EXHIBIT 4.1
EXECUTION COPY
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IKON RECEIVABLES FUNDING, LLC,
Issuer
BNY MIDWEST TRUST COMPANY,
Trustee
and
IOS CAPITAL, LLC,
Servicer
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INDENTURE
Dated as of April 1, 2003
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$852,085,000 in aggregate principal amount
of Lease-Backed Notes, consisting of:
$ 253,200,000 of 1.30813% Class A-1 Lease-Backed Notes
$ 26,700,000 of 1.68% Class A-2 Lease-Backed Notes
$ 206,400,000 of Variable Rate Class A-3a Lease-Backed Notes
$ 206,400,000 of 2.33% Class A-3b Lease-Backed Notes
$ 159,385,000 of 3.27% Class A-4 Lease-Backed Notes
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION...................................... 3
SECTION 1.01. General Definitions........................................................ 3
SECTION 1.02. Compliance Certificates and Opinions....................................... 24
SECTION 1.03. Form of Documents Delivered to Trustee and Insurer......................... 24
SECTION 1.04. Acts of Noteholders, etc................................................... 25
SECTION 1.05. Notices, etc., to Trustee, Servicer, Issuer, Insurer and Rating Agencies... 26
SECTION 1.06. Notice to Noteholders; Waiver.............................................. 27
SECTION 1.07. Effect of Headings and Table of Contents................................... 28
SECTION 1.08. Successors and Assigns..................................................... 28
SECTION 1.09. Benefits of Indenture...................................................... 28
SECTION 1.10. Recording of Indenture..................................................... 28
SECTION 1.11. GOVERNING LAW; WAIVER OF JURY TRIAL........................................ 28
SECTION 1.12. FORUM NON CONVENIENS....................................................... 29
SECTION 1.13. Legal Holidays............................................................. 29
SECTION 1.14. Execution in Counterparts.................................................. 29
SECTION 1.15. Inspection................................................................. 29
SECTION 1.16. Survival of Representations and Warranties................................. 30
ARTICLE II THE NOTES .................................................................................. 30
SECTION 2.01. General Provisions; Optional Redemption by Issuer.......................... 30
SECTION 2.02. Execution, Authentication, Delivery, and Dating............................ 32
SECTION 2.03. Transfer and Exchange...................................................... 32
SECTION 2.04. Mutilated, Destroyed, Lost and Stolen Notes................................ 33
SECTION 2.05. Book-Entry Registration.................................................... 34
SECTION 2.06. Notice to Clearing Agency Noteholders...................................... 35
SECTION 2.07. Definitive Notes........................................................... 35
SECTION 2.08. Payment of Interest and Principal; Rights Preserved........................ 36
SECTION 2.09. Persons Deemed Owners...................................................... 36
SECTION 2.10. Cancellation............................................................... 36
SECTION 2.11. Noteholder Lists........................................................... 37
SECTION 2.12. Treasury Notes............................................................. 37
SECTION 2.13. CUSIP Numbers.............................................................. 37
SECTION 2.14. Calculation of the LIBOR Rate.............................................. 37
ARTICLE III ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION AND APPLICATION OF MONEYS; REPORTS.............. 38
SECTION 3.01. Transaction Accounts; Investments by Trustee............................... 38
SECTION 3.02. Collection of Moneys....................................................... 40
SECTION 3.03. Collection Account; Payments............................................... 41
SECTION 3.04. The Reserve Account........................................................ 44
i
SECTION 3.05. Reports by Trustee; Notices of Certain Payments............................ 44
SECTION 3.06. Trustee May Rely on Certain Information from Servicer...................... 45
SECTION 3.07. Optional Deposits by the Insurer; Notice of Waivers........................ 45
SECTION 3.08. The Security Deposit Account............................................... 46
SECTION 3.09. Renewal Account............................................................ 46
SECTION 3.10. Shared Collections......................................................... 47
SECTION 3.11. Securities Intermediary.................................................... 47
ARTICLE IV THE POLICY.................................................................................. 48
SECTION 4.01. Claims Under Policy........................................................ 48
SECTION 4.02. Preference Claims.......................................................... 49
SECTION 4.03. Surrender of Policy........................................................ 50
ARTICLE V RELEASE OF LEASES AND INTERESTS IN EQUIPMENT................................................. 50
SECTION 5.01. Release of Equipment....................................................... 50
SECTION 5.02. Release of Leases Upon Final Lease Payment................................. 50
SECTION 5.03. Execution of Documents..................................................... 51
SECTION 5.04. Further Release of Collateral.............................................. 51
ARTICLE VI SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER............................................. 51
SECTION 6.01. Servicer Events of Default................................................. 51
SECTION 6.02. Substitute Servicer........................................................ 52
ARTICLE VII EVENTS OF DEFAULT; REMEDIES................................................................ 52
SECTION 7.01. Events of Default.......................................................... 52
SECTION 7.02. Acceleration of Maturity; Rescission and Annulment......................... 54
SECTION 7.03. Remedies................................................................... 55
SECTION 7.04. Trustee Shall File Proofs of Claim......................................... 56
SECTION 7.05. Waiver of Past Events...................................................... 57
SECTION 7.06. Trustee May Enforce Claims Without Possession of Notes..................... 57
SECTION 7.07. Application of Money Collected............................................. 57
SECTION 7.08. Limitation on Suits........................................................ 59
SECTION 7.09. Unconditional Right of Noteholders to Receive Principal and Interest....... 60
SECTION 7.10. Restoration of Rights and Remedies......................................... 60
SECTION 7.11. Rights and Remedies Cumulative............................................. 60
SECTION 7.12. Delay or Omission Not Waiver............................................... 60
SECTION 7.13. Control by Noteholders..................................................... 61
SECTION 7.14. Undertaking for Costs...................................................... 61
SECTION 7.15. Waiver of Stay or Extension Laws........................................... 61
SECTION 7.16. Sale of Asset Pool......................................................... 62
ARTICLE VIII THE TRUSTEE............................................................................... 63
SECTION 8.01. Certain Duties and Responsibilities........................................ 63
SECTION 8.02. Notice of Defaults or Events of Default.................................... 64
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SECTION 8.03. Certain Rights of Trustee.................................................. 64
SECTION 8.04. May Hold Notes............................................................. 66
SECTION 8.05. Money Held in Trust........................................................ 66
SECTION 8.06. Compensation, Reimbursement, etc........................................... 66
SECTION 8.07. Corporate Trustee Required; Eligibility.................................... 66
SECTION 8.08. Resignation and Removal; Appointment of Successor.......................... 67
SECTION 8.09. Acceptance of Appointment by Successor..................................... 68
SECTION 8.10. Merger, Conversion, Consolidation or Succession to Business................ 69
SECTION 8.11. Co-Trustees and Separate Trustees.......................................... 69
SECTION 8.12. Acceptance by Trustee...................................................... 70
SECTION 8.13. Preferential Collection of Claims Against the Issuer....................... 71
SECTION 8.14. Reports by Trustee to Noteholders.......................................... 71
SECTION 8.15. No Proceedings............................................................. 71
SECTION 8.16. Appointment and Powers..................................................... 71
SECTION 8.17. Performance of Duties...................................................... 72
SECTION 8.18. Representations and Warranties of Trustee.................................. 72
SECTION 8.19. Control by the Insurer..................................................... 72
SECTION 8.20. Maintenance of Office or Agency............................................ 73
ARTICLE IX COVENANTS................................................................................... 73
SECTION 9.01. Payment of Principal and Interest.......................................... 73
SECTION 9.02. Maintenance of Office or Agency; Chief Executive Office.................... 73
SECTION 9.03. Money for Payments to Noteholders to be Held in Trust...................... 73
SECTION 9.04. Corporate Existence; Merger; Consolidation, etc............................ 74
SECTION 9.05. Protection of Asset Pool; Further Assurances............................... 75
SECTION 9.06. [Reserved]................................................................. 76
SECTION 9.07. Performance of Obligations; Assignment and Servicing Agreement............. 76
SECTION 9.08. Negative Covenants......................................................... 76
SECTION 9.09. Information as to Issuer................................................... 77
SECTION 9.10. Taxes...................................................................... 77
SECTION 9.11. Indemnification............................................................ 78
SECTION 9.12. Commission Reports; Reports to Trustee; Reports to Noteholders............. 78
SECTION 9.13. Insurer's Right with Respect to Subsequent Issuances....................... 79
SECTION 9.14. Perfection Representations, Warranties and Covenants....................... 79
SECTION 9.15. Representations and Warranties............................................. 82
ARTICLE X SUPPLEMENTAL INDENTURES...................................................................... 84
SECTION 10.01. Supplemental Indentures Without Consent of Noteholders..................... 84
SECTION 10.02. Supplemental Indentures with Consent of Noteholders........................ 85
SECTION 10.03. Execution of Supplemental Indentures....................................... 86
SECTION 10.04. Effect of Supplemental Indentures.......................................... 86
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SECTION 10.05. Reference in Notes to Supplemental Indentures.............................. 86
SECTION 10.06. Compliance with Trust Indenture Act........................................ 86
ARTICLE XI SATISFACTION AND DISCHARGE.................................................................. 86
SECTION 11.01. Satisfaction and Discharge of Indenture.................................... 86
SECTION 11.02. Application of Trust Money................................................. 87
ARTICLE XII MISCELLANEOUS.............................................................................. 88
SECTION 12.01. Trust Indenture Act Controls............................................... 88
SECTION 12.02. Communication by Noteholders with Other Noteholders........................ 88
SECTION 12.03. Location of Leases......................................................... 88
SECTION 12.04. Officers' Certificate and Opinion of Counsel as to Conditions Precedent.... 88
SECTION 12.05. Statements Required in Certificate or Opinion.............................. 89
SECTION 12.06. Nonpetition................................................................ 89
SECTION 12.07. Non-Recourse............................................................... 89
SECTION 12.08. Subordination of Interest of Noteholders................................... 89
SCHEDULES
SCHEDULE 1 Leases
EXHIBITS
EXHIBIT A Forms of Notes and Trustee's Certificate of Authentication
iv
IKON RECEIVABLES LLC
Reconciliation and Tie between the Indenture
dated as of April 1, 2003 and the
Trust Indenture Act of 1939, as amended
Trust Indenture Act Section Indenture Section
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Section 310 (a)(1)................................ Section 8.07
(a)(2)................................ 8.07
(a)(3)................................ Not Applicable
(a)(4)................................ Not Applicable
(b)................................... 8.07; 8.08; 7.08;
1.05; 1.06
(c)................................... Not Applicable
311 (a)................................... 8.13
(b)................................... 8.13
312 (a)................................... 2.11
(b)................................... 12.02
(c)................................... 12.02
313 (a)................................... 8.14
(b)(1)................................ Not Applicable
(b)(2)................................ 8.14
(c)................................... 8.14; 1.06
(d)................................... 8.14
314 (a)................................... 9.12; 9.09; 1.06
(b)................................... Not Applicable
(c)(1)................................ 12.04
(c)(2)................................ 12.04
(c)(3)................................ 12.01
(d)................................... 12.01
(e)................................... 12.05
(f)................................... Not Applicable
315 (a)................................... 8.01(a)
(b)................................... 8.02; 1.06
(c)................................... 8.01(b)
(d)................................... 8.01(c)
(e)................................... 7.14
316 (a)(last sentence).................... 2.12
(a)(1)(A)............................. 7.13
(a)(1)(b)............................. 7.12
(a)(2)................................ Not Applicable
317 (a)(1)................................ 7.03(c)
(a)(2)................................ 7.04
(b)................................... 9.03(c)
318 (a)................................... 12.01, 12.02
(c)................................... 12.01
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INDENTURE
This INDENTURE dated as of April 1, 2003, is among IKON
RECEIVABLES FUNDING, LLC, a Delaware limited liability company (herein called
the "Issuer"), BNY MIDWEST TRUST COMPANY, an Illinois Banking Corporation, as
trustee (herein called the "Trustee"), and IOS CAPITAL, LLC, a Delaware limited
liability company, as servicer (herein called the "Servicer").
RECITALS
The Issuer has duly authorized the issuance of $852,085,000 in
aggregate principal amount of its Lease-Backed Notes, consisting of $253,200,000
aggregate principal amount of 1.30813% Class A-1 Lease-Backed Notes (the "Class
A-1 Notes"), $26,700,000 aggregate principal amount of 1.68% Class A-2
Lease-Backed Notes (the "Class A-2 Notes"), $206,400,000 aggregate principal
amount of variable rate Class A-3a Lease-Backed Notes (the "Class A-3a Notes"),
$206,400,000 aggregate principal amount of 2.33% Class A-3b Lease-Backed Notes
(the "Class A-3b Notes"; and, together with the Class A-3a Notes, the "Class A-3
Notes"), and $159,385,000 aggregate principal amount of 3.27% Class A-4
Lease-Backed Notes (the "Class A-4 Notes"; and, together with the Class A-1
Notes, Class A-2 Notes, and Class A-3 Notes, the "Notes" or the "Class A
Notes"), and to provide therefor the Issuer has duly authorized the execution
and delivery of this Indenture. The Notes shall be entitled to payments of
interest and principal as set forth herein.
Ambac Assurance Corporation, a Wisconsin stock insurance company
(the "Insurer"), has issued and delivered a financial guaranty insurance policy,
dated the Issuance Date (with endorsements, the "Policy"), pursuant to which the
Insurer guarantees Insured Payments, as defined in the Policy. The Insurer has
also issued and delivered the Swap Insurance Policy (as defined herein).
As an inducement to the Insurer to issue and deliver the Policy
and the Swap Insurance Policy, the Issuer and the Insurer have executed and
delivered the Insurance and Indemnity Agreement, dated as of April 23, 2003 (as
amended from time to time, the "Insurance Agreement") among IOS Capital, LLC,
IKON Receivables-2, LLC, the Issuer and the Insurer.
As an additional inducement to the Insurer to issue the Policy
and the Swap Insurance Policy, and as security for the performance by the Issuer
of the Insurer Secured Obligations (as defined below) and as security for the
performance by the Issuer of the Trustee Secured Obligations, the Issuer has
agreed to assign the Asset Pool (as defined below) to the Trustee for the
benefit of the Issuer Secured Parties, as their respective interests may appear.
All things necessary to make the Notes, when executed by the
Issuer and authenticated and delivered hereunder, the valid obligations of the
Issuer, and to make this Indenture a valid agreement of the Issuer, in
accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the holders thereof, it is mutually covenanted and agreed, for the
benefit of all Noteholders, as follows:
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee on the Issuance Date,
for the benefit and security of the Issuer Secured Parties, all of the Issuer's
right, title and interest in and to (a) the Leases and all Lease Payments,
Renewal Payments, Casualty Payments, Retainable Deposits, Lease Purchase
Amounts, Termination Payments, Servicer Advances and other amounts now due or
becoming due with respect thereto since the Cut-Off Date (other than any
prepayments of rent required pursuant to the terms of any Lease at or before the
commencement of the Lease and any payments due before the Cut-Off Date) and all
Additional Leases and Substitute Leases and all Lease Payments, Renewal
Payments, Casualty Payments, Retainable Deposits, Lease Purchase Amounts,
Termination Payments, Servicer Advances and other amounts due or becoming due
with respect thereto since the effective date of their respective addition or
substitution (other than any prepayments of rent required by the terms of any
Lease at or before the commencement of the Lease and any payments due before the
effective date of such addition or substitution), (b) all rights to payment or
performance under any Lease Guaranty, (c) all rights and interests of the Issuer
in any collateral with respect to any Lease, including any security deposit
(whether or not they shall have become Retainable Deposits) and any security
interest in any Equipment securing the obligations of the related Lessees under
the Leases, (d) all interests of the Issuer in the Equipment (which, however,
excludes any ownership interests therein) at any time subject to any Lease,
including the security interest granted by the Seller to the Issuer pursuant to
the Assignment and Servicing Agreement in the Equipment, (e) all rights,
remedies, claims, powers and privileges of the Issuer under or with respect to
the Swap and the Swap Documents (including all rights or security interests with
respect to any guarantees thereof or collateral pledged to the Issuer
thereunder), (f) all Transaction Accounts and all moneys or other property
(including all rights of the Issuer with respect to financial assets) from time
to time on deposit in, or credited to, any of the Transaction Accounts,
including all investments and income from the investment of such moneys, (g) all
rights of the Issuer under the Assignment and Servicing Agreement including,
without limitation, all rights to require the repurchase of Leases, and (h) all
proceeds of any of the foregoing, whether in cash or other property
(collectively, the "Asset Pool").
Such Grant is made in trust to the Trustee, for the benefit of
the Issuer Secured Parties.
The Grant of the Asset Pool effected by this Indenture shall
include all rights, powers, and options (but none of the obligations) of the
Issuer with respect thereto, including, without limitation, the immediate and
continuing right to claim for, collect, receive, and give receipts for Lease
Payments in respect of the Leases and all other moneys constituting part of the
Asset Pool, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options,
2
to bring judicial proceedings in the name of the Issuer or otherwise, and
generally to do and receive anything that the Issuer is or may be entitled to do
or receive under the Leases or with respect to any part of the Asset Pool.
In addition, the Insurer shall cause the Policy to be issued to
the Trustee for the benefit of the Noteholders and shall cause the Swap
Insurance Policy to be issued.
The Trustee acknowledges such Grant, accepts the trusts
hereunder in accordance with the provisions hereof, and agrees to perform the
duties herein required to the best of its ability and to the end that the
interests of the Noteholders and the Insurer may be adequately and effectively
protected as hereinafter provided.
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01. General Definitions.
Except as otherwise specified or as the context may otherwise
require, the following terms have the meanings set forth below for all purposes
of this Indenture, and the definitions of such terms are applicable to the
singular as well as to the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
1999-2 Series: means the $699,595,000 aggregate original
principal amount of Lease-Backed Notes issued pursuant to the Series 1999-2
Indenture.
2000-1 Series: means the $498,510,000 aggregate original
principal amount of Lease-Backed Notes issued pursuant to the Series 2000-1
Indenture.
2000-2 Series: means the $634,431,000 aggregate original
principal amount of Lease-Backed Notes issued pursuant to the Series 2000-2
Indenture.
2001-1 Series: means the $595,000,000 aggregate original
principal amount of Lease-Backed Notes issued pursuant to the Series 2001-1
Indenture.
2002-1 Series: means the $634,800,00 aggregate original
principal amount of Leased Backed Notes issued pursuant to the Series 2002-1
Indenture.
Acceleration Event: if: (i) a Servicer Event of Default has
occurred (regardless of whether the rights and obligations of the Servicer have
been terminated pursuant to Section 6.01) unless waived by the Insurer (so long
as an Insurer Default has not occurred and is not continuing); (ii) with respect
to any Payment Date, the Overcollateralization Balance is less than or equal to
the Overcollateralization Floor; (iii) for any three consecutive Due Periods,
the average of the Annualized Default Rates for those Due Periods is greater
than 6.25%; or (iv) for any three consecutive Due Periods, the average of the
Delinquency Rates for those Due Periods is greater than
3
7.0%, provided that, Acceleration Events may be waived by the Insurer but are
not subject to cure.
Act: with respect to any Noteholder, as defined in Section 1.04.
Additional Lease: as defined in Section 14 of the Assignment and
Servicing Agreement.
Additional Principal: with respect to each Payment Date equals
the excess, if any, of (i)(A) the Outstanding Principal Amount of the Notes plus
the Overcollateralization Balance as of the immediately preceding Payment Date
after giving effect to payments on the preceding Payment Date minus (B) the
Discounted Present Value of the Performing Leases as of the related
Determination Date, over (ii) the Class A Principal Payment to be paid on the
current Payment Date.
Affiliate: with respect to any specified Person, any other
Person which directly or indirectly controls, or is controlled by, or is under
direct or indirect common control with, such specified Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise. A Person
shall be presumed to be an Affiliate of another Person where (a) such Person
beneficially owns or holds 10% or more of any class of voting securities of such
designated Person or 10% or more of the equity interests in such designated
Person; or (b) such designated Person beneficially owns or holds 10% or more of
any class of voting securities in such Person or such designated Person
beneficially owns or holds 10% or more of the equity interests in such Person.
Allocated Other Series Shared Collections: as defined in Section
3.10.
Annualized Default Rate: for any Due Period, the sum as of the
related Determination Date of the Discounted Present Value of the Leases that
became Non-Performing Leases during such Due Period minus the sum of the
recoveries on Non-Performing Leases received during such Due Period, divided by
the Discounted Present Value of the Leases on the Determination Date immediately
preceding that Determination Date, multiplied by twelve.
Applicable Indenture means, for each Other Series, the Indenture
pursuant to which such Other Series was issued.
Applicable Trustee means, for each Other Series, the Trustee
appointed pursuant to the Applicable Indenture for such Series.
Asset Pool: as defined in the Granting Clause hereof.
Assignment and Servicing Agreement: the Assignment and Servicing
Agreement dated as of April 1, 2003 among the Issuer, the Seller and IOS
Capital, as the same may be amended or modified from time to time in accordance
with the provisions hereof and thereof.
4
Authorized Officer: with respect to any matter, any officer of
or other Person representing the Issuer, IOS Capital or the Servicer, as the
case may be, who is authorized to act for the Issuer, IOS Capital or the
Servicer, as the case may be.
