................................................Further Instruments and Acts 34
ARTICLE VII THE INDENTURE TRUSTEE............................................................... 34
SECTION 7.01............................................................Duties of Indenture Trustee 34
SECTION 7.02...................................................................Eligible Investments 36
SECTION 7.03............................................Indenture Trustee's Assignment of Contracts 36
SECTION 7.04........................................Certain Matters Affecting the Indenture Trustee 36
SECTION 7.05....................................Indenture Trustee Not Liable for Notes or Contracts 37
SECTION 7.06........................................................Indenture Trustee May Own Notes 38
SECTION 7.07..................................................Indenture Trustee's Fees and Expenses 38
SECTION 7.08.........................................Eligibility Requirements for Indenture Trustee 39
SECTION 7.09.......................................Preferential Collection of Claims Against Issuer 39
SECTION 7.10............................................Resignation or Removal of Indenture Trustee 40
SECTION 7.11............................................................Successor Indenture Trustee 41
SECTION 7.12...........................................Merger or Consolidation of Indenture Trustee 41
SECTION 7.13......................Appointment of Co-Indenture Trustee or Separate Indenture Trustee 41
SECTION 7.14........................Indenture Trustee May Enforce Claims Without Possession of Note 43
SECTION 7.15..................................................................Suits for Enforcement 43
SECTION 7.16..................................................................Undertaking for Costs 43
iii
SECTION 7.17....................................Representations and Warranties of Indenture Trustee 44
SECTION 7.18............................................................................Tax Returns 44
ARTICLE VIII EVENTS OF DEFAULT; REMEDIES......................................................... 45
SECTION 8.01......................................................................Events of Default 45
SECTION 8.02.....................................Acceleration of Maturity, Rescission and Annulment 45
SECTION 8.03...............................................................................Remedies 47
SECTION 8.04.............................................................Notice of Event of Default 47
SECTION 8.05.................................................Exercise of Power by Indenture Trustee 48
SECTION 8.06.............................................Indenture Trustee May File Proofs of Claim 48
SECTION 8.07..........................................................Allocation of Money Collected 48
SECTION 8.08............................................................Waiver of Events of Default 49
SECTION 8.09....................................................................Limitation On Suits 50
SECTION 8.10...................Unconditional Right of Noteholders to Receive Principal and Interest 50
SECTION 8.11.....................................................Restoration of Rights and Remedies 50
SECTION 8.12.........................................................Rights and Remedies Cumulative 51
SECTION 8.13...........................................................Delay or Omission Not Waiver 51
SECTION 8.14.........................................................Control by Controlling Parties 51
SECTION 8.15...............................................................Sale of Pledged Property 51
SECTION 8.16........................................................................Action on Notes 52
ARTICLE IX TERMINATION......................................................................... 52
SECTION 9.01........................................Termination of Obligations and Responsibilities 52
SECTION 9.02...............................Optional Redemption of Notes; Final Disposition of Funds 53
ARTICLE X NOTEHOLDERS' LISTS AND REPORTS...................................................... 54
SECTION 10.01..............Trust To Furnish To Indenture Trustee Names and Addresses of Noteholders 54
iv
SECTION 10.02............................Preservation of Information; Communications to Noteholders 54
SECTION 10.03......................................................................Reports by Trust 54
SECTION 10.04..........................................................Reports by Indenture Trustee 55
SECTION 10.05.............................................Compliance Certificates and Opinions, etc 55
ARTICLE XI MISCELLANEOUS PROVISIONS............................................................ 56
SECTION 11.01.............................................................................Amendment 56
SECTION 11.02...................................................Conformity With Trust Indenture Act 56
SECTION 11.03...................................................Limitation on Rights of Noteholders 56
SECTION 11.04..........................................................................Counterparts 57
SECTION 11.05.........................................................................GOVERNING LAW 57
SECTION 11.06...............................................................................Notices 57
SECTION 11.07............................................................Severability of Provisions 58
SECTION 11.08.....................................................Conflict with Trust Indenture Act 58
SECTION 11.09...............................................................Third Party Beneficiary 58
SECTION 11.10............................................................................Assignment 58
SECTION 11.11........................................................................Binding Effect 58
SECTION 11.12.................................................................Survival of Agreement 58
SECTION 11.13..............................................................................Captions 59
SECTION 11.14..............................................................................Exhibits 59
SECTION 11.15..........................................................................Calculations 59
SECTION 11.16........................................................................No Proceedings 59
Annex A - Defined Terms
v
EXHIBITS
Exhibit A - Form of Indenture Trustee's Acknowledgement of Receipt
Exhibit B - Form of Wiring Instructions
Exhibit C - Form of Class A Notes
Exhibit D - Form of Class B Notes
Exhibit E - Form of Transferee Certification (Non-144A)
Exhibit F - Form of Transferee Certification (144A QIB)
Exhibit G - Form of Transferee Certification (Investment Company)
Exhibit H - Form of Instrument of Transfer
Exhibit I - Form of Assignment
Exhibit J - Form of Note Insurer Consent for Subsequent Contracts
vi
ABFS EQUIPMENT CONTRACT TRUST 1998-A
Reconciliation and Tie between the Indenture,
dated as of June 1, 1998, and the
Trust Indenture Act of 1939, as amended
Trust Indenture Act Section Indenture Section
--------------------------- -----------------
Section 310(a)(1) Section 7.08
(a)(2) 7.08
(a)(3) 7.13
(a)(4) Not Applicable
(b) 7.08; 7.10
(c) Not Applicable
311(a) 7.09
(b) 7.09
312(a) 10.02
(b) 10.02
(c) 10.02
313(a) 10.04
(b)(1) 10.02; 10.04; 4.01; 4.02; 4.03
(b)(2) 10.04
(c) 10.04
(d) 10.04
314(a) 10.03; 3.05; 6.06
(b) Not Applicable
(c)(1) 10.05
(c)(2) 10.05
(c)(3) Not Applicable
(d) Not Applicable
(e) 10.05
(f) Not Applicable
315(a) 7.01; 7.05
(b) 8.04
(c) 8.05
(d) 7.01
(e) 7.01
316(a) (last sentence) 2.07
(a)(1)(A) 7.17
(a)(1)(B) 8.06
317(a)(1) 8.03
(a)(2) 8.04
(b) 6.09
318(a) 11.09
(c) 11.09
vii
This INDENTURE, dated as of June 1, 1998 (this "Indenture"), is made
by and among ABFS EQUIPMENT CONTRACT TRUST 1998-A, a Delaware business trust,
as issuer (the "Issuer" or the "Trust"), AMERICAN BUSINESS LEASING, INC., a
Pennsylvania corporation, as servicer (the "Servicer"), and THE CHASE
MANHATTAN BANK, a New York banking corporation, not in its individual capacity
but solely as the indenture trustee (the "Indenture Trustee") and as back-up
servicer (the "Back-up Servicer").
WITNESSETH:
In consideration of the mutual agreements herein contained, and of
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.
------ ------------
Capitalized terms used and not defined herein shall have the meanings
specified in Annex A hereto.
SECTION 1.02 Incorporation by Reference of the Trust Indenture Act.
------ ------------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"Indenture Trustee" or "institutional trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer.
All other TIA terms used in this Indenture that are defined by the
TIA, or defined by Commission rule have the meaning assigned to them by such
definitions.
SECTION 1.03 General Interpretive Principles.
------ --------------------------------
For purposes of this Indenture except as otherwise expressly provided or
unless the context otherwise requires:
(a)__ the terms defined in this Indenture have the meanings assigned
to them in this Indenture and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include
the other gender;
(b)__ accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP as in effect on the date
hereof;
(c)__ references herein to "Articles", "Sections", "Subsections",
"Paragraphs" and other subdivisions without reference to a document are
to designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Indenture;
(d)__ a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same
Section in which the reference appears, and this rule shall also apply
to Paragraphs and other subdivisions;
(e)__ the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular provision; and
(f)__ the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 1.04 Conflict with TIA.
------ ------------------
If any provision hereof limits, qualifies or conflicts with a provision of
the TIA that is required under the TIA to be part of and govern this Indenture,
the latter provision shall control and all provisions required by the TIA are
hereby incorporated by reference. If any provision of this Indenture modifies or
excludes any provision of the TIA that may be so modified or excluded, the
latter provisions shall be deemed to apply to this Indenture as so modified or
to be excluded, as the case may be.
ARTICLE II
PLEDGE OF INITIAL PLEDGED PROPERTY;
ORIGINAL ISSUANCE OF NOTES;
CONVEYANCE OF SUBSEQUENT CONTRACTS
SECTION 2.01 Pledge of Pledged Property.
------ ---------------------------
The Trust, simultaneously with the execution and delivery of this
Indenture, does hereby pledge, deposit, transfer, assign, and otherwise grant
to the Indenture Trustee, to be held in trust for the benefit of the
Noteholders and the Note Insurer, as their interests may appear as provided in
this Indenture, all the right, title, and interest of the Trust in and to (1)
the Pledged Notes, (2) the Note Insurance Policy,
2
(3) all Eligible Investments and all other amounts on deposit in the
Pre-Funding Account and the Capitalized Interest Account, and (4) an
assignment of the Trust's security interest in all of the following items that
have been pledged as collateral security for the Pledged Notes: (a) the
security interest or any ownership interest of the Transferors in the
Equipment, (b) the Contracts, including, without limitation, all Actual
Payments and any other payments due or made with respect to the Contracts
after the Cut-Off Date relating to such Contracts, (c) any guarantees of an
Obligor's obligations under a Contract, (d) all other documents in the
Contract Files relating to the Contracts, including, without limitation, any
UCC financing statements related to the Contracts or the Equipment, (e) any
Insurance Policies and Insurance Proceeds with respect to the Contracts, (f)
the Receivables Pledge Agreement, the Receivables Sale Agreement and the
Servicing Agreement, each as executed and delivered in accordance therewith,
(g) a Eligible Investments and all other amounts on deposit in the Collection
Account held by the Indenture Trustee, (i) all Source Agreements and Source
Agreement Rights to the extent they relate to any Contract and any Equipment
covered by the Contracts, and (j) any and all income and proceeds of any of
the foregoing (the property and interests in (1) through (4) above,
collectively, constituting the "Pledged Property"); provided, however, that
the pledge, transfer and assignment effected by this Section 2.0 shall not
include the Initial Unpaid Amounts relating thereto.
This Indenture is a security agreement within the meaning of Article
8 and Article 9 of the Uniform Commercial Code as in effect in the State of
New York and the Commonwealth of Pennsylvania. The pledge provided for in this
Section 2.01 is intended by the Trust to be a grant by the Trust to the
Indenture Trustee, on behalf of the Noteholders and the Note Insurer, of a
valid first priority perfected security interest in all of the Trust's right,
title and interest in and to the Pledged Property.
SECTION 2.02 Indenture Trustee to Act as Custodian.
------ --------------------------------------
The executed original counterpart of each Contract, together with the other
documents or instruments, if any, which constitute a part of a Contract File,
shall be held by the Indenture Trustee, as bailee for the benefit of the
Noteholders and the Note Insurer.
SECTION 2.03 Conditions to Closing.
------ ----------------------
As conditions to the execution, authentication and delivery of the Notes by
the Indenture Trustee and the sale of the Notes by the Indenture Trustee (by
issuance thereof by the Indenture Trustee upon the Trust's instructions) on
the Closing Date, (a) the Issuer shall have received by wire transfer the net
proceeds of sale of the Class A Notes and the Class B Notes in authorized
denominations equal in the aggregate to the Initial Class A Note Principal
Balance and the Initial Class B Note Principal Balance, and (b) each of the
Indenture Trustee and the Note Insurer shall have received the following on or
before the Closing Date:
(i) The List of Initial Contracts, certified by the President, any
Senior Vice President, any Vice President or any Assistant Vice
President of the Servicer;
(ii) Copies of a written consent of the members for each of the
Transferors approving the execution, delivery and performance of the
Transaction Documents to which it is a party and the transactions
contemplated hereby and thereby, certified by a Secretary or an
Assistant Secretary of the Managing Member of such Transferor;
(iii) A copy of an officially certified document, dated not more than
thirty (30) days prior to the Closing Date, evidencing the due
organization and good standing of each Transferor in the State of
Delaware;
(iv) Delivery of the executed Financing Statements with respect to
the Contracts, in accordance with the Filing Requirements, prepared for
filing;
(v) A certificate listing the Servicing Officers as of the Closing
Date;
(vi) Executed copies of the Transaction Documents in form and
substance acceptable to the Note Insurer;
(vii) Copies of resolutions of the Board of Directors of each of the
Originators approving the execution, delivery and performance of the
Transaction Documents to which it is a party and the transactions
contemplated hereby and thereby, certified by a Secretary or an
Assistant Secretary of the related Originator;
(viii) Copies of officially certified documents, dated not more than
thirty (30) days prior to the Closing Date, evidencing the due
organization and good standing of (x) ABL in the Commonwealth of
Pennsylvania and (y) Federal Leasing in the State of New Jersey;
(ix) An executed Note Insurance Policy;
(x) A custody receipt, substantially in the form of Exhibit A hereto,
pursuant to which the Indenture Trustee certifies that it has received
(a) a Contract File with respect to each Contract on the List of
Contracts and (b) the Pledged Notes;
(xi) All Necessary Consents;
(xii) A letter from ▇▇▇▇▇'▇ that it has assigned a rating of "Aaa" to
the Class A Notes;
(xiii) A letter from S&P that it has assigned a rating of "AAA" to
the Class A Notes;
(xiv) A letter from DCR that it has assigned a rating of at least
"BBB" to the Class B Notes; and
(xv) Opinions of counsel to the Originators, the Transferors and the
Servicer, in form and substance acceptable to the Indenture Trustee and
the Note Insurer, covering such matters as the Indenture Trustee or the
Note Insurer may reasonably request including, without limitation,
opinions concerning nonconsolidation, true sale, security interest,
Federal tax and general corporate matters;
and (c) the Note Insurer shall have received in writing on or before the Closing
Date the following:
4
(i) Acknowledgement by the Back-up Servicer that it and the Servicer
have agreed to a format pursuant to which data will be received;
(ii) An opinion of counsel to the Back-up Servicer, dated as of the
Closing Date, as to the due authorization, execution and delivery of
the Servicing Agreement by the Back-up Servicer; and
(iii) An officer's certificate from a responsible officer of the
Back-up Servicer, dated as of the Closing Date, to the effect that (i)
the representations and warranties contained in Section 2.03 of the
Servicing Agreement are true and correct in all material respects as of
the Closing Date and (ii) no Event of Back-up Servicing Termination
exists.
SECTION 2.04 Acceptance by Indenture Trustee.
------ --------------------------------
The Indenture Trustee acknowledges its acceptance, simultaneously with the
execution and delivery of this Indenture, of all right, title and interest in
and to the Pledged Property on behalf of the Noteholders and the Note Insurer,
and declares that the Indenture Trustee holds and will hold such right, title
and interest for the benefit of all present and future Noteholders and the
Note Insurer, for the use and purpose and subject to th terms and provisions
of this Indenture. The Trust hereby (x) appoints the Indenture Trustee as the
Trust's attorney-in-fact with all power independently to enforce all of the
Trust's rights against the Originators, the Transferors, the Source(s) and the
Servicer hereunder, under the Transfer Agreements, the Source Agreements and
under the Servicing Agreement, as applicable, and (y) directs the Indenture
Trustee to enforce such rights. The Indenture Trustee hereby accepts such
appointment and agrees to enforce such rights.
SECTION 2.05 Conveyance and Acceptance of Subsequent Contracts
------ -------------------------------------------------
(a)__
(a) From time to time the Transferors will, not less than five (5)
Business Days prior to each Subsequent Funding Date, deliver to the Note
Insurer and the Indenture Trustee a List of Subsequent Contracts that are
scheduled to be acquired by the Transferors, pledged by the Transferors to the
Indenture Trustee, on behalf of the Issuer, and such security interest to be
assigned by the Issuer to the Indenture Trustee, for the benefit of the
Noteholders and the Note Insurer, which Subsequent Contracts shall satisfy the
requirements set forth in Section 2.05(c). If any of the Subsequent Contracts
included on such List of Subsequent Contracts are not approved by the Note
Insurer, the Transferors may, not less than two (2) Business Days prior to the
related Subsequent Funding Date on or prior to the Funding Termination Date,
deliver another Contract which has been approved by the Note Insurer.
5
(b)__ Subject to the conditions set forth in Section 2.05(c), in
consideration of the Indenture Trustee's delivery to, or at the order of, the
Transferors on the related Subsequent Funding Date, upon the order of the
Servicer, with the prior written consent of the Note Insurer in the form of
Exhibit J hereto, all or a portion of the Pre-Funded Amount in an amount equal
to 95% of the aggregate Discounted Contract Principal Balance of each
Subsequent Contract to be acquired on such Subsequent Funding Date, (a) the
Transferors shall, on each Subsequent Funding Date, pledge to the Indenture
Trustee, on behalf of the Issuer, all right, title and interest of such
Transferor in and to, and (b) the Issuer shall, on each Subsequent Funding
Date, assign to the Indenture Trustee, for the benefit of the Noteholders and
the Note Insurer, all rights, and interests of the Issuer in and to, in each
case, (x) each Subsequent Contract listed on the List of Subsequent Contracts
delivered to the Note Insurer and the Indenture Trustee (including all
Scheduled Payments due thereunder), (y) the security interest or ownership
interest in the related Equipment and (z) the items listed in clauses (c),
(d), (e), (i) and (j) of Section 2.01, with respect to the Subsequent
Contracts.