Available Funds: with respect to any Payment Date, (1) the
following amounts on deposit in the Collection Account on the related
Determination Date: (a) Lease Payments (including Renewal Payments) due during
the immediately preceding or any prior Due Period, (b) recoveries from
Non-Performing Leases (including amounts received from the Seller pursuant to
Section 5.05 of the Assignment and Servicing Agreement) to the extent IOS
Capital has not repurchased or substituted Substitute Leases for such
Non-Performing Leases; (c) late charges received on delinquent Lease Payments
not advanced by the Servicer; (d) proceeds from purchases by IOS Capital of
Leases as a result of breaches of representations and warranties to the extent
IOS Capital has not substituted Substitute Leases for such Leases; (e) proceeds
from the investment of funds in the Collection Account, the Renewal Account, the
Reserve Account and the Security Deposit Account; (f) Casualty Payments; (g)
Retainable Deposits; (h) Servicer Advances, if any, in respect of the related
Due Period; (i) any amounts paid by the Counterparty to the Issuer pursuant to
the Swap Documents; (j) Termination Payments to the extent that, prior to the
occurrence of an Acceleration Event, an event that would give rise to the
obligation to pay Additional Principal under Section 3.03(b)(viii) or an Event
of Default, the Issuer does not reinvest such Termination Payments in Additional
Leases; (k) proceeds received for redemption of the Notes pursuant to Section
2.01(b); (l) payments received from the Insurer pursuant to Section 3.07; (m)
funds, if any, on deposit in the Renewal Account; (n) to the extent there occurs
an Available Funds Shortfall, funds, if any, on deposit in the Reserve Account
after making any distribution in respect of such Payment Date from the Reserve
Account to the Collection Account on account of investment earnings pursuant to
the first sentence of Section 3.04(b); and (o) Allocated Other Series Shared
Collections to be allocated to the Notes for such Payment Date pursuant to
Section 3.10.
Available Funds Shortfall: as defined in Section 3.04(b).
Available Reserve Amount: with respect to any Payment Date, the
amount on deposit in the Reserve Account after making any distribution in
respect of such Payment Date from the Reserve Account to the Collection Account
on account of investment earnings pursuant to the first sentence of Section
3.04(b).
Benefit Plan: as defined in Section 2.03(a).
Book-Entry Class A-1 Notes: the Class A-1 Notes, evidenced by
one or more global notes registered in the name of DTC or its nominee, the
ownership and transfers of which shall be made through book entries by DTC as
described in Section 2.05.
Book-Entry Class A-2 Notes: the Class A-2 Notes, evidenced by
one or more global notes registered in the name of DTC or its nominee, the
ownership and transfers of which shall be made through book entries by DTC as
described in Section 2.05.
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Book-Entry Class A-3a Notes: the Class A-3a Notes, evidenced by
one or more global notes registered in the name of DTC or its nominee, the
ownership and transfers of which shall be made through book entries by DTC as
described in Section 2.05.
Book-Entry Class A-3b Notes: the Class A-3b Notes, evidenced by
one or more global notes registered in the name of DTC or its nominee, the
ownership and transfers of which shall be made through book entries by DTC as
described in Section 2.05.
Book-Entry Class A-4 Notes: the Class A-4 Notes, evidenced by
one or more global notes registered in the name of DTC or its nominee, the
ownership and transfers of which shall be made through book entries by DTC as
described in Section 2.05.
Book-Entry Note: any Book-Entry Class A-1 Note, Book-Entry Class
A-2 Note, Book-Entry Class A-3a Note, Book-Entry Class A-3b Note or Book-Entry
Class A-4 Note.
Business Day: any day that is not a Saturday, Sunday or other
day on which commercial banking institutions in the cities in which the
Corporate Trust Office and the principal offices of the Insurer and the Servicer
are located are authorized or obligated by law or executive order to remain
closed.
Casualty Payment: any payment pursuant to a Lease on account of
the loss, theft, condemnation, governmental taking, destruction, or damage
beyond repair of any item of Equipment subject thereto which results, in
accordance with the terms of the Lease, in a reduction in the number or amount
of any future Lease Payments due thereunder or in the termination of the
Lessee's obligation to make future Lease Payments thereunder.
Cede & Co.: the initial registered holder of the Notes, acting
as nominee of The Depository Trust Company.
Class A Notes: as defined in the Recitals hereto.
Class A Percentage: 89.99156%.
Class A Principal Payment: (a) while the Class A-1 Notes are
outstanding, (i) on all Payment Dates prior to the Payment Date in May 2004, the
lesser of (1) the amount necessary to reduce the Outstanding Principal Amount on
the Class A-1 Notes to zero and (2) the difference between (A) the Discounted
Present Value of the Performing Leases as of the Determination Date for the
preceding Payment Date and (B) the Discounted Present Value of the Performing
Leases as of the related Determination Date, and (ii) on and after the Payment
Date in May 2004, the entire Outstanding Principal Amount of the Class A-1
Notes, and (b) after the Class A-1 Notes have been paid in full, the amount
necessary to reduce the aggregate Outstanding Principal Amount on the Class A
Notes to the Class A Target Investor Principal Amount.
6
Class A Target Investor Principal Amount: with respect to each
Payment Date, an amount equal to the lesser of (a) the product of (i) the Class
A Percentage and (ii) the Discounted Present Value of the Performing Leases as
of the related Determination Date, and (b) the Discounted Present Value of the
Performing Leases as of the related Determination Date minus the
Overcollateralization Floor.
Class A-1 Initial Principal Amount: $253,200,000.
Class A-1 Note Interest Rate: the rate at which interest accrues
on the Class A-1 Notes, which rate shall be equal to 1.30813%.
Class A-1 Note Owner: with respect to a Book-Entry Class A-1
Note, the Person who is the beneficial owner of such Book-Entry Class A-1 Note,
as reflected on the books of DTC, or on the books of a Person maintaining an
account with DTC (directly or as an indirect participant, in accordance with the
rules of DTC).
Class A-1 Noteholder: Cede & Co. or a holder of a Definitive
Class A-1 Note.
Class A-1 Notes: as defined in the Recitals hereto.
Class A-2 Initial Principal Amount: $26,700,000.
Class A-2 Note Interest Rate: the rate at which interest accrues
on the Class A-2 Notes, which rate shall be equal to 1.68%.
Class A-2 Note Owner: with respect to a Book-Entry Class A-2
Note, the Person who is the beneficial owner of such Book-Entry Class A-2 Note,
as reflected on the books of DTC, or on the books of a Person maintaining an
account with DTC (directly or as an indirect participant, in accordance with the
rules of DTC).
Class A-2 Noteholder: Cede & Co. or a holder of a Definitive
Class A-2 Note.
Class A-2 Notes: as defined in the Recitals hereto.
Class A-3a Initial Principal Amount: $206,400,000.
Class A-3b Initial Principal Amount: $206,400,000.
Class A-3a Note Interest Rate: the rate at which interest
accrues on the Class A-3a Notes, which rate shall be equal to LIBOR plus 0.24%.
Class A-3b Note Interest Rate: the rate at which interest
accrues on the Class A-3b Notes, which rate shall be equal to 2.33% per annum.
Class A-3a Note Owner: with respect to a Book-Entry Class A-3a
Note, the Person who is the beneficial owner of such Book-Entry Class A-3a Note,
as reflected
7
on the books of DTC, or on the books of a Person maintaining an account with DTC
(directly or as an indirect participant, in accordance with the rules of DTC).
Class A-3b Note Owner: with respect to a Book-Entry Class A-3b
Note, the Person who is the beneficial owner of such Book-Entry Class A-3b Note,
as reflected on the books of DTC, or on the books of a Person maintaining an
account with DTC (directly or as an indirect participant, in accordance with the
rules of DTC).
Class A-3a Noteholder: Cede & Co. or a holder of a Definitive
Class A-3a Note.
Class A-3b Noteholder: Cede & Co. or a holder of a Definitive
Class A-3b Note.
Class A-3 Notes: as defined in the Recitals hereto.
Class A-3a Notes: as defined in the Recitals hereto.
Class A-3b Notes: as defined in the Recitals hereto.
Class A-4 Initial Principal Amount: $159,385,000.
Class A-4 Note Interest Rate: the rate at which interest accrues
on the Class A-4 Notes, which rate shall be equal to 3.27% per annum.
Class A-4 Note Owner: with respect to a Book-Entry Class A-4
Note, the Person who is the beneficial owner of such Book-Entry Class A-4 Note,
as reflected on the books of DTC, or on the books of a Person maintaining an
account with DTC (directly or as an indirect participant, in accordance with the
rules of DTC).
Class A-4 Noteholder: Cede & Co. or a holder of a Definitive
Class A-4 Note.
Class A-4 Notes: as defined in the Recitals hereto.
Clearstream: Clearstream Banking, societe anonyme.
Clearing Agency: an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act, or any successor provision
thereof. The initial Clearing Agency shall be DTC.
Clearing Agency Participant: a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
Code: as defined in Section 2.03(a).
Collection Account: the account or accounts by that name
established and maintained by the Trustee pursuant to Section 3.01(a).
8
Commission: the Securities and Exchange Commission.
Corporate Trust Office: the principal corporate trust office of
the Trustee located at 0 Xxxxx Xx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000, Attn: Structured Finance Services, or at such other address as the
Trustee may designate from time to time by notice to the Noteholders, the
Insurer, the Issuer and the Servicer.
Counterparty: Xxxxxx Brothers Special Financing Inc., a Delaware
corporation, or its permitted successors or assigns under the Swap Documents.
Cumulative Loss Amount: with respect to each Payment Date, an
amount equal to the excess, if any, of (a) the total of (i) the Outstanding
Principal Amount of the Notes as of the immediately preceding Payment Date after
giving effect to all principal payments made on that day, plus (ii) the
Overcollateralization Balance as of the immediately preceding Payment Date,
minus (iii) the lesser of (A) the Discounted Present Value of the Performing
Leases as of the Determination Date relating to the immediately preceding
Payment Date minus the Discounted Present Value of the Performing Leases as of
the related Determination Date and (B) Available Funds remaining after the
payment of the Insurer Premium, amounts owing to the Counterparty pursuant to
the Swap Documents, amounts owing the Servicer, Interest Payments and
Reimbursement Amounts on such Payment Date, over (b) the Discounted Present
Value of the Performing Leases as of the related Determination Date.
Cut-Off Date: the opening of business on April 1, 2003.
Default: any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
Deficiency Amount: (a) for any Payment Date, any shortfall in
the sum of Available Funds (excluding amounts in the Reserve Account) plus
amounts on deposit in the Reserve Account available to pay the related Interest
Payments due on such Payment Date, (b) on the Payment Date in May 2004, any
shortfall in the sum of Available Funds (excluding amounts in the Reserve
Account) plus amounts on deposit in the Reserve Account available to pay the
Outstanding Principal Amount of Class A-1 Notes, (c) on the Payment Date in
November 2005, any shortfall in the sum of Available Funds (excluding amounts in
the Reserve Account) plus amounts on deposit in the Reserve Account available to
pay the Outstanding Principal Amount of the Class A-2 Notes, (d) on the Payment
Date in December 2007, any shortfall in the sum of Available Funds (excluding
amounts in the Reserve Account) plus amounts on deposit in the Reserve Account
available to pay, on a pro rata basis, the Outstanding Principal Amount of the
Class A-3a Notes and the Class A-3b Notes and (e) on the Payment Date in July
2011, any shortfall in the sum of Available Funds (excluding amounts in the
Reserve Account) plus amounts on deposit in the Reserve Account available to pay
the Outstanding Principal Amount of the Class A-4 Notes (in each case after
taking into account all payments to be made on such Payment Date, including
payments resulting from the application of funds in accordance with Section
3.07).
9
Definitive Note: a definitive, fully registered Note issued
pursuant to Section 2.07.
Delinquency Rate: for any Due Period, the sum as of the related
Determination Date of the Discounted Present Value of the Leases that more than
62 days delinquent, as of such Determination Date, divided by the Discounted
Present Value of the Leases on that Determination Date.
Delinquent Lease: as of any Determination Date, any Lease (other
than a Lease which became a Non-Performing Lease prior to such Determination
Date) with respect to which the Lessee has not paid at least 90% of each Lease
Payment then due.
Depository Agreement: the letter of representations, between the
Issuer and the Depository Trust Company, as Clearing Agency.
Designated Indenture: means each or any of the indentures for
any Designated Series.
Designated Series: means any series of lease-backed notes of the
Issuer or any issuer that is affiliated with the Issuer other than (i) the Notes
issued pursuant to this Indenture or (ii) any notes issued pursuant to, the
Series 1999-2 Indenture, the Series 2000-1 Indenture, the Series 2000-2
Indenture, the Series 0000-0 Xxxxxxxxx and the Series 2002-1 Indenture, that are
designated by the Issuer to be included in the sharing of Shared Collections and
Other Series Shared Collections.
Designated Trustee: means each or any of the trustees appointed
pursuant to the Designated Indentures.
Determination Date: with respect to any Payment Date, the fifth
Business Day immediately preceding such Payment Date.
Discount Rate: with respect to any Determination Date, 3.60%.
Discounted Present Value: with respect to any Lease as of any
date, an amount equal to the net present value of all remaining scheduled Lease
Payments, determined by discounting each such Lease Payment on a monthly basis
(assuming a calendar year consisting of twelve 30-day months), at a rate equal
to the Discount Rate, to the last day of the Due Period prior to the relevant
calculation date. In determining the Discounted Present Value of any Lease on
any date, it will be assumed that Lease Payments are due on the last day of the
calendar month immediately preceding the relevant calculation date and the
future remaining Lease Payments will be calculated after giving effect to any
payments received prior to the date of calculation to the extent such payments
relate to Lease Payments due and payable by the Lessee with respect to the
related Due Period and any prior Due Period. In calculating the Discounted
Present Value of any Downsizeable Lease, remaining scheduled Lease Payments
shall be reduced by the maximum amount that any such Lease Payments related to
such Downsizeable Lease may be reduced pursuant to a Downsizing Addendum related
to such Downsizeable Lease.
10
Discounted Present Value of the Delinquent Leases: with respect
to any Payment Date or Determination Date, the Discounted Present Value of the
Leases that are Delinquent Leases and as to which a Lease Payment, or any
portion thereof, was more than 62 days overdue as of the last day of the Due
Period immediately preceding such Payment Date or Determination Date.
Discounted Present Value of the Performing Leases: the
Discounted Present Value of the Leases, reduced by the discounted present value
of all future remaining scheduled Lease Payments on the Non-Performing Leases,
discounted at the Discount Rate and otherwise determined in accordance with the
definition of "Discounted Present Value".
Downsizeable Lease: means a Lease with respect to which a
Downsizing Addendum has been executed by the Originator and the Lessee.
Downsizing Addendum: means an addendum to a Lease (or a
modification made directly in the Lease) permitting the Lessee thereunder to
terminate the Lease with respect to certain Equipment originally covered by the
Lease, and to reduce the Lease Payments due under such Lease as a result of such
termination.
DTC: The Depository Trust Company.
Due Period: with respect to any Payment Date and the
Determination Date with respect thereto, the period beginning on the first day
and ending on the last day of the calendar month prior to the month in which
such Payment Date and such Determination Date occur.
Eligible Account: either (a) an account maintained with a
depository institution or trust company acceptable to each of the Rating
Agencies and (so long as no Insurer Default has occurred and is continuing) the
Insurer or (b) a trust account or similar account acceptable to each of the
Rating Agencies maintained with a federal or state chartered depository
institution, which may be an account maintained with the Trustee.
Eligible Investments: any one or more of the following
obligations or securities:
(a) direct non-callable obligations of, and non-callable
obligations fully guaranteed by, the United States of America, or any
agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America;
(b) demand and time deposits in, certificates of deposits
of, and bankers' acceptances issued by, any depository institution or
company (including the Trustee acting in its commercial capacity)
incorporated under the laws of the United States of America or any state
thereof, having a combined capital and surplus of at least $100,000,000,
and subject to supervision and examination by federal and/or state
banking authorities, so long as at the time of such investment or
contractual commitment providing for such investment the commercial
paper
11
or other short-term debt obligations of such depository institution or
company (or, in the case of a depository institution that is the
principal subsidiary of a holding company, the commercial paper or other
short-term debt obligations of such holding company) have the highest
short-term credit ratings available from Moody's and S & P;
(c) purchase obligations with respect to and collateralized
by (i) any security described in clause (a) above or (ii) any other
security issued or guaranteed by an agency or instrumentality of the
United States of America, in each case entered into with a depository
institution or company (acting as principal) of the type described in
clause (b) above; provided that the Trustee has taken delivery of such
security;
(d) commercial paper (including both non-interest bearing
discount obligations and interest-bearing obligations) payable on demand
or on a specified date not more than 270 days after the date of issuance
thereof having the highest short-term credit ratings from Moody's and
S&P at the time of such investment;
(e) money market funds that redeem their shares on demand
and are rated "P-1/Aaa" by Moody's and "AAAm" or "AAA-G" by S&P
(including funds for which the Trustee or any of its affiliates is
investment manager or advisor);
(f) demand notes payable on demand issued by an institution
rated "P-1" by Moody's and "A-1+" by S&P at the time of such investment;
(g) funding agreements or guaranteed investment contracts
provided by issuers rated "Aaa" or "P-1" by Moody's and "A-1+" by S&P
which provide, by their terms, for receipt by the Trustee on or prior to
the next Payment Date of a predetermined fixed dollar amount which
cannot vary or change; and
(h) such other investments as may be approved by the Rating
Agencies and, so long as no Insurer Default has occurred and is
continuing, the Insurer.
Equipment: with respect to any Lease, any office, business, or
other equipment or personal property leased to a Lessee, together with any
replacement parts, additions, modifications, and/or repairs thereto, any
replacements or substitutions thereof, and any accessories incorporated therein
and/or affixed thereto, subject to such Lease, or, following expiration or
termination of the Lease to which the same was previously subject, remaining
subject to the security interest granted by the Seller to the Issuer pursuant to
Section 1.02(b) of the Assignment and Servicing Agreement.
ERISA: the Employee Retirement Income Security Act of 1974, as
amended.
Euroclear: the Euroclear System.
Event of Default: as defined in Section 7.01.
Exchange Act: the Securities Exchange Act of 1934, as amended.
12
Excess Copy Charge: with respect to any Lease, means the amount
owing by such Lessee under such Lease reflecting usage of the related Equipment
in excess of a specified copy amount per month.
Financing Statement: as defined in Section 14 of the Assignment
and Servicing Agreement.
Governmental Authority: any court or federal or state regulatory
body, administrative agency or other tribunal or other governmental
instrumentality.
Grant: grant, bargain, sell, convey, assign, transfer, mortgage,
pledge, create and grant a security interest in and right of set-off against,
deposit, set over and confirm.
Holder: a holder of a Note.
Indemnified Party: as defined in Section 9.11.
Indenture: this instrument as originally executed and as from
time to time supplemented or amended pursuant to the applicable provisions
hereof.
Initial Payment Date: May 15, 2003.
Insurance Agreement: as defined in the Recitals hereto.
Insured Payments: as defined in the Policy and as defined as
"Insured Amounts" in the Swap Insurance Policy.
Insurer: as defined in the Recitals hereto.
Insurer Default: the failure by the Insurer to make a payment
required under the Policy in accordance with the terms thereof.
Insurer Premium: any monthly premium fees due and payable to the
Insurer pursuant to the Insurance Agreement.
Insurer Secured Obligations: all amounts and obligations which
may at any time be owed to or on behalf of the Insurer (or any agents,
accountants or attorneys for the Insurer) under this Indenture, the Insurance
Agreement or any other Transaction Document.
Interest Accrual Period: means, with respect to the Class A-1
and the Class A-3a Notes, the period beginning on, and including, April 23,
2003, and ending on, but excluding, the Initial Payment Date and each subsequent
period beginning on, and including, the last day of the preceding Interest
Accrual Period and ending on, but excluding, the next following Payment Date.
Interest Payments: as defined in Section 2.01(c).
IOS Capital: IOS Capital, LLC, a Delaware limited liability
company.
13
Issuance Date: April 23, 2003.
Issuer: the Person named as the "Issuer" in the first paragraph
of this instrument.
Issuer Order or Issuer Request: a written order or request
delivered to the Trustee and signed in the name of the Issuer by an Authorized
Officer.
Issuer Secured Parties: each of the Trustee on behalf of the
Noteholders, in respect of the Trustee Secured Obligations, and the Insurer, in
respect of the Insurer Secured Obligations.
Late Payment Rate: as defined in the Policy.
Lease: collectively, (i) each lease agreement, conditional sale
contract and other agreement creating a contractual obligation to which the
Originator is a party, to the extent that such lease agreement, conditional sale
contract or other agreement is described in Exhibit A to the Assignment and
Servicing Agreement (as such Exhibit A may be amended from time to time in
accordance with the Assignment and Servicing Agreement), including, without
limitation, each Additional Lease and Substitute Lease; (ii) each schedule,
supplement or addendum to each such lease agreement, conditional sale contract
or other agreement (and each master lease agreement insofar as it relates to any
such schedule, supplement or addendum); and (iii) any and all amendments or
modifications from time to time to each such lease agreement, conditional sale
contract or other agreement, or to any schedule, supplement or addendum, in
accordance with the Assignment and Servicing Agreement.
Lease Delinquency Payment: any payment made with respect to a
Lease in an amount equal to all or part of any specific Lease Payment due with
respect to such Lease (a) by the Servicer pursuant to Section 5.01 of the
Assignment and Servicing Agreement, (b) by a transfer from the Reserve Account
pursuant to Section 3.04, or (c) by the Issuer in its sole discretion.
Lease Guaranty: with respect to any Lease, any guaranty of
payment or performance of the whole or any part of the liabilities or
obligations of the Lessee under such Lease.
Lease Payment: the equipment financing or equipment rental
portion of each fixed periodic rental payment payable by a Lessee under a Lease.
Casualty Payments, Retainable Deposits, Termination Payments, prepayments of
rent required pursuant to the terms of a Lease at or before commencement of such
Lease, payments becoming due before the Cut-Off Date and supplemental or
additional payments required by the terms of a Lease with respect to taxes,
insurance, maintenance (including, without limitation, any Maintenance Charges),
security deposits or other specific charges (including, without limitation, any
Excess Copy Charges) shall not be Lease Payments hereunder and, in calculating
the Discounted Present Value of the Leases and the Discounted Present Value of
the Performing Leases, the amount thereof shall not be included.
14
Lease Purchase Amount: at any date of determination with respect
to any Lease, means the sum of (i) the Discounted Present Value of the Lease as
of the beginning of the Due Period relating to such date of determination (plus
any amounts previously due and unpaid) and (ii) the product of (x) the amount
described in the foregoing clause (i) and (y) one-twelfth of the Discount Rate.
Lessee: with respect to any Lease, the lessee thereunder.
LIBOR: the London interbank offered rate for one-month
Eurodollar deposits appearing on the Telerate Screen Page 3750, as determined in
accordance with Section 2.14.
LIBOR Business Day: any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the city of London,
England are required or authorized by law to be closed.
Lien: as defined in Section 14 of the Assignment and Servicing
Agreement.
Maintenance Charges: with respect to any Lease, the amount owing
by the Lessee under the terms of the related Lease in respect of maintenance
services being provided in connection therewith.
Maturity: with respect to any installment of principal of or
interest on any Note, the date on which such installment is due and payable as
therein or herein provided, whether at the Stated Maturity, by declaration of
acceleration, or otherwise.
Moody's: Xxxxx'x Investors Service, Inc. and any successors
thereto.
Non-Performing Lease: as of any Determination Date, any Lease
with respect to which at any time following the Cut-Off Date or related Transfer
Date, as the case may be, either (a) more than 10% of any Lease Payment was more
than 120 days overdue as of the last day of the Due Period with respect to such
Determination Date, unless on or before such Determination Date such Lease
Payment (or portion thereof) has been paid or (b) the Servicer has accelerated
the remaining payments or (c) the Servicer has determined such Lease to be
uncollectible in accordance with the Servicer's customary practices prior to the
last day of the Due Period with respect to such Determination Date.
Noteholder: at any time, any Person in whose name a Note is
registered in the Note Register.
Note Interest Rate: the Class A-1 Note Interest Rate, the Class
A-2 Note Interest Rate, the Class A-3a Note Interest Rate, the Class A-3b Note
Interest Rate or the Class A-4 Note Interest Rate, as the case may be.
Note Owner: the beneficial owner of a Note issued hereunder.
Note Register: as defined in Section 2.03(a).
15
Note Registrar: as defined in Section 2.03(a).
Notes: any notes authorized by, and authenticated and delivered
under, this Indenture.
Notice of Claim: as defined in the Policy.
Officers' Certificate: with respect to the Issuer, the Seller or
the Servicer, a certificate signed by the Chairman, the President or a Vice
President of the Issuer, the Seller or the Servicer, as the case may be, and by
another Vice President, the Treasurer, and Assistant Treasurer, the Secretary,
or an Assistant Secretary of the Issuer, the Seller or the Servicer, as the case
may be, who is not the same Person as the other officer signing such
certificate.
Opinion of Counsel: a written opinion, which shall be
satisfactory in form and substance to the Trustee and the Insurer, of counsel
who may, except as otherwise expressly provided in this Indenture, be inside or
outside counsel for the Issuer and who shall be satisfactory to the Trustee and
the Insurer.
Other Indenture: means each or any of the Series 1999-2
Indenture, the Series 2000-1 Indenture, the Series 2000-2 Indenture, the Series
2001-1 Indenture, the Series 2002-1 Indenture, or any Designated Indenture.
Other Lease Payments: all payments on or in respect of Leases
which are not Lease Payments, Lease Delinquency Payments, Casualty Payments,
Retainable Deposits or Termination Payments, including Maintenance Charges and
Excess Copy Charges.
Other Series: means each or any of the 1999-2 Series, the 2000-1
Series, the 2000-2 Series, the 2001-1 Series, the 2002-1 Series or any
Designated Series.
Other Series Shared Collections: means, with respect to any
Other Series, "Shared Collections" under and as defined in the Applicable
Indenture for such Other Series.
Other Series Shortfall Amount: means, with respect to any Other
Series, the "Shortfall Amount" as defined in the Applicable Indenture for such
Other Series.
Other Trustee means: means each or any of the Series 1999-2
Trustee, the Series 2000-1 Trustee, the Series 2000-2 Trustee, the Series 2001-1
Trustee, the Series 2002-1 Trustee or any Designated Trustee.
Outstanding: with respect to the Notes, as of any date of
determination, all Notes theretofore authenticated and delivered under this
Indenture except:
(a) Notes theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
16
(b) Notes or portions thereof for whose payment money in the
necessary amount has been theretofore irrevocably deposited with the
Trustee in trust for the holders of such Notes; and
(c) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Trustee is presented that any such Note is
held by a Person in whose hands the Note is a valid obligation;
provided, however, that Notes which have been paid with proceeds of the Policy
shall continue to remain Outstanding for purposes of this Indenture until the
Insurer has been paid as subrogee hereunder or reimbursed as to such payment
pursuant to the Insurance Agreement as evidenced by a written notice from the
Insurer delivered to the Trustee, and the Insurer shall be deemed to be the
Holder thereof to the extent of any payments thereon made by the Insurer; and
provided, further, that in determining whether the holders of the requisite
percentage of the Outstanding Principal Amount of the Notes have given any
request, demand, authorization, direction, notice, consent, or waiver hereunder,
Notes owned by the Issuer or any Affiliate of the Issuer shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent, or waiver, only Notes that a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Notes so owned by the Issuer or any Affiliate of the Issuer that
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Notes and that the pledgee is not the Issuer, any other
obligor upon the Notes, IOS Capital, the Seller or any Affiliate of any of the
foregoing Persons.
Outstanding Class A Principal Amount: The aggregate principal
amount of the Class A Notes Outstanding at any time.
Outstanding Class A-1 Principal Amount: the aggregate principal
amount of the Class A-1 Notes Outstanding at any time.
Outstanding Class A-2 Principal Amount: the aggregate principal
amount of the Class A-2 Notes Outstanding at any time.
Outstanding Class A-3a Principal Amount: the aggregate principal
amount of the Class A-3a Notes Outstanding at any time.
Outstanding Class X-0x Xxxxxxxxx Xxxxxx: the aggregate principal
amount of the Class A-3b Notes Outstanding at any time.
Outstanding Class A-4 Principal Amount: the aggregate principal
amount of the Class A-4 Notes Outstanding at any time.
Outstanding Principal Amount: the aggregate unpaid principal
amount of the Notes Outstanding at any time.
17
Overcollateralization Balance: with respect to each Payment Date
is an amount equal to the excess, if any, of (a) the Discounted Present Value of
Performing Leases as of the related Determination Date over (b) the Outstanding
Principal Amount of the Notes as of such Payment Date after giving effect to all
principal payments made on that day.
Overcollateralization Floor: with respect to any Payment Date,
(a) 2.5% of the Discounted Present Value of the Leases as of the Cut-Off Date,
plus (b) the Cumulative Loss Amount with respect to such Payment Date, minus (c)
the amount on deposit in the Reserve Account (after giving effect to withdrawals
to be made on account of such Payment Date).
Paying Agent: each agent of the Issuer appointed for the purpose
of making payments on the Notes, including the Trustee.
Payment Date: the 15th day of each month (or the next Business
Day thereafter if such day is not a Business Day), commencing on the Initial
Payment Date, and ending on the latest Stated Maturity.
Person: any individual, corporation, partnership, joint venture,
association, limited liability company, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
Policy: the financial guaranty insurance policy No. AB0661BE
with respect to the Notes, dated April 23, 2003, including any endorsements
thereto, issued by the Insurer to the Trustee for the benefit of the
Noteholders.
Preference Amounts: as defined in the Policy.
Principal Payments: as defined in Section 2.01(b).
Preference Claim: as defined in Section 4.02(b).
Rating Agency: each of S&P and Moody's.
Record Date: with respect to any Payment Date, the last Business
Day immediately preceding such Payment Date so long as the Notes are Book-Entry
Notes. In the event any of the Notes are Definitive Notes, the Record Date with
respect to such Notes shall be the last Business Day of the month preceding each
Payment Date.
Reference Bank Rate: as defined in Section 2.14.
Registration Statement: the Registration Statement (File No.
333-71362), as amended and supplemented from time to time, relating to the
offering from time to time of up to $2,500,000,000 aggregate principal amount of
the Issuer's Lease-Backed Notes which Registration Statement contemplates that
the Issuer will issue subsequent Series of the Issuer's Lease-Backed Notes.
18
Reimbursement Amount: as of any date, the sum of (x) (i) all
Insured Payments (including optional payments) paid by the Insurer, but for
which the Insurer has not been reimbursed prior to such date pursuant to Section
3.03(b) or 7.07 hereof, plus (ii) interest accrued thereon, calculated at the
Late Payment Rate from the date the Trustee received the related Insured
Payments, or the date such Insured Payments were made, in the case of Insured
Payments consisting of Preference Amounts not made to the Trustee or in the case
of Insured Payments made to the Counterparty under the Swap Insurance Policy,
and (y) without duplication (i) any amounts then due and owing to the Insurer
under the Insurance Agreement and other related documents plus (ii) interest on
such amounts at the Late Payment Rate from the date such amounts were due.
Related Interests: as defined in Section 14 of the Assignment
and Servicing Agreement.
Renewal: the renewal of a Lease beyond the initial term.
Renewal Payment: any of the monthly payments (or, in the case of
non-monthly Leases, the applicable payments) received after the conclusion of
the initial Lease term from a Lessee.
Renewal Account: the account by that name established and
maintained by the Trustee pursuant to Section 3.01
Renewal Account Deposit Period: the period from the Payment Date
on which a Renewal Trigger Event has occurred until the Payment Date succeeding
such Payment Date on which no Renewal Trigger Event exists.
Renewal Trigger Event: will occur when the Renewal Trigger Ratio
is less than 20%.
Renewal Trigger Ratio: with respect to any Payment Date, a
fraction expressed as a percentage equal to (i) the aggregate number of Leases
of which the obligors thereunder have elected to extend the term of such Leases
upon the expiration thereof during the three preceding Due Periods divided by
(ii) the aggregate number of Leases which have reached their stated expiration
date during the three preceding Due Periods.
Required Deposit Date: as defined in Section 3.03(a).
Required Payments: as defined in Section 3.04(b).
Required Renewal Amount: during the Renewal Account Deposit
Period an amount equal to the lesser of (a) 2.0% of the Discounted Present Value
of the Leases as of the Cut-off Date and (b) the then Outstanding Principal
Amount of the Notes less the Available Reserve Amount.
Required Reserve Amount: as of any time, the lesser of (a) 1.0%
of the initial Discounted Present Value of the Leases as of the Cut-Off Date and
(b) the then Outstanding Principal Amount of the Notes.
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Reserve Account: the account by that name established and
maintained by the Trustee pursuant to Section 3.01.
Responsible Officer: with respect to the Trustee, any officer
assigned to the Corporate Trust Office of the Trustee, including any managing
director, vice president, assistant vice president, assistant treasurer,
assistant secretary or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Indenture, and also,
with respect to a particular matter, any other officer, to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Retainable Deposits: any security or other similar deposit which
the Servicer has determined in accordance with its customary servicing practices
is not refundable to the related Lessee.
Secured Party: has the meaning assigned to such term in Section
9.14 hereof.
S&P: Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies Inc. and any successor thereto.
Securities Act: the Securities Act of 1933, as amended.
Security Deposit Account: the account by that name established
and maintained by the Trustee pursuant to Section 3.01.
Seller: IKON Receivables-2, LLC, a Delaware limited liability
company.
Series Acceleration Event: means, with respect to any Other
Series, an "Acceleration Event" as defined in the Applicable Indenture for such
Other Series.
Series Event of Default Acceleration: means, with respect to any
Other Series, that such Other Series has been declared due and payable pursuant
to an Event of Default under the Applicable Indenture (which had been Section
7.02 under all Other Indentures of each previous Series) for such Other Series
and that moneys collected by the Applicable Trustee for such Other Series are
being applied in accordance with the priority of payments following an Event of
Default under (which had been Section 7.06 under all Other Indentures of each
previous Series) the Applicable Indenture for such Other Series.
Series 1999-2 Indenture: means the Indenture dated as of October
1, 1999 by and among IKON Receivables, LLC, as Issuer, BNY Midwest Trust Company
as ultimate successor in-interest to the corporate trust business of Xxxxxx
Trust and Savings Bank, as Trustee and IOS Capital, LLC, as Servicer, as
amended.
Series 2000-1 Indenture: means the Indenture dated as of June 1,
2000 by and among IKON Receivables, LLC, as Issuer, JPMorgan Chase Bank as the
ultimate
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successor of the corporate trust business of BankOne, N.A., as Trustee, and IOS
Capital, LLC, as Servicer, as amended.
Series 2000-2 Indenture: means the Indenture dated as of
December 1, 2000 by and among IKON Receivables, LLC, as Issuer, JPMorgan Chase
Bank as ultimate successor-in-interest to the corporate trust business of The
Chase Manhattan Bank, as Trustee, and IOS Capital, LLC, as Servicer, as amended.
Series 2001-1 Indenture: means the Indenture dated as of June 1,
2001 by and among IKON Receivables, LLC, as Issuer, the Suntrust Bank, as
Trustee and IOS Capital, LLC, as Servicer, as amended.
Series 2002-1 Indenture: means the Indenture dated as of May 1,
2002 by and among IKON Receivables, LLC, as Issuer, BNY Midwest Trust Company,
as Trustee and IOS Capital, LLC, as Servicer, as amended.
Series 1999-2 Trustee: means the trustee appointed pursuant to
the Series 0000-0 Xxxxxxxxx.
Series 2000-1 Trustee: means the trustee appointed pursuant to
the Series 0000-0 Xxxxxxxxx.
Series 2000-2 Trustee: means the trustee appointed pursuant to
the Series 0000-0 Xxxxxxxxx.
Series 2001-1 Trustee: means the trustee appointed pursuant to
the Series 0000-0 Xxxxxxxxx.
Series 2002-1 Trustee: means the trustee appointed pursuant to
the Series 0000-0 Xxxxxxxxx.
Servicer: IOS Capital and any successor Servicer appointed
pursuant to the terms hereof and of the Assignment and Servicing Agreement and,
to the extent that it at any time is performing the functions of the Servicer,
the Trustee, subject to the terms of Section 6.01 hereof.
Servicer Advance: as defined in Section 5.01 of the Assignment
and Servicing Agreement.
Servicer Event of Default: as defined in Section 10.01 of the
Assignment and Servicing Agreement.
Servicer Order: a written order or request delivered to the
Trustee and signed in the name of the Servicer by an Authorized Officer.
Servicing Fee: the Servicing Fee payable pursuant to the
Assignment and Servicing Agreement.
21
Servicing Report: as defined in Section 6.01(b) of the
Assignment and Servicing Agreement.
Shared Collections: means, with respect to any Payment Date, any
amount specified to be treated as such pursuant to clause (xii) of Section
3.03(b) or clause ninth of Section 7.07 of this Indenture.
Shared Collection Section: means, with respect to each Other
Indenture, the section of such Other Indenture which corresponds to Section 3.10
of this Indenture.
Shortfall Amount: means with respect to any Payment Date and the
Notes (i) if an Acceleration Event has occurred or an event that would give rise
to the obligation to pay Additional Principal under Section 3.03(b)(viii), but
the Notes have not been declared due and payable pursuant to Section 7.02, the
excess of (x) the full amount needed to make on such Payment Date the payments
provided for in clauses (i) through (ix) of Section 3.03(b) over (y) Available
Funds (excluding any Other Series Shared Collections allocated to the Notes
pursuant to Section 3.10) for such Payment Date, (ii) if the Notes have been
declared due and payable pursuant to Section 7.02 and moneys collected by the
Trustee are being applied in accordance with Section 7.07, the excess of (x) the
full amount needed to make on such Payment Date the payments provided for in
clauses first through sixth of Section 7.07 over (y) the amounts (excluding any
Other Series Shared Collections allocated to the Notes pursuant to Section 3.10)
available on such Payment Date to make such payments and (iii) otherwise, zero.
Specified Subsequent Notes: as defined in Section 9.13.
Stated Maturity: The stated maturity date with respect to the
Class A-1 Notes is the Payment Date in May 2004 (the "Class A-1 Stated Maturity
Date"), the stated maturity date with respect to the Class A-2 Notes is the
Payment Date in November 2005 (the "Class A-2 Stated Maturity Date"), the stated
maturity date with respect to the Class A-3a Notes is the Payment Date in
December 2007 (the "Class A-3a Stated Maturity Date"), the stated maturity date
with respect to the Class A-3b Notes is the Payment Date in December 2007 (the
"Class A-3b Stated Maturity Date") and the stated maturity date with respect to
the Class A-4 Notes is the Payment Date in July 2011 (the "Class A-4 Stated
Maturity Date"; and, together with the Class A-1 Stated Maturity Date, the Class
A-2 Stated Maturity Date, the Class A-3a Stated Maturity Date, and the Class
A-3b Stated Maturity Date, the "Stated Maturity Dates").
Substitute Lease: as defined in Section 11.01(a) of the
Assignment and Servicing Agreement.
Swap: that certain interest rate swap transaction governed by
the Swap Documents.
Swap Documents: The ISDA Master Agreement dated April 23, 2003,
between the Issuer and the Counterparty, including the schedule thereto, the
related credit support annex, the confirmation thereunder and the guaranty of
Xxxxxx Holdings, Inc., as the same may be amended from time to time as permitted
therein and herein, in each case to the extent relating to the Swap.
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Swap Insurance Policy: the financial guaranty insurance policy
No. SF0610BE dated April 23, 2003 with respect to the Issuer's obligations under
the Swap Documents, including any endorsements thereto, issued by the Insurer to
the Counterparty.
Telerate Screen Page 3750: means the display designated as page
3750 on the Telerate Service (or such other page as may replace page 3750 on
that service for the purpose of displaying London interbank offered rates of
major banks).
Termination Payment: a payment payable by a Lessee under a Lease
upon the early termination of such Lease (but not on account of a casualty or a
Lease default) which may be agreed upon by the Servicer, acting in the name of
the Issuer, and the Lessee in accordance with the provisions of Section 5.02 of
the Assignment and Servicing Agreement.
Transaction Accounts: the Collection Account, the Renewal
Account, the Reserve Account and the Security Deposit Account.
Transaction Documents: this Indenture, the Assignment and
Servicing Agreement and the Insurance Agreement.
Transaction Payment Amount: for each Required Deposit Date, the
amount of all Lease Payments (including Renewal Payments), Lease Delinquency
Payments, Lease Purchase Amounts, recoveries relating to Non-Performing Leases,
Casualty Payments, Retainable Deposits, Termination Payments, payments received
from the Counterparty under the Swap Documents and other payments on or in
respect of a Lease received by the Servicer required to be deposited in the
Collection Account pursuant to Section 3.03(a) and required to be reported by
the Servicer for such Required Deposit Date in accordance with Section 6.01(c)
of the Assignment and Servicing Agreement.
Transfer Date: With respect to any Substitute Lease or
Additional Lease, the date of transfer thereof to the Issuer pursuant to the
Assignment and Servicing Agreement.
Trustee: the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Person shall have become the
Trustee pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Person; provided, that the provisions of
Section 7.07, 8.07 and Section 8.10, as applicable to any Person at any time
serving as Trustee hereunder, shall survive the termination of such Person's
status as Trustee hereunder and the succession of any other Person to such
status.
Trustee Secured Obligations: all amounts and obligations which
the Issuer or the Servicer, as the case may be, may at any time owe to or on
behalf of itself or of the Trustee for the benefit of the Noteholders under this
Indenture or the Notes.
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Trust Indenture Act: the Trust Indenture Act of 1939, as
amended, as in effect on the date on which this Indenture is qualified under the
Trust Indenture Act, except as provided in Section 10.06 or 12.01 hereof.
Underwriting Agreement: the Underwriting Agreement dated as of
April 16, 2003, among the Issuer, IOS Capital and the several underwriters named
therein relating to the issuance of the Notes.
Uniform Commercial Code: with respect to a particular
jurisdiction, the Uniform Commercial Code, as in effect from time to time in
such jurisdiction, or any successor statute thereto.
Warranty Lease: a Lease subject to purchase or substitution by
IOS Capital as a result of a breach of a representation or warranty in
accordance with the provisions of Section 5.04 of the Assignment and Servicing
Agreement.
SECTION 1.02. Compliance Certificates and Opinions.
Upon any written application or request by the Issuer to the
Trustee to take any action under any provision of this Indenture, other than any
request that (a) the Trustee authenticate the Notes specified in such request,
(b) the Trustee invest moneys in any of the Transaction Accounts pursuant to the
written directions specified in such request, or (c) the Trustee pay moneys due
and payable to the Issuer hereunder to the Issuer's assignee specified in such
request, the Trustee shall require the Issuer to furnish to the Trustee and, so
long as no Insurer Default has occurred and is continuing, the Insurer, an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and that the request otherwise is in accordance with the terms of the Indenture,
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such requested action as to which other evidence of satisfaction of the
conditions precedent thereto is specifically required by any provision of this
Indenture, no additional certificate or opinion need be furnished.