(c)__ The Issuer agrees that any pledge of Subsequent Contracts shall
satisfy the following conditions:
(i) On or prior to the related Subsequent Funding Date, the Issuer
shall have delivered to the Indenture Trustee an Assignment (and the
Indenture Trustee shall have accepted such Assignment on behalf of the
Note Insurer and the Noteholders) in substantially the form of Exhibit
I attached hereto;
(ii) The Note Insurer shall have approved in writing the pledge to
the Trust of such Subsequent Contracts, such approval to be evidenced
conclusively by the receipt by the Indenture Trustee on the related
Subsequent Funding Date of a written consent of the Note Insurer,
substantially in the form of Exhibit J attached hereto;
(iii) The Indenture Trustee shall have received a written direction
of the Servicer authorizing the Indenture Trustee to release from the
Pre-Funding Account and pay to, or at the direction of, the
Transferors, an amount equal to 95% of the aggregate Discounted
Contract Principal Balances of all Subsequent Contracts (calculated as
of the related Subsequent Funding Date) to be pledged to the Trust, and
pledged to the Indenture Trustee, for the benefit of the Noteholders
and th Note Insurer, on such Subsequent Funding Date;
(iv) The Indenture Trustee and the Note Insurer shall have received
the List of Subsequent Contracts with respect to the related Subsequent
Contracts together with the item listed in Section 2.03(b)(x) hereof
with respect to the Subsequent Contracts;
(v) The Issuer shall have caused to be delivered to the Indenture
Trustee and the Note Insurer, Opinions of Counsel with respect to the
pledge to the Indenture Trustee, on behalf of the Issuer, of the
Subsequent Contracts on such Subsequent Funding Date, substantially in
the form of the respective Opinions of Counsel delivered on the Closing
Date pursuant to Section 2.03(b)(xv);
6
(vi) Each Subsequent Contract shall be a Contract, with respect to
which all of the representations and warranties set forth in Section
2.02 of the Servicing Agreement were true as of the related Subsequent
Cut-Off Date;
(vii) As of the related Subsequent Cut-Off Date, none of the
Subsequent Contracts then being pledged shall have a final scheduled
payment date later than twelve months before the Class A Maturity Date;
(viii) No selection process believed by the Transferors and the
Issuer to be materially adverse to the interests of the Noteholders or
the Note Insurer was used in selecting the Subsequent Contracts; and
(ix) Such pledge shall not occur after the Funding Termination Date.
(d)__ Upon the release of the funds from the Pre-Funding Account as
described in Section 2.05(c)(iii) above, the Indenture Trustee shall pay over
such funds to the Transferors or their respective assigns, in consideration
for the related Subsequent Receivables, which the Transferors shall have
simultaneously acquired from the Originators pursuant to the Subsequent
Receivables Sale Agreement, and pledged to the Trust pursuant to the
Subsequent Receivables Pledge Agreement.
SECTION 2.06 Liabilities of the Trust and Parties to this
------ --------------------------------------------
Indenture; Limitations Thereon
------------------------------
(a)__
(a) The obligations evidenced by the Notes provide recourse only to the
Trust Property and provide no recourse against the Originators, the
Transferors, the Servicer, the Indenture Trustee, the Owner Trustee or any
other Person, other than the Note Insurer pursuant to the Note Insurance
Policy.
(b)__ None of the Originators, the Transferors, the Servicer, the
Back-up Servicer or any other Person shall be liable to the Indenture Trustee
or the Noteholders except as provided in Article VI hereof and Sections 5.01,
5.03, 5.05 and 5.07 of the Servicing Agreement and Section 6.03 of the
Receivables Sale Agreement and the Receivables Pledge Agreement. Without
limiting the generality of the foregoing, if any Obligor fails to pay any
Scheduled Payment, Final Scheduled Payment, or other amounts due under a
Contract, then none of the Indenture Trustee, the Noteholders or the Note
Insurer will have any recourse against the Originators, the Transferors, or
the Servicer for such Scheduled Payment, Final Scheduled Payment, other
amounts due under the Contract or any losses, damages, claims, liabilities or
expenses incurred by the Indenture Trustee, any Noteholder or the Note Insurer
as a direct or indirect result thereof, except as may be provided for in
Article VI hereof and Sections 5.01, 5.03, 5.05 and 5.07 of the Servicing
Agreement and Section 6.03 of the Receivables Sale Agreement and the
Receivables Pledge Agreement.
7
(c)__ The Indenture Trustee agrees that in the event of a default by an
Obligor under the terms of a Contract, which default is not cured within any
applicable cure period set forth in such Contract, the Indenture Trustee, the
Noteholders and the Note Insurer shall be expressly limited to the sources of
payment specified herein. In addition, the Indenture Trustee shall have the
right to exercise the rights of the related Originator under the Contract, the
Insurance Policies and any document in the Contract File in the name of the
Indenture Trustee, the Noteholders and the Note Insurer, either directly or
through the Servicer as agent, and the Indenture Trustee is hereby directed by
the Trust to exercise such rights; provided, however, that the Indenture
Trustee shall not be required to take any action pursuant to this Section
2.06(c) except upon written instructions from the Servicer or the Note
Insurer. A carbon, photographic or other reproduction of this Indenture or any
financin statement is sufficient as a financing statement in any State.
(d)__ The pledge of the Pledged Property by the Issuer pursuant to this
Indenture does not constitute and is not intended to result in an assumption
by the Indenture Trustee, the Trust, the Note Insurer, or any Noteholder of
any obligation (except for the obligation not to disturb an Obligor's right of
quiet enjoyment) of the Originators or the Servicer to any Obligor or other
Person in connection with the Equipment, the Contracts, the Insurance Policies
or any document in the Contrac Files.
SECTION 2.07 Intended Tax Characterization.
------ ------------------------------
The parties hereto agree that it is their mutual intent that, for all
applicable tax purposes, the Class A Notes and the Class B Notes shall
constitute indebtedness and that for all applicable tax purposes, accordingly,
the Trust shall be treated as sole and exclusive owner of the Pledged
Property. Further, each party hereto, and each Noteholder (by receiving and
holding a Note), hereby covenants to every other party hereto and the
Noteholders to treat the Class A Notes and the Class B 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 Class A Notes or of the Class B
Notes as indebtedness for tax purposes. All successors and assigns of the
parties hereto shall be bound by the provisions hereof.
SECTION 2.08 Originators or Affiliates as Noteholders.
------ -----------------------------------------
In determining whether the Noteholders of the required outstanding
Percentage Interests have concurred in any direction, waiver or consent, Notes
owned by the Originators, any other obligor upon the Notes or an Affiliate of
the Originators shall be considered as though not outstanding, except that for
the purposes of determining whether the Indenture Trustee shall be protected
in relying on any such direction, waiver or consent only Notes which a
Responsible Officer of the Indenture Trustee actually knows are so owned shall
be so disregarded.
8
ARTICLE III
ACCOUNTS; ALLOCATION AND APPLICATION OF
THE TRUST PROPERTY
SECTION 3.01 Collection Account; Pre-Funding Account; Capitalized
------ ----------------------------------------------------
Interest Account.
-----------------
(a)__ The Collection Account.
----- -----------------------
(i) The Indenture Trustee shall establish and maintain the Collection
Account for the benefit of the Trust, as an Eligible Bank Account, in the name
of "ABFS Equipment Contract Trust 1998-A Collection Account, in trust for the
benefit of the ABFS Equipment Contract Trust 1998-A." At the Servicer's written
direction, the Indenture Trustee shall make withdrawals from the Collection
Account only as provided in the Receivables Pledge Agreement in respect of
payments on the Pledged Notes, and the Indenture Trustee shall apply the
proceeds of such payments to make the disbursements set forth in Section
3.04(b) of this Indenture. The Indenture Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Collection
Account and all proceeds thereof. The Collection Account shall be under the
sole dominion and control of the Indenture Trustee, for the benefit of the
Trust.
(ii) At the times indicated in this Section 3.01(a)(ii) or in Section
3.01(a)(iii) below, the following amounts (net of Excluded Amounts) shall be
deposited in the Collection Account in immediately available funds:
(A) The Servicer shall deposit or cause to be deposited the
aggregate amounts of Actual Payments;
(B) The Servicer shall deposit the aggregate Servicer Advances
payable pursuant to Section 4.03 of the Servicing Agreement;
(C) The Servicer shall deposit any Reacquisition Amounts payable
by it under the Servicing Agreement, or by the Originators pursuant to
Section 4.01 hereof;
(D) The Indenture Trustee shall deposit Investment Earnings
(including, without limitation, Pre-Funding Earnings), as described in
Section 3.02(a) hereof;
9
(E) The Indenture Trustee shall transfer from the Capitalized
Interest Account, the Capitalized Interest Requirement, if any, with
respect to each Payment Date occurring during the Pre-Funding Period;
and
(F) The Indenture Trustee shall deposit the amount, if any,
received by the Indenture Trustee as a result of a drawing on the Note
Insurance Policy pursuant to Section 3.03(a) hereof.
(iii) The Servicer shall so transfer the aggregate amount of Actual
Payments to the Collection Account no later than two (2) Business Days after
the Servicer's receipt of such amount and determination that such amounts
relate to the Contracts, but in no event later than five Business Days
following receipt thereof. The Servicer shall so deposit the aggregate amount
of Servicer Advances no later than the related Determination Date. The Servicer
shall instruct the Indenture Trustee in writing to deposit the portion of any
Advance Payment due and owing for a Collection Period no later than the related
Determination Date. Except as otherwise expressly set forth, any other deposits
and transfers of funds to be made pursuant to this Section 3.01(a) shall be
made no later than the third Business Day immediately preceding the related
Payment Date.
(iv) Notwithstanding the foregoing, the Servicer may deduct from
amounts otherwise payable to the Collection Account amounts previously
deposited by the Servicer into the Collection Account but (i) subsequently
uncollectable as a result of dishonor of the instrument of payment for or on
behalf of the Obligor or (ii) later determined to have resulted from mistaken
deposits.
(b)__ The Pre-Funding Account.
----- ------------------------
(i) The Indenture Trustee shall establish and maintain the Pre-Funding
Account for the benefit of the Note Insurer and the Noteholders, as an Eligible
Bank Account, in the name of "ABFS Equipment Contract Trust 1998-A Pre-Funding
Account, in trust for the benefit of the registered holders of Equipment
Contract-Backed Notes and the Note Insurer." At the Servicer's written
direction, the Indenture Trustee shall make withdrawals from the Pre-Funding
Account only as provided i Section 2.05 of this Indenture. The Indenture
Trustee shall possess all right, title and interest in all funds on deposit
from time to time in the Pre-Funding Account and all proceeds thereof. The
Pre-Funding Account shall be under the sole dominion and control of the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer.
(ii) On the Closing Date, the Indenture Trustee shall deposit, on
behalf of the Noteholders and the Note Insurer, in the Pre-Funding Account, the
Original Pre-Funded Amount; provided, that the Original Pre-Funded Amount shall
not exceed 30% of the Initial Aggregate Collateral Balance.
(iii) The Indenture Trustee shall withdraw and distribute or cause to
be distributed the following moneys held in the Pre-Funding Account at the
times specified, based on written instructions provided by the Servicer or
other party as indicated:
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(A) On any Subsequent Funding Date, the Servicer may instruct the
Indenture Trustee to withdraw from amounts on deposit in the
Pre-Funding Account an amount equal to 95% of the aggregate Discounted
Contract Principal Balances (as of the Subsequent Cut-Off Date) of all
Subsequent Contracts (which Subsequent Contracts have been approved in
writing by the Note Insurer) to be pledged to the Trust on such
Subsequent Funding Date and pay such amount to, or at the directio of,
the Transferors as an additional advance of funds on the Pledged
Notes;
(B) On each Payment Date through and including the Payment Date
immediately following the last Subsequent Funding Date (or, if the
last Subsequent Funding Date is also a Payment Date, then on the last
Subsequent Funding Date), the Indenture Trustee shall transfer from
the Pre-Funding Account to the Collection Account the Pre-Funding
Earnings, if any, applicable to each such Payment Date; and
(C) If all or any portion of the Pre-Funded Amount remains in the
Pre-Funding Account on the Payment Date which immediately follows the
Funding Termination Date (or, in the event that the Funding
Termination Date is a Payment Date, then on such Payment Date), the
Indenture Trustee shall withdraw from the Pre-Funding Account on such
Payment Date the remaining Pre-Funded Amount and shall distribute (a)
the Class A Accelerated Percentage of such amount to the Class A
Noteholders, as a prepayment of principal on the Class A Notes and (b)
the Class B Accelerated Percentage of such amount to the Class B
Noteholders, as a prepayment of principal on the Class B Notes.
(c)__ The Capitalized Interest Account.
----- ---------------------------------
(i) The Indenture Trustee shall establish and maintain the Capitalized
Interest Account for the benefit of the Note Insurer and the
Noteholders, as an Eligible Bank Account, in the name of "ABFS Equipment
Contract Trust 1998-A Capitalized Interest Account, in trust for the
benefit of the registered holders of Equipment Contract-Backed Notes and
the Note Insurer." At the Servicer's written direction, the Indenture
Trustee shall make withdrawals from the Capitalized Interest Account
only as provided in Section 3.01(c)(ii) of this Indenture. The Indenture
Trustee shall possess all right, title and interest in all funds on
deposit from time to time in the Capitalized Interest Account and all
proceeds thereof. The Capitalized Interest Account shall be under the
sole dominion and control of the Indenture Trustee, for the benefit of
the Noteholders and the Note Insurer.
(ii) On the Closing Date, the Indenture Trustee will deposit from the
proceeds of the sale of the Class A Notes and the Class B Notes, the
Capitalized Interest Account Deposit in the Capitalized Interest
Account. On each Payment Date occurring during the Pre-Funding Period
only, the Indenture Trustee shall transfer from the Capitalized Interest
Account to the Collection Account the Capitalized Interest Requirement,
if any, for such Payment Date; provided that such amounts will be used
only to pay (A) interest on the Notes and (B) the Premium Amount payable
on such Payment Date. Any amount remaining on deposit in the Capitalized
Interest Account on the Payment Date immediately following the end of
the Pre-Funding Period (after taking into account any transfer to be
made from the Capitalized Interest Account to the Collection Account on
such Payment Date) shall be released by the Indenture Trustee to the
Transferors (in proportion to the Percentage Interest of th Trust
Certificates held by each Transferor), and the Capitalized Interest
Account shall thereafter be closed.
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SECTION 3.02 Investment of Monies Held in the Accounts; Subaccounts
------ ------------------------------------------------------
(a)__
(a) The Servicer shall direct the Indenture Trustee in writing to invest the
amounts in any Account in Eligible Investments that mature not later than the
Business Day immediately preceding the next Payment Date following the
investment of such amounts. Eligible Investments shall not be sold or disposed
of prior to their maturities. Investment Earnings on amounts held in any
Account shall be deposited in the Collection Account as earned. The amount of
any Insured Payment shall be held uninvested.
(b)__ The Indenture Trustee and the Servicer may, from time to time and in
connection with the administration of any Account, establish and maintain with
the Indenture Trustee one or more sub-accounts of any of the Accounts, as the
Indenture Trustee, the Note Insurer and/or the Servicer may consider useful.
SECTION 3.03 The Note Insurance Policy
------ -------------------------
(a)__
(a) On each Determination Date, the Servicer shall determine with respect to
the immediately following Payment Date, the amounts to be on deposit in the
Collection Account on such Determination Date with respect to the immediately
preceding Collection Period and equal to the total of (x) Available Funds with
respect to such Collection Period, minus (y) the Trust Operating Expenses (the
"Available Distribution Amount"), and shall inform the Indenture Trustee in
writing no later than 10:00 a.m., New York City time, on such Determination
Date of the results of such determination.
(b)__ If the Class A Insured Distribution Amount for any Payment Date
exceeds the Available Distribution Amount for such Payment Date (such event
being an "Available Funds Shortfall"), the Indenture Trustee shall complete a
Notice in the form of Exhibit A to the Note Insurance Policy and submit such
notice to the Note Insurer via facsimile transmission no later than 12:00 noon
New York City time on the second Business Day preceding such Payment Date as a
claim for an Insured Payment i an amount equal to such Available Funds
Shortfall.
(c)__ Upon receipt of Insured Payments from the Note Insurer, the
Indenture Trustee shall immediately deposit such Insured Payments in the
Collection Account pursuant to Section 3.01(a)(ii)(F) and shall distribute
such Insured Payments, or the proceeds thereof, in accordance with Section
3.04 hereof to the Class A Noteholders exclusively. The parties hereto
recognize that the making of an Insured Payment does not relieve any of the
parties hereto of any obligation hereunder or under any of the Transaction
Documents.
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(d)__ The Indenture Trustee shall (x) receive Insured Payments as
attorney-in-fact of each of the Class A Noteholders and (y) disburse such
Insured Payment to the Class A Noteholders as set forth in Section 3.04 hereof.
The Note Insurer shall be entitled to receive the related Reimbursement Amount
pursuant to Sections 3.04(b)(xi) hereof with respect to each Insured Payment
made by the Note Insurer. The Trust hereby agrees for the benefit of the Note
Insurer (and each Noteholder, by acceptance of its Notes, will be deemed to
have agreed) that to the extent the Note Insurer makes Insured Payments, either
directly or indirectly (as by paying through the Indenture Trustee), to the
Class A Noteholders, the Note Insurer will be entitled to receive the related
Reimbursement Amount pursuant to Sections 3.04(b)(xi) hereof.
(e)__ The Class A Notes will be insured by the Note Insurance Policy
pursuant to the terms set forth therein, notwithstanding any provisions to the
contrary contained in this Indenture. All amounts received under the Note
Insurance Policy shall be used solely for the payment when due to the Class A
Noteholders of the Insured Payment.
(f)__ If a Responsible Officer of the Indenture Trustee at any time has
actual knowledge that there will not be sufficient moneys in the Collection
Account to make required payments of principal and interest on the Pledged
Notes in an amount necessary to subsequently make all required payments of
principal and interest to the Class A Noteholders on the applicable Payment
Date, the Indenture Trustee shall immediately notify the Note Insurer or its
designee by telephone, promptly confirmed in writing by overnight mail or
facsimile transmission, of the amount of such deficiency. In addition, if a
Responsible Officer of the Indenture Trustee has actual notice that any of the
Class A Noteholders have been required to disgorge payments of principal or
interest on the Class A Notes pursuant to a final judgment by a court of
competent jurisdiction that such payment constitutes a voidable preference to
such Holders within the meaning of any applicable bankruptcy laws, then the
Indenture Trustee shall notify the Note Insurer or its designee of such fact by
telephone, promptly confirmed in writing by overnight mail or facsimile
transmission. Such notice shall be in addition to the procedures set forth in
the Note Insurance Policy for making a claim under the Note Insurance Policy.