SECTION 1.03. Form of Documents Delivered to Trustee and
Insurer.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Issuer delivered
to the Trustee or the Insurer may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based
24
are erroneous. Any such Officers' Certificate or opinion and any Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Issuer as to such factual matters unless such officer or counsel knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous. Any Opinion of
Counsel may be based on the written opinion of other counsel reasonably
acceptable to the Trustee and the Insurer, in which event such Opinion of
Counsel shall be accompanied by a copy of such other counsel's opinion and shall
include a statement to the effect that such counsel believes that such counsel,
the Trustee and the Insurer may reasonably rely upon the opinion of such other
counsel.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Wherever in this Indenture, the Assignment and Servicing
Agreement or the Insurance Agreement, in connection with any application or
certificate or report to the Trustee or the Insurer, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Trustee's or the Insurer's right to rely upon the truth
and accuracy of any statement or opinion contained in any such document as
provided in Section 8.01(a)(ii).
Whenever in this Indenture it is provided that the absence of
the occurrence and continuation of a Default or Event of Default or Servicer
Event of Default or Insurer Default is a condition precedent to the taking of
any action by the Trustee or the Insurer at the request or direction of the
Issuer, then, notwithstanding that the satisfaction of such condition is a
condition precedent to the Issuer's right to make such request or direction, the
Trustee and the Insurer shall be fully protected in acting in accordance with
such request or direction if it does not have knowledge of the occurrence and
continuation of such Default or Event of Default or Servicer Event of Default or
Insurer Default. For all purposes of this Indenture, neither the Trustee nor the
Insurer shall be deemed to have knowledge of any Insurer Default, Servicer Event
of Default, Default or Event of Default nor shall the Trustee or the Insurer
have any duty to monitor or investigate to determine whether such default has
occurred (other than an Event of Default of the kind described in Section
7.01(a) or 7.01(b)) unless, in the case of the Trustee, a Responsible Officer of
the Trustee shall have actual knowledge thereof or shall have been notified in
writing thereof by the Issuer, the Servicer, the Insurer or any Noteholder.
SECTION 1.04. Acts of Noteholders, etc.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders
25
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Noteholders in person or by agents duly appointed
in writing; and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Issuer and/or the
Insurer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 8.01) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section 1.04.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the written affidavit of a witness
of such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the holder of any Note shall bind every future
holder of the same Note and the holder of every Note issued upon the
registration of transfer thereof or in exchange therefore or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Note.
(d) By accepting the Notes issued pursuant to this
Indenture, each Noteholder irrevocably appoints the Trustee hereunder as the
special attorney-in-fact for such Noteholder vested with full power on behalf of
such Noteholder to effect and enforce the rights of such Noteholder and the
revisions pursuant hereto for the benefit of such Noteholder; provided that
nothing contained in this Section 1.04(d) shall be deemed to confer upon the
Trustee any duty or power to vote on behalf of the Noteholders with respect to
any matter on which the Noteholders have a right to vote pursuant to the terms
of this Indenture.
SECTION 1.05. Notices, etc., to Trustee, Servicer, Issuer,
Insurer and Rating Agencies.
Any request, demand, authorization, direction, notice, consent,
waiver, Act of Noteholders, or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with, the Trustee,
the Issuer, the Insurer or the Servicer shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid or certified mail return receipt requested, or sent
by private courier or confirmed telecopy. Unless otherwise specifically provided
herein, no such request, demand, authorization, direction, notice, consent,
waiver, Act of Noteholders or other document shall be effective until
26
received and any provision hereof requiring the making, giving, furnishing, or
filing of the same on any date shall be interpreted as requiring the same to be
sent or delivered in such fashion that it will be received on such date. Any
such request, demand, authorization, direction, notice, consent, waiver, Act of
Noteholders, or other document shall be sent or delivered to the following
addresses:
(a) if to the Trustee, at the Corporate Trust Office (Number
for telecopy (000) 000-0000), or at any other address previously furnished in
writing to the Issuer, the Insurer and the Servicer by the Trustee; or
(b) if to the Issuer, at IKON Receivables Funding, LLC, 0000
Xxxx Xxxx, X.X. Xxx 0000, Xxxxx, Xxxxxxx 00000, Attention: Xxxxx X. Xxxxx
(Number for telecopy: (000) 000-0000), with a copy to, General Counsel, IKON
Office Solutions, Inc., 00 Xxxxxx Xxxxxx Xxxxxxx, Xxxxxxx, XX 00000, or at any
other address previously furnished in writing to the Trustee, the Insurer and
the Servicer by the Issuer; or
(c) if to the Servicer, at IOS Capital, LLC, 0000 Xxxx Xxxx,
X.X. Xxx 0000, Xxxxx, Xxxxxxx, 00000, Attention: Xxxxx X. Xxxxx, Vice President
- Finance, with a copy to the General Counsel, (Number for telecopy: (912)
471-2375), with a copy to, General Counsel, IKON Office Solutions, Inc., 00
Xxxxxx Xxxxxx Xxxxxxx, Xxxxxxx, XX 00000, or at any other address previously
furnished in writing to the Trustee, the Insurer and the Servicer; or
(d) if to the Rating Agencies: to Standard and Poor's, 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Ratings,
and to Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: ABS Monitoring Department; or
(e) if to the Insurer: to Ambac Assurance Corporation, Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Asset Backed
Securities Department Head (Number for telecopy: (000) 000-0000).
SECTION 1.06. Notice to Noteholders; Waiver.
(a) Where this Indenture provides for notice to Noteholders
of any event, or the mailing of any report to Noteholders, such notice or report
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid or certified mail return receipt
requested, or sent by private courier or confirmed telecopy to each Noteholder
affected by such event or to whom such report is required to be mailed, at its
address as it appears in the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice or
the mailing of such report. In any case where a notice or report to Noteholders
is mailed, neither the failure to mail such notice or report, nor any defect in
any notice or report so mailed, to any particular Noteholder shall affect the
sufficiency of such notice or report with respect to other Noteholders. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Noteholders shall be filed with the Trustee, but such filing
27
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
(b) In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to mail or
send notice to Noteholders, in accordance with Section 1.06(a), of any event or
any report to Noteholders when such notice or report is required to be delivered
pursuant to any provision of this Indenture, then such notification or delivery
as shall be made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.
SECTION 1.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and in the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 1.08. Successors and Assigns.
All covenants and agreements in this Indenture by the Issuer or
the Trustee shall bind its respective successors and permitted assigns, whether
so expressed or not.
SECTION 1.09. Benefits of Indenture.
The Insurer and its successors and assigns shall be a
third-party beneficiary to the provisions of this Indenture, and shall be
entitled to rely upon and directly enforce the provisions of this Indenture so
long as no Insurer Default has occurred and is continuing. Nothing in this
Indenture or in the Notes, express or implied, shall give to any other Person,
other than the parties hereto and their successors hereunder and the
Noteholders, and any other party secured hereunder, and any other Person with an
ownership interest in any part of the Asset Pool, any benefit or any legal or
equitable right, remedy or claim under this Indenture. The Insurer may disclaim
any of its rights and powers under this Indenture, but not its duties and
obligations under the Policy or the Swap Insurance Policy, upon delivery of a
written notice to the Trustee.
SECTION 1.10. Recording of Indenture.
If this Indenture is subject to recording in any appropriate
public recording offices, such recording is to be effected by the Issuer and at
its expense accompanied by an Opinion of Counsel (which may be counsel to the
Trustee or any other counsel reasonably acceptable to the Trustee and the
Insurer) to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Trustee under this Indenture.
SECTION 1.11. GOVERNING LAW; WAIVER OF JURY TRIAL.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THIS INDENTURE IS SUBJECT
TO THE TRUST INDENTURE ACT OF 1939, AS AMENDED, AND SHALL BE GOVERNED THEREBY
AND
28
CONSTRUED IN ACCORDANCE THEREWITH. EACH OF THE PARTIES TO THIS INDENTURE HEREBY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED
TO OR IN CONNECTION WITH THIS INDENTURE. INSTEAD, ANY DISPUTE RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
SECTION 1.12. FORUM NON CONVENIENS.
EACH OF THE PARTIES TO THIS INDENTURE HEREBY WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER, AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 1.12 SHALL
AFFECT THE RIGHT OF ANY PARTY TO THIS INDENTURE TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR AFFECT EITHER'S RIGHT TO BRING ANY ACTION OR
PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 1.13. Legal Holidays.
In any case where any Payment Date or the Stated Maturity or any
other date on which principal of or interest on any Note is proposed to be paid
shall not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Notes) such payment need not be made on such date, but may
be made on the next succeeding Business Day with the same force and effect as if
made on such Payment Date, Stated Maturity, or other date on which principal of
or interest on any Note is proposed to be paid; provided that no interest shall
accrue for the period from and after such Payment Date, Stated Maturity, or any
other date on which principal of or interest on any Note is proposed to be paid,
as the case may be, until such next succeeding Business Day.
SECTION 1.14. Execution in Counterparts.
This Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 1.15. Inspection.
The Issuer agrees that, on reasonable prior notice, it will
permit the representatives of the Trustee or the Insurer or any Noteholder
holding Notes, or a beneficial interest therein, evidencing at least 25% of the
Outstanding Principal Amount of the Notes, during the Issuer's normal business
hours, to examine all of the books of account, records, reports and other papers
of the Issuer, to make copies thereof and extracts therefrom, to cause such
books to be audited by independent accountants selected by the Issuer and
reasonably acceptable to the Trustee and the Insurer or such Noteholder, as the
case may be, and to discuss the Issuer's affairs, finances and accounts
29
with its officers, employees and independent accountants (and by this provision
the Issuer hereby authorizes its accountants to discuss with such
representatives such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested for the purpose of reviewing
or evaluating the financial condition or affairs of the Issuer or the
performance of and compliance with the covenants and undertakings of the Issuer
in this Indenture, the Assignment and Servicing Agreement or any of the other
documents referred to herein or therein. Any expense incident to the exercise by
the Trustee or the Insurer at any time or any Noteholder during the continuance
of any Default or Event of Default, of any right under this Section 1.15 shall
be borne by the Issuer.
SECTION 1.16. Survival of Representations and Warranties.
The representations, warranties and certifications of the Issuer
made in this Indenture or in any certificate or other writing delivered by the
Issuer pursuant hereto shall survive the authentication and delivery of the
Notes hereunder.
ARTICLE II
THE NOTES
SECTION 2.01. General Provisions; Optional Redemption by Issuer.
(a) The Notes shall consist of $253,200,000 principal amount
of Class A-1 Notes, $26,700,000 principal amount of Class A-2 Notes,
$206,400,000 principal amount of Class A-3a Notes, $206,400,000 principal amount
of Class A-3b Notes, $159,385,000 principal amount of Class A-4 Notes and the
forms thereof and of the Trustee's certificate of authentication shall be in
substantially the forms set forth in Exhibit A hereto, with such appropriate
insertions, omissions, substitutions, and other variations as are required or
permitted by this Indenture.
The aggregate principal amount of Notes which may be
authenticated and delivered under this Indenture is limited to $852,085,000 of
Notes, except for Notes authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section
2.03, 2.04, or 10.05. The Notes shall be issuable only in registered form and
only in minimum denominations of at least $1,000; provided that the foregoing
shall not restrict or prevent the transfer in accordance with Section 2.03 of
any Note having a remaining Outstanding Principal Amount of other than an
integral multiple of $1,000, or the issuance of a single Note of each Class,
with a denomination less than $1,000.
(b) For each Payment Date, payments of principal (the
"Principal Payments") on the Notes will be made in accordance with Sections
3.03(b), or 7.07, as applicable. Except as otherwise provided in Section 7.02,
no part of the principal of any Note shall be paid prior to the Payment Date on
which such principal is due in accordance with the preceding provisions of this
Section 2.01(b), except that the Issuer may redeem the Notes in their entirety
(including any unpaid interest due), without premium, as of any Payment Date on
which the Discounted Present Value of the
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Performing Leases is less than or equal to ten percent (10%) of the aggregate
Discounted Present Value of the Leases as of the Cut-Off Date (after giving
effect to all Principal Payments on such Payment Date). The Issuer will give
written notice of any such redemption to the Trustee and the Insurer, and the
Trustee shall give written notice to the Noteholders at least 30 days before the
Payment Date fixed for such prepayment by certified mail return receipt
requested, hand delivery or overnight courier. Notice of such prepayment having
been so given, the remaining unpaid principal as of the Payment Date fixed for
prepayment together with all interest accrued and unpaid to such Payment Date,
shall become due and payable on such Payment Date.
(c) For each Payment Date, the interest due and payable (the
"Interest Payments") with respect to the Class A-1 Notes, Class A-2 Notes, Class
A-3a Notes, Class A-3b Notes and Class A-4 Notes will be the interest that has
accrued on the respective Notes since the last Payment Date or, in the case of
the Initial Payment Date, since the Issuance Date, at the Class A-1 Note
Interest Rate, Class A-2 Note Interest Rate, Class A-3a Note Interest Rate,
Class A-3b Note Interest Rate and Class A-4 Note Interest Rate, respectively,
applied to the then Outstanding Principal Amounts of the Class A-1 Notes, Class
A-2 Notes, Class A-3a Notes, Class A-3b Notes and Class A-4 Notes, respectively,
on the preceding Payment Date. With respect to the Class A-1 Notes and Class
A-3a Notes, the interest will be calculated on the basis of a year of 360 days
and the actual number of days in the related interest accrual period. With
respect to the Class A-2 Notes, Class A-3b Notes and Class A-4 Notes, the
interest will be calculated on the basis of a year of 360 days comprised of
twelve 30-day months. Interest Payments will be made in accordance with Sections
3.03(b), 3.04(b) and 7.07, as applicable.
(d) All payments made with respect to any Note shall be made
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts and shall be
applied first to the interest then due and payable on such Notes, then to the
principal thereof, and finally to premium, if any.
(e) All Class A-1 Notes issued under this Indenture shall be
in all respects equally and ratably entitled to the benefits hereof without
preference, priority or distinction on account of the actual time or times of
authentication and delivery, all in accordance with the terms and provisions of
this Indenture. Payments of principal and interest on the Class A-1 Notes shall
be made pro rata among all Outstanding Class A-1 Notes, without preference or
priority of any kind.
(f) All Class A-2 Notes issued under this Indenture shall be
in all respects equally and ratably entitled to the benefits hereof without
preference, priority or distinction on account of the actual time or times of
authentication and delivery, all in accordance with the terms and provisions of
this Indenture. Payments of principal and interest on the Class A-2 Notes shall
be made pro rata among all Outstanding Class A-2 Notes, without preference or
priority of any kind.
(g) All Class A-3a Notes and all Class A-3b Notes issued
under this Indenture shall be in all respects equally and ratably entitled to
the benefits hereof without preference, priority or distinction on account of
the actual time or times of authentication and delivery, all in accordance with
the terms and provisions of this
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Indenture. Payments of principal and interest on the Class A-3a Notes and Class
A-3b Notes shall be made pro rata among all Outstanding Class A-3a Notes and
Class A-3b Notes, without preference or priority of any kind.
(h) All Class A-4 Notes issued under this Indenture shall be
in all respects equally and ratably entitled to the benefits hereof without
preference, priority or distinction on account of the actual time or times of
authentication and delivery, all in accordance with the terms and provisions of
this Indenture. Payments of principal and interest on the Class A-4 Notes shall
be made pro rata among all Outstanding Class A-4 Notes, without preference or
priority of any kind.
SECTION 2.02. Execution, Authentication, Delivery, and Dating.
(a) The Notes shall be manually executed by the Issuer.
(b) Any Note bearing the signature of an individual who was
at the time of execution thereof a proper officer of the Issuer shall bind the
Issuer, notwithstanding that such individual ceases to hold such office prior to
the authentication and delivery of such Note or did not hold such office at the
date of such Note.
(c) No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Note a certificate of authentication substantially in the form provided for
herein, executed by the Trustee by manual signature, and such certificate upon
any Note shall be conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder. Each Note shall be dated the
date of its authentication.
(d) The Notes may from time to time be executed by the
Issuer and delivered to the Trustee for authentication together with an Issuer
Request to the Trustee directing the authentication and delivery of such Notes
and thereupon the same shall be authenticated and delivered by the Trustee in
accordance with such Issuer Request.
SECTION 2.03. Transfer and Exchange.
(a) The Trustee is hereby appointed "Note Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided. The Note
Registrar shall cause to be kept at the Corporate Trust Office a register (the
"Note Register") in which, subject to such reasonable regulations as the Trustee
may prescribe, the Issuer shall provide for the registration of Notes and of
transfers of Notes.
The Trustee shall not register the transfer of any Note (other
than the transfer of a Note to the nominee of the Clearing Agency) unless the
transferee has executed and delivered to the Trustee a certification to the
effect that either (i) the transferee is not (A) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA or (b) a plan (as defined in Section 4975(e)(1) of the Internal Revenue
Code of 1986, as amended (the "Code")) that is subject to Section 4975 of the
Code (each of the foregoing, a "Benefit Plan"), and is not acting on behalf of
or investing the assets of a Benefit Plan, or (ii) the transferee's acquisition
and continued holding of the Note will be covered by a U.S. Department of
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Labor Prohibited Transaction Class Exemption. Each transferee of a Book-Entry
Note shall be deemed to make one of the foregoing representations.
(b) Subject to Section 2.03(a), upon surrender for
registration of transfer of any Note at the office designated pursuant to
Section 9.02 for such purpose, the Issuer shall execute and the Trustee upon
written request shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of any authorized denominations
and of a like aggregate original principal amount. The Trustee shall make a
notation on any such new Note of the amount of principal, if any, that has been
paid on the Note.
(c) All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Issuer, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
(d) Every Note presented or surrendered for registration of
transfer or for exchange shall (if so required by the Issuer or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed, by the holder thereof
or his attorney duly authorized in writing.
(e) No service charge shall be made for any registration of
transfer or exchange of Notes, but the Issuer or the Trustee may require payment
by the transferor of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 10.05 not involving
any transfer.
SECTION 2.04. Mutilated, Destroyed, Lost and Stolen Notes.
(a) If any mutilated Note is surrendered to the Trustee, the
Issuer shall execute and the Trustee shall authenticate and deliver in exchange
therefore a replacement Note of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
(b) If (i) there shall be delivered to the Issuer and the
Trustee evidence to their satisfaction of the destruction, loss or theft of any
Note and (ii) there is delivered to the Issuer, the Trustee and (unless an
Insurer Default has occurred and is continuing) the Insurer such security or
indemnity as may be required by them to save each of them and any agent of
either of them harmless, then, in the absence of actual notice to the Issuer or
the Trustee that such Note has been acquired by a bona fide purchaser, the
Issuer shall execute and upon its written request the Trustee shall authenticate
and deliver, in lieu of any such destroyed, lost or stolen Note, a replacement
Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
(c) In case the final installment of principal on any such
mutilated, destroyed, lost or stolen Note has become or will at the next Payment
Date become due and payable, the Issuer in its discretion may, instead of
issuing a replacement Note, pay such Note.
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(d) Upon the issuance of any replacement Note under this
Section, the Issuer or the Trustee may require the payment by the Noteholder of
a sum sufficient to cover any tax or other governmental charge that may be
imposed as a result of the issuance of such replacement Note.
(e) Every replacement Note issued pursuant to this Section
2.04 in lieu of any destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the destroyed,
lost or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Notes duly issued hereunder.
(f) The provisions of this Section 2.04 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.05. Book-Entry Registration.
Each of the Class A-1 Notes, Class A-2 Notes, Class A-3a Notes,
Class A-3b Notes and Class A-4 Notes, upon original issuance, shall be issued in
the form attached as Exhibit A and delivered to The Depository Trust Company,
the initial Clearing Agency, by, or on behalf of, the Issuer. Each of the Class
A-1 Notes, Class A-2 Notes, Class A-3a Notes, Class A-3b Notes and Class A-4
Notes shall initially be registered on the Note Register in the name of Cede &
Co., the nominee of The Depository Trust Company, as the initial Clearing
Agency, and no Class A-1 Note Owner, Class A-2 Note Owner, Class A-3a Note
Owner, Class A-3b Note Owner or Class A-4 Note Owner will receive a definitive
note representing such Note Owner's interest, except as provided in Section
2.07. Unless and until Definitive Class A-1 Notes, Definitive Class A-2 Notes,
Definitive Class A-3a Notes, Class A-3b Notes and/or Definitive Class A-4 Notes
("Definitive Notes") have been issued to the applicable Note Owners pursuant to
Section 2.07:
(a) the provisions of this Section 2.05 shall be in full
force and effect with respect to the Class A-1 Notes, Class A-2 Notes, Class
A-3a Notes, Class A-3b Notes or the Class A-4 Notes, as the case may be;
(b) the Issuer, the Servicer and the Trustee, and their
officers, directors, employees and agents, may deal with the Clearing Agency and
the Clearing Agency Participants for all purposes with respect to the Class A-1
Notes, Class A-2 Notes, Class A-3a Notes, Class A-3b Notes or Class A-4 Notes,
as the case may be (including the making of distributions on the Class A-1
Notes, Class A-2 Notes, Class A-3a Notes, Class A-3b Notes and Class A-4 Notes,
as the case may be), as the authorized representatives of the respective Note
Owners;
(c) to the extent that the provisions of this Section 2.05
conflict with any other provisions of this Indenture, the provisions of this
Section 2.05 shall control; and
(d) the rights of the respective Note Owners shall be
exercised only through the Clearing Agency and the Clearing Agency Participants
and shall be limited to
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those established by law and agreements between such respective Note Owners and
the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
Depository Agreement, unless and until Definitive Notes are issued pursuant to
Section 2.07, the initial Clearing Agency will make book-entry transfers among
the Clearing Agency Participants and receive and transmit distributions of
principal and interest on the related Class A-1 Notes, Class A-2 Notes, Class
A-3a Notes, Class A-3b Notes and Class A-4 Notes, as the case may be, to such
Clearing Agency Participants.