(g)__ Anything herein to the contrary notwithstanding, any payment with
respect to the principal of or interest on the Class A Notes which is made with
moneys received pursuant to the terms of the Note Insurance Policy shall not be
considered payment by the Issuer of the Class A Notes, shall not discharge the
Issuer in respect of its obligation to make such payment and shall not result
in the payment of or the provision for the payment of the principal of or
interest on the Class A Notes within the meaning of Section 9.01 hereof. The
Issuer and the Indenture Trustee acknowledge that, without the need for any
further action on the part of the Note Insurer, the Issuer, the Indenture
Trustee or the Note Registrar (i) to the extent the Note Insurer makes
payments, directly or indirectly, on account of principal of or interest on the
Class A Notes to the Holders of such Class A Notes, the Note Insurer will be
fully subrogated to the rights of such Holders to receive such principal and
interest from the Issuer, and (ii) the Note Insurer shall be paid such
principal and interest in its capacity as a Holder of the Class A Notes, but
only from the sources and in the manner provided herein for the payment of such
principal and interest in each case only after the Holders of the Class A Notes
have received payment of all scheduled payments of principal and interest due
thereon.
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(h)__ Without limiting the provisions of Article VIII hereof or the rights
or interests of the Holders as otherwise set forth herein, so long as no Note
Insurer Default exists, the Indenture Trustee shall cooperate in all respects
with any reasonable request by the Note Insurer for action to preserve or
enforce the Note Insurer's rights or interests under this Indenture, including,
without limitation, upon occurrence and continuance of an Event of Default, a
request to take any one or more of the following actions:
(i) institute proceedings for the collection of all amounts then
payable on the Class A Notes, or under this Indenture in respect of
the Class A Notes, enforce any judgment obtained and collect from the
Issuer moneys adjudged due;
(ii) institute proceedings from time to time for the complete or
partial foreclosure of this Indenture; and
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights
and remedies of the Note Insurer hereunder.
(i)__ The parties hereto grant to the Note Insurer, as long as no Note
Insurer Default is continuing, the right of prior approval of amendments
or supplements to the Transaction Documents and of the exercise of any
option, vote, right, power or the like available to the Class A
Noteholders hereunder.
SECTION 3.04 Disbursements From Collection Account
------ -------------------------------------
(a)__.
(a) On each Payment Date, the Indenture Trustee shall pay the Available
Funds then on deposit in the Collection Account with respect to the immediately
preceding Collection Period, as indicated on the Monthly Statement, as
applicable, to the Persons to which such money is then due, calculated on the
basis of and in accordance with the Monthly Statement for the related
Collection Period; provided, however, that in the event the Servicer fails to
deliver a Monthly Statement by a Payment Date the Indenture Trustee shall,
nevertheless, pay interest on the Notes from the sources of funding set forth
herein, in each case in an amount equal to the product of (i) one-twelfth, (ii)
the Note Rate and (iii) the related Note Principal Balance, as reflected on the
Monthly Statement most recently delivered by the Servicer (net of any principal
payments in respect thereof on the immediately preceding Payment Date).
14
(b)__ On each Payment Date, the Indenture Trustee shall pay such money to
the following Persons, in the following order of priority, without duplication:
(i) To the related Originator by wire transfer of immediately
available funds, the aggregate amount of any Excluded Amounts or
Initial Unpaid Amounts inadvertently deposited in the Collection
Account;
(ii) From the amount then remaining in the Collection Account, to
any party entitled thereto, by check, any indemnity payments paid
pursuant to any Contract, to the extent that such amounts are
inadvertently deposited in the Collection Account;
(iii) From the Available Funds then remaining in the Collection
Account, to the Servicer by wire transfer to the account designated in
writing by the Servicer of immediately available funds, the aggregate
amount of the following, in the following priority:
An amount equal to the unreimbursed Servicer Advances (other
than Servicer Advances for the current Collection Period);
An amount equal to the Servicer Fee owing on such Payment
Date, plus any unpaid Servicer Fee owing from prior Collection
Periods; and
Any Servicing Charges inadvertently deposited in the
Collection Account;
(iv) From the Available Funds then remaining in the Collection
Account, to the Back-up Servicer by wire transfer to the account
designated in writing by the Back-up Servicer of immediately available
funds, an amount equal to the Back-up Servicer Fee owing on such
Payment Date, plus any unpaid Back-up Servicer Fees from prior
Collection Periods;
(v) From the Available Funds then remaining in the Collection
Account, to the Note Insurer by wire transfer to the account
designated in writing by the Note Insurer, an amount equal to the
Premium Amount owing on such Payment Date, plus any unpaid Premium
Amounts from prior Collection Periods;
(vi) From the Available Funds then remaining in the Collection
Account, to the Indenture Trustee by wire transfer to the account
designated in writing by the Indenture Trustee, an amount equal to the
Indenture Trustee Fees owing on such Payment Date, plus any unpaid
Indenture Trustee Fees from prior Collection Periods;
15
(vii) From the Available Funds then remaining in the Collection
Account, to the Indenture Trustee by wire transfer to the account
designated in writing by the Indenture Trustee, an amount equal to the
reimbursable expenses due and unpaid to the Indenture Trustee in
accordance with Section 7.07(a)(ii) hereof, up to the $30,000
limitation set forth in Section 7.07(a)(ii);
(viii) From (x) the Available Funds then remaining in the
Collection Account plus (y) the proceeds of any applicable Insured
Payment, to the Class A Noteholders, the Class A Note Interest for the
related Collection Period;
(ix) From the Available Funds then remaining in the Collection
Account, to the extent that such disbursement shall not result in an
Available Funds Shortfall or any unpaid Reimbursement Amount, from
Available Funds then remaining in the Collection Account to the Class
B Noteholders an amount equal to the Class B Note Priority Interest
for the related Collection Period;
(x) From (x) the Available Funds then remaining in the Collection
Account plus (y) the proceeds of any applicable Insured Payment, until
the Class A Note Principal Balance has been reduced to zero, to the
Class A Noteholders from the Available Funds then remaining in the
Collection Account, the sum of (a) the Class A Base Principal
Distribution Amount for such Payment Date and (b) any Class A Overdue
Principal;
(xi) From the Available Funds then remaining in the Collection
Account, to the Note Insurer by wire transfer to the account
designated in writing by the Note Insurer, the Reimbursement Amount,
if any, owing on such Payment Date;
(xii) From Available Funds then remaining in the Collection
Account, to the Class B Noteholders an amount equal to the Class B
Note Junior Interest for the related Collection Period;
(xiii) From the Available Funds then remaining in the Collection
Account, until the Class B Note Principal Balance has been reduced to
zero, to the Class B Noteholders, from the Available Funds then
remaining in the Collection Account, the sum of (a) the Class B Base
Principal Distribution Amount for such Payment Date and (b) any Class
B Overdue Principal, allocated, first, to the Class B Collateralized
Note Balance, and, second, to the Class B Uncollateralized Note
Balance; provided, however, that if a Restricting Event exists on such
Payment Date and the Class A Note Principal Balance on such Payment
Date (after giving effect to all prior payments of principal to the
Class A Noteholders made on such Payment Date) exceeds zero, the
amount otherwise required to be paid to the Class B Noteholders under
this clause (xiii), shall instead be paid to the Class A Noteholders
pursuant to this clause (xiii) during such time as a Restricting Event
is continuing as an additional reduction of the Class A Note Principal
Balance up to the amount necessary to reduce the Class A Note
Principal Balance to zero;
16
(xiv) From the Available Funds then remaining in the Collection
Account, to the Indenture Trustee, the Indenture Trustee Expenses then
due, together with any Indenture Trustee Expenses from prior
Collection Periods, in excess of the $30,000 limitation set forth in
Section 7.07(a)(ii) hereof, and up to the aggregate $45,000 limitation
set forth in Section 7.07(a)(iii);
(xv) From the Available Funds then remaining in the Collection
Account, to the Servicer by wire transfer of immediately available
funds to the account designated in writing by the Servicer, any other
amounts due the Servicer as expressly provided in the Servicing
Agreement; and
(xvi) From the Available Funds then remaining in the Collection
Account, to the Residual Holders, as sponsors of the Trust, any
remaining Available Funds; provided, however, that
(I) if a Restricting Event does not exist on such
Payment Date, but if any payment of funds to the
Residual Holders on such Payment Date would result
in the Residual Balance being less than 3% of the
Initial Aggregate Collateral Balance such entire
remaining amount of Available Funds then remaining,
regardless of any allocation to principal or
interest in respect of the Residual Balance, shall
not be paid to the Residual Holders but shall
instead be paid (x) if the Class A Note Principal
Balance on such Payment Date (after giving effect
to all payments of principal to the Class A
Noteholders made on such Payment Date pursuant to
clauses (x) and (xiii)) exceeds zero, to the Class
A Noteholders pursuant to this clause (xvi) as an
additional reduction of the Class A Note Principal
Balance up to the amount necessary to reduce such
balance to zero; and (y) if the Class A Note
Principal Balance is zero, but the Class B Note
Principal Balance on such Payment Date (after
giving effect to all payments of principal to the
Class B Noteholders made on such Payment Date
pursuant to clause (xiii)) exceeds zero, the amount
otherwise required to be paid to the Residual
Holders under this clause (xvi) shall instead be
paid to the Class B Noteholders pursuant to this
clause (xvi) as an additional reduction of the
Class B Note Principal Balance up to the amount
necessary to reduce such balance to zero; and
(II) if a Restricting Event exists on such Payment Date,
the amount otherwise required to be paid to the
Residual Holders under this clause (xvi) shall
instead be paid (x) if the Class A Note Principal
Balance on such Payment Date (after giving effect
to all payments of principal to the Class A
Noteholders made on such Payment Date pursuant to
clauses (x) and (xiii)) exceeds zero, to the Class
A Noteholders pursuant to this clause (xvi) during
17
such time as a Restricting Event is continuing as
an additional reduction of the Class A Note
Principal Balance up to the amount necessary to
reduce such balance to zero; (y) if the Class A
Note Principal Balance is zero, but the Class B
Note Principal Balance on such Payment Date (after
giving effect to all payments of principal to the
Class B Noteholders made on such Payment Date
pursuant to clause (xiii)) exceeds zero, the amount
otherwise required to be paid to the Residual
Holders under this clause (xvi) shal instead be
paid to the Class B Noteholders pursuant to this
clause (xvi) during such time as a Restricting
Event is continuing as an additional reduction of
the Class B Note Principal Balance up to the amount
necessary to reduce such balance to zero; and (z)
if the Class A Note Principal Balance and the Class
B Note Principal Balance are each zero, such amount
shall be paid to the Residual Holders pursuant to
this clause (xvi).
(c)__ All payments to Noteholders shall be made on each Payment Date to
each Noteholder of record on the related Record Date by check, or, if requested
by a Noteholder holding $5,000,000 or more of any Class of Notes, by wire
transfer to the account designated in writing in the form of Exhibit B hereto
(or such other account as such Noteholder may designate in writing) delivered
to the Indenture Trustee on or prior to the related Determination Date, in
immediately available funds, in amounts equal to such Noteholder's pro rata
share (based on the aggregate Class A Percentage Interest in the case of the
Class A Noteholders and the aggregate Class B Percentage Interest in the case
of the Class B Noteholders) of such payment.
SECTION 3.05 Statements to Noteholders
------ -------------------------
(a)__
(a) If the Servicer has delivered the Monthly Statement on the preceding
Determination Date, then on each Payment Date the Servicer will forward it to
the Note Insurer, and the Indenture Trustee will mail to the Rating Agencies
and each Noteholder, a statement (which statement will be prepared by the
Servicer and furnished to the Indenture Trustee in the Monthly Statement
delivered pursuant to Section 4.07 of the Servicing Agreement or otherwise
pursuant to this Indenture), setting forth the following information (per
$1,000 of Initial Class A Note Principal Amount or of Initial Class B Note
Principal Amount (as the case may be) as to (i) and (ii) below):
(i) With respect to a statement to a Class A Noteholder or a Class B
Noteholder, the amount of such payment allocable to such Noteholder's
Percentage Interest of the Class A or Class B Principal Distribution
Amount and Class A or Class B Overdue Principal, as applicable;
(ii) With respect to a statement to a Noteholder, the amount of such
payment allocable to such Noteholder's Percentage Interest of Class A or
Class B Note Current Interest and Class A or Class B Overdue Interest,
as applicable;
18
(iii) The aggregate amount of fees and compensation received by the
Servicer pursuant to Section 3.04 hereof for the Collection Period;
(iv) The aggregate Class A Note Principal Balance, the aggregate Class
B Note Principal Balance, the Class A Percentage, the Class B
Percentage, the Class A Note Factor, the Class B Note Factor, the Pool
Factor and the Aggregate Discounted Contract Principal Balance, after
taking into account all distributions made on such Payment Date;
(v) The total unreimbursed Servicer Advances with respect to the
related Collection Period;
(vi) The amount of Defaulted Contract Recoveries for the related
Collection Period and the Aggregate Discounted Contract Principal
Balance for all Contracts that became Defaulted Contracts during the
related Collection Period calculated immediately prior to the time such
Contracts became Defaulted Contracts;
(vii) The total number of Contracts and the Aggregate Discounted
Contract Principal Balance thereof, together with the number and
Aggregate Discounted Contract Principal Balance of all Contracts as to
which the Obligors, have missed one, two, three or four Scheduled
Payments (including Final Scheduled Payments), and Delinquent Contracts
reconveyed; and
(viii) During the Pre-Funding Period only, the amount on deposit in
the Pre-Funding Account and the Capitalized Interest Account after
giving effect to withdrawals from such Accounts on such Payment Date.
(b)__ By January 31 of each calendar year, commencing January 31, 1999, or
as otherwise required by applicable law, the Indenture Trustee shall furnish to
each Person who at any time during the immediately preceding calendar year was
a Noteholder a statement prepared by the Servicer, and delivered to the
Indenture Trustee, containing the applicable aggregate amounts with respect to
such Noteholder hereof for such calendar year or, in the event such Person was
a Noteholder during a portion of such calendar year, for the applicable portion
of such year, for the purposes of such Noteholder's preparation of Federal
income tax returns. In addition to the foregoing the Servicer and the Indenture
Trustee (to the extent the Servicer has provided the necessary information to
the Indenture Trustee) shall make available to Noteholders, the Rating Agencies
or the Note Insurer any other information provided to the Servicer or the
Indenture Trustee or otherwise in the Indenture Trustee's possession reasonably
requested by Noteholders, the Rating Agencies or the Note Insurer in connection
with tax matters, in accordance with the written directions of the Servicer.
(c)__ The Servicer shall furnish to each Noteholder and the Note Insurer,
on request, during the term of this Indenture, such periodic, special or other
reports or information not specifically provided for herein, as shall be
necessary, reasonable or appropriate with respect to such Noteholder or the
Note Insurer all such reports or information to be provided by and in
accordance with such applicable instructions and directions as the Noteholder
or the Note Insurer may reasonably require and as the Servicer may reasonably
be able to produce; provided, however, that, as a condition of furnishing such
materials, the Servicer may require such Noteholder to execute a
confidentiality agreement in form and substance acceptable to the Servicer.
19
(d)__ The Indenture Trustee shall promptly send to the Note Insurer, each
Noteholder and to the Rating Agencies in writing:
(i) Notice of any breach by the Transferors, the Trust, the Originators
or the Servicer of any of their respective representations, warranties and
covenants made herein, in the Servicing Agreement or in any other
Transaction Document;
(ii) A copy of each Servicer compliance statement delivered to the
Indenture Trustee pursuant to Section 4.08 of the Servicing Agreement;
(iii) Notice of any breach by the Indenture Trustee of its
representations and warranties set forth in Section 7.17 hereof of which a
Responsible Officer has actual knowledge;
(iv) Notice of the occurrence of any Event of Default or Restricting
Event;
(v) Notice of any Event of Servicing Termination or default under the
Insurance Agreement, or any other default under any of the Transaction
Documents;
(vi) Notice of any Event of Back-up Servicing Termination; and
(vii) Notice of the resignation or removal of the Indenture Trustee;
provided, however, that in each case the Indenture Trustee shall only be
required to send such notices and other items to the Noteholders to the extent
that the Indenture Trustee has itself received the related information and the
Noteholders have not already received such notice or other items. Except as
may be specifically provided herein, the Indenture Trustee shall have no
obligation to seek to obtain any such information.
SECTION 3.06 Compliance With Withholding Requirements.
------ -----------------------------------------
Notwithstanding any other provisions of this Indenture, the Indenture
Trustee, as paying agent for and on behalf of, and at the direction of the
Servicer, shall comply with all Federal withholding requirements respecting
payments (or advances thereof) to Noteholders as may be applicable to
instruments constituting indebtedness for Federal income tax purposes. Any
amounts so withheld shall be treated as having been paid to the related
Noteholder for all purposes of this Indenture. In no event shall the consent of
Noteholders be required for any withholding.
20
ARTICLE IV
REMOVAL OF NON-CONFORMING PLEDGED
PROPERTY; SUBSTITUTION OF CONTRACTS
SECTION 4.01 Removal of Non-Conforming Pledged Property.
------ -------------------------------------------
(a)__
(a) Upon discovery by the Trust, the Note Insurer, the Servicer (or any of
its successors or assigns) or in the case of the Indenture Trustee, upon actual
knowledge of a Responsible Officer of the Indenture Trustee, of a breach of any
of the representations or warranties set forth in Section 2.02 of the Servicing
Agreement that materially and adversely affects the interest of the Note
Insurer, any Noteholders, any Contract, the related Equipment or the related
Contract File, as the case may be, or if the Servicer fails to cause delivery
of evidence of filing or copies of any UCC financing statement in accordance
with the Servicing Agreement (any such event, a "Warranty Event"), the party
(including any such successor or assign) discovering such breach shall give
prompt written notice to the other parties. As of the later of (x) the last day
of the calendar month of such discovery or such receipt o notice of breach or
(y) two weeks from the date of such discovery or such receipt of notice of
breach (or, at the related Originator's election, any earlier date), the
related Originator shall deposit (or cause to be deposited) in the Collection
Account the Reacquisition Amount with respect to such Contract or replace such
Contract with a Substitute Contract pursuant to Section 4.02 hereof. Any such
nonconforming Contract so removed shall not be deemed to be a Defaulted
Contract for purposes of this Article IV.
(b)__ The obligation of an Originator to remove any Contract and to remit
the Reacquisition Amount, as appropriate, with respect to the related Contract
as to which a breach has occurred and is continuing shall constitute the sole
remedy against such Originator for such breach available to the Indenture
Trustee and the Noteholders, except to the extent that such breach is the
result of any fraud or willful misconduct on the part of such Originator.
SECTION 4.02 Substitution of Contracts.
------ --------------------------
(a)__
(a) Subject to the provisions of Sections 4.02(b) through (d) hereof, the
related Originator, with the written consent of the Note Insurer, upon notice
from the Servicer, may substitute one or more Contracts (each a "Substitute
Contract") and the related Equipment and replace a Contract and the related
Equipment that (i) becomes a Defaulted Contract or an Early Termination
Contract or (ii) is the subject of a Prepayment, a Casualty Loss or a Warranty
Event.
(b)__ Each Substitute Contract shall be a Contract, with respect to which
all of the representations and warranties set forth in Section 2.02 of the
Servicing Agreement were true as of the related Substitute Contract Cut-Off
Date.
21
(c)__ Prior to any substitution pursuant to this Section 4.02, the
Indenture Trustee shall have received an executed transfer agreement between
the related Transferor and the related Originator providing for the
unconditional sale and transfer of the Substitute Contracts and related
Equipment by such Originator to such Transferor, the List of Substitute
Contracts reflecting the substitution, a release request, in form and substance
acceptable to the Transferors and the Indenture Trustee, with respect to the
Contract being replaced and the originally executed trust receipt relating
thereto.
(d)__ No such substitution under this Section 4.02 shall be permitted on
any Transfer Date if:
(i) on a cumulative basis from the Initial Cut-Off Date, the sum
of the Discounted Contract Principal Balances (as of the related
Substitute Cut-Off Date) of such Substitute Contracts would exceed
ten percent (10%) of the Initial Aggregate Collateral Balance;
(ii) as of the related Substitute Cut-Off Date, the Substitute
Contracts then being pledged have an Aggregate Discounted Contract
Principal Balance that is less than the Aggregate Discounted
Contract Principal Balance of the Contracts being replaced;
(iii) as of the related Substitute Cut-Off Date, any of the
Substitute Contracts then being pledged have a final scheduled
payment date later than twelve months before the Class A Maturity
Date;
(iv) the Servicer makes a good faith determination that the
credit quality of the Substitute Contract is not worse than that of
the Contract being replaced; and
(v) as a result thereof, (x) the sum of the Scheduled Payments on
all Contracts, after giving effect to such substitutions, due in any
Collection Period thereafter would be less than (y) the sum of the
Scheduled Payments which would otherwise be due in such Collection
Period, prior to giving effect to such substitution.
(e)__ Upon the replacement of a Contract and the related Equipment with a
Substitute Contract as described above, the security interest of the Indenture
Trustee in such replaced Contract, the related Equipment and all proceeds
thereon shall be terminated and such replaced Contract and the related
Equipment shall be transferred to the Transferor, pledged to the Trust as
collateral security for the Pledged Notes, and such security interest shall be
assigned to the Indenture Trustee, for the benefit of the Noteholders and the
Note Insurer.
SECTION 4.03 Release of Trust Property.
------ --------------------------
(a)__
(a) The Indenture Trustee when required by the provisions of this Indenture
and with the prior written consent of the Note Insurer shall execute
instruments provided to it in order to release property from the Lien of this
Indenture, in a manner and under circumstances that are not inconsistent with
the provisions of this Indenture, the Servicing Agreement and the Receivables
Pledge Agreement. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article IV shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any monies.
22
(b)__ The Indenture Trustee shall, at such time as the parties'
obligations under this Indenture terminate pursuant to Section 9.01 hereof,
release any remaining portion of the Trust Property that secured the Notes from
the Lien of this Indenture and release to the Trust or any other Person
entitled thereto any funds then on deposit in the Collection Account and any
subaccounts thereof as may have been established pursuant to Section 3.02(b);
provided, that with the prior written consent of the Note Insurer, the Trust
Property may be released after the date on which there are no Notes outstanding
and all sums due the Indenture Trustee and the Note Insurer pursuant to this
Indenture, the Insurance Agreement and any other Transaction Document have each
been paid and prior to the expiration of the 123-day period reference in
Section 9.01. The Indenture Trustee shall release property from the Lien of
this Indenture pursuant to this Section 4.03(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel, the
prior written consent of the Note Insurer (so long as no Note Insurer Default
has occurred and is continuing) and (if required by the TIA) Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(1) meeting the
applicable requirements of Section 10.05 hereof.
ARTICLE V
THE NOTES
SECTION 5.01 The Notes.
------ ----------
(a)__
(a) The Class A Notes will be issued in denominations of $100,000 and $1,000
increments above $100,000 up to the Initial Class A Note Principal Balance and
the Class B Notes will be issued in denominations of $100,000 and $1,000
increments above $100,000 up to the Initial Class B Note Principal Balance.
Each Note shall represent a validly issued and binding obligation, but only if
such Note has been executed on behalf of the Trust by a Responsible Officer of
the Owner Trustee by manual signature, and authenticated on behalf of the
Indenture Trustee by a Responsible Officer of the Indenture Trustee by manual
signature. Each Note bearing the manual signatures of individuals who were, at
the time when such signatures were affixed, authorized to sign on behalf of the
Trust shall continue to be a valid and binding obligation, notwithstanding that
such individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of such Note or did not hold such offices at the
date of such Note. No Note shall be entitled to any benefit under this
Indenture, or be valid for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form set forth in the form
of the Notes of the related Class, each attached as Exhibits hereto, signed by
the Indenture Trustee by manual signature, and such signature upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder. All Class A Notes shall be
substantially in the form set forth in Exhibit C and all Class B Notes shall be
substantially in the form set forth in Exhibit D hereto. Each Note shall be
dated the date of its authentication. Neither the Notes nor the Contracts are
insured by the Federal Deposit Insurance Corporation or any other governmental
agency.
23
(b)__ It is intended that the Notes be registered so as to participate in
a global book-entry system with the Depository, as set forth herein. The Class
A Notes shall, except as otherwise provided in the next paragraph, be initially
issued in the form of a single fully registered Class A Note with a
denomination equal to the Initial Class A Note Principal Balance. The Class B
Notes shall, except as otherwise provided in the next paragraph, be initially
issued in the form of a single fully registered Class B Note, with a
denomination equal to the Initial Class B Note Principal Balance. Upon initial
issuance, the ownership of each such Class A Note and Class B Note shall be
registered in the Register in the name of Cede & Co., or any successor thereto,
as nominee for the Depository.
The Trust and the Indenture Trustee are hereby authorized to execute
and deliver the Representation Letter with the Depository.
With respect to Notes registered in the Register in the name of Cede &
Co., as nominee of the Depository, the Trust and the Indenture Trustee shall
have no responsibility or obligation to Direct Participants or Indirect
Participants or beneficial owners for which the Depository holds Notes from
time to time as a trustee. Without limiting the immediately preceding sentence,
the Trust, the Servicer and the Indenture Trustee shall have no responsibility
or obligation with respect to (i) th accuracy of the records of the Depository,
Cede & Co., or any Direct Participants or Indirect Participant with respect to
any ownership interest in any Note, (ii) the delivery to any Direct
Participants or Indirect Participant or any other Person, other than a
Noteholder, of any notice with respect to the Notes or (iii) the payment to any
Direct Participants or Indirect Participant or any other Person, other than a
Noteholder, of any amount with respect to any distribution of principal or
interest on the Notes. No Person other than a Noteholder shall receive a
certificate evidencing a Class A Note or Class B Note.
Upon delivery by the Depository to the Indenture Trustee of written
notice to the effect that the Depository has determined to substitute a new
nominee in place of Cede & Co., and subject to the provisions hereof with
respect to the payment of interest by the mailing of checks or drafts to the
Noteholders appearing as Noteholders at the close of business on a Record Date,
the name "Cede & Co." in this Indenture shall refer to such new nominee of the
Depository.
(c)__ In the event that (i) the Depository or the Servicer advises the
Indenture Trustee in writing that the Depository is no longer willing or able
to discharge properly its responsibilities as nominee and depository with
respect to the Notes and the Servicer or the Depository is unable to locate a
qualified successor or (ii) the Indenture Trustee at its sole option elects to
terminate the book-entry system through the Depository, the Notes shall no
longer be restricted to being registered in the Register in the name of Cede &
Co. (or a successor nominee) as nominee of the Depository. At that time, the
Servicer may determine that the Notes shall be registered in the name of and
deposited with a successor depository operating a global book-entry system, as
may be acceptable to the Servicer, or such depository's agent or designee but,
if the Servicer does not select such alternative global book-entry system, then
the Notes may be registered in whatever name or names Noteholders transferring
Notes shall designate, in accordance with the provisions hereof; provided,
however, that any such registration shall be at the expense of the Servicer.
24
(d)__ Notwithstanding any other provision of this Indenture to the
contrary, so long as any Note is registered in the name of Cede & Co., as
nominee of the Depository, all distributions of principal or interest on such
Notes as the case may be and all notices with respect to such Notes as the case
may be shall be made and given, respectively, in the manner provided in the
Representation Letter.
In the event any Notes are issued in book-entry form with the
Depository: (i) the Indenture Trustee may deal with the Depository as the
authorized representative of the Noteholders; (ii) the rights of the
Noteholders shall be exercised only through the Depository and shall be limited
to those established by law and agreement between the Noteholders and the
Depository; (iii) the Depository will make book-entry transfers among the
direct participants of the Depository and will receive and transmit
distributions of principal and interest on the Notes to such direct
participants; and (iv) the direct participants of the Depository shall have no
rights under this Indenture under or with respect to any of the Notes held on
their behalf by the Depository, and the Depository may be treated by the
Indenture Trustee and its agents, employees, officers and directors as the
absolute owner of the Notes for all purposes whatsoever.
SECTION 5.02 Initial Issuance of Notes.
------ --------------------------
(a)__
(a) The Indenture Trustee shall, upon the written instruction of the Trust,
in exchange for the Pledged Property, authenticate and deliver Class A Notes
and Class B Notes executed by the Trust in authorized denominations equaling in
the aggregate the Initial Class A Note Principal Balance and the Initial Class
B Note Principal Balance, respectively.
(b)__ Notwithstanding anything herein to the contrary, in the case of the
initial sale of a Note, the acquirer of such Note shall be deemed to have
represented and warranted (i) that it is not acquiring its interest in the Note
with the assets of (A) an employee benefit plan (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
which is subject to Title I of ERISA, (B) a plan or other arrangement described
in Section 4975 of the Cod or (C) any entity whose underlying assets include
plan assets by reason of an investment in such entity by a plan described in
(A) or (B) above (collectively, a "Benefit Plan Investor") or (ii) that it is
purchasing Class A Notes and its purchase and continued holding of the Class A
Notes will be covered by a U.S. Department of Labor Class Exemption.
25
SECTION 5.03 Registration of Transfer and Exchange of Notes.
------ -----------------------------------------------
(a)__
(a) The Indenture Trustee, as initial Note Registrar, shall maintain, or
cause to be maintained, at the Corporate Trust Office, a register (the
"Register") in which the Indenture Trustee shall provide for the registration
of Notes and of transfers and exchanges of Notes as herein provided. All Notes
shall be so registered.
(b)__ Upon surrender for registration of transfer of any Note at the
Corporate Trust Office, the Trust shall execute, and the Indenture Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes in authorized denominations of the same
class, of a like aggregate Class A Percentage Interest or Class B Percentage
Interest, as the case may be, dated the date of such authentication; provided
that, none of the Notes may be transferred to the Transferors or any of their
respective Affiliates unless the Indenture Trustee, the Noteholders, the Note
Insurer and the Rating Agencies shall have been furnished with an Opinion of
Counsel experienced in Federal bankruptcy matters to the effect that such sale
or transfer would not adversely affect the character of the conveyance of the
Conveyed Assets to the Transferors as an absolute transfer.
(c)__ At the option of a Noteholder, Notes may be exchanged for other
Notes of the same Class (of authorized denominations in the case of Class A
Notes and Class B Notes) of a like aggregate Class A Percentage Interest or
Class B Percentage Interest, as the case may be, upon surrender of the Notes to
be exchanged at any such office or agency. Whenever any Notes are so
surrendered for exchange, the Trust shall execute, and the Indenture Trustee
shall authenticate and deliver the Notes that the Noteholder making the
exchange is entitled to receive. Every Note presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer substantially in the form of Exhibit H hereto, duly
executed by the Noteholder thereof or its attorney duly authorized in writing.
(d)__ No service charge shall be made for any registration of transfer of
any Note or for the exchange of any Note, but the Indenture Trustee may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer of any Note or exchange of any Note.
(e)__ Once definitive Notes have been issued, no sale or other transfer
of any Note shall be made to any Person unless such Person delivers to the
Indenture Trustee a completed representation letter in substantially the form
attached as either Exhibit F or Exhibit G hereto.
(f)__ All Notes surrendered for registration of transfer and all Notes
surrendered for exchange shall be delivered to the Indenture Trustee and
cancelled and subsequently destroyed by the Indenture Trustee in accordance
with its customary practices in effect from time to time.
26
(g)__ Notwithstanding the foregoing, in the case of any sale or other
transfer of record or beneficial ownership of a Note, the transferee of such
Note shall be deemed to have represented and warranted (i) that it is not a
Benefit Plan Investor or (ii) that it is purchasing the Class A Notes and its
purchase and continued holding of the Class A Notes will be covered by a U.S.
Department of Labor Class Exemption.
SECTION 5.04 Mutilated, Destroyed, Lost or Stolen Notes.
------ -------------------------------------------
If any mutilated Note is surrendered to the Indenture Trustee, or the
Indenture Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, and there is delivered to the Trust, the Servicer
and the Indenture Trustee such security or indemnity satisfactory to each of
them as may be required by them to save each of them harmless, then, in the
absence of notice to the Indenture Trustee that any such Note has been acquired
by a bona fide purchaser, the Trust shall execute and the Indenture Trustee
shall authenticate and deliver in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note a new Note of like Class and
Percentage Interest. In connection with the issuance of any new Note under this
Section 5.04, the Indenture Trustee may require the payment by the Noteholder
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto. Any duplicate Note issued pursuant to this Section
5.04 shall constitute a Note duly issued by the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Note shall be found at any time.
SECTION 5.05 Persons Deemed Owners.
------ ----------------------
The Note Insurer and the Indenture Trustee may treat the Person in whose name
any Note is registered as the owner of such Note for the purpose of receiving
distributions pursuant to Section 3.04 hereof and for all other purposes
whatsoever, and the Note Insurer and the Indenture Trustee shall not be
affected by any notice to the contrary.
SECTION 5.06 Access to List of Noteholders' Names and Addresses.
------ ---------------------------------------------------
The Indenture Trustee will furnish or cause to be furnished to the Servicer
within fifteen (15) days after receipt by the Indenture Trustee of a request
therefor from the Servicer in writing, a list, of the names and addresses of
the Noteholders as of the most recent Record Date. If one or more Noteholders
representing a Class A Percentage Interest or a Class B Percentage Interest of
not less than 25% (an "Applicant" shall apply in writing to the Indenture
Trustee, and such application shall state that the Applicant desires to
communicate with other Noteholders with respect to its rights under this
Indenture or under the Notes, then the Indenture Trustee shall, within five (5)
Business Days after the receipt of such application, send such notice to the
current list of Noteholders. Every Noteholder, by receiving and holding a Note,
agrees with the Trust, the Servicer and the Indenture Trustee that none of the
Trust, the Servicer or the Indenture Trustee shall be held accountable by
reason of the disclosure of any such information, regardless of the source from
which such information was derived.
27
SECTION 5.07 Acts of Noteholders.
------ --------------------
(a)__
(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 an agent duly
appointed in writing, and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Indenture Trustee and where required to the Trust, the Note Insurer or
the Servicer. 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 7.01 hereof) conclusive in favor of the Indenture
Trustee, the Trust, the Originators and the Servicer, if made in the manner
provided in this Section 5.07.
(b)__ The fact and date of the execution by any Noteholder of any such
instrument or writing may be proven in any reasonable manner which the
Indenture Trustee deems sufficient.
(c)__ The ownership of Notes shall be proven by the Register.
(d)__ Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Noteholder shall bind every holder of every Note
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done or omitted to be done by the
Indenture Trustee, the Trust or the Servicer in reliance thereon, whether or
not notation of such action is made upon such Note.
SECTION 5.08 No Proceedings.
------ ---------------
By its acceptance of a Note, each Noteholder shall be deemed to have agreed
that it will not directly or indirectly institute, or cause to be instituted,
against the Residual Holders or the Trust any bankruptcy or insolvency
proceeding so long as there shall not have elapsed one year plus one day since
the maturity date of the latest maturing securities of the Trust.
ARTICLE VI
THE TRUST
SECTION 6.01 Liability of the Trust.
------ -----------------------
The Trust shall be liable for payments in respect of the Notes in accordance
herewith only to the extent of the obligations specifically undertaken by the
Trust herein.
SECTION 6.02 Limitation on Liability of the Trust.
------ -------------------------------------
Neither the Owner Trustee nor the directors, officers, employees or agents of
the Trust or the Owner Trustee shall be under any liability to the Indenture
Trustee, the Noteholders, the Originators, the Servicer, the Residual Holders
or any other Person hereunder or pursuant to any document delivered hereunder,
28
it being expressly understood that all such liability is expressly waived and
released as a condition of, and as consideration for, the Trust's execution and
delivery of this Indenture and the issuance of the Notes. The Trust shall not
be under any liability to the Indenture Trustee, the Noteholders, the
Originators, the Servicer, the Residual Holders or any other Person for any
action taken or for refraining from the taking of any action in its capacity as
Trust pursuant to this Indenture whether arising from express or implied duties
under this Indenture; provided, however, that this provision shall not protect
the Trust against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith, misrepresentation or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Trust may rely in good faith on any document of any kind
prima facie properly executed and submitted by any other Person respecting any
matters arising hereunder.
SECTION 6.03 Indemnity for Liability Claims.
------ -------------------------------
The Residual Holders, on behalf of the Trust, shall be deemed to have agreed
to indemnify, defend and hold harmless the Indenture Trustee (which shall
include any of its directors, employees, officers and agents), the Owner
Trustee (which shall include any of its directors, employees, officers and
agents), the Noteholders and the Note Insurer against and from any and all
costs, expenses, losses, damages, claims and liabilities arising ou of or
resulting from the use, repossession or operation of the Equipment to the
extent not covered by the Servicer's indemnity provided by Section 5.01 of the
Servicing Agreement; provided, however, that such amounts shall be payable
solely from amounts payable to the Residual Holders pursuant to Section
3.04(b)(xvi) hereof.