For purposes of any provision of this Indenture requiring or
permitting actions with the consent of, or at the direction of, holders of Class
A-1 Notes, Class A-2 Notes, Class A-3a Notes, Class A-3b Notes or Class A-4
Notes, as the case may be, evidencing a specified percentage of the Outstanding
Principal Amount of the Class A-1 Notes, Class A-2 Notes, Class A-3a Notes,
Class A-3b Notes or the Class A-4 Notes, respectively, such direction or consent
may be given by Note Owners (acting through the Clearing Agency and the Clearing
Agency Participants) owning Class A-1 Notes, Class A-2 Notes, Class A-3a Notes,
Class A-3b Notes or Class A-4 Notes evidencing the requisite percentage of the
Outstanding Principal Amount of such Notes, respectively.
SECTION 2.06. Notice to Clearing Agency Noteholders.
Whenever notice or other communication to the Class A-1
Noteholders, Class A-2 Noteholders, Class A-3a Noteholders, Class A-3b
Noteholders or Class A-4 Noteholders is required under this Agreement, unless
and until Definitive Notes shall have been issued to the related Note Owners
pursuant to Section 2.07, the Trustee shall give all such notices and
communications specified herein to be given to such Noteholders to the
applicable Clearing Agency which shall give such notices and communications to
the related Class A-1 Note Owners, Class A-2 Note Owners, Class A-3a Note
Owners, Class A-3b Note Owners or Class A-4 Note Owners in accordance with its
applicable rules, regulations and procedures.
SECTION 2.07. Definitive Notes.
(a) If (a) (i) the Servicer advises the Issuer in writing
that DTC is no longer willing or able to properly discharge its responsibilities
under the Depository Agreement with respect to the Notes and (ii) the Issuer is
unable to locate a qualified successor, (b) the Servicer, at its option, advises
the Issuer in writing that it elects to terminate the book-entry system with
respect to the Notes or (c) after the occurrence of an "Event of Default" under
this Indenture or a default by the Servicer under the Assignment and Servicing
Agreement, Noteholders evidencing not less than a majority of the aggregate
unpaid Outstanding Principal Amount of the Notes advise the Issuer in writing
that the continuation of a book-entry system with respect to the Notes is no
longer in the best interests of the Note Owners, then the Issuer shall notify
the Trustee and all Note Owners through the Clearing Agency, of the occurrence
of any such event and of the availability of Definitive Notes. Upon surrender by
DTC of the Notes, accompanied by registration and transfer instructions from DTC
for registration, the Issuer shall reissue such Notes as Definitive Notes to the
Noteholders. The Issuer shall not be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Notes, as the
35
case may be, all references herein to obligations imposed upon or to be
performed by DTC shall be deemed to be imposed upon and performed by the Issuer,
to the extent applicable with respect to such Definitive Notes, and the Issuer
shall recognize the holders of the relevant Definitive Notes as Noteholders
hereunder.
(b) Definitive Notes will not be eligible for clearing or
settlement through DTC, Euroclear or Clearstream.
SECTION 2.08. Payment of Interest and Principal; Rights
Preserved.
(a) Any installment of interest or principal, payable on any
Note that is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall be paid to the Person in whose name such Note was
registered at the close of business on the Record Date for such Payment Date by
wire transfer of federal funds to the account and number specified in the Note
Register on such Record Date for such Person or, if no such account or number is
so specified, then by check mailed to such Person's address as it appears in the
Note Register on such Record Date.
(b) All reductions in the principal amount of a Note
effected by payments of installments of principal made on any Payment Date shall
be binding upon all holders of such Note and of any Note issued upon the
registration of transfer thereof or in exchange therefore or in lieu thereof,
whether or not such payment is noted on such Note. All payments on the Notes
shall be paid without any requirement of presentment but each holder of any Note
shall be deemed to agree, by its acceptance of the same, to surrender such Note
at the Corporate Trust Office against payment of the final installment of
principal of such Note.
SECTION 2.09. Persons Deemed Owners.
Prior to due presentment of a Note for registration of transfer,
the Issuer, the Trustee, the Insurer, and any agent of the Issuer, the Trustee
or the Insurer may treat the registered Noteholder as the owner of such Note for
the purpose of receiving payment of principal of and interest on such Note and
for all other purposes whatsoever, whether or not such Note be overdue, and
neither the Issuer, the Trustee, the Insurer nor any agent of the Issuer, the
Trustee or the Insurer shall be affected by notice to the contrary.
SECTION 2.10. Cancellation.
All Notes surrendered for registration of transfer or exchange
or following final payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The
Issuer may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
cancelled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. Subject to the next sentence, all
cancelled Notes held by the Trustee may be disposed of in the normal course of
its business or as directed by an Issuer Order. Promptly following the date on
which all principal of and interest on the Notes has been paid in full and the
Notes have been surrendered to the Trustee, the
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Trustee shall, if the Insurer has paid any amount in respect of the Notes under
the Policy or otherwise which has not been reimbursed to it, deliver such
surrendered Notes to the Insurer.
SECTION 2.11. Noteholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders and shall otherwise comply with Section 312(a) of the Trust
Indenture Act. In the event the Trustee no longer serves as the Note Registrar,
the Issuer (or any other obligor upon the Notes) shall furnish to the Trustee at
least five Business Days before each interest payment date (and in all events in
intervals of not more than 6 months) and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Noteholders, and the Issuer
shall otherwise comply with Section 312(a) of the Trust Indenture Act.
SECTION 2.12. Treasury Notes.
In determining whether the Noteholders of the required
Outstanding Principal Amount of the Notes have concurred in any direction,
waiver or consent, Notes owned by the Issuer, any other obligor upon the Notes
or an Affiliate of the Issuer shall be considered as though not Outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes which
a Responsible Officer actually knows are so owned shall be so disregarded.
SECTION 2.13. CUSIP Numbers.
The Issuer in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall indicate the "CUSIP" numbers of
the Notes in notices of redemption and related materials as a convenience to
Noteholders; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of redemption and related materials.
SECTION 2.14. Calculation of the LIBOR Rate.
With respect to each Payment Date, LIBOR for the Class A-3a
Notes shall be established by the Trustee and as to any Interest Accrual Period,
LIBOR will equal the London interbank offered rate for Eurodollar deposits for
one month which appears on the Telerate Screen page 3750 as of 11:00 A.M.,
London time, on the second LIBOR Business Day prior to the first day of such
Interest Accrual Period (with respect to the Initial Payment Date, LIBOR has
been set as of April 18, 2003). If such rate does not appear on such page (or
such other page as may replace that page on that service, or if such service is
no longer offered, such other service for displaying LIBOR as may be selected by
the Trustee), the rate will be the Reference Bank Rate. The "Reference Bank
Rate" will be determined on the basis of the rates at which deposits in U.S.
Dollars are offered by the reference banks (which shall be three major banks
that are engaged in transactions in the London interbank market, selected by the
Trustee) as of 11:00 A.M.,
37
London time, on the day that is two LIBOR Business Days prior to the immediately
preceding Payment Date to prime banks in the London interbank market for a
period of one month in amounts approximately equal to the principal amount of
the Class A-3a Notes then outstanding (or an appropriate standard size amount).
The Trustee will request the principal London office of each of the reference
banks to provide a quotation of its rate. If at least two such quotations are
provided, the rate will be the arithmetic mean of the quotations. If on such
date fewer than two quotations are provided as requested, the rate will be the
arithmetic mean of the rates quoted by two or more major banks in New York City,
selected by the Trustee, as of 11:00 A.M., New York City time, on the first day
of the relevant Interest Accrual Period date for loans in U.S. Dollars to
leading European banks for a period of one month in amounts approximately equal
to the principal amount of the Class A-3a Notes then outstanding. If no such
quotations can be obtained, the rate will be LIBOR for the prior Payment Date.
The Trustee shall provide the Counterparty with notice as to the calculation of
LIBOR for each Interest Accrual Period.
ARTICLE III
ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
AND APPLICATION OF MONEYS; REPORTS
SECTION 3.01. Transaction Accounts; Investments by Trustee.
(a) On or before the Issuance Date, the Trustee shall
establish in the name of the Trustee for the benefit of the Noteholders and the
Insurer to the extent of their interests therein as provided in this Indenture
the following accounts, which accounts shall be Eligible Accounts maintained at
the Corporate Trust Office:
(i) Collection Account;
(ii) Renewal Account;
(iii) Reserve Account; and
(iv) Security Deposit Account.
Subject to the further provisions of this Section 3.01(a), the Trustee shall,
upon receipt or upon transfer from another account, as the case may be, deposit
into such accounts all amounts received by it which are required to be deposited
therein in accordance with the provisions of this Indenture. All such amounts
and all investments made with such amounts, including all income and other gain
from such investments, shall be held by the Trustee in such accounts as part of
the Asset Pool as herein provided, subject to withdrawal by the Trustee in
accordance with, and for the purposes specified in the provisions of, this
Indenture and the other Transaction Documents.
(b) The Trustee shall hold in trust but shall not be
required to deposit in any account specified in Section 3.01(a) any payment
received by it until such time as the Trustee shall have identified to its
reasonable satisfaction the nature of such payment and, on the basis thereof,
the proper account or accounts into which such payment is to be
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deposited. In determining into which of the accounts, if any, referred to above
any amount received by the Trustee is to be deposited, the Trustee may
conclusively rely (in the absence of bad faith on the part of the Trustee) on
the advice of the Servicer or, if the Servicer shall have failed to provide such
instructions, by the Insurer. Unless the Trustee is advised differently in
writing by the Lessee making the payment or by the Servicer in writing (with the
Servicer's instruction controlling), the Trustee shall assume that any amount
remitted to it by such Lessee is to be deposited into the Collection Account
pursuant to Section 3.03. The Trustee may establish from time to time such
deadline or deadlines as it shall determine are reasonable or necessary in the
administration of the Asset Pool after which all amounts received or collected
by the Trustee on any day shall not be deemed to have been received or collected
until the next succeeding Business Day.
(c) Neither the Servicer nor the Trustee shall have any
right of set-off with respect to the Collection Account, the Renewal Account,
the Reserve Account or the Security Deposit Account or any investment therein.
(d) So long as no Event of Default has occurred and is
continuing, all or a portion of the amounts in the Transaction Accounts shall be
invested and reinvested by the Trustee pursuant to a Servicer Order in one or
more Eligible Investments. Subject to the restrictions on the maturity of
investments set forth in Section 3.01(f), each such Servicer Order may authorize
the Trustee to make the specific Eligible Investments set forth therein, to make
Eligible Investments from time to time consistent with the general instructions
set forth therein, or to make specific Eligible Investments pursuant to
instructions received in writing or by telegraph or facsimile transmission from
the employees or agents of the Servicer, identified therein, in each case in
such amounts as such Servicer Order shall specify. The Issuer agrees to report
as income for financial reporting and tax purposes (to the extent reportable)
all investment earnings on amounts in the Collection Account, the Renewal
Account, the Reserve Account or the Security Deposit Account. The Servicer
agrees to give appropriate and timely written investment directions to the
Trustee so that there will not be more than two Business Days in any one
calendar year at the end of which funds in the Transaction Accounts are not
invested, directly or indirectly, pursuant to a Servicer Order in Eligible
Investments that mature on or after the opening of business on the next Business
Day.
(e) In the event that either (i) the Servicer shall have
failed to give written investment directions to the Trustee by 9:30 A.M., New
York City time on any Business Day on which there may be uninvested cash or (ii)
an Event of Default shall be continuing, the Trustee shall promptly invest and
reinvest the funds then in the Collection Account, the Renewal Account, the
Reserve Account or the Security Deposit Account, as the case may be, to the
fullest extent practicable in Eligible Investments specified in clause (e) of
the definition thereof. All investments made by the Trustee shall be payable on
demand or mature no later than the maturity date therefore permitted by Section
3.01(f) unless the Trustee shall have received written confirmation from each
Rating Agency that the liquidation of such Eligible Investments prior to their
respective maturity dates will not result in the reduction or withdrawal of such
Rating Agency's then-current rating of the Notes.
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(f) Unless payable on demand, no investment of any amount
held in the Collection Account, the Reserve Account or the Security Deposit
Account shall mature later than the Business Day immediately preceding the
Payment Date which is scheduled to occur immediately following the date of
investment. All income or other gains (net of losses) from the investment of
moneys deposited in the Collection Account, the Reserve Account or the Security
Deposit Account shall be deposited by the Trustee in such account immediately
upon receipt.
(g) Any investment of any funds in the Transaction Accounts
and any sale of any investment held in such accounts shall be made under the
following terms and conditions:
(i) each such investment shall be made in the name of the
Trustee or in the name of a nominee of the Trustee, in each case in such manner
as shall be necessary to maintain the identity of such investments as assets of
the Asset Pool;
(ii) any certificate or other instrument evidencing such
investment shall be delivered directly to the Trustee or its agent and the
Trustee shall have sole possession or control of such instrument, and all income
on such investment; and
(iii) the proceeds of any sale of an investment shall be
remitted by the purchaser thereof directly to the Trustee for deposit in the
account in which such investment was held.
(h) If any amounts are needed for disbursement from the
Transaction Accounts and sufficient uninvested funds are not collected and
available therein to make such disbursement, in the absence of a Servicer Order
for the liquidation of investments held therein in an amount sufficient to
provide the required funds, the Trustee shall select and cause to be sold or
otherwise converted to cash a sufficient amount of the investments in such
accounts.
(i) The Trustee shall not in any way be held liable by
reason of any insufficiency in the Transaction Accounts resulting from losses on
investments made in accordance with the provisions of this Section 3.01 (but the
institution serving as Trustee shall at all times remain liable for its own debt
obligations, if any, constituting part of such investments) or losses incurred
in respect of the liquidation of any Eligible Investment prior to its stated
maturity. The Trustee shall not be liable for the selection of any Eligible
Investment or any investment made by it in accordance with this Section 3.01 on
the grounds that it could have made a more favorable investment or a more
favorable selection for sale of an investment.
SECTION 3.02. Collection of Moneys.
(a) On or before the Issuance Date, the Servicer shall
designate a lockbox, which shall be an Eligible Account with a single
institution (although there may be more than one such account at such
institution), for the receipt directly from Lessees of all payments under the
Leases and for the receipt from IOS Capital or the Lessees of security deposits
in respect of any of the Leases. Amounts so received shall be deposited in the
Collection Account in accordance with the provisions of Section 3.03(a) or, in
the
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case of security deposits, in the Security Deposit Account in accordance with
Section 3.08(a).
(b) The Trustee shall from time to time, in accordance with
the written instructions of the Servicer, withdraw from the Collection Account
and pay to the Servicer for appropriate application by the Servicer any amounts
in the Collection Account which the Servicer advises the Trustee and Insurer in
writing are Other Lease Payments. Prior to such payment, the Trustee shall have
rights to and an interest in such amounts to the extent (but only to the extent)
it is determined that such amounts actually constitute Transaction Payment
Amounts.
(c) If at any time the Issuer shall receive any amount
referred to in Section 3.03(a), it shall hold such payment in trust for the
benefit of the Trustee, the holders of the Notes and the Insurer, shall
segregate such payment from the other property of the Issuer, and shall,
promptly (but in no event later than the next following Business Day) upon
receipt, deliver such payment in the form received to the Trustee.
SECTION 3.03. Collection Account; Payments.
(a) The Servicer shall within two Business Days of receipt
(a "Required Deposit Date") deposit the following funds, as received, into the
Collection Account:
(i) Lease Payments (including Renewal Payments);
(ii) recoveries from Non-Performing Leases to the extent IOS
Capital has not substituted Substitute Leases for such Non-Performing Leases;
(iii) late charges received on delinquent Lease Payments not
advanced by the Servicer;
(iv) proceeds from purchases by IOS Capital of Leases as a
result of breaches of representations and warranties of IOS Capital pursuant to
Section 5.04 of the Assignment and Servicing Agreement to the extent IOS Capital
has not substituted Substitute Leases for such Leases;
(v) proceeds, if any, from investment of funds in the
Collection Account, the Reserve Account, the Security Deposit Account and the
Renewal Account;
(vi) Casualty Payments;
(vii) Servicer Advances, if any;
(viii) any amounts paid by the Counterparty to the Issuer
pursuant to the Swap Documents;
(ix) Retainable Deposits;
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(x) Termination Payments to the extent that, prior to an
Acceleration Event or an event that would give rise to the obligation to pay
Additional Principal under Section 3.03(b)(viii) or Event of Default, the Issuer
does not reinvest such Termination Payments in Additional Leases; and
(xi) proceeds for redemption of the Notes in the event the
Issuer exercises its right to redeem the Notes in accordance with Section
2.01(b).
(b) Unless the Notes have been declared due and payable
pursuant to Section 7.02 and moneys collected by the Trustee are being applied
in accordance with Section 7.07, Available Funds on deposit in the Collection
Account (including the amounts, if any, deposited into the Collection Account
from the Reserve Account, the Security Deposit Account and the Renewal Account
in accordance with the provisions of Sections 3.04, 3.08 and 3.09, or as
Allocated Other Series Shared Collections pursuant to Section 3.10) shall be
withdrawn by the Trustee as directed by the Servicer in the related Servicing
Report on or before each Payment Date from the Collection Account, in the
amounts required, for application, in the following order of priority, to make
the following Required Payments (all in accordance with the applicable Servicing
Report):
(i) to pay the Insurer the amounts then due and owing in
respect of the Insurer Premium;
(ii) to pay the Counterparty any amount due pursuant to the
Swap Documents (except any amounts payable to the Counterparty upon termination
of the Swap Documents);
(iii) to pay the Servicing Fee;
(iv) to reimburse unreimbursed Servicer Advances in respect
of a prior Payment Date;
(v) concurrently and pro rata: (a) to make Interest Payments
on the Class A-1 Notes; (b) to make Interest Payments on the Class A-2 Notes;
(c) to make Interest Payments on the Class A-3a Notes; (d) to make Interest
Payments on the Class A-3b Notes; and (e) to make Interest Payments on the Class
A-4 Notes;
(vi) to pay the Insurer any Reimbursement Amounts due under
the terms of the Insurance Agreement;
(vii) to make the Class A Principal Payment (a) to the Class
A-1 Noteholders only, until the Outstanding Principal Amount on the Class A-1
Notes is reduced to zero, then (b) to the Class A-2 Noteholders only, until the
Outstanding Principal Amount on the Class A-2 Notes is reduced to zero, then (c)
pro rata, to the Class A-3a Noteholders and the Class A-3b Noteholders only,
until the Outstanding Principal Amount on the Class A-3a Notes and the
Outstanding Principal Amount on the Class A-3b Notes has been reduced to zero,
then (d) pro rata, to the Class A-4 Noteholders only, until the Outstanding
Principal Amount on the Class A-4 Notes has been reduced to zero;
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(viii) if an Acceleration Event has occurred or, if and so long
as IOS Capital is the Servicer, the senior long-term debt rating assigned by
Xxxxx'x or S&P to IOS Capital is Ba2 or below or BB or below, respectively, to
pay the Additional Principal, if any, as an additional reduction of principal,
to the Class A Noteholders then receiving the Class A Principal Payment, in the
order established in clause (vii) above, until the Outstanding Principal Amount
on all of the Class A Notes has been reduced to zero;
(ix) to pay the Counterparty any amounts due upon termination
of the Swap Documents;
(x) to make a deposit to the Reserve Account in an amount
equal to the excess of the Required Reserve Amount over the Available Reserve
Amount;
(xi) during a Renewal Account Deposit Period, to make a
deposit to the Renewal Account in an amount equal to the excess of the Required
Renewal Amount over the amount on deposit in the Renewal Account; and
(xii) to pay the Issuer, the balance, if any; provided,
however, that if a Series Acceleration Event or Series Event of Default
Acceleration has occurred with respect to one or more Other Series (a) first to
be treated as Shared Collections and allocated to such Other Series as and to
the extent provided in Section 3.10 and in the Shared Collections Section of the
Applicable Indenture for each such Other Series (and paid to the Applicable
Trustee for each such Other Series) and (b) then to pay the Issuer, the balance,
if any.
(c) Notwithstanding the foregoing, on any Payment Date the
Servicer shall instruct the Trustee to retain, and the Trustee shall retain, in
the Collection Account an amount equal to all Lease Payments received that were
due after the prior Due Period, and all Casualty Payments, and Termination
Payments received or realized after the Determination Date for such Payment Date
and shall not distribute any such amounts on such Payment Date, provided that,
upon the occurrence of an Acceleration Event, an event which would give rise to
the obligation to pay Additional Principal pursuant to Section 3.03(b)(viii) or
an Event of Default, such amounts shall not be retained by the Trustee in the
Collection Account. If at any time any amount or portion thereof previously
distributed pursuant to this Section 3.03(c) shall have been recovered, or shall
be subject to recovery, in any proceeding with respect to the Issuer or
otherwise, then for purposes of determining future distributions pursuant to
this Section 3.03(c) such amount or portion thereof shall be deemed to have not
been previously so distributed.
(d) The Servicer shall submit with the Servicing Report a
certificate (i) setting forth any amounts to be withdrawn (on an item-by-item
basis) from the Collection Account other than as provided in Section 3.03(b),
(ii) stating that none of such amounts are all or part of any amounts required
to be retained in the Collection Account pursuant to this Section 3.03 and (iii)
identifying the Lease or Leases to which such amounts relate.
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SECTION 3.04. The Reserve Account.