SECTION 6.04 Liabilities.
------ ------------
Notwithstanding any provision of this Indenture, by entering into this
Indenture, the Trust and the Residual Holders agree to be liable, directly to
the injured party, for the entire amount of any losses, claims, damages or
liabilities (other than those losses incurred by a Class A Noteholder or a
Class B Noteholder in the capacity of an investor in the Class A Notes or the
Class B Notes) imposed on or asserted against the Trust or otherwise arising
out of or based on the arrangements created by this Indenture (to the extent of
the Trust Property remaining after the Class A Noteholders, the Class B
Noteholders and the Note Insurer have been paid in full are insufficient to pay
such losses, claims, damages or liabilities).
SECTION 6.05 [Reserved].
------
Annual Statement as to Compliance.
----------------------------------
The Servicer, on behalf of the Trust, will deliver to the Indenture Trustee
and the Note Insurer, within 90 days after the end of each fiscal year of the
Trust (commencing with the fiscal year ended December 31, 1998), and otherwise
in compliance with the requirements of TIA Section 314(a)(4) an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that:
29
(i) a review of the activities of the Trust during such year and
of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Trust has complied with all conditions and
covenants under this Indenture throughout such year, or, if there
has been a default in the compliance of any such condition or
covenant, specifying each such default known to such Authorized
Officer and the nature and status thereof.
SECTION 6.07 Payment of Principal and Interest.
------ ----------------------------------
The Trust will duly and punctually pay the principal of and interest
on the Notes in accordance with the terms of the Notes and this Indenture.
Amounts properly withheld under the Code by any Person from a payment to any
Noteholder of interest and/or principal shall be considered as having been paid
by the Trust to such Noteholder for all purposes of this Indenture.
SECTION 6.08 Maintenance of Office or Agency.
------ --------------------------------
The Trust will maintain in New York, New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Trust in respect of the Notes and this
Indenture may be served. The Trust hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Trust will give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If at any time the Trust
shall fail to maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the Trust
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
SECTION 6.09 Money for Payments to be Held in Trust.
------ ---------------------------------------
(a)_
(a) On or before each Payment Date, the Trust shall deposit or cause to be
deposited in the Collection Account, but only from the sources described
herein, an aggregate sum sufficient to pay the amounts then becoming due under
the Notes, such sum to be held in trust for the benefit of the Persons entitled
thereto and (unless the paying agent is the Indenture Trustee) shall promptly
notify the Indenture Trustee of its action or failure so to act.
(b)__ The Trust will cause each paying agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee and the Note Insurer an
instrument in which such paying agent shall agree with the Indenture Trustee
(and if the Indenture Trustee acts as paying agent, it hereby so agrees),
subject to the provisions of this Section, that such paying agent will:
(i) 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;
30
(ii) give the Indenture Trustee notice of any default by the
Trust (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with
respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to
the Indenture Trustee all sums so held in trust by such paying
agent;
(iv) immediately resign as a paying agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment
of Notes if at any time it ceases to meet the standards required to
be met by a paying agent at the time of its appointment; and
(v) comply with all requirements of the Code 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.
(c)__ The Trust may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, direct
any paying agent to pay to the Indenture Trustee all sums held in trust by such
paying agent, such sums to be held by the Indenture Trustee upon the same
trusts as those upon which the sums were held by such paying agent; and upon
such a payment by any paying agent to the Indenture Trustee, such paying agent
shall be released from all further liability with respect to such money.
(d)__ Subject to Section 9.02(d) hereof and to applicable laws with
respect to the escheat of funds, any money held by the Indenture Trustee or any
paying agent in trust for the payment of any amount due with respect to any
Note and remaining unclaimed for two years after such amount has become due and
payable shall be discharged from such trust and be paid to the Trust with the
written consent and direction of the Note Insurer and shall be deposited by the
Indenture Trustee in the Collection Account; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Trust for
payment thereof (but only to the extent of the amounts so paid to the Trust),
and all liability of the Indenture Trustee or such paying agent with respect to
such trust money shall thereupon cease; provided, however, that, if such money
or any portion thereof had been previously deposited by the Note Insurer with
the Indenture Trustee for the payment of principal or interest on th Notes, to
the extent any amounts are owing to the Note Insurer, such amounts shall be
paid promptly to the Note Insurer, upon receipt of a written request by the
Note Insurer to such effect; and provided, further, that the Indenture Trustee
or such paying agent, before being required to make any such repayment, shall
at the expense of the Trust cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
31
and of general circulation in The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than thirty (30) days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Trust. The Indenture
Trustee shall also adopt and employ, at the expense of the Trust, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Notes have been called
but have not been surrendered for redemption or whose right to or interest in
moneys due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any paying agent, at the last address of record for
each such Holder).
SECTION 6.10 Existence.
------ ----------
Except as otherwise permitted by the provisions of Section 6.14, the Trust
will keep in full effect its existence, rights and franchises as a business
trust under the laws of the State of Delaware (unless, with the prior written
consent of the Note Insurer and the satisfaction of the Rating Agency
Condition, it becomes, or any successor Trust hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which cas the Trust will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes and each other instrument or
agreement included in the Pledged Property.
SECTION 6.11 Protection of Trust Property.
------ -----------------------------
The Trust intends the security interest granted pursuant to this Indenture in
favor of the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, to be prior to all other Liens in respect of the Trust Property, and
the Trust shall take all actions necessary to obtain and maintain, in favor of
the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer,
a first Lien on, and a first priority, perfected security interest in, the
Trust Property. The Trust will from time to time prepare (or shall cause to be
prepared), 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 necessary or
advisable to:
(i) grant more effectively all or any portion of the Trust Property;
(ii) maintain or preserve the Lien and security interest (and the
priority thereof) in favor of the Indenture Trustee, for the
benefit of the Noteholders and the Note Insurer, created by this
Indenture or carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
grant made or to be made by this Indenture;
(iv) enforce any of the Pledged Property;
(v) preserve and defend title to the Trust Property and the rights
of the Indenture Trustee in such Trust Property against the
claims of all persons and parties; and
32
(vi) pay all taxes or assessments levied or assessed upon the Trust
Property when due.
The Trust hereby designates the Indenture Trustee as its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by the Indenture Trustee or the Note Insurer
pursuant to this Section 6.11.
SECTION 6.12 Performance of Obligations; Servicing of Receivables.
------ -----------------------------------------------------
(a)__
(a) The Trust will not take any action, and will use its best efforts not to
permit any action to be taken by others, that would release any Person from any
of such Person's covenants or obligations under any instrument or agreement
included in the Trust Property or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectivenes of, any such instrument or agreement, except as
ordered by any bankruptcy or other court or as expressly provided in this
Indenture, the other Transaction Documents or any other instrument or
agreement.
(b)__ The Trust may contract with other Persons acceptable to the Note
Insurer to assist it in performing its duties under this Indenture, and any
performance of such duties by a Person identified to the Indenture Trustee and
the Note Insurer in an Officer's Certificate of the Trust shall be deemed to be
action taken by the Trust. Initially, the Trust has contracted with the
Servicer to substantially perform the Trust's duties under this Indenture, and
in such regard, the Trust may rely upon information provided by the Servicer in
connection with any Officer's Certificate of the Trust to be provided pursuant
to this Indenture and any other action to be take by the Trust pursuant to this
Indenture.
(c)__ The Trust will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Transaction
Documents and in the instruments and agreements included in the Trust Property,
including, but not limited to, preparing (or causing to be prepared) and filing
(or causing to be filed) all UCC financing statements and continuation
statements required to be filed by the terms of this Indenture, the Servicing
Agreement and the other Transaction Documents in accordance with and within the
time periods provided for herein and therein.
(d)__ If a Responsible Officer of the Owner Trustee shall have actual
knowledge of the occurrence of (i) an Event of Servicing Termination under the
Servicing Agreement, (ii) a Restricting Event under this Indenture or (iii) an
Event of Default under this Indenture, the Trust shall promptly notify the
Indenture Trustee, the Note Insurer and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Trust is taking in respect of
such default. If a Servicer Termination Event shall arise from the failure of
the Servicer to perform any of its duties or obligations under the Servicing
Agreement with respect to the Contracts, the Trust shall take all reasonable
steps available to it to remedy such failure.
33
SECTION 6.13 Negative Covenants.
------ -------------------
So long as any Notes are Outstanding, the Trust shall not:
(a) except as expressly permitted by this Indenture or the Transaction
Documents, sell, transfer, exchange or otherwise dispose of any of the
Trust Property, unless directed to do so by the Note Insurer;
(b) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against
any present or former Noteholder by reason of the payment of the taxes
levied or assessed upon any part of the Trust Property; or
(c) (i) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien in favor of the Indenture Trustee created by
this Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture except as may
be expressly permitted hereby, (ii) permit any lien, charge, excise,
claim, security interest, mortgage or other encumbrance (other than the
Lien of this Indenture) to be created on or extend to or otherwise arise
upon or burden the Trust Property or any part thereof or any interest
therein or the proceeds thereof (other than tax liens, mechanics' liens
and other liens that arise by operation of law, in each case on Equipment
and arising solely as a result of an action or omission of the related
Obligor), (iii) permit the Lien of this Indenture not to constitute a
valid first priority (other than with respect to any such tax, mechanics'
or other lien) security interest in the Trust Property or (iv) amend,
modify or fail to comply with the provisions of the Transaction Documents
without the prior written consent of the Note Insurer and the
satisfaction of the Rating Agency Condition.
SECTION 6.14 Trust May Consolidate, Etc. Only on Certain Terms.
------ --------------------------------------------------
(a)__
(a) The Trust shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Trust) formed by or surviving
such consolidation or merger shall be a Person organized and
existing under the laws of the United States or any State and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the
Indenture Trustee and the Note Insurer, the due and punctual payment
of the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Trust to be performed or observed, all as provided
herein;
34
(ii) immediately after giving effect to such transaction, no
Event of Default or Restricting Event shall have occurred and be
continuing;
(iii) the Trust shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee and the
Note Insurer) to the effect that such transaction will not have any
material adverse tax consequence to the Trust, the Note Insurer or
any Noteholder;
(iv) any action as is necessary to maintain the Lien and security
interest created by this Indenture shall have been taken;
(v) the Trust shall have delivered to the Indenture Trustee and
the Note Insurer an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation or merger and such supplemental
indenture comply with this Article VI and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act);
(vi) the Rating Agencies have confirmed that such transaction
will not result in the reduction or withdrawal of any rating on each
Class of Notes; and
(vii) the Note Insurer has given its prior written consent.
(b)__ The Trust shall not convey or transfer all or substantially
all of its properties or assets, including those included in the Trust
Property, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Trust the conveyance or transfer of
which is hereby restricted shall (A) be a United States citizen or a
Person organized and existing under the laws of the United States or
any State, (B) expressly assume, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee and the Note Insurer, the due
and punctual payment of the principal of and interest on all Notes
and the performance or observance of every agreement and covenant of
this Indenture and each of the Transaction Documents on the part of
the Trust to be performed or observed, all as provided herein, (C)
expressly agree by means of such supplemental indenture that all
right, title and interest so conveyed or transferred shall be
subject and subordinate to the rights of Holders of the Notes, (D)
unless otherwise provided in such supplemental indenture, expressly
agree to indemnify, defend and hold harmless the Trust against and
from any loss, liability or expense arising under or related to this
Indenture and the Notes and (E) expressly agree by means of such
supplemental indenture that such Person (or if a group of persons,
then one specified Person) shall prepare (or cause to be prepared)
and make all filings with the Commission (and any other appropriate
Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Event of Default or Restricting Event shall have occurred and be
continuing;
35
(iii) the Trust shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee and the
Note Insurer) to the effect that such transaction will not have any
material adverse tax consequence to the Trust, the Note Insurer or
any Noteholder;
(iv) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(v) the Trust shall have delivered to the Indenture Trustee and
the Note Insurer an Officer's Certificate and an Opinion of Counsel
each stating that such conveyance or transfer and such supplemental
indenture comply with this Article VI and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act);
(vi) the Rating Agencies have confirmed that such transaction
will not result in the reduction or withdrawal of any rating on each
Class of Notes; and
(vii) the Note Insurer has given its prior written consent.
SECTION 6.15 Successor or Transferee.
------ ------------------------
(a)__
(a) Upon any consolidation or merger of the Trust in accordance with Section
6.14, the Person formed by or surviving such consolidation or merger (if other
than the Issuer) shall succeed to, and be substituted for, and may exercise
every right and power of, the Trust under this Indenture with the same effect
as if such Person had been named as the Trust herein.
(b)__ Upon a conveyance or transfer of all the assets and properties of
the Trust pursuant to Section 6.14(b), the Trust will be released from every
covenant and agreement of this Indenture to be observed or performed on the
part of the Trust with respect to the Notes immediately upon the delivery of
written notice to the Indenture Trustee and the Note Insurer stating that the
Trust is to be so released.
SECTION 6.16 No Other Business.
------ ------------------
The Trust shall not engage in any business other than financing, purchasing,
owning, selling and managing the Pledged Notes in the manner contemplated by
this Indenture and the other Transaction Documents and activities incidental
thereto.
SECTION 6.17 No Borrowing.
------ -------------
The Trust shall not issue, incur, assume, guarantee or otherwise become
liable, directly or indirectly, for any Indebtedness except for (i) the Notes
36
and (ii) obligations owing from time to time to the Note Insurer . The proceeds
of the Notes shall be used exclusively to fund the Trust's purchase of the
Pledged Notes and the other assets constituting the Pledged Property and to pay
the Trust's organizational, transactional and start-up expenses.
SECTION 6.18 Guarantees, Loans, Advances and Other Liabilities.
------ --------------------------------------------------
Except as contemplated by the Servicing Agreement or this Indenture, the
Trust shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 6.19 Capital Expenditures.
------ ---------------------
The Trust shall not make any expenditure (by long-term or operating lease or
otherwise) for capital assets (either realty or personal).
SECTION 6.20 Compliance with Laws.
------ ---------------------
The Trust shall comply with the requirements of all applicable laws, the
non-compliance with which would, individually or in the aggregate, materially
and adversely affect the ability of the Trust to perform its obligations under
the Notes, this Indenture or any other Transaction Document.
SECTION 6.21 Further Instruments and Acts.
------ -----------------------------
Upon request of the Indenture Trustee or the Note Insurer, the Trust will
execute and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose of
this Indenture and the other Transaction Documents.
ARTICLE VII
THE INDENTURE TRUSTEE
SECTION 7.01 Duties of Indenture Trustee.
------ ----------------------------
(a)__
(a) The Indenture Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. If an Event of Default
of which a Responsible Officer of the Indenture Trustee shall have actual
knowledge has occurred and has not been cured or waived, the Indenture 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 such Person's
own affairs.
37
(b)__ The Indenture Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Indenture Trustee that are specifically required
to be furnished pursuant to any provision of this Indenture, shall examine them
to determine whether they conform as to form to the requirements of this
Indenture. No acceptance of, or reliance on, any such item by the Indenture
Trustee shall constitute a representation by th Indenture Trustee of the
enforceability or sufficiency of such item.
(c)__ No provision of this Indenture shall be construed to relieve the
Indenture Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however,
that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default that may have occurred, the
duties and obligations of the Indenture Trustee shall be determined
solely by the express provisions of this Indenture; the Indenture
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture; no implied covenants or obligations shall be read into
this Indenture against the Indenture Trustee; and in the absence of
bad faith on the part of the Indenture Trustee, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Indenture Trustee and, if
specifically required to be furnished pursuant to any provision of
this Indenture, conforming to the requirements of this Indenture;
(ii) The Indenture Trustee shall not be liable for an error of
judgment made in good faith by a Responsible Officer of the
Indenture Trustee unless it shall be proved that the Indenture
Trustee was negligent in ascertaining the pertinent facts;
(iii) The Indenture Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with this Indenture, pursuant to the
direction of the Holders of Notes evidencing the greatest Percentage
Interests in the related Class, but in no event less than 25%,
relating to the time, method and place of conducting any proceeding
for any remedy available to the Indenture Trustee, or exercising,
suffering or omitting t take any trust or power conferred upon the
Indenture Trustee, under this Indenture;
(iv) The Indenture Trustee shall not be charged with knowledge of
any Event of Servicing Termination, any Event of Default or
Restricting Event unless a Responsible Officer of the Indenture
Trustee obtains actual knowledge of such failure or event or the
Indenture Trustee receives written notice of such failure or event
from the Servicer, the Trust, the Note Insurer or any Noteholder;
and
38
(v) The Indenture Trustee shall have no duty to monitor the
performance of the Servicer (as custodian or otherwise), nor shall
it have any liability in connection with the malfeasance or
nonfeasance by the Servicer; provided, however, that the foregoing
shall not diminish or in any way modify any obligation of the
Back-up Servicer under the Servicing Agreement. The Indenture
Trustee shall have no liability in connection with compliance of the
Servicer or the Trust with statutor or regulatory requirements
related to the Contracts or the related Equipment. The Indenture
Trustee shall not make or be deemed to have made any representations
or warranties with respect to the Contracts or related Equipment or
the validity or sufficiency of any pledge of the Contracts to the
Trust or the Indenture Trustee. The Indenture Trustee shall have no
obligation or liability in respect of the maintenance of casualty or
liability insurance in connection with the Contracts or the related
Equipment.
(d)__ The Indenture Trustee shall not be required to expend or risk its
own funds or otherwise incur financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if
there is reasonable ground for believing that the repayment of such funds or
indemnity satisfactory to it against such risk or liability is not assured to
it, and none of the provisions contained in this Indenture shall in any event
require the Indenture Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer under this Indenture or
the Servicing Agreement except during such time, if any, as the Indenture
Trustee shall be the successor to, and be vested with the rights, duties,
powers and privileges of, the Servicer in accordance with the terms of this
Indenture.
(e)__ On each Determination Date, the Indenture Trustee shall give
notice, by facsimile, to a Servicing Officer of the Servicer and the Note
Insurer if the total amount then on deposit in the Collection Account is less
than the amount indicated in the Monthly Statement.