(a) On the Issuance Date, the Issuer has made an initial
deposit of $9,186,902.18 into the Reserve Account which deposit has been made by
the Issuer out of the proceeds of the sale of the Notes. On each Payment Date,
the Trustee shall transfer to the Collection Account from the Reserve Account
such amounts as shall be required by Section 3.04(b).
(b) Prior to each Payment Date the Trustee shall transfer
from the Reserve Account to the Collection Account the amount specified by the
Servicer in the related Servicing Report representing investment earnings on
amounts held in the Reserve Account as of the related Determination Date. If by
12:00 noon, New York City time, on the Business Day preceding any Payment Date,
Available Funds less the Available Reserve Amount are insufficient to permit on
such Payment Date all distributions required by Section 3.03(b)(i) through
3.03(b)(vii) (such payments, the "Required Payments" and such shortfall, an
"Available Funds Shortfall"), then, to the extent of the Available Reserve
Amount, the Trustee shall transfer, not later than the end of such Business Day,
from the Reserve Account to the Collection Account such amount to the extent
available as shall be necessary to make on such Payment Date all Required
Payments.
(c) In the event that after giving effect to all the
disbursements required to be made on any Payment Date, the Available Reserve
Amount exceeds the Required Reserve Amount, the Trustee shall deposit, not later
than the end of business on such Payment Date, an amount equal to such excess
into the Collection Account.
(d) Upon the satisfaction and discharge of this Indenture,
any balance remaining in the Reserve Account, after all obligations to the
Noteholders and the Insurer hereunder have been fully satisfied, shall be paid
to reimburse the Trustee for any amounts owing to it arising from the
performance of its obligations under this Indenture and, then, to the Issuer.
SECTION 3.05. Reports by Trustee; Notices of Certain Payments.
(a) The Trustee shall within two Business Days after the
request of the Issuer, the Servicer, the Insurer, the Counterparty or any
Noteholder, deliver to the requesting Person a written report setting forth the
amounts on deposit in the Collection Account, the Reserve Account, Renewal
Account and the Security Deposit Account and identifying the investments
included therein.
(b) On or prior to each Payment Date, the Servicer shall
provide to the Trustee and the Trustee shall forward to the Insurer, each Rating
Agency and each Noteholder of record a statement setting forth at least the
following information as to the Notes to the extent applicable:
(i) the amount of Interest Payments and payments in
reduction of principal paid on such Payment Date with respect to all Class A-1
Notes, Class A-2 Notes, Class A-3a Notes, Class A-3b Notes and Class A-4 Notes,
respectively;
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(ii) the aggregate Outstanding Principal Amount of all
Outstanding Class A-1 Notes, Class A-2 Notes, Class A-3a Notes, Class A-3b Notes
and Class A-4 Notes, respectively and the Pool Factor for each such Class after
giving effect to all payments reported under (i) above;
(iii) the amount of the Servicing Fee and unreimbursed
Servicer Advances paid on such Payment Date pursuant to Section 3.03(b)(iii) and
Section 3.03(b)(iv);
(iv) the amount on deposit in the Collection Account, the
Renewal Account, the Reserve Account and the Security Deposit Account, in each
case after giving effect to all of the withdrawals and applications or transfers
required on or before such Payment Date pursuant to Sections 3.02, 3.03, 3.04,
3.08, 3.09 and 3.10;
(v) the Discounted Present Value of Performing Leases and
the Discounted Present Value of Non-Performing Leases as of the last day of the
related Due Period; and
(vi) the aggregate Lease Purchase Amounts for Leases
purchased by the Originator pursuant to Section 5.04 of the Assignment and
Servicing Agreement during the related Due Period.
(c) With each report of the Trustee furnished pursuant to
this Section 3.05 following any Payment Date, the Trustee shall enclose a copy
of the relevant Servicing Report.
(d) Upon the request of a Noteholder or the Insurer, the
Trustee will provide information as to the Outstanding Principal Amount of each
Class of Notes to such Noteholder or the Insurer.
SECTION 3.06. Trustee May Rely on Certain Information from
Servicer.
Pursuant to Sections 5.01, 6.01 and 6.02 of the Assignment and
Servicing Agreement and Sections 3.02 through 3.05 hereof, the Servicer is
required to furnish to the Trustee and/or the Insurer from time to time certain
information and make various calculations which are relevant to the performance
of the Trustee's duties in this Article III and in Article IV of this Indenture.
The Trustee and the Insurer shall be entitled to conclusively rely in good faith
on such information or calculations unless and until the Insurer or a
Responsible Officer of the Trustee, as the case may be, has actual knowledge, or
is advised by any Noteholder or the Insurer (in writing), that such information
or calculations is or are incorrect.
SECTION 3.07. Optional Deposits by the Insurer; Notice of
Waivers.
(a) The Insurer shall at any time, and from time to time,
with respect to a Payment Date, have the option (but shall not be required,
except as provided in Article IV) to deliver amounts to the Trustee for deposit
into the Collection Account for any of the following purposes: (i) to provide
funds in respect of the payment of fees or
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expenses of any provider of services to the Issuer with respect to such Payment
Date or (ii) to include such amount as part of the Available Funds for such
Payment Date to the extent that without such amount a draw would be required to
be made on the Policy. Any amounts so delivered by the Insurer shall be included
in Reimbursement Amounts.
(b) If the Insurer waives any event that might trigger an
event of default under the Insurance Agreement and so notifies the Trustee in
writing, the Trustee shall notify the Rating Agencies of such waiver.
SECTION 3.08. The Security Deposit Account.
(a) On the Issuance Date, the Issuer has made an initial
deposit into the Security Deposit Account of $9,366.00 representing security
deposits in respect of the Leases as of the Issuance Date. The Servicer on
behalf of the Issuer shall within two Business Days of receipt thereof deposit
into the Security Deposit Account all additional security deposits received in
respect of the Leases from time to time in the Asset Pool.
(b) Prior to each Payment Date, the Trustee shall transfer
from the Security Deposit Account to the Collection Account the amounts
specified by the Servicer in the related Servicing Report representing (a)
investment earnings on amounts held in the Security Deposit Account as of the
related Determination Date and (b) Retainable Deposits.
(c) The Servicer shall be responsible for the payment of all
amounts held from time to time in the Security Deposit Account not required to
be transferred to the Collection Account in accordance with Section 3.08(b) to
the Lessees or other Persons entitled thereto in accordance with the related
Lease documentation. From time to time, upon written request of the Servicer (a
copy of which shall be provided to the Insurer), the Trustee shall release from
the Security Deposit Account and from the Lien of this Indenture such amounts as
the Servicer shall determine to be necessary for application as provided in the
immediately preceding sentence.
SECTION 3.09. Renewal Account.
(a) On or before the Issuance Date, the Trustee shall
establish the Renewal Account in accordance with Section 3.01(a) hereof.
(b) The Servicer shall deposit all Renewal Payments into the
Collection Account. Prior to each Payment Date, the Trustee shall transfer from
the Renewal Account to the Collection Account the amount specified by the
Servicer in the related Servicing Report representing investment earnings on
amounts held in the Renewal Account. During a Renewal Account Deposit Period,
Available Funds remaining after the payment of the Required Payments and amounts
required to be deposited into the Reserve Account shall be deposited into the
Renewal Account to the extent the amount on deposit in the Renewal Account is
less than the Required Renewal Amount. Any amounts on deposit in the Renewal
Account in excess of the Required Renewal Amount will be deposited into the
Collection Account.
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(c) In the event that Available Funds (exclusive of amounts
on deposit in the Reserve Account and the Renewal Account) are insufficient to
pay the Required Payments and amounts required to be deposited in the Reserve
Account on any Payment Date, the Trustee shall transfer from the Renewal Account
to the Collection Account an amount equal to the lesser of the funds on deposit
in the Renewal Account and the amount of such deficiency.
(d) Upon the satisfaction and discharge of this Indenture,
any balance remaining in the Renewal Account, after all obligations to the
Noteholders and the Insurer hereunder have been fully satisfied, shall be paid
to reimburse the Trustee for any amounts owing to it arising from the
performance of its obligations under this Indenture and then, to the Issuer.
SECTION 3.10. Shared Collections.
Shared Collections and Other Series Shared Collections for any
Payment Date shall be allocated as directed by the Servicer in the Servicer
Report to the Notes in an amount equal to the product of (i) the aggregate
amount of Shared Collections and Other Series Shared Collections for such
Payment Date and (ii) a fraction, the numerator of which is the Shortfall Amount
for such Payment Date, and the denominator of which is the aggregate amount of
the Shortfall Amount for the Notes and the Other Series Shortfall Amounts for
such Payment Date.
Shared Collections and Other Series Shared Collections for any
Payment Date shall be allocated as directed by the Servicer in the Servicer
Report or, if the Servicer fails to so direct (and so long as no Insurer Default
has occurred and is continuing), by the Insurer to each Other Series in an
amount equal to the product of (i) the aggregate amount of Shared Collections
and Other Series Shared Collections for such Payment Date and (ii) a fraction,
the numerator of which is the Other Series Shortfall Amount for such Other
Series for such Payment Date, and the denominator of which is the aggregate
amount of the Shortfall Amount for the Notes and the Other Series Shortfall
Amounts for such Payment Date.
Any Other Series Shared Collections allocated to the Notes and
received by the Trustee ("Allocated Other Series Shared Collections") shall be
deposited in the Collection Account as Available Funds.
SECTION 3.11. Securities Intermediary.
(a) The Trustee (i) shall hold all Eligible Investments that
constitute investment property through a securities intermediary (the Trustee
hereby agrees that it shall act as "securities intermediary" (within the meaning
of Section 8-102(a)(14) of the UCC) with respect to the Transaction Accounts
held by the Trustee), which securities intermediary shall (and the Trustee
hereby does) (I) agree that such investment property shall at all times be
credited to a securities account of which the Trustee is the entitlement holder,
(II) comply with entitlement orders (as defined in Section 8-102(a)(8) of the
UCC) originated by the Trustee without the further consent of any other person
or entity, (III) agree that all property credited to such securities account
shall be treated as a
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financial asset, (IV) waive any lien on, security interest in, or right of
set-off with respect to any property credited to such securities account, and
(V) agree that its jurisdiction for purposes of Section 8-110 and Section
9-305(a)(3) of the UCC shall be New York, and that such agreement shall be
governed by the laws of the State of New York; and (ii) maintain for the benefit
of the Secured Party, possession or control of all other Eligible Investments
(including any negotiable instruments, if any, evidencing such Eligible
Investments) not described in clause (i) above. Terms used in clause (i) above
that are defined in the New York UCC and not otherwise defined herein shall have
the meaning set forth in the New York UCC.
(b) The Trustee, acting in accordance with the terms of this
Indenture, shall be entitled to deliver an entitlement order to the securities
intermediary at which such accounts are maintained at any time; provided,
however, that the Trustee agrees not to invoke its right to provide an
entitlement order unless an Event of Default has occurred and is continuing.
Upon receipt of the entitlement order in accordance with the provisions of this
Indenture, the Trustee shall comply with such entitlement order without further
consent by the Issuer or any other Person other than the Insurer.
ARTICLE IV
THE POLICY
SECTION 4.01. Claims Under Policy.
(a) On each Determination Date, the Trustee shall determine
from the related Servicer Report with respect to the immediately following
Payment Date the Deficiency Amount, if any. If the Trustee determines that a
Deficiency Amount would exist, the Trustee shall complete a Notice in the form
of Exhibit A to the Policy and submit such Notice to the Insurer no later than
12:00 noon New York City time on the third Business Day preceding such Payment
Date as a claim for payment in an amount equal to the Deficiency Amount. Amounts
paid by the Insurer pursuant to a claim submitted under this Section 4.01 shall
be deposited by the Trustee into the Collection Account for payment to
Noteholders on the related Payment Date pursuant to Section 3.03(b).
(b) Any notice delivered by the Trustee to the Insurer
pursuant to Section 4.01(a) shall specify the Deficiency Amount claimed under
the Policy and shall constitute a "Notice" (as defined in the Policy) under the
Policy. In accordance with the provisions of the Policy, the Insurer is required
to pay to the Trustee the Deficiency Amount properly claimed thereunder by 12:00
noon, New York City time, on the later of (i) the third Business Day (as defined
in the Policy) following receipt on a Business Day of the Notice of Claim, and
(ii) the applicable Payment Date. Except as otherwise provided in Section
3.07(a), any payment made under the Policy by the Insurer shall be applied
solely to the payment of the Notes as set forth in the Policy, and for no other
purpose.
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(c) The Trustee shall (i) receive as attorney-in-fact of
each Noteholder any Deficiency Amount from the Insurer and (ii) deposit the same
in the Collection Account for payment to Noteholders as provided in Section
3.03(b). For the purposes of clause (d) below, any Deficiency Amount disbursed
by the Trustee from claims made under the Policy shall not be considered payment
by the Issuer with respect to such Notes, and shall not discharge the
obligations of the Issuer with respect thereto. The Insurer shall be entitled to
receive the related Reimbursement Amount pursuant to Section 3.03(b) with
respect to each Insured Payment made by the Insurer.
(d) The Insurer shall, to the extent it makes any payment
with respect to the Notes, become subrogated to the rights of the recipients of
such payments to the extent of such payments. Subject to and conditioned upon
any payment with respect to the Notes by or on behalf of the Insurer, the
Trustee and the Noteholders shall assign to the Insurer all rights to the
payment of interest or principal with respect to the Notes which are then due
for payment to the extent of all payments made by the Insurer, and the Insurer
may exercise any option, vote, right, power or the like with respect to the
Notes to the extent that it has made payment pursuant to the Policy. To evidence
such subrogation, the Note Registrar (as defined in this Indenture) shall note
the Insurer's rights as subrogee upon the register of Noteholders upon receipt
from the Insurer of proof of payment by the Insurer of any Insured Payment (as
defined in the Policy). The foregoing subrogation shall in all cases be subject
to the rights of the Noteholders to receive all Insured Payments (as defined in
the Policy) in respect of the Notes.
(e) The Trustee shall keep a complete and accurate record of
all Policy proceeds deposited into the Collection Account and the allocation of
such funds to payment of interest on and principal paid in respect of any Note.
The Insurer shall have the right to inspect such records at reasonable times
upon one Business Day's prior notice to the Trustee.
(f) The Trustee shall be entitled to enforce on behalf of
the Noteholders the obligations of the Insurer under the Policy. Notwithstanding
any other provision of this Indenture or any Transaction Documents, the
Noteholders are not entitled to make any claims under the Policy or institute
proceedings directly against the Insurer.
SECTION 4.02. Preference Claims.
(a) In the event that the Trustee has received a certified
copy of an order of the appropriate court that any amount previously distributed
to a Noteholder in respect of any Note has been avoided in whole or in part as a
preference payment under applicable bankruptcy law, the Trustee shall so notify
the Insurer, shall comply with the provisions of the Policy to obtain payment by
the Insurer of such avoided payment, and shall, at the time it provides notice
to the Insurer, notify Holders of the Notes by mail that, in the event that any
Noteholder's payment is so recoverable, such Noteholder will be entitled to
payment pursuant to the terms of the Policy. The Trustee shall furnish to the
Insurer its records evidencing the payments of principal of and interest on the
Notes, if any, which have been made by the Trustee and subsequently recovered
from Noteholders, and the dates on which such payments were made. Pursuant to
the terms of
49
the Policy, the Insurer will make such payment on behalf of the Noteholder to
the receiver or trustee in bankruptcy named in the final order of the court
exercising jurisdiction on behalf of the Noteholder and not to any Noteholder
directly (unless a Noteholder has returned principal or interest on the Notes to
such receiver or trustee in bankruptcy, in which case the Insurer will make such
payment to the Trustee for payment to such Noteholder upon proof of such payment
reasonably satisfactory to the Insurer).
(b) The Trustee shall promptly notify the Insurer of any
proceeding or the institution of any action (of which the Trustee has actual
knowledge) seeking the avoidance as a preferential transfer under applicable
bankruptcy, insolvency, receivership, rehabilitation or similar law (a
"Preference Claim") of any payment made with respect to the Notes. Each Holder,
by its purchase of Notes, and the Trustee hereby agree that so long as an
Insurer Default shall not have occurred and be continuing, the Insurer may at
any time during the continuation of any proceeding relating to a Preference
Claim direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order relating to any
Preference Claim and (ii) the posting of any surety, supersedes or performance
bond pending any such appeal. In addition, and without limitation of the
foregoing, as set forth in Section 4.01(d), the Insurer shall be subrogated to,
and each Noteholder and the Trustee hereby delegate and assign, to the fullest
extent permitted by law, the rights of the Trustee and each Noteholder in the
conduct of any proceeding with respect to a Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such Preference Claim.
SECTION 4.03. Surrender of Policy.
The Trustee shall promptly surrender the Policy to the Insurer
for cancellation upon the expiration of the Policy in accordance with the terms
thereof.
ARTICLE V
RELEASE OF LEASES AND INTERESTS IN EQUIPMENT
SECTION 5.01. Release of Equipment.
Subject to the satisfaction of the provisions of Section 5.02,
the Trustee shall release the Trustee's security interest in the Issuer's
interest in the Equipment from the Lien of the Indenture upon receipt from the
Servicer of written certification of the occurrence of: (a) the sale of such
Equipment pursuant to Section 4.03(b) of the Assignment and Servicing Agreement,
or (b) the release of the related Lease from the Lien of this Indenture;
provided that, upon the occurrence of an Event of Default, so long as no Insurer
Default shall have occurred and is continuing, the Trustee shall not release
such security interest without the consent of the Insurer.
SECTION 5.02. Release of Leases Upon Final Lease Payment.
In the event that the Trustee shall have received notice (either
in writing or orally with prompt written or telecopied confirmation) from the
Servicer that the Trustee has received with respect to any Lease (i) the final
Lease Payment (including Renewal
50
Payments) due and payable under such Lease, (ii) a Termination Payment in
respect of such Lease, (iii) a Lease Purchase Amount in respect of such Lease,
(iv) a Casualty Payment under such Lease (and, following such final Lease
Payment, Casualty Payment, Lease Purchase Amount or Termination Payment, no
further payments (other than Other Lease Payments) on or in respect of such
Lease are or will be due and payable), (v) the full amount of any recoveries
with respect to any such Lease that is a Non-Performing Lease or (vi) one or
more Substitute Leases in substitution for such Lease, such Lease shall be
released from the lien of this Indenture and returned to the Issuer.
SECTION 5.03. Execution of Documents.
The Trustee shall promptly execute and deliver such documents,
including, without limitation, partial releases and termination statements
(which shall be furnished to the Trustee by the Issuer), and take such other
actions as the Issuer, by Issuer Request, may reasonably request (including the
return of any Lease which has been released) to fully effectuate the release
from this Indenture of any Lease and interests in the related Equipment required
to be so released pursuant to Sections 5.01 or 5.02.
SECTION 5.04. Further Release of Collateral.
Notwithstanding any provision of this Indenture to the contrary,
any amounts properly retained by the Servicer pursuant to Section 4.03, 4.04 and
4.05 of the Assignment and Servicing Agreement are, without further action by
the Trustee, released from the Lien of this Indenture.
ARTICLE VI
SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER
SECTION 6.01. Servicer Events of Default.
If a Servicer Event of Default has occurred and is continuing
or, if and so long as IOS Capital is the Servicer, the senior long-term debt
rating assigned by Xxxxx'x or S&P to IOS Capital is Ba2 or below or BB or below,
respectively, the Trustee shall, upon the written request of the Insurer (so
long as no Insurer Default has occurred and is continuing ) or the holders of
66-2/3% of the then Outstanding Principal Amount of the Notes (if an Insurer
Default has occurred and is continuing), give notice in writing to the Servicer
of the termination of all of the rights and obligations of the Servicer under
the Assignment and Servicing Agreement (but none of IOS Capital's obligations
pursuant to Section 5 of the Assignment and Servicing Agreement, which shall
survive such termination). On and after the giving of such written notice, all
rights and obligations of the Servicer under the Assignment and Servicing
Agreement, including, without limitation, the Servicer's right thereunder to
receive the Servicing Fee, but none of the Servicer's obligations pursuant to
Section 4 thereof incurred by the Servicer prior to the date of such transfer,
shall pass to, be vested in, and be assumed by the Trustee, and the Trustee
shall be authorized to, and shall, execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such
51
termination and of such passing, vesting, and assumption; provided that in
performing the duties of the Servicer under the Assignment and Servicing
Agreement the Trustee shall at all times be deemed to be acting as the Trustee
hereunder and shall be entitled to the full benefit of all the protections,
benefits, immunities and indemnities provided in this Indenture for or with
respect to the Trustee, including, without limitation, those set forth in
Article VIII hereof.
SECTION 6.02. Substitute Servicer.
Notwithstanding the provisions of Section 6.01, the Trustee may,
if it shall be unwilling to continue to act as the successor to the Servicer in
accordance with Section 6.01, or shall, if it is unable to continue to so act or
is so instructed in writing by the Insurer (if no Insurer Default has occurred
and is continuing) or the holders of 66-2/3% of the then Outstanding Principal
Amount of the Notes (if an Insurer Default has occurred and is continuing),
appoint a successor to the Servicer in accordance with the provisions of Section
10.03 of the Assignment and Servicing Agreement.
ARTICLE VII
EVENTS OF DEFAULT; REMEDIES
SECTION 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any Interest Payment on any
Note when the same becomes due and payable or in any premium due to the Insurer;
or
(b) default in the payment of the principal of the Notes at
Stated Maturity; or
(c) default in the observance or performance of any covenant
or agreement of the Issuer or Seller made in this Indenture or any other
Transaction Document (other than a covenant or agreement, a default in the
observance or performance of which is elsewhere in this Section specifically
dealt with), or any representation or warranty of the Issuer or Seller made in
this Indenture or any other Transaction Document proving to have been incorrect
in any material respect as of the time when the same shall have been made, and
such default shall continue or not be cured, or the circumstance or condition in
respect of which such misrepresentation or warranty was incorrect shall not have
been eliminated or otherwise cured, for a period of 30 days (or for such longer
period, not in excess of 90 days, as may be reasonably necessary to remedy such
default if the Servicer delivers an Officers' Certificate to the Trustee to the
effect that the Issuer has commenced, or will promptly commence and diligently
pursue, all reasonable efforts to remedy such default and such default can be
remedied in 90 days or less) after there shall have been given, by registered or
certified
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mail, to the Issuer by the Trustee or the Insurer or to the Issuer and the
Trustee by the Insurer (so long as no Insurer Default has occurred and is
continuing) or the Holders of at least 25% of the Outstanding Principal Amount
of the Notes (if an Insurer Default has occurred and is continuing), a written
notice specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(d) an involuntary petition or proceeding shall be filed (i)
in respect of the Issuer or Seller under any applicable federal or state
bankruptcy, insolvency, reorganization, or other similar law or (ii) seeking a
decree or order adjudging the Issuer or Seller as bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, or composition of or in respect
of the Issuer or Seller under any applicable federal or state law, or the
appointment of a custodian, receiver, liquidator, assignee, trustee,
sequestrator, or other similar official of the Issuer or Seller or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and either (1) such petition shall not have been dismissed within a
period of 60 consecutive days or (2) any such order for relief or decree shall
be entered in any such proceeding or any such receiver, liquidator, assignee,
trustee, sequestrator or other "similar official" shall be appointed; or
(e) the commencement by the Issuer or Seller of a voluntary
case or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
decree or order for relief in respect of the Issuer or Seller in an involuntary
case or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any applicable federal
or state law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator, or similar official of the Issuer or Seller or
of any substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the Issuer's or the Seller's failure to pay its
debts generally as they become due, or the taking of corporate action by the
Issuer or Seller in furtherance of any such action;
(f) the occurrence and continuance of a Servicer Event of
Default (other than a Servicer Event of Default arising under Section 10.01(iii)
of the Assignment and Servicing Agreement resulting solely from a material
breach of the Insurance Agreement);
(g) the Issuer or Seller shall become an "investment
company" within the meaning of the Investment Company Act of 1940, as amended;
or
(h) the Swap has been terminated upon the exercise of a
termination right by the Counterparty under the terms of the Swap Documents and
the Swap has not been replaced with a replacement swap and replacement swap
counterparty acceptable to the Insurer within 30 days of the occurrence of such
termination.
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The Issuer shall deliver to the Trustee and the Insurer and the
Rating Agencies, within three days after obtaining knowledge of the occurrence
thereof, written notice in the form of an Officers' Certificate of any event
which with the giving of notice and the lapse of time would become an Event of
Default under (c), (d), (e) or (f) above, its status and what action the Issuer
is taking or proposes to take with respect thereto.
SECTION 7.02. Acceleration of Maturity; Rescission and
Annulment.
(a) If an Event of Default occurs and is continuing, then,
subject to the provisions of Section 7.02(c) below, and in every such case, the
Trustee may, and (if so directed in writing by holders of 66-2/3% of the then
Outstanding Principal Amount of the Notes) shall, declare the unpaid principal
amount of the Notes to be immediately due and payable at par together with all
accrued and unpaid interest thereon, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Issuer.
(b) Subject to Section 7.02(c) below, the holders of 66-2/3%
of the then Outstanding Principal Amount of the Notes may direct in writing the
time, method and place of conducting any proceedings for any remedy available to
the Trustee or of exercising any trust or power conferred on it.
(c) Subject only to provisions hereof expressly stated to be
applicable notwithstanding this Section 7.02 and notwithstanding any other
contrary provision of this Indenture, so long as the Policy remains in effect
and no Insurer Default has occurred and is continuing, and irrespective of any
contrary instruction from the holders of any Notes but subject to any further
conditions or requirements of this Indenture, the Trustee (i) shall not declare
the Notes to be immediately due and payable or waive any Event of Default or
exercise any remedies upon the occurrence of an Event of Default, except at the
written direction of the Insurer, (ii) shall upon the occurrence of an Event of
Default declare the Notes to be immediately due and payable or waive any such
Event of Default upon the written direction of the Insurer, and (iii) shall upon
the occurrence and continuance of an Event of Default, exercise or refrain from
exercising available remedies in accordance with the written direction and
control of the Insurer.
(d) At any time after such an Event of Default has occurred
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the Insurer (if no
Insurer Default has occurred and is continuing) or the holders of Notes
evidencing 66-2/3% of the then Outstanding Principal Amount of the Notes (if an
Insurer Default has occurred and is continuing) by written notice to the Issuer
and the Trustee, may rescind and annul such declaration and its consequences if
the Issuer has paid or deposited with the Trustee a sum sufficient to pay:
(i) all Principal Payments on any Class A Notes which have
become due otherwise than by such declaration of acceleration and
interest thereon from the date when the same first became due until the
date of payment or deposit at the appropriate Note Interest Rate,
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(ii) all Interest Payments due with respect to any Class A
Notes and, to the extent that payment of such interest is lawful,
interest upon overdue interest from the date when the same first became
due until the date of payment or deposit at a rate per annum equal to
the appropriate Note Interest Rates, and
(iii) all sums paid or otherwise advanced by the Trustee
hereunder and all sums due to the Insurer and the reasonable
compensation, expenses, disbursements, and advances of the Trustee and
the Insurer and their respective agents and counsel;
No such rescission shall affect any subsequent Event of Default or impair any
right consequent thereon.
SECTION 7.03. Remedies.
(a) If an Event of Default occurs and is continuing of which
a Responsible Officer has actual knowledge, the Trustee shall immediately give
notice to each Noteholder, the Insurer and the Rating Agencies as set forth in
Section 8.02.
(b) Following any acceleration of the Notes, the Trustee
shall have all of the rights, powers and remedies with respect to the Asset Pool
as are available to secured parties under the Uniform Commercial Code or other
applicable law. Such rights, powers and remedies may be exercised by the Trustee
in its own name as trustee of an express trust.
(c) If an Event of Default specified in Section 7.01(a) or
7.01(b) occurs and is continuing, the Trustee is authorized to recover judgment
in its own name and as trustee of an express trust against the Issuer for the
whole amount of principal and interest remaining unpaid.
(d) In exercising its rights and obligations under this
Section 7.03, the Trustee may sell, subject to the consent of the Insurer (so
long as no Insurer Default shall have occurred and is continuing) and shall
sell, if directed by the Insurer (so long as no Insurer Default shall have
occurred and is continuing), the assets in the Asset Pool; provided that, if the
Event of Default involves other than non-payment of principal or interest on the
Notes, then such sale must be for an amount greater than or equal to amounts due
under clauses first through fifth in Section 7.07 unless directed otherwise by
the Insurer (if no Insurer Default has occurred and is continuing) or the
holders of 66-2/3% of the then Outstanding Principal Amount of the Notes (if an
Insurer Default has occurred and is continuing). None of the Trustee, the
Insurer nor any Noteholder shall have any rights against the Issuer other than
to enforce the Lien of this Indenture and to sell the assets in the Asset Pool.
(e) Upon an Event of Default and acceleration of the Notes,
the Insurer may elect to redeem the Notes or to purchase the Notes from each
Noteholder by paying an amount equal to all outstanding principal of and all
accrued and unpaid interest on the Notes. Upon such purchase or redemption, the
Trustee and each Noteholder shall transfer, assign and convey to the Insurer on
such Payment Date all right, title and interest of each of the Noteholders in
and to (i) the outstanding Notes and (ii) all rights
55
under the Transaction Documents and all other documents, instruments and
agreements related to the foregoing (collectively with the rights and interests
described in clauses (i) and (ii) of this Section 7.03(e), the "Assigned
Assets"). The Trustee, the Issuer and each Noteholder agree that the
aforementioned transfer, assignment and conveyance of the property shall become
effective upon such redemption or purchase, without any further act by the
Insurer, the Servicer, the Issuer, the Trustee or any Noteholder; provided;
however, that the Insurer may request the Trustee to, and if so requested the
Trustee shall, execute and deliver to the Insurer an assignment (without
representation, warranty or recourse by or to the Trustee), in form and
substance satisfactory to the Insurer, to the Insurer of the Assigned Assets so
assigned by the Issuer, Trustee and each Noteholder. Each Noteholder authorizes
the Trustee to execute and deliver such documents and to take such actions as
shall be required to effectuate such assignment and to effectively vest in the
Insurer all right, title and interest in and to the Assigned Assets.
SECTION 7.04. Trustee Shall File Proofs of Claim.
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition,
or other judicial proceeding relative to the Issuer, the Seller, IOS Capital,
the Servicer or any other obligor upon the Notes or the other obligations
secured hereby or relating to the property of the Issuer, the Seller, IOS
Capital, the Servicer or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Issuer, the Seller, IOS
Capital or the Servicer for the payment of overdue principal or interest or any
such other obligation) shall by intervention in such proceeding or otherwise,
(i) file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Notes and any other obligation
secured hereby and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee, the Insurer (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee and the Insurer and their respective agents and counsel) and the
Noteholders allowed in such judicial proceeding; provided, however, that the
Trustee shall file such proof of claim on behalf of the Insurer only upon the
Insurer's written direction and on behalf of the Noteholders only at the written
direction of the holders of not less than 66-2/3% of the then Outstanding
Principal Amount of the Notes; and
(ii) collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or
other similar official in any such judicial proceeding is hereby authorized by
each Noteholder and the Insurer to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Noteholders to pay to the Trustee and the Insurer any amount due them for
the reasonable compensation, expenses, disbursements and advances of the Trustee
and the Insurer and their respective agents and counsel, and any other amounts
due the Trustee under Section 7.07.
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(b) Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any holder thereof or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such
proceeding.
SECTION 7.05. Waiver of Past Events.
If a Default or Event of Default shall have occurred, the
Insurer (so long as no Insurer Default shall have occurred and is continuing)
may waive such Default or Event of Default and its consequences except a Default
in payment of principal (or premium, if any) of or interest on any of the Notes.
In the case of any such waiver, the Issuer, the Trustee and the Holders of the
Notes shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereto.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
SECTION 7.06. Trustee May Enforce Claims Without Possession of
Notes.
All rights of action and claims under this Indenture or the
Notes may be prosecuted and enforced by the Trustee without the possession of
any of the Notes or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the holders of the Notes and the Insurer.
SECTION 7.07. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article
following an Event of Default, and any moneys that may then be held or
thereafter received by the Trustee, including any Other Series Shared
Collections allocated to the Notes pursuant to Section 3.10 and the Shared
Collections Section of each Other Indenture, shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of the entire amount due on account of principal or interest, upon
presentation of the Notes and surrender thereof:
first to the payment of all costs and expenses of collection
incurred by the Trustee, the Insurer and, only upon the occurrence and
continuance of an Insurer Default, the Noteholders (including the
reasonable fees and expenses of any counsel to the Trustee, the Insurer
and, only upon the occurrence of an Insurer Default, the Noteholders)
and all fees and expenses (including legal fees and
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expenses) owed to the Trustee not in excess of $250,000 under this
Indenture and the Assignment and Servicing Agreement;
second to pay the Counterparty any amount due pursuant to the
Swap Documents (except any amounts payable to the Counterparty upon
termination of the Swap Documents);
third to the Servicer under the Assignment and Servicing
Agreement (irrespective of whether IOS Capital or an Affiliate of IOS
Capital is then acting as servicer), to the payment of all Servicing
Fees and unreimbursed Servicer Advances then due to such Person;
fourth first, pro rata to the payment of all accrued and unpaid
interest on the Outstanding Class A-1 Principal Amount, Outstanding
Class A-2 Principal Amount, Outstanding Class A-3a Principal Amount,
Outstanding Class A-3b Principal Amount and Outstanding Class A-4
Principal Amount, respectively, to the date of payment thereof,
including (to the extent permitted by applicable law) interest on any
overdue installment of interest and principal from the maturity of such
installment to the date of payment thereof at the rate per annum equal
to the Class A-1 Note Interest Rate, Class A-2 Note Interest Rate, Class
A-3a Note Interest Rate, Class A-3b Note Interest Rate and Class A-4
Note Interest Rate, respectively, second, to the payment of the
Outstanding Class A-1 Principal Amount, third, to the payment of the
Outstanding Class A-2 Principal Amount, fourth, to the pro rata payment
of the Outstanding Class A-3a Principal Amount and the Outstanding Class
A-3b Principal Amount and fifth, to the payment of the Outstanding Class
A-4 Principal Amount; provided, that the Noteholders may allocate such
payments for interest, principal and premium at their own discretion,
except that no such allocation shall affect the allocation of such
amounts or future payments received by any other Noteholder;
fifth to the payment of amounts then due the Insurer under
this Indenture, including the Insurer Premium (other than amounts
referred to in clause seventh below);
sixth to the payments of amounts then due to the Counterparty
upon termination of the Swap Documents;
seventh to the payment to the Insurer of any Reimbursement
Amounts;
eighth to the payment of any fees and expenses (including legal
fees and expenses) in excess of $250,000 owed to the Trustee, owed to
any successor trustee, co-trustee or separate trustee under this
Indenture and the Assignment and Servicing Agreement;
ninth to the payment of the remainder, if any, to the Issuer
or any other Person legally entitled thereto; provided, however, that if
a Series Acceleration Event or Series Event of Default Acceleration has
occurred with respect to one or more Other Series (i) first to be
treated as Shared Collections and allocated to such Other Series as and
to the extent provided in Section 3.10
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and in the Shared Collections Section of the Applicable Indenture for
each such Other Series (and paid to the Applicable Trustee for each such
Other Series) and (ii) then to pay the Issuer or any Person legally
entitled thereto, the balance, if any.
SECTION 7.08. Limitation on Suits.
None of the Noteholders nor (in the event an Insurer Default has
occurred and is continuing or the financial strength rating assigned by any of
Xxxxx'x, S&P or Fitch Ratings is reduced below "AAA") the Insurer shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Noteholder or (only upon the occurrence of either
of the events stated above) the Insurer, as the case may be, has previously
given written notice to the Trustee of a continuing Event of Default;
(ii) the holders of not less than 66-2/3% of the then
Outstanding Principal Amount of the Notes or (only upon the occurrence of either
of the events stated above), the Insurer, as the case may be, shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default in its own name as Trustee hereunder;
(iii) such Noteholder or Noteholders or (only upon occurrence
of either of the events stated above) the Insurer, as the case may be, have
offered to the Trustee indemnity satisfactory to it against the costs, expenses
and liabilities to be incurred in compliance with such request;
(iv) the Trustee for 30 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding;
(v) so long as any of the Notes remain Outstanding, no
direction inconsistent with such written request has been given to the Trustee
during such 30-day period by the holders of 66-2/3% of the then Outstanding
Principal Amount of the Notes or (only upon the occurrence of either of the
events stated above) the Insurer, as the case may be; and
(vi) such Noteholder shall have obtained the written consent
of the Insurer, unless an Insurer Default has occurred and is continuing;
it being understood and intended that no one or more Noteholders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb, or prejudice the rights of any other
Noteholders, or to obtain or to seek to obtain priority or preference over any
other Noteholders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Noteholders. It is further understood and intended that so long as any portion
of the Notes remains Outstanding, IOS Capital shall not have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture
(other than for the enforcement of Sections 3.03(b), 3.04(b), 3.05, 3.06, 4.01
and 4.02 hereof) or for the
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appointment of a receiver or trustee (including, without limitation, a
proceeding under the Bankruptcy Code), or for any other remedy hereunder.
Nothing in this Section 7.08 shall be construed as limiting the rights of
otherwise qualified Noteholders to petition a court for the removal of a Trustee
pursuant to Section 8.08(h) hereof.
SECTION 7.09. Unconditional Right of Noteholders to Receive
Principal and Interest.
Notwithstanding any other provision in this Indenture, other
than the provisions hereof limiting the right to recover amounts due on the
Notes to recoveries from the property of the Asset Pool, the holder of any Note
shall have the absolute and unconditional right to receive payment of the
principal of and interest on such Note on the Maturities for such payments,
including the Stated Maturity, and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the consent of such
Noteholder.
SECTION 7.10. Restoration of Rights and Remedies.
If the Trustee, the Insurer or any Noteholder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee, the Insurer or to such Noteholder, then and
in every such case, subject to any determination in such proceeding, the Issuer,
the Trustee, the Insurer and the Noteholders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee, the Insurer and the Noteholders continue as though no
such proceeding had been instituted.
SECTION 7.11. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost, or stolen Notes in Section 2.04 (f), no
right or remedy herein conferred upon or reserved to the Insurer or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 7.12. Delay or Omission Not Waiver.
No delay or omission of the Trustee, the Insurer or of any
holder of any Note to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee, the Insurer or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee, the Insurer or by the Noteholders, as the case may be.
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SECTION 7.13. Control by Noteholders.
Until such time as the conditions specified in Section
11.01(a)(i) have been satisfied in full, the Insurer (if no Insurer Default has
occurred and is continuing) or the holders of 66-2/3% of the then Outstanding
Principal Amount of the Notes (if an Insurer Default has occurred and is
continuing) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee. Notwithstanding the foregoing,
(i) no such direction shall be in conflict with any rule of
law or with this Indenture;
(ii) the Trustee shall not be required to follow any such
direction which the Trustee reasonably believes might result in any personal
liability on the part of the Trustee for which the Trustee is not indemnified to
its satisfaction; and
(iii) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with any such direction; provided that the
Trustee shall give notice of any such action to the Insurer and each Noteholder.
SECTION 7.14. Undertaking for Costs.
All parties to this Indenture agree (and each holder of any Note
by its acceptance thereof shall be deemed to have agreed) that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the Trustee
or the Insurer, to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate more than 10% of the then Outstanding
Principal Amount of the Notes, or to any suit instituted by any Noteholder for
the enforcement of the payment of the principal of or interest on any Note on or
after the Maturities for such payments, including the Stated Maturity as
applicable.
SECTION 7.15. Waiver of Stay or Extension Laws.
The Issuer covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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SECTION 7.16. Sale of Asset Pool.
(a) The power to effect any sale of any portion of the Asset
Pool described pursuant to Section 7.03 shall not be exhausted by any one or
more sales as to any portion of the Asset Pool remaining unsold, but shall
continue unimpaired until the entire Asset Pool shall have been sold or all
amounts referred to in clauses first through fifth in Section 7.07 shall have
been paid. The Trustee may from time to time, upon written directions in
accordance with Section 7.13, postpone any public sale by public announcement
made at the time and place of such sale. For any public sale of the Asset Pool,
the Trustee shall have provided each Noteholder and the Insurer with notice of
such sale at least two weeks in advance of such sale which notice shall specify
the date, time and location of such sale.
(b) To the extent permitted by applicable law, the Trustee
shall not in any private sale sell to a third party the Asset Pool, or any
portion thereof unless,
(i) until such time as the conditions specified in Section
11.01 have been satisfied in full, the Insurer (if no Insurer Default has
occurred and is continuing) or the holders of not less than 66-2/3% of the then
Outstanding Principal Amount of the Notes (if an Insurer Default has occurred
and is continuing) consent to or direct the Trustee in writing to make such
sale; or
(ii) the proceeds of such sale would be not less than the sum
of all amounts due to the Trustee hereunder and all amounts referred to in
clause first through third of Section 7.07 on the Payment Date next succeeding
the date of such sale.
The foregoing provisions shall not preclude or limit the ability of the Trustee
to purchase all or any portion of the Asset Pool at a private sale.
(c) In connection with a sale of all or any portion of the
Asset Pool:
(i) any one or more Noteholders or the Insurer may bid for
and purchase the property offered for sale, and upon compliance with the terms
of sale may hold, retain, and possess and dispose of such property, without
further accountability, and any Noteholder or the Insurer, as the case may be,
may, in paying the purchase money therefore, deliver in lieu of cash any
Outstanding Notes or claims for interest thereon (or, in the case of the
Insurer, surrender the Insurer's subrogation rights with respect to such
Outstanding Notes or claims for interest thereon) for credit in the amount that
shall, upon distribution of the net proceeds of such sale, be payable thereon,
and the Notes, in case the amounts so payable thereon shall be less than the
amount due thereon, shall be returned to the Noteholders after being
appropriately stamped to show such partial payment;
(ii) the Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest, without representation,
warranty or recourse, in any portion of the Asset Pool in connection with a sale
thereof;
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(iii) the Trustee is hereby irrevocably appointed the agent
and attorney-in-fact of the Issuer to transfer and convey its interest in any
portion of the Asset Pool in connection with a sale thereof, and to take all
action necessary to effect such sale; and
(iv) no purchaser or transferee at such a sale shall be bound
to ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(d) The method, manner, time, place and terms of any sale of
all or any portion of the Asset Pool shall be commercially reasonable.
(e) The provisions of this Section 7.16 shall not be
construed to restrict the ability of the Trustee to exercise any rights and
powers against the Issuer or the Asset Pool that are vested in the Trustee by
this Indenture, including, without limitation, the power of the Trustee to
proceed against the collateral subject to the lien of this Indenture and to
institute judicial proceedings for the collection of any deficiency remaining
thereafter.
(f) The purchase price received by the Trustee in respect of
any sale made in accordance with this Section 7.16 shall be deemed conclusive
and binding on the parties hereto, the Insurer and the Noteholders.