(f)__ The Indenture Trustee shall immediately notify the Note Insurer and
each Rating Agency of: (i) any proposed change herein or supplement hereto;
(ii) the occurrence of any Event of Default, Event of Servicing Termination,
Event of Back-up Servicing Termination or Restricting Event actually known to a
Responsible Officer of the Indenture Trustee; (iii) any proposed change of the
Indenture Trustee hereunder; (iv) any matter to be put to the Noteholders for
election hereunder; (v) any proposed exercise by the Noteholders of any option,
vote, right, power or the like hereunder; and (vi) any other matter, notice of
which is required hereunder to be given to any of the Noteholders or to the
Indenture Trustee.
SECTION 7.02 Eligible Investments.
------ ---------------------
The Servicer shall direct the Indenture Trustee to invest in Eligible
Investments, as further specified from time to time by written notice to the
Indenture Trustee executed by a Servicing Officer, any cash amounts deposited
in the Accounts pursuant to the terms of this Indenture or the Servicing
Agreement, immediately upon deposit of any such cash amounts; provided,
however, that each such Eligible Investment (i) shall mature no later than the
Business Day immediately preceding the Payment Date in respect of the
Collection Period during which such deposit was made and (ii) shall not be sold
or disposed of prior to its maturity. The Indenture Trustee shall not be liable
or responsible for the selection of or losses on any investments made by it
pursuant to and in compliance with such instructions of the Servicer pursuant
to this Section 7.02. The Indenture Trustee shall have no obligation to
initiate any investments in the absence of such written direction.
39
SECTION 7.03 Indenture Trustee's Assignment of Contracts.
------ --------------------------------------------
If in any enforcement suit or legal proceeding it is held, or in connection
with the collection of a Defaulted Contract the Servicer or its assigns
reasonably anticipates that the Servicer or its assigns may not or will not be
able to enforce a Contract on the ground that neither the Servicer nor its
assigns are a real party-in-interest or a holder entitled to enforce the
Contract, then the Indenture Trustee shall, at the Servicer's or its assigns'
expense, take such steps as the Indenture Trustee deems necessary to enforce
the Contract, including (i) bringing suit in the Indenture Trustee's name or
the names of the Noteholders and the Note Insurer and (ii) executing and
delivering all such instruments or documents as shall be required to transfer
title to a Contract to the Servicer or its assigns or otherwise enforce such
Contract.
SECTION 7.04 Certain Matters Affecting the Indenture Trustee.
------ ------------------------------------------------
Except as otherwise provided in Section 7.01:
(a)__ The Indenture Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond
or other paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b)__ The Indenture Trustee may consult with counsel and any Opinion of
Counsel or advice shall constitute full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel or
advice;
(c)__ The Indenture Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture, or to institute,
conduct or defend any litigation hereunder or in relation hereto, at the
request, order or direction of the Note Insurer (or, in the case of a Note
Insurer Default, any of the Noteholders), pursuant to the provisions of this
Indenture unless the Note Insurer or such Noteholders shall have offered to the
Indenture Trustee such security or indemnity satisfactory to it against the
costs, expenses, and liabilities that may be incurred therein or thereby that
are reasonable in the opinion of the Indenture Trustee (the unsecured indemnity
agreement of the Note Insurer being satisfactory in all such instances);
provided, however, that nothing contained herein shall relieve the Indenture
Trustee of the obligations, upon the occurrence of an Event of Default (that
has not been cured), to exercise such of the rights and powers vested in it by
this Indenture and to use the same degree of skill and care in their exercise
as a prudent Person would exercise under the circumstances in the conduct of
such Person's own affairs;
40
(d)__ The Indenture Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;
(e)__ Prior to the occurrence of an Event of Default of which a
Responsible Officer of the Indenture Trustee shall have actual knowledge and
after the curing of all Events of Default that may have occurred, the Indenture
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document,
unless requested in writing to do so by the Note Insurer or by the Holders of
Notes of any Class evidencing Percentage Interests of not less than 25% of such
Class; provided, however, that if the payment within a reasonable time to the
Indenture Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the Indenture
Trustee, not reasonably assured to the Indenture Trustee by the security
afforded to it by the terms of this Indenture, the Indenture Trustee may requir
indemnity satisfactory to it against such cost, expense or liability as a
condition to so proceeding (the unsecured indemnity agreement of the Note
Insurer being satisfactory in all such instances). The reasonable expense of
every such examination shall be paid by the requesting party. Nothing in this
clause (e) shall derogate from the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors;
and
(f)__ The Indenture Trustee may execute any of the trusts or powers or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian. The Indenture Trustee shall not be responsible for
the misconduct, negligence or for the supervision of any of the Indenture
Trustee's agents or attorneys appointed with due care by the Indenture Trustee
hereunder or that of the Originators, the Servicer or the Trust.
SECTION 7.05 Indenture Trustee Not Liable for Notes or Contracts.
------ ----------------------------------------------------
The Notes do not represent an obligation issued by the Indenture Trustee or
any Affiliate thereof. The promise to pay the Notes according to their terms
and the terms of this Indenture set forth in the Notes and in Section 2.05
hereof provides recourse to the Pledged Property and, with respect to the Class
A Notes, the Note Insurance Policy only. The Indenture Trustee does not assume
any responsibility for the accuracy of the statements herein or in the Notes
(other than as set forth in Section 7.17 and the certificate of authentication
on the Notes). The Indenture Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Notes (other than the
certificate of authentication on the Notes) or of any Contract or related
document. The Indenture Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity or enforceability of
any security interest in any Equipment or any Contract, to the perfection or
priority thereof, or to the efficacy of the Trust or any portion thereof to pay
any Note, the existence or validity of any Contract, the validity of the pledge
of any Contract to the Indenture Trustee, on behalf of the Trust, or of any
intervening assignment, the review of any Contract, any Contract File or the
Computer Tape (it being understood that neither the Indenture Trustee nor any
of its agents have reviewed or intend to revie such matters, the sole
responsibility for such review being vested in the Trust), the completeness of
any Contract File, the receipt by it or its custodian of any Contract, the
performance or enforcement of any Contract, subject to Section 4.01 of the
Servicing Agreement, the compliance by the Trust with any covenant or the
41
breach by the Originators or the Trust of any warranty or representation made
under the Servicing Agreement, under the Transfer Agreements or in any related
document or the accuracy of any such warranty or representation, any investment
of monies in the Collection Account (except to the extent that the Indenture
Trustee, in its individual capacity, is an obligor with respect to any such
investment) or any loss resulting therefrom, the acts or omissions of the
Servicer, or any Obligor, any action of the Servicer taken in the name of the
Indenture Trustee, any action by the Indenture Trustee taken at the instruction
of the Servicer or the preparation and filing of tax returns for the Trust. No
recourse shall be had for any claim based on any provision of this Indenture,
the Notes or any Contract or assignment thereof against The Chase Manhattan
Bank, in its individual capacity, and The Chase Manhattan Bank, in its
individual capacity shall not have any personal obligation, liability or duty
whatsoever to any Noteholder or any other Person with respect to any such
claim, and any such claim shall be asserted solely against the Trust or any
indemnitor who shall furnish indemnity as provided herein, except for such
liability as is determined to have resulted from its own negligence or willful
misconduct. The Indenture Trustee shall not be accountable for the use or
application by the Originators or the Trust of any of the Notes or of the
proceeds of such Notes or for the use or application of any funds paid to the
Servicer in respect of the Contracts.
SECTION 7.06 Indenture Trustee May Own Notes.
------ --------------------------------
The Indenture Trustee in its individual or any other capacity may become the
owner or pledgee of Notes with the same rights as it would have if it were not
Indenture Trustee, subject to the definition of the term "Noteholder" in Annex
A hereto.
SECTION 7.07 Indenture Trustee's Fees and Expenses.
------ --------------------------------------
(a)__
(a) The Servicer, on behalf of the Residual Holders, agrees:
(i) to pay to the Indenture Trustee, pursuant to Section
3.04(b)(vi), as applicable, on each Payment Date reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard
to the compensation of an Indenture Trustee of an express trust);
and
(ii) except to the extent otherwise expressly provided herein, to
reimburse the Indenture Trustee, pursuant to Section 3.04(b)(vii),
as applicable, upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Indenture Trustee
in accordance with any provision of this Indenture (including the
reasonable compensation and expenses and disbursements of any of its
agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or willful
misconduct; provided, that for purposes of this clause (ii), such
expenses, disbursements and advances shall be limited to an
aggregate amount of $30,000 over the life of the transaction; and
42
(iii) to reimburse the Indenture Trustee, pursuant to Section
3.04(b)(xiv), as applicable, for all reasonable expenses,
disbursements and advances that would have been paid pursuant to
Section 7.07(a)(ii) but for the $30,000 limitation; provided, that
for purposes of this clause (iii), such expenses, disbursements and
advances shall be limited to an aggregate amount of $45,000 over the
life of the transaction (for an aggregate limitation pursuant to
clauses (ii) and (iii) of $75,000).
(b)__ The Servicer's obligations under this Section 7.07 shall survive
the termination of this Indenture or the earlier resignation or removal of the
Indenture Trustee. The Indenture Trustee shall not be entitled to any other or
additional compensation or reimbursement, except as expressly provided herein
or as otherwise agreed from time to time.
(c)__ Subject to Section 7.10 hereof, the failure by the Servicer to pay
to the Indenture Trustee any compensation or other expenses shall not relieve
the Indenture Trustee of its obligations hereunder.
(d)__ In the event the Indenture Trustee performs services or incurs
expenses in the context of a proceeding described in Sections 6.01(a)(iv),
6.01(a)(v) or 6.01(a)(vii) of the Servicing Agreement, the fees for such
services and such expenses shall be considered expenses of administration for
the purposes of any bankruptcy laws or laws relating to creditors rights
generally.
SECTION 7.08 Eligibility Requirements for Indenture Trustee.
------ -----------------------------------------------
The Indenture Trustee shall at all times satisfy the requirements of TIA
Section 310(a). The Indenture Trustee hereunder shall at all times be a
corporation acceptable to the Note Insurer having its principal office in a
State, organized and doing business under the laws of any State or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, have a
deposit rating of at least "investment grade" from the Rating Agencies, and
subject to supervision or examination by federal or State authority; provided,
however, that no entity shall qualify as Indenture Trustee hereunder to the
extent that such qualification would, in itself, affect any then current rating
of the Class A Notes or the Class B Notes by the Rating Agencies. If such
corporation publishes reports of condition at least annually, pursuant to law
or the requirements of the aforesaid supervising or examining authority, then
for the purpose of this Section 7.08, 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. Any successor Indenture
Trustee's deposit ratings shall be at least "investment grade" by the Rating
Agencies. In case at any time the Indenture Trustee shall cease to be eligible
in accordance with the provisions of this Section 7.08, the Indenture Trustee
shall resign immediately in the manner and with the effect specified in Section
7.09 hereof. The Indenture Trustee shall comply with TIA Section 310(b),
including the optional provision permitted by the second sentence of TIA
Section 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities of the Trust are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
43
SECTION 7.09 Preferential Collection of Claims Against Issuer.
------ -------------------------------------------------
The Indenture Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). An Indenture Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
SECTION 7.10 Resignation or Removal of Indenture Trustee.
------ --------------------------------------------
(a)__
(a) The Indenture Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Servicer, the
Trust, the Note Insurer and each Noteholder which resignation will not become
effective until such time as a successor Indenture Trustee has been appointed
in accordance with the provisions of this Section 7.10. Upon receiving such
notice of resignation, the Servicer shall promptly appoint a successor
Indenture Trustee acceptable to the Note Insurer by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Indenture Trustee and one copy to the successor Indenture Trustee. If no
successor Indenture Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Indenture Trustee may petition any court of competent jurisdiction
for th appointment of a successor Indenture Trustee, which successor must be
reasonably acceptable to the Note Insurer and whose appointment satisfies the
Rating Agency Condition.
(b)__ If at any time the Indenture Trustee shall cease to be eligible in
accordance with the provisions of Section 7.08 hereof and shall fail to resign
after written request therefor by the Servicer, the Note Insurer, the Holders
of Notes of any Class evidencing Percentage Interests of more than 25% of such
Class, or, if at any time the Indenture Trustee shall be legally unable to act,
or shall be adjudged a bankrupt or insolvent, or a receiver of the Indenture
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Indenture Trustee or of its property or affairs for
the purpose of rehabilitation, conservation, or liquidation, then the Servicer
may, with the consent of the Note Insurer, and shall, at the direction of (i)
the Note Insurer, or (ii) at the direction of either the Holders of Notes of
any Class evidencing Percentage Interests of more than 25% of the related Class
(with the consent of the Note Insurer), remove the Indenture Trustee.
Notwithstanding anything in this Indenture to the contrary, the Note Insurer
shall have the right to remove the Indenture Trustee for "cause." For purposes
of this section, "cause" shall mean (i) the negligence or willful misconduct of
the Indenture Trustee in the performance of its duties under this Indenture or
the Insurance Agreement or (ii) the failure or unwillingness of the Indenture
Trustee to perform its duties under this Indenture or the Insurance Agreement;
provided, however the Note Insurer may not remove the Indenture Trustee for
"cause" pursuant to clause (ii) of the immediately preceding sentence unless it
has (A) consulted with the Indenture Trustee in good faith and provided notice
to the Indenture Trustee regarding any actions or omissions of the Indenture
Trustee under this Indenture or the Insurance Agreement which the Note Insurer
believes constitutes a failure or unwillingness (if such failure or
unwillingness is capable of remedy) of the Indenture Trustee to perform its
duties under this Indenture or the Insurance Agreement and (B) provided the
44
Indenture Trustee with the opportunity to remedy such failure or unwillingness
within ten (10) Business Days (or such longer period to which the Note Insurer
may reasonably consent) following the receipt by the Indenture Trustee of
written notice thereof. In the event that the Indenture Trustee is removed by
the Note Insurer pursuant to this Section, the removal and substitution
procedures set forth in this Section 7.10 and Section 7.11 hereof shall be
followed. If the Note Insurer, Servicer or Noteholders remove the Indenture
Trustee, the Servicer or such Noteholders shall promptly appoint a successor
Indenture Trustee (acceptable to the Note Insurer) by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Indenture
Trustee so removed and one copy to the successor Indenture Trustee.
(c)__ Any resignation or removal of the Indenture Trustee and appointment
of a successor Indenture Trustee pursuant to this Section 7.10 shall not become
effective until acceptance of appointment by the successor Indenture Trustee as
provided in Section 7.11 hereof. Notice of the resignation or removal of the
Indenture Trustee shall be given in writing to the Rating Agencies by the
Servicer. In the event no successor Indenture Trustee has been appointed within
thirty (30) days of th resignation or removal of the Indenture Trustee, the
Indenture Trustee may petition a court of competent jurisdiction to appoint a
successor Indenture Trustee.
SECTION 7.11 Successor Indenture Trustee.
------ ----------------------------
(a)__
(a) Any successor Indenture Trustee appointed as provided in Section 7.10
hereof shall execute, acknowledge and deliver to the Servicer, the Trust and
predecessor Indenture Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor
Indenture Trustee shall become effective and such successor Indenture Trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as Indenture Trustee. The predecessor
Indenture Trustee shall deliver to the successor Indenture Trustee all
documents and statements held by it hereunder. The Servicer, the Trust and the
predecessor Indenture Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully and certainly vesting
and confirming in the successor Indenture Trustee all such rights, powers,
duties and obligations. The predecessor Indenture Trustee shall not be liable
for the acts or omissions of any successor Indenture Trustee hereunder.
(b)__ No successor Indenture Trustee shall accept appointment as provided
in this Section 7.11 unless at the time of such acceptance such successor
Indenture Trustee shall be acceptable to the Note Insurer and shall satisfy the
Rating Agency Condition and eligible as the Indenture Trustee under the
provisions of Section 7.08 hereof, and as a successor Servicer under the
provisions of Section 6.02 of the Servicing Agreement.
(c)__ Upon acceptance of appointment by a successor Indenture Trustee as
provided in this Section 7.11, the Servicer shall mail notice of the succession
of such Indenture Trustee hereunder to the Note Insurer and all Noteholders at
their addresses as shown in the Note Register. If the Servicer fails to mail
such notice within ten (10) days after acceptance of appointment by such
successor Indenture Trustee, then the successor Indenture Trustee shall cause
such notice to be mailed at the expense of the Servicer.
45
SECTION 7.12 Merger or Consolidation of Indenture Trustee.
------ ---------------------------------------------
Any corporation into which the Indenture Trustee may be merged or with which
it may be consolidated, or any corporation resulting from any merger,
conversion, or consolidation to which the Indenture Trustee shall be a party,
or any corporation succeeding to the corporate trust business of the Indenture
Trustee, shall be the successor of the Indenture Trustee hereunder, provided
such corporation shall be eligible under the provisions of Section 7.08 hereof,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
SECTION 7.13 Appointment of Co-Indenture Trustee or Separate.
------ ------------------------------------------------
Indenture Trustee
-----------------
(a)__
(a) Notwithstanding any other provisions of this Indenture, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust or any Equipment may at the time be located, the Indenture
Trustee shall, with the consent of the Note Insurer and the satisfaction of the
Rating Agency Condition, or the Note Insurer shall have the power from time to
time, and shall execute and deliver all instruments to appoint one or more
Persons approved by the Indenture Trustee to act as co-Indenture Trustee or
co-Indenture Trustees, jointly with the Indenture Trustee, or separate
Indenture Trustee or separate Indenture Trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders and the Note Insurer, as their interests appear
herein, such title to the Trust, or any part thereof, and, subject to the other
provisions of this Section 7.13, such powers, duties, obligations, rights and
trusts as the Servicer, the Trust and the Indenture Trustee may consider
necessary or desirable; provided, however, that if there is a conflict between
the Trust, the Indenture Trustee and the Note Insurer regarding the appointment
of a co-Indenture Trustee or separate Indenture Trustee, the Note Insurer shall
prevail. If the Servicer shall not have joined in such appointment within
fifteen (15) days after the receipt by it of a request so to do, or in the case
an Event of Servicing Termination shall have occurred and be continuing, the
Indenture Trustee and the Trust, acting jointly, shall have the power to make
such appointment; provided, however, that if the Trust shall not have joined in
such appointment within fifteen (15) days after the receipt by it of a request
so to do, the Indenture Trustee alone shall have the power to make such
appointment. No co-Indenture Trustee or separate Indenture Trustee hereunder
shall be required to meet the terms of eligibility as a successor Indenture
Trustee under Section 7.08 hereof, and no notice to Noteholders of the
appointment of any co-Indenture Trustee or separate Indenture Trustee shall be
required under Section 7.12 hereof.