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default
known to the Trustee:
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and the other
Transaction Documents to which it is a party, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Indenture.
(b) In case an Event of Default has occurred and is
continuing to the actual knowledge of a Responsible Officer of the Trustee, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
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(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own grossly negligent action, its own
grossly negligent failure to act, or its own willful misconduct, except that:
(i) this subsection shall not be construed to limit the
effect of subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was grossly negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Noteholders in accordance with Section 7.13 relating to the
time, method, and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture; and
(iv) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it, against such risk or
liability is not assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 8.02. Notice of Defaults or Events of Default.
Within two Business Days after a Responsible Officer obtaining
knowledge of the occurrence of any Default or Event of Default hereunder, the
Trustee shall transmit, by certified mail return receipt requested, hand
delivery or overnight courier, to (a) all Noteholders, as their names and
addresses appear in the Note Register, (b) the Insurer and (c) the Rating
Agencies, notice of such Default or Event of Default hereunder known to the
Trustee, unless such Default or Event of Default shall have been cured or
waived.
SECTION 8.03. Certain Rights of Trustee.
(a) Subject to the provisions of Section 8.01:
(i) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, note, debenture, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties (and the Trustee need not investigate any fact or
matter stated in the document);
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(ii) any request or direction or action of the Issuer
mentioned herein shall be sufficiently evidenced by an Issuer Order;
(iii) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, conclusively rely upon an Officers' Certificate;
(iv) the Trustee may consult with counsel as to legal matters
and the advice of any such counsel selected by the Trustee shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(v) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Noteholders or the Insurer pursuant to this Indenture,
unless such Noteholders or the Insurer shall have offered to the Trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(vi) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, note,
debenture, other evidence of indebtedness, or other paper or document, unless
requested in writing to do so by the Insurer (so long as no Insurer Default has
occurred and is continuing) and having been indemnified to its satisfaction by
the Insurer against the costs, expenses and liabilities that it may incur in
making such investigation, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Issuer, personally or by agent or attorney;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, custodians or nominees and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent, attorney,
custodian or nominee appointed with due care by it hereunder;
(viii) the Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers;
(ix) the Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties hereunder;
(x) the Trustee shall not be bound to ascertain or inquire
as to the performance or observance of any covenants, conditions or agreements
on the part of the Issuer;
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(xi) the permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for other than its gross negligence or willful default;
and
(xii) in the event that the Trustee is also acting as paying
agent or transfer agent and registrar hereunder, the rights and protections
afforded to the Trustee pursuant to this Article VIII shall also be afforded to
such paying agent or transfer agent or registrar.
(b) The recitals contained herein and in the Notes, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Issuer, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture, or of the Notes, except to the extent provided by the Trustee's
certificate of authentication on the Notes. The Trustee shall not be accountable
for the use or application by the Issuer of the proceeds of the Notes.
SECTION 8.04. May Hold Notes.
The Trustee, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with the Issuer with the
same rights it would have if it were not Trustee.
SECTION 8.05. Money Held in Trust.
Money and investments held by the Trustee shall be held in trust
in one or more trust accounts hereunder, but need not be segregated from other
funds except to the extent required by law.
SECTION 8.06. Compensation, Reimbursement, etc.
The Servicer agrees:
(a) to pay to the Trustee from time to time such
compensation for all services rendered by it hereunder as the Issuer and the
Trustee may agree in writing (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and
(b) to reimburse the Trustee upon its request, for all
reasonable expenses, disbursements, and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement, or advance as may be attributable to its
negligence or bad faith.
SECTION 8.07. Corporate Trustee Required; Eligibility.
(a) There shall at all times be a Trustee hereunder which
shall (i) be a corporation organized and doing business under the laws of the
United States of America, any state thereof or the District of Columbia,
authorized under such laws to exercise
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corporate trust powers; (ii) have a combined capital and surplus of at least
$50,000,000; (iii) be subject to supervision or examination by federal or state
authority; and (iv) at the time of appointment, shall have senior long-term debt
obligations (or, if the Trustee does not have outstanding senior long-term debt
obligations and is a subsidiary of a holding company, which holding company
shall have long-term obligations) having a credit rating of at least "A-" from
S&P and "Baa3" from Xxxxx'x.
(b) If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
(c) This Indenture shall always have a Trustee who satisfies
the requirements of Section 310(a)(1) of the Trust Indenture Act. The Trustee is
subject to the provisions of Section 310(b) of the Trust Indenture Act regarding
disqualification of a trustee upon acquiring any conflicting interest.
SECTION 8.08. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 8.09.
(b) The Trustee may resign at any time by giving sixty days'
written notice thereof to the Issuer, the Insurer (if no Insurer Default has
occurred and is continuing) and, if an Insurer Default has occurred and is
continuing, the Noteholders, by mailing notice of resignation by first-class
mail, postage prepaid, to the Issuer or the Insurer at their respective
addresses set forth in the Assignment and Servicing Agreement and to Noteholders
at their addresses appearing on the Note Register.
(c) The Trustee may be removed at any time by written notice
of the Insurer (if no Insurer Default has occurred and is continuing) or the
holders of not less than 66-2/3% of the then Outstanding Principal Amount of the
Notes (if an Insurer Default has occurred and is continuing) delivered to the
Trustee and the Issuer.
(d) If the Trustee shall resign, be removed, or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Issuer, with the consent of the Insurer (if no Insurer Default
has occurred and is continuing) or the holders of 66-2/3% of the then
Outstanding Principal Amount of the Notes (if an Insurer Default has occurred
and is continuing), by an act of the Issuer, shall promptly appoint a successor
Trustee.
(e) If no successor Trustee shall have been so appointed as
hereinbefore provided and accepted appointment in the manner hereinafter
provided within 30 days after any such resignation or removal, existence of
incapability, or occurrence of such vacancy, the Trustee, the Insurer (if no
Insurer Default has occurred
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and is continuing) or any Noteholder (if an Insurer Default has occurred and is
continuing) may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
(f) The Issuer shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee by
mailing written notice of such event by first-class mail, postage prepaid, to
the Insurer at its address set forth in the Assignment and Servicing Agreement
and to all Noteholders as their names and addresses appear in the Note Register
and to each Rating Agency. Each notice shall include the name of the successor
Trustee and the address of its Corporate Trust Office.
(g) The Issuer may remove the Trustee, with the consent of
the Insurer (as long as no Insurer Default shall have occurred and is
continuing), if the Trustee fails to comply with Section 8.07 of this Indenture.
(h) If the Trustee after written request by any Noteholder
who has been a Noteholder for at least six months fails to comply with Section
310(b) of the Trust Indenture Act, such Noteholder may petition any court of
competent jurisdiction, for the removal of the Trustee and the appointment of a
successor Trustee acceptable to the Insurer.
(i) The Issuer (with the consent of the Insurer, if no
Insurer Default has occurred and is continuing) may and shall at the direction
of the Insurer (if no Insurer Default has occurred and is continuing) or the
Noteholders evidencing more than 25% of the aggregate Outstanding Principal
Amount of the Notes (if an Insurer Default has occurred and is continuing),
remove the Trustee if the Trustee ceases to be eligible to continue as such
under this Indenture and fails to resign after written request therefor.
SECTION 8.09. Acceptance of Appointment by Successor.
(a) Every successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Issuer and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on request of
the Issuer or the successor Trustee, such retiring Trustee shall, upon payment
of its charges and expenses, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee, all
property and money held by such retiring Trustee hereunder. Upon request of any
such successor Trustee, the Issuer shall execute any and all instruments for
more fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts.
(b) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
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SECTION 8.10. Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Trustee may be merged or converted or
with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such Person
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Notes shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion,
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Notes so authenticated with the same effect as if such successor
Trustee had itself authenticated such Notes. The Trustee shall provide prompt
written notice to each Rating Agency of any event referenced in this Section
8.10.
SECTION 8.11. Co-Trustees and Separate Trustees.
(a) At any time or times, if the Issuer, the Trustee, the
Insurer or any Noteholder determines that it is necessary for the purpose of
meeting the legal requirements of any jurisdiction in which any of the Asset
Pool may at the time be located, the Issuer and the Trustee (with the written
consent of the Insurer, if no Insurer Default has occurred and is continuing)
shall have power to appoint, and, upon the written request of the Trustee or the
Insurer (if no Insurer Default has occurred and is continuing) or the holders of
a majority of the then Outstanding Principal Amount of the Notes (if an Insurer
Default has occurred and is continuing), the Issuer shall for such purpose join
with the Trustee in the execution, delivery, and performance of all instruments
and agreements necessary or proper to appoint, one or more Persons either to act
as co-trustee, jointly with the Trustee, of all or any part of such Asset Pool,
or to act as separate trustee of any such property, in either case with such
powers as may be provided in the instrument of appointment, and to vest in such
Person or Persons in the capacity aforesaid, any property, title, right or power
deemed necessary or desirable, subject to the other provisions of this Section.
If the Issuer does not join in such appointment within 15 days after the receipt
by it of a request so to do, or in case an Event of Default has occurred and is
continuing, the Trustee (if no Insurer Default has occurred and is continuing),
or the holders of a majority of the then Outstanding Principal Amount of the
Notes (if an Insurer Default has occurred and is continuing), alone shall have
power to make such appointment. The appointment of a co-trustee or separate
trustee shall not relieve the Trustee of its obligations hereunder. Any fees or
expenses payable to such co-trustee or separate trustee shall be paid by the
Servicer and shall be in addition to any fees and expenses payable to the
Trustee.
(b) Should any written instrument from the Issuer be
required by any co-trustee or separate trustee so appointed for more fully
confirming to such co-trustee or separate trustee such property, title, right,
or power, any and all such instruments shall, on request, be executed,
acknowledged and delivered by the Issuer.
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(c) Every co-trustee or separate trustee shall, to the
extent permitted by law, but to such extent only, be appointed subject to the
following terms:
(i) The Notes shall be authenticated and delivered and all
rights, powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised, solely by
the Trustee.
(ii) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Trustee or by the Trustee and such co-trustee or separate trustee jointly, as
shall be provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that, under any law of any jurisdiction in which
any particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate
trustee.
(iii) The Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Issuer evidenced by an Issuer Order
and the written concurrence of the Insurer (if no Insurer Default has occurred
and is continuing), may accept the resignation of or remove any co-trustee or
separate trustee appointed under this Section, and, in case an Event of Default
has occurred and is continuing, the Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without the
concurrence of the Issuer (if no Insurer Default has occurred and is
continuing). Upon the written request of the Trustee, the Issuer shall join with
the Trustee in the execution, delivery and performance of all instruments and
agreements necessary or proper to effectuate such resignation or removal. A
successor to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee or any other
such trustee hereunder and the Trustee shall not be personally liable by reason
of any act or omission of any co-trustee or other such separate trustee
hereunder selected by the Trustee with due care or appointed in accordance with
directions to the Trustee pursuant to this Section 8.11.
(v) Any Act of Noteholders delivered to the Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
(vi) No co-trustee or separate trustee shall accept its
appointment unless at the time of such acceptance such co-trustee or separate
trustee shall be qualified and eligible under this Article subject to Section
8.07.
SECTION 8.12. Acceptance by Trustee.
The Trustee hereby acknowledges the conveyance of the Asset Pool
and the receipt of the Leases and the other assets in the Asset Pool granted by
the Issuer hereunder and declares that the Trustee, through a custodian, will
hold such Leases and
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other Asset Pool conveyed by the Issuer in trust, for the use and benefit of all
Noteholders and the Insurer subject to the terms and provisions hereof.
SECTION 8.13. Preferential Collection of Claims Against the
Issuer.
The Trustee is subject to Trust Indenture Act Section 311(a),
excluding any creditor relationship listed in Trust Indenture Act Section
311(b). A Person who has resigned or been removed as Trustee shall be subject to
Trust Indenture Act Section 311(a) to the extent indicated therein.
SECTION 8.14. Reports by Trustee to Noteholders.
To the extent required by the Trust Indenture Act, within 60
days after each October 15, following the date of this Indenture, the Trustee
shall mail to the Insurer and to Noteholders a brief report dated as of such
reporting date that complies with Trust Indenture Act Section 313(a), if such a
report is required pursuant to Trust Indenture Act Section 313(a). The Trustee
also shall comply with Trust Indenture Act Section 313(b). The Trustee shall
also transmit by mail all reports as required by Trust Indenture Act Section
313(c).
A copy of each such report required under Trust Indenture Act
Section 313 shall, at the time of such transmission to the Insurer and the
Noteholders be filed with the Commission and with each stock exchange or other
market system on which the Notes are listed. The Issuer or any other obligor
upon the Notes shall notify the Trustee in writing if the Notes become listed on
any stock exchange or market trading system.
SECTION 8.15. No Proceedings.
The Trustee hereby agrees that it will not, with respect to its
fees and expenses, directly or indirectly institute, or cause to be instituted,
against the Issuer any proceeding of the type referred to in Section 7.01(d) or
(e) so long as there shall not have elapsed one year plus one day since the
latest maturing Notes have been paid in full in cash, provided, however that
nothing herein shall prohibit the Trustee from filing proofs of claim or
otherwise participating in any such proceeding.
SECTION 8.16. Appointment and Powers.
Subject to the terms and conditions hereof, each of the Issuer
Secured Parties hereby appoints BNY Midwest Trust Company as the Trustee with
respect to the Asset Pool and as initial Paying Agent, and BNY Midwest Trust
Company hereby accepts such appointment and agrees to act as Trustee with
respect to the Asset Pool for the Issuer Secured Parties, to maintain custody
and possession of the assets in the Asset Pool (except as otherwise provided
herein and in the Assignment and Servicing Agreement) and to perform the other
duties of the Trustee in accordance with the provisions of this Indenture and
the Assignment and Servicing Agreement. Each Issuer Secured Party hereby
authorizes the Trustee to take such action on its behalf, and to exercise such
rights, remedies, powers and privileges hereunder, as the Insurer (if no Insurer
Default has occurred and is continuing) or the holders of not less than 66-2/3%
of the then Outstanding Principal Amount of the Notes (if an Insurer Default has
occurred
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and is continuing) may direct and as are specifically authorized to be exercised
by the Trustee by the terms hereof, together with such actions, rights,
remedies, powers and privileges as are reasonably incidental thereto. The
Trustee shall act upon and in compliance with the written instructions of the
Insurer or the Noteholders given in accordance with the provisions of this
Indenture promptly following receipt of such written instructions; provided that
the Trustee shall not act in accordance with any instructions (i) which are not
authorized by, or in violation of the provisions of, this Indenture, (ii) which
are in violation of any applicable law, rule or regulation or (iii) for which
the Trustee has not received indemnity satisfactory to it. Receipt of such
instructions shall not be a condition to the exercise by the Trustee of its
express duties hereunder, except where this Indenture provides that the Trustee
is permitted to act only following and in accordance with such instructions.
SECTION 8.17. Performance of Duties.
The Trustee shall have no duties or responsibilities except
those expressly set forth in this Indenture and the other Transaction Documents
to which the Trustee is a party or as directed in writing by the Insurer or the
Noteholders in accordance with this Indenture. The Trustee shall not be required
to take any discretionary action hereunder except at the written direction of
the Insurer (if no Insurer Default has occurred and is continuing) or if an
Insurer Default has occurred and is continuing, the holders of 66 2/3 of the
then Outstanding Principal Amount of the Notes and as provided in Section 7.13.
The Trustee shall, and hereby agrees that it will, perform all of the duties and
obligations required of it under this Indenture and the other Transaction
Documents to which it is a party.
SECTION 8.18. Representations and Warranties of Trustee.
The Trustee represents and warrants to the Issuer and the
Secured Party that:
(i) The Trustee is a corporation duly organized and existing
under the laws of the State of Illinois;
(ii) The Trustee has full power, authority and right to
execute, deliver and perform this Indenture and to authenticate the Notes, and
has taken all necessary action to authorize the execution, delivery and
performance by it of this Indenture and to authenticate the Notes;
(iii) This Indenture has been duly executed and delivered by
the Trustee; and
(iv) The Trustee meets the requirements of eligibility as a
trustee hereunder set forth in Section 8.07.
SECTION 8.19. Control by the Insurer.
The Trustee shall comply with notices and instructions given by
the Issuer only if accompanied by the written consent of the Insurer, except
that if any Event of
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Default has occurred and is continuing, the Trustee shall act upon and comply
with notices and instructions given by the Insurer alone in the place and stead
of the Issuer.
SECTION 8.20. Maintenance of Office or Agency.
The Trustee will maintain at its expense an office or offices,
or agency or agencies, where notices and demands to or upon the Trustee in
respect of the Notes and this Indenture may be served. The Trustee initially
appoints its Corporate Trust Office as its office for such purposes. The Trustee
will give prompt written notice to the Issuer, the Servicer, the Insurer and to
Holders of any change in the location of the Notes Register or any such office
or agency.
ARTICLE IX
COVENANTS
SECTION 9.01. Payment of Principal and Interest.
The Issuer will duly and punctually pay the principal of and
interest on the Notes in accordance with the terms of the Notes and this
Indenture.
SECTION 9.02. Maintenance of Office or Agency; Chief Executive
Office.
(a) The Issuer will maintain at the Corporate Trust Office
an office or agency where Notes may be surrendered for registration of transfer
or exchange and where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. The Issuer hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands. The Corporate Trust Office will be maintained in the United States
until the Indenture is discharged.
(b) The chief executive office of each of the Issuer, the
Seller and the Servicer, and the office at which each of the Issuer, the Seller
and the Servicer maintains its records with respect to the Leases, its interests
in the Equipment, and the transactions contemplated hereby, is currently located
in Macon, Georgia and such office will be located in the United States until the
Indenture is discharged. None of the Issuer, the Seller or the Servicer will
change the location of such offices or their jurisdiction of organization
without giving the Trustee and the Insurer at least 30 days prior written notice
thereof.
SECTION 9.03. Money for Payments to Noteholders to be Held in
Trust.
(a) All payments of amounts due and payable with respect to
any Notes that are to be made from amounts withdrawn from the Collection Account
pursuant to Section 3.03(b) or Section 7.07 shall be made on behalf of the
Issuer by the Trustee, and no amounts so withdrawn from the Collection Account
for payments of Notes shall be paid over to the Issuer under any circumstances
except as provided in this Section 9.03 or in Section 3.03(b), Section 3.04(b)
or Section 7.07.
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(b) In making payments hereunder, the Trustee will:
(i) allocate all sums received for payment to the
Noteholders on each Payment Date among such Noteholders pursuant to Section
3.03(b) or Section 7.07, as applicable, in accordance with the information known
to the Trustee;
(ii) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and pay such sums to such Persons as herein provided; and
(iii) comply with all requirements of the Code (or any
successor statutes), and all regulations thereunder, with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
Whenever the Issuer shall have one or more Paying Agents, it
will, prior to each due date of the principal of or interest on any Notes,
deposit with a Paying Agent a sum sufficient to pay the principal or interest so
becoming due, such sum to be held in trust for the benefit of the Noteholders
entitled to such principal or interest, and (unless such Paying Agent is the
Trustee) the Issuer will promptly notify the Trustee in writing of its action or
failure so to act.
The Issuer will cause each Paying Agent other than the Trustee
to execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of or interest on Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided, and
(2) give the Trustee written notice of any default by the
Issuer (or any other obligor upon the Notes) in the making of any
payment of principal or interest.
(c) Except as required by applicable law, any money held by
the Trustee in trust for the payment of any amount due with respect to any Note
and remaining unclaimed for three years after such amount has become due and
payable to the Noteholder shall be discharged from such trust and, subject to
applicable escheat laws, paid to the Issuer upon request; and such Noteholder
shall thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Trustee with respect to such trust money shall
thereupon cease.
SECTION 9.04. Corporate Existence; Merger; Consolidation, etc.
(a) The Issuer will keep in full effect its existence and
rights as a limited liability company under the laws of the State of Delaware.
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(b) The Issuer shall at all times observe and comply in all
material respects with (i) all laws applicable to it, (ii) all requisite and
appropriate organizational and other formalities in the management of its
business and affairs and the conduct of the transactions contemplated hereby and
by the Underwriting Agreement and the Assignment and Servicing Agreement.
(c) The Issuer shall not (i) consolidate or merge with or
into any other Person or convey or transfer its properties and assets
substantially as an entirety to any other Person or (ii) commingle its assets
with those of any other Person except temporarily as permitted by Section
4.01(a) of the Assignment and Servicing Agreement.
SECTION 9.05. Protection of Asset Pool; Further Assurances.
The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such Financing Statements,
continuation statements, instruments of further assurance, and other
instruments, and will take such other action as may be necessary or advisable
to:
(i) Grant more effectively all or any portion of the Asset
Pool;
(ii) maintain or preserve the Lien of this Indenture or carry
out more effectively the purposes hereof;
(iii) publish notice of, or protect the validity of, any Grant
made or to be made by this Indenture and perfect the security interest
contemplated hereby in favor of the Trustee in each of the Leases, and all other
property included in the Asset Pool;
(iv) enforce or cause the Servicer to enforce any of the
Leases; or
(v) preserve and defend title to the Leases (including the
right to receive all payments due or to become due thereunder), the interests in
the Equipment, or other property included in the Asset Pool and preserve and
defend the rights of the Trustee and the Noteholders in such Leases (including
the right to receive all payments due or to become due thereunder), interests in
the Equipment and other property against the claims of all Persons and parties.
The Issuer, upon the Issuer's failure to do so, hereby designates the Trustee
its agent and attorney-in-fact to execute any Financing Statement or
continuation statement required pursuant to this Section 9.05; provided,
however, that such designation shall not be deemed to create a duty in the
Trustee to monitor