(b)__ Every separate Indenture Trustee and co-Indenture Trustee shall, to
the extent permitted by law, be appointed and act subject to the following
provisions and conditions:
46
(i) All rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed
upon and exercised or performed by the Indenture Trustee and such
separate Indenture Trustee or co-Indenture Trustee jointly (it being
understood that such separate Indenture Trustee or co-Indenture
Trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any
law of any jurisdictio in which any particular act or acts are to be
performed (whether as Indenture Trustee hereunder or as successor to
the Servicer hereunder), the Indenture Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of
title to the Trust Property or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate Indenture Trustee or co-Indenture Trustee but solely at the
direction of the Indenture Trustee;
(ii) No separate Indenture Trustee or co-Indenture Trustee
hereunder shall be personally liable by reason of any act or
omission of any other separate Indenture Trustee or co-Indenture
Trustee hereunder; and
(iii) The Indenture Trustee may at any time accept the
resignation of or remove any separate Indenture Trustee or
co-Indenture Trustee.
(c)__ Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate Indenture
Trustees and co-Indenture Trustees, as effectively as if given to each of them.
Every instrument appointing any separate Indenture Trustee or co-Indenture
Trustee shall refer to this Indenture and the conditions of this Article VII.
Each separate Indenture Trustee and co-Indenture Trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this Indenture relating to
the conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee and a copy thereof given to the Servicer and the Trust.
(d)__ Any separate Indenture Trustee or co-Indenture Trustee may at any
time constitute the Indenture Trustee, its agent or attorney-in-fact, with full
power and authority, to the extent not prohibited by law, to do any lawful act
under or in respect of this Indenture on its behalf and in its name. If any
separate Indenture Trustee or co-Indenture Trustee shall die, become incapable
of acting, resign or be removed, then all of its estates, properties, rights,
remedies and trusts shal vest in and be exercised by the Indenture Trustee, to
the extent permitted by law, without the appointment of a new or successor
separate Indenture Trustee or successor co-Indenture Trustee.
(e)__ The Servicer shall be responsible for the payment of any fees or
expenses of any separate Indenture Trustee or co-Indenture Trustee.
SECTION 7.14 Indenture Trustee May Enforce Claims Without
------ --------------------------------------------
Possession of Note.
-------------------
47
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Indenture 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 Indenture Trustee shall be brought in its
own name or in its capacity as Indenture Trustee. Any recovery of judgment
shall, after provisio for the payment of the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel, be
for the ratable benefit of the Noteholders in respect of which such judgment
has been recovered.
SECTION 7.15 Suits for Enforcement.
------ ----------------------
In case an Event of Servicing Termination or other default by the Servicer
under the Servicing Agreement or under this Indenture shall occur and be
continuing, the Indenture Trustee, in its discretion, may, subject to the
provisions of 6.04 of the Servicing Agreement, proceed to protect and enforce
its rights and the rights of the Noteholders and the Note Insurer under this
Indenture by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Indenture or in aid of the execution of any power granted in this
Indenture or for the enforcement of any other legal, equitable or other remedy,
as the Indenture Trustee, being advised by counsel, shall deem most effectual
to protect and enforce any of the rights of the Indenture Trustee, the
Noteholders or the Note Insurer.
SECTION 7.16 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 Indenture Trustee for any
action taken, suffered or omitted by it as Indenture Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 7.16 shall not apply to any
suit instituted by the Indenture Trustee or the Note Insurer, to any suit
instituted by any Noteholder, or group of Noteholders, holding in the aggregate
more than 10% of the then outstanding Note Principal Balance, 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 7.17 Representations and Warranties of Indenture Trustee.
------ ----------------------------------------------------
The Indenture Trustee represents and warrants for the benefit of the
Noteholders and the Note Insurer that:
(a) Organization and Good Standing. The Indenture Trustee is a banking
corporation duly organized, validly existing and in good standing under
the laws of the state of New York.
48
(b) Authorization. The Indenture Trustee has the power, authority and
legal right to execute, deliver and perform this Indenture, and the
execution, delivery and performance of this Indenture have been duly
authorized by the Indenture Trustee by all necessary corporate action.
(c) Binding Obligations. This Indenture, assuming due authorization,
execution and delivery by all other parties thereto, constitutes the
legal, valid and binding obligation of the Indenture Trustee, enforceable
against the Indenture Trustee in accordance with its terms, except that
(i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws (whether statutory,
regulatory or decisional) now or hereafter in effect relating to
creditors' rights generally and the rights of trust companies in
particular and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to certain equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought, whether in a proceeding at law or in equity.
SECTION 7.18 Tax Returns.
------ ------------
In the event the Trust shall be required to file tax returns, the Indenture
Trustee shall prepare or shall cause to be prepared any tax returns required to
be filed by the Trust and shall remit such returns to the Owner Trustee for
signature at least five (5) Business Days before such returns are due to be
filed. The Servicer, upon request, will furnish the Indenture Trustee with all
such information known to the Servicer as may be reasonably required in
connection with the preparation of all tax returns of the Trust. In no event
shall the Indenture Trustee or the Owner Trustee in their respective individual
capacities be liable for any liabilities, costs or expenses of the Trust, the
Noteholders or the Servicer arising under any tax law or regulation, including,
without limitation, Federal, State or local income or excise taxes or any other
tax imposed on or measured by income (or any interest or penalty with respect
thereto or arising from any failure to comply therewith).
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
SECTION 8.01 Events of Default.
------ ------------------
"Event of Default" wherever used herein means any one of the following events
(whatever the reason for such Event of Default and without regard to 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) failure to distribute or cause to be distributed to the Indenture
Trustee, for the benefit of the Noteholders, all or part of any payment
of interest required to be made on each Payment Date under the terms of
such Notes or this Indenture when due and payable; or
49
(b) failure to distribute or cause to be distributed to the Indenture
Trustee, for the benefit of the Noteholders (x) on any Payment Date, an
amount equal to the principal due on the outstanding Notes as of such
Payment Date to the extent that sufficient Available Funds are on deposit
in the Collection Account or (y) on the Class A Maturity Date or the
Class B Maturity Date, as the case may be, any remaining principal owed
on the outstanding Class A Notes or Class B Notes, as the case may be; or
(c) default in the performance, or breach, of any other covenant of
the Issuer in this Indenture, and continuance of such default or breach
for a period of thirty (30) days after the earliest of (i) any officer of
the Issuer first acquiring the knowledge thereof, (ii) the Indenture
Trustee's giving written notice thereof to the Issuer, or (iii) the Note
Insurer or the Holders of a majority of the then Outstanding Note
Principal Balance of the Notes giving written notice thereof to the
Issuer and the Indenture Trustee; or
(d) any representation or warranty of the Issuer made in this
Indenture or any other writing provided to the Holders of the Notes
proves to be incorrect in any material respect as of the time when the
same has been made; provided, however, that the breach of any
representation or warranty made by the Issuer will be deemed to be
"material" only if it negatively affects the Note Insurer or the
Noteholders, the enforceability of this Indenture or the Notes; or
(e) the entry by a court having jurisdiction in the premises of (A) 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 (B) a decree or order
adjudging the Issuer a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment, or
composition of or in respect of the Issuer under any applicable federal
or state law, or appointing 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 the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect
for a period of 60 consecutive days; or
(f) 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 as 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 any such Person or of any
substantial part or its property, or the making by it of an assignment
for the benefit of creditors, or the failure of any such Person to pay
its debts generally as they become due, or the taking of corporate action
by any such Person in furtherance of any such action; or
50
(g) the Issuer becomes subject to regulation by the Securities and
Exchange Commission as an investment company within the meaning of the
Investment Company Act of 1940, as amended; or
(h) an event of default shall have occurred and be continuing under
the Insurance Agreement; or
(i) a Transferor Event of Default shall occur and be continuing with
respect to either of the Pledged Notes.
51
SECTION 8.02 Acceleration of Maturity, Rescission and Annulment.
------ ---------------------------------------------------
(a)__
(a) If an Event of Default occurs and is continuing, then and in every such
case the Indenture Trustee, at the written direction of the Controlling
Parties, shall declare the principal of all of the Notes to be immediately due
and payable, by a notice in writing to the Servicer, and upon any such
declaration such principal (together with all accrued and previously unpaid
interest) shall become immediately due and payable; provided, that, with
respect to Events of Default enumerated in Section 8.01(e) and (f), the
principal of all Notes shall become immediately due and payable without further
action of any Person. The Indenture Trustee shall give notice to each
Noteholder, the Note Insurer and the Rating Agencies of such declaration.
(b)__ At any time, after such a declaration of acceleration has been
made, but before any sale of the Pledged Property has been made or a judgment
or decree for payment of the money due has been obtained by the Indenture
Trustee as hereinafter in this Article VIII provided, the Controlling Parties,
by written notice to the Servicer and the Indenture Trustee, may rescind and
annul such declaration and its consequence if monies have been paid or
deposited with the Indenture Trustee in a sum sufficient to pay:
(i) all overdue installments of interest on all Class A Notes and
Class B Notes;
(ii) the principal of any of the Class A Notes or Class B Notes
which has become due otherwise than by such declaration of
acceleration and interest thereon at the applicable Note Rate;
(iii) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest on the Class A Notes
and Class B Notes at the rate specified therefor in the related
Note; and
(iv) all sums paid or advanced, together with interest thereon,
by the Indenture Trustee or the Note Insurer hereunder or under the
Insurance Agreement or the Note Insurance Policy, as applicable, and
the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee, the Note Insurer and their respective agents
and counsel.
No such rescission shall affect any subsequent default or impair
any right consequent thereon.
Subsequent to any such declaration of acceleration and so long as
such declaration and its consequences have not been rescinded and annulled,
prior to the exercise by the Indenture Trustee of the remedies set forth in
Section 8.03(a) or (c) hereof, the Indenture Trustee shall give the Noteholders
and the Note Insurer ten days' notice of its intention to take such actions.
52
SECTION 8.03 Remedies.
------ ---------
If an Event of Default shall have occurred and be continuing, the Indenture
Trustee, at the written direction of the Controlling Parties, shall do one or
more of the following as shall be directed by the Controlling Party:
(a)__ institute, in its own name and as Indenture Trustee, Proceedings
for the collection of the entire amount of principal and interest
remaining unpaid on the Notes, or under this Indenture in respect of the
Notes, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Pledged Property securing the Notes the
monies adjudged due;
(b)__ sell the Pledged Property or any portion thereof or rights or
interest therein, at one or more sales called and conducted in any
commercially reasonable manner permitted by law;
(c)__ institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Pledged
Property securing the Notes; or
(d)__ exercise any remedies of a secured party under the UCC or other
applicable law and take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee, the Note
Insurer or the Noteholders hereunder.
SECTION 8.04 Notice of Event of Default.
------ ---------------------------
Within two (2) Business Days after a Responsible Officer obtaining actual
knowledge of the occurrence of any Event of Default, the Indenture Trustee
shall transmit, by certified mail return receipt requested, hand delivery or
overnight courier, to all Noteholders, as their names and addresses appear in
the Register, notice of such Event of Default, unless such Event of Default
shall have been cured or waived.
SECTION 8.05 Exercise of Power by Indenture Trustee.
------ ---------------------------------------
In case an Event of Default has occurred and is continuing to the actual
knowledge of a Responsible Officer of the Indenture Trustee, the Indenture
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 its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
SECTION 8.06 Indenture Trustee May File Proofs of Claim.
------ -------------------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
reorganization, arrangement, adjustment, composition or other judicial
Proceeding, relating to the Trust or any other obligor upon the Notes or the
property of the Trust or of such other obligor or their creditors, the
Indenture Trustee (irrespective of whether the principal of any class of Notes
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Indenture Trustee shall have made any
demand for the payment of overdue principal or interest) shall be entitled and
empowered, to intervene in such proceeding or otherwise:
53
(a) to file and prove a claim for all amounts owing and unpaid in
respect of the Notes and to file such other papers or documents and
take such other action including participating as a member, voting
or otherwise, in any committee of creditors appointed in the matter,
as may be necessary or advisable in order to have the claims of the
Indenture Trustee, the Note Insurer (including, in each case, any
claim for the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, the Note Insurer and their
respective agents and counsel) and the Noteholders allowed in such
judicial Proceeding;
(b) to petition for lifting of the automatic stay and thereupon
to foreclose upon the Pledged Property as elsewhere provided herein;
and
(c) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such judicial Proceeding is hereby authorized by each
Noteholder to make such payments to the Indenture Trustee, and in the event
that the Indenture Trustee shall consent to the making of such payments
directly to the Note Insurer or the Noteholders, to pay to the Indenture
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel.
Nothing herein contained shall be deemed to authorize the Indenture Trustee to
authorize or to consent or accept or adopt on behalf of the Note Insurer or
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Note Insurer or the Notes or the rights of any
Holder thereof, or to authorize the Indenture Trustee to vote in respect of
the claim of the Note Insurer or any Noteholder in any such Proceeding.
SECTION 8.07 Allocation of Money Collected.
------ ------------------------------
If the Notes have been declared due and payable following an Event of Default
and such declaration and its consequences have not been rescinded and annulled,
any money collected by the Indenture Trustee with respect to the Notes pursuant
to this Article VIII (and any funds then held or thereafter received by the
Indenture Trustee) shall be applied in the following order, at the date or
dates fixed by the Indenture Trustee:
First : To the Indenture Trustee or the Note Insurer, as the case may
-----
be, the costs incurred by such parties in the collection of such moneys
collected;
Second : To the payment of all amounts due the Indenture Trustee under
------
Section 7.07 hereof and all Back-up Servicer Fees due to the Back-up Servicer
under the Servicing Agreement;
54
Third : To the payment of all Premium Amounts due and payable to the
-----
Note Insurer;
Fourth : To the payment of Class A Note Interest to the Class A
------
Noteholders;
Fifth : To the payment of the outstanding Class A Note Principal
-----
Balance to the Class A Noteholders;
Sixth : To the payment of all unpaid Reimbursement Amounts, if any, to
-----
the Note Insurer;
Seventh : To the payment of Class B Note Interest to the Class B
-------
Noteholders
Eighth : To the payment of the outstanding Class B Note Principal
------
Balance to the Class B Noteholders;
Ninth : To the payment of all reasonable costs and expenses incurred
-----
by any Noteholder in connection with the enforcement of its rights hereunder or
under the Notes, ratably, without preference or priority of any kind; and
Tenth : To the payment of any surplus to or at the written direction
-----
of the Residual Holders.
SECTION 8.08 Waiver of Events of Default.
------ ----------------------------
(a)__
(a) The Controlling Party (with the prior written consent of the Note
Insurer) may, by one or more instruments in writing, waive any Event of Default
hereunder and its consequences, except a continuing Event of Default:
(i) in respect of the payment of the principal of or interest on
any Note (which may only be waived by the Holder of such Note), or
(ii) in respect of a covenant or provision hereof which under
Article XI cannot be modified or amended without the consent of the
Holder of each Note outstanding affected (which only may be waived
by the Holders of all affected Notes outstanding).
(b)__ A copy of each waiver pursuant to Section 8.08(a) shall be
furnished by the Servicer to the Indenture Trustee. Upon any such waiver, such
Event of Default shall cease to exist and shall be deemed to have been cured,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereon.
SECTION 8.09 Limitation On Suits.
------ --------------------
55
. No Holder 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:
(a) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(b) the Controlling Parties shall have made written request to the
Indenture Trustee to institute Proceedings in respect of such Event of
Default in its own name as Indenture Trustee hereunder;
(c) such Holder or Holders have offered to the Indenture Trustee
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Indenture Trustee for thirty (30) days after its receipt of
such notice, request and offer of indemnity has failed to institute any
such Proceeding;
(e) no direction inconsistent with such written request has been given
to the Indenture Trustee during such thirty (30) day period by the
Controlling Parties; and
(f) the Note Insurer has given its prior written consent;
it being understood and intended that no one or more Holders 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 Holders
or the Note Insurer or to enforce any right under this Indenture, except in
the manner herein provided.
SECTION 8.10 Unconditional Right of Noteholders to Receive
------ -------------------------------------------------
Principal and Interest.
-----------------------
Notwithstanding any other provision in this Indenture, the Noteholders shall
have the right, which is absolute and unconditional, to receive payment of the
principal of and interest on such Note as such principal and interest becomes
due and payable in accordance with the terms of this Indenture (including,
without limitation, the limitation on such payments to the extent of Available
Funds on each Payment Date) and the Controlling Party shall have the right to
institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Controlling Party.
SECTION 8.11 Restoration of Rights and Remedies.
------ -----------------------------------
If the Indenture Trustee, the Note Insurer or any Noteholder has instituted
any Proceeding to enforce any right or remedy in accordance with the terms of
this Indenture and such Proceeding has been discontinued or abandoned for any
reason, or has been determined adverse to the Indenture Trustee, the Note
Insurer or to such Noteholder, then and in every such case, the Indenture
Trustee, the Note Insurer and the Noteholders shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies
hereunder shall continue as though no such Proceeding has been instituted.
56
SECTION 8.12 Rights and Remedies Cumulative.
------ -------------------------------
No right or remedy herein conferred upon or reserved to the Indenture
Trustee, the Note Insurer or 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 8.13 Delay or Omission Not Waiver.
------ -----------------------------
No delay or omission of the Indenture Trustee, the Note Insurer or any
Noteholder 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 Indenture Trustee, the Note Insurer or the
Noteholders, or any of them, may be exercised from time to time, as often as
may be deemed expedient, by the Indenture Trustee, the Note Insurer or the
Noteholders, subject in each case however to the right of the Note Insurer to
control any such right and remedy.
SECTION 8.14 Control by Controlling Parties.
------ -------------------------------
The Controlling Parties shall have the right to direct in writing the
decision whether to conduct, and the time, method and place of conducting, any
Proceeding for any remedy available to the Indenture Trustee with respect to
the Notes or exercising any trust or power conferred on the Indenture Trustee
with respect to the Notes; provided, that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(b) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee which is not inconsistent with such direction;
provided, however, that the Indenture Trustee need not take any action
which it determines might involve it in liability or be unjustly
prejudicial to the Holders not consenting.
SECTION 8.15 Sale of Pledged Property.
------ -------------------------
(a)__
(a) The power to effect any sale pursuant to Section 8.03 hereof shall not be
exhausted by any one or more sales as to any portion of the Pledged Property
remaining unsold, but shall continue unimpaired until the entire Pledged
Property securing the Notes shall have been sold or all amounts payable under
this Indenture with respect thereto shall have been paid. The Indenture Trustee
57
may from time to time postpone any sale by public announcement made at the time
and place of such sale. To the extent permitted by applicable law, the
Indenture Trustee shall not sell the Pledged Property without the prior written
consent of the Note Insurer and the satisfaction of the Rating Agency
Condition.
(b)__ The Note Insurer and any Noteholder may bid for and acquire any
portion of the Pledged Property securing the Notes in connection with any sale
thereof.
(c)__ Each of the parties hereby covenants and agrees that a sale of the
entirety of the Contracts and the Equipment by a public sale held not less than
ten days after notice thereof is commercially reasonable.
(d)__ The Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance, provided to it by the Servicer, transferring its
interest in any portion of the Pledged Property in connection with a sale
thereof. In addition, the Indenture Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Trust to transfer and convey its interest in
any portion of the Pledged Property in connection with a sale thereof, and to
take all action necessary to effect such sale. No purchaser or transferee at
such a sale shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any monies.
SECTION 8.16 Action on Notes.
------ ----------------
The Indenture Trustee's right to seek and recover judgment on the Notes or
under this Indenture shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to this Indenture.
Neither the Lien of this Indenture nor any rights or remedies of the Indenture
Trustee or the Noteholders shall be impaired by the recovery of any judgment by
the Indenture Trustee against the Trust or the Transferors or by the levy of
any execution under such judgment upon any portion of the Pledged Property or
upon any of the assets of the Trust or the Transferors.
ARTICLE IX
TERMINATION
SECTION 9.01 Termination of Obligations and Responsibilities.
------ ------------------------------------------------
The respective obligations and responsibilities of the Servicer, the
Indenture Trustee and the trust created hereby shall terminate at the option of
the Residual Holders, at any time which is 123 days after the payment to
Noteholders of all amounts required to be paid to them pursuant to this
Indenture, reducing the Class A Note Principal Balance and the Class B Note
Principal Balance to zero; provided that all amounts then owing to the Note
Insurer and the Indenture Trustee pursuant to the Transaction Documents have
been paid to such parties; and provided, however, that in no event shall the
58
trust created hereby continue beyond the expiration of 21 years from the death
of the last survivor of the descendants living on the date of this Indenture of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, late Ambassador to the Court of St. ▇▇▇▇▇. Notwithstanding
the foregoing, the representations and warranties and indemnification
obligations of the Originator and the Servicer hereunder and under the
Servicing Agreement shall survive the termination of the Trust and of this
Indenture. Upon termination of the Trust, the Indenture Trustee shall release
any remaining Trust Property to the Residual Holders; provided, that the Class
A Note Principal Balance and the Class B Note Principal Balance have been
reduced to zero and all amounts then owing to the Note Insurer or the Indenture
Trustee pursuant to the Transaction Documents have been paid to such parties.
SECTION 9.02 Optional Redemption of Notes; Final Disposition of
------ --------------------------------------------------
Funds.
------
(a)_
(a) On any Payment Date as of which the sum of (1) the Class A Note Principal
Balance and (2) the Class B Note Principal Balance is less than ten percent
(10.00%) of the sum of (x) the Initial Class A Note Principal Balance and (y)
the Initial Class B Note Principal Balance, the Residual Holders shall have the
option to cause the retirement of the Notes by depositing with the Indenture
Trustee the sum of (i) the outstanding Class A Note Principal Balance and the
outstanding Class B Note Principal Balance as of such Payment Date (after
giving effect to the payment of any principal on such Payment Date), (ii)
accrued interest on the related Note Principal Balances at the related Note
Rate and (iii) all amounts owed to the Indenture Trustee and the Note Insurer
pursuant to the Transaction Documents. Upon receipt of such amounts and all
amounts then owed to the Indenture Trustee the Indenture Trustee shall (x) make
the final payment in full to the Noteholders, (y) pay all amounts owed to the
Note Insurer and (z) release any remaining Trust Property to the Residual
Holders. In the event that the Residual Holders elects to redeem the Notes in
accordance with this Section 9.02, the Residual Holders shall be required to
notify the Indenture Trustee in writing by no later than two (2) Business Days
prior to a notice required to be sent by the Indenture Trustee pursuant to
Section 9.02(b).
(b)__ Notice of any termination pursuant to this Section 9.02 shall be
given promptly by the Indenture Trustee, by letter to Noteholders, the Rating
Agencies and the Note Insurer mailed not later than the 10th day of the month
immediately preceding the month of such final Payment Date specifying (i) the
Payment Date upon which final payment of the Notes will be made, (ii) the
scheduled amount of any such final payment, (iii) that interest shall cease to
accrue on the Class A Notes and Class B Notes on such final Payment Date and
(iv) the address for presentation of the Notes for final payment. On such final
Payment Date, the Indenture Trustee shall cause to be distributed (A) to
Noteholders an amount equal to (x) the amount otherwise distributable to the
Noteholders on such Payment Date but for such purchase pursuant to this Section
9.02 and (y) each Class A Noteholder's and Class B Noteholder's pro rata share
(based on the aggregate related Percentage Interest) of the Class A Note
Principal Balance and the Class B Note Principal Balance deposited by the
Residual Holders into the Collection Account pursuant to this Section 9.02 and
(B) to the Note Insurer, all amounts owed to the Note Insurer under the
Transaction Documents. After such Payment Date, interest on the Class A Notes
and Class B Notes shall cease to accrue.
59
(c)__ The final payment on any Note shall only be made upon the
presentation of such Note to the Indenture Trustee at the office specified in
the notice described in Section 9.02(b) above.
(d)__ In the event that any amount due to any Noteholder remains
unclaimed, the Servicer shall, at its expense, cause to be published once, in
the eastern edition of The Wall Street Journal, notice that such money remains
unclaimed. If, within two years after such publication, such amount remains
unclaimed, the Servicer shall be entitled to all unclaimed funds and other
assets which remain subject hereto, and the Indenture Trustee upon written
direction from the Servicer shall transfer such funds and shall be discharged
of any responsibility for such funds and, the Noteholders shall look to the
Servicer for payment.
ARTICLE X
NOTEHOLDERS' LISTS AND REPORTS
SECTION 10.01 Trust To Furnish To Indenture Trustee Names and
------ -----------------------------------------------
Addresses of Noteholders.
-------------------------
The Trust will furnish or cause to be furnished to the Indenture Trustee (a)
not more than five (5) days after the earlier of (i) each Record Date and (ii)
three months after the last Record Date, a list, in such form as the Indenture
Trustee may reasonably require, of the names and addresses of the Holders as of
such Record Date, (b) at such other times as the Indenture Trustee may request
in writing, within thirty (30) days after receipt by the Issuer of any such
request, a list of similar form and content as of a date not more than ten (10)
days prior to the time such list is furnished; provided, however, that so long
as the Indenture Trustee is the Note Registrar, no such list shall be required
to be furnished. The Indenture Trustee or, if the Indenture Trustee is not the
Note Registrar, the Trust shall furnish to the Note Insurer or the Trust in
writing upon their written request and at such other times as the Note Insurer
or the Trust may request a copy of the list of Noteholders.
SECTION 10.02 Preservation of Information; Communications to
------ ----------------------------------------------
Noteholders.
------------
(a)__
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Noteholders contained in
the most recent list furnished to the Indenture Trustee and the names and
addresses of Noteholders received by the Indenture Trustee in its capacity as
Note Registrar.
(b)__ Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under
the Notes.
(c)__ The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
60
SECTION 10.03 Reports by Trust.
------ -----------------
(a)__
(a) The Trust shall:
(i) file with the Indenture Trustee, within fifteen (15) days
after the Trust is required to file the same with the Commission,
copies of the annual reports and copies of the information documents
and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Trust may be required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time
by the Commission such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA Section
313(c)) such summaries of any information, documents and reports
required to be filed by the Trust pursuant to clauses (i) and (ii)
of this Section 10.03(a) as may be required by rules and regulations
prescribed from time to time by the Commission.
(b)__ Unless the Trust otherwise determines, the fiscal year of the Trust
shall end as of December 31 of each year for purposes of this section.
SECTION 10.04 Reports by Indenture Trustee.
------ -----------------------------
If required by TIA Section 313(a), within sixty (60) days after each August
31, beginning with August 31, 1998, the Indenture Trustee shall mail to each
Noteholder as required by TIA Section 313(c) a brief report dated as of such
date that complies with TIA Section 313(a). The Indenture Trustee also shall
comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Trust shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
SECTION 10.05 Compliance Certificates and Opinions, etc.
------ ------------------------------------------
(a)__
(a) Upon any application or request by the Trust to the Indenture Trustee to
take any action under any provision of this Indenture, the Trust shall furnish
to the Indenture Trustee and the Note Insurer (i) an Officer's Certificate
61
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with and (iii) (if required by the TIA)
an Independent Certificate from a firm of certified public accountants meeting
the applicable requirements of this Section 10.05, except that, in the case of
any such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
(b)__ Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) 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;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(iv) a statement as to whether, in the opinion of each such
signatory such condition or covenant has been complied with.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01 Amendment.
------ ----------
(a)__
(a) This Indenture may be amended from time to time by the Trust, the
Servicer and the Indenture Trustee, without the consent of any of the
Noteholders but with the prior written consent of the Note Insurer, to cure any
ambiguity herein; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel acceptable to the Indenture Trustee adversely affect
in any respect the interests of any Noteholder.
(b)__ This Indenture may also be amended from time to time by the Trust,
the Servicer and the Indenture Trustee with the prior written consent of the
Controlling Party for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
62
modifying in any manner the rights of the Noteholders; provided, however, that
no such amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Contracts or
distributions that are required to be made on any Note without the consent of
the Holder of such Note or (ii) reduce the aforesaid percentage required to
consent to any such amendment, without the consent of the Holders of all Notes
then outstanding.
(c)__ Prior to the effectiveness of any amendment under Section 11.01(a)
or (b), the Rating Agencies shall have confirmed in writing their respective
ratings of the Notes.
(d)__ Promptly after the execution of any such amendment, the Indenture
Trustee shall furnish a written copy of the text of such amendment (and any
consent required with respect thereto) to each Noteholder, the Note Insurer and
the Rating Agencies.
(e)__ Approval of the particular form of any proposed amendment or
consent shall not be necessary for the consent of the Noteholders under Section
11.01(b), but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by the Noteholders shall be subject to
such reasonable requirements as the Indenture Trustee may prescribe.
(f)__ The Indenture Trustee and the Note Insurer shall be entitled to
receive an officer's certificate and an Opinion of Counsel to the effect that
all conditions precedent to the amendment of this Indenture have been
satisfied. The Indenture Trustee may, but shall not be obligated to, execute
and deliver any such amendment which affects that Indenture Trustee's rights,
powers, immunities or indemnifications hereunder.
SECTION 11.02 Conformity With Trust Indenture Act.
------ ------------------------------------
Every amendment of this Indenture and every supplemental indenture executed
pursuant to this Article XI shall conform to the requirements of the Trust
Indenture Act as then in effect so long as this Indenture shall then be
qualified under the TIA.
SECTION 11.03 Limitation on Rights of Noteholders.
------ ------------------------------------
(a)__
(a) The death or incapacity of any Noteholder shall not operate to terminate
this Indenture or the Trust, nor entitle such Noteholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b)__ It is understood and intended, and expressly covenanted by each
Noteholder with every other Noteholder and the Indenture Trustee, that no one
or more Holders of Notes shall have any right in any manner whatever by virtue
or by availing itself or themselves of any provisions of this Indenture to
affect, disturb or prejudice the rights of the Holders of any other of the
63
Notes, to obtain or seek to obtain priority over or preference to any other
Holder of the same Class of Notes or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable and common
benefit of all Noteholders of the same Class. For the protection and
enforcement of the provisions of this Section 11.03, each and every Noteholder
and the Indenture Trustee shall be entitled to such relief as can be given
either at law or in equity.
SECTION 11.04 Counterparts.
------ -------------
For the purpose of facilitating the execution of this Indenture and for other
purposes, this Indenture may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
all of which counterparts shall constitute but one and the same instrument.
SECTION 11.05 GOVERNING LAW.
------ --------------
THIS INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS OF ANY STATE.
SECTION 11.06 Notices.
------ --------
All demands, notices, instructions, directions and communications (other than
periodic communications of a routine nature made in connection with the
dissemination of information regarding the Pledged Property, the Servicer and
the Trust required to be delivered hereunder, which shall be delivered or
mailed by first class mail or facsimile transmission) hereunder shall be in
writing, personally delivered or mailed by overnight courier, and shall be
deemed to have been duly given upon receipt (a) in the case of the Servicer, at
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ Cynwyd,
Pennsylvania 19004, Attention: General Counsel, telephone (▇▇▇) ▇▇▇-▇▇▇▇,
telecopy (▇▇▇) ▇▇▇-▇▇▇▇, (b) in the case of the Trust, Delaware Trust Capital
Management Inc., at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration, telephone (▇▇▇) ▇▇▇-▇▇▇▇, telecopy
(▇▇▇) ▇▇▇-▇▇▇▇, (c) in the case of the Indenture Trustee, at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Global Trust Services, telephone
(▇▇▇) ▇▇▇-▇▇▇▇, telecopy (▇▇▇) ▇▇▇-▇▇▇▇, (d) in the case of S&P, at ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed
Surveillance, telephone (▇▇▇) ▇▇▇-▇▇▇▇, telecopy (▇▇▇) ▇▇▇-▇▇▇▇, (e) in the
case of ▇▇▇▇▇'▇, at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, telephone
(▇▇▇) ▇▇▇-▇▇▇▇, telecopy (▇▇▇) ▇▇▇-▇▇▇▇, (f) in the case of the Note Insurer,
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ New York, Attention: Surveillance Department (in
each case in which notice or other communication to the Note Insurer refers to
an Event of Default, a claim on the Note Insurance Policy or with respect to
which failure on the part of the Note Insurer to respond shall be deemed to
constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of each of the General
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Counsel and the Head -- Financial Guaranty Group and shall be marked to
indicate "URGENT MATERIAL ENCLOSED"), and (g) in the case of DCR, ▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed
Monitoring, telecopy (▇▇▇) ▇▇▇-▇▇▇▇. Any notice required or permitted to be
mailed to a Noteholder shall be given by first class mail, postage prepaid, at
the address of such Holder as shown in the Note Register. Any notice so mailed
within the time prescribed in this Indenture shall be conclusively presumed to
have been duly given on the fifth Business Day following mailing, whether or
not the Noteholder receives such notice.
SECTION 11.07 Severability of Provisions.
------ ---------------------------
If any one or more of the covenants, agreements, provisions, or terms of this
Indenture shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Indenture and shall in no
way affect the validity or enforceability of the other provisions of this
Indenture or of the Notes or the rights of the Holders thereof.
SECTION 11.08 Conflict with Trust Indenture Act.
------ ----------------------------------
If any provision hereof limits, qualifies or conflicts with another provision
hereof that is required to be included in this indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.09 Third Party Beneficiary.
------ ------------------------
The parties hereto acknowledge and agree that the Note Insurer is an express
third party beneficiary of this Indenture.
SECTION 11.10 Assignment.
------ -----------
Notwithstanding anything to the contrary contained herein, except as provided
in Section 5.02 of the Servicing Agreement, this Indenture may not be assigned
by the Servicer except with prior written consent of the Trust, the Note
Insurer and the Holders of the Applicable Securities. Notice of any such
assignment received by a Responsible Officer of the Indenture Trustee shall be
given to the Rating Agencies by the Indenture Trustee.
SECTION 11.11 Binding Effect.
------ ---------------
This Indenture shall inure to the benefit of, and shall be binding upon the
Servicer, the Trust, the Indenture Trustee and the Noteholders and their
respective successors and permitted assigns, subject, however, to the
limitations contained in this Indenture. This Indenture shall not inure to the
benefit of any Person other than the Trust, the Servicer, the Indenture
Trustee, the Note Insurer and the Noteholders.
65
SECTION 11.12 Survival of Agreement.
------ ----------------------
All covenants, agreements, representations and warranties made herein and in
the other documents delivered pursuant hereto shall survive the pledge of the
Pledged Property and the issuance of the Notes and shall continue in full force
and effect until terminated pursuant to Section 9.01 hereof.
SECTION 11.13 Captions.
------ ---------
The captions or headings in this Indenture are for convenience only and in no
way define, limit or describe the scope or intent of any provisions or sections
of this Indenture.
SECTION 11.14 Exhibits.
------ ---------
The Exhibits to this Indenture are hereby incorporated herein and made a part
hereof and are an integral part of this Indenture.
SECTION 11.15 Calculations.
------ -------------
Except as otherwise provided in this Indenture, all interest rate
calculations under this Indenture, including those with respect to the
Contracts, will be made on the basis of a 360-day year and twelve 30-day months
(i.e., each Interest Accrual Period shall be deemed to be equal 30 day periods)
and will be carried out to at least seven decimal places.
SECTION 11.16 No Proceedings.
------ ---------------
The Servicer, the Trust and the Indenture Trustee each hereby agrees that it
will not directly or indirectly institute, or cause to be instituted, against
the Transferors, the Managers or the Trust any bankruptcy or insolvency
proceeding so long as there shall not have elapsed one year plus one day since
the maturity date of the latest maturing securities of the Trust.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Trust, the Servicer, the Indenture
Trustee and the Back-up Servicer have caused this Indenture to be duly
executed by their respective officers, all as of the day and year first above
written.
ABFS EQUIPMENT CONTRACT TRUST
1998-A, as Issuer
By: DELAWARE TRUST CAPITAL MANAGEMENT,
INC., not in its individual capacity
but solely as Owner Trustee
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
AMERICAN BUSINESS LEASING, INC.,
as Servicer
By /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
THE CHASE MANHATTAN BANK, not in its
individual capacity but solely as
Indenture Trustee and as Back-up
Servicer
By /s/ ▇▇▇▇ Trenamon
-----------------------------------
Name: ▇▇▇▇ Trenamon
Title: Senior Vice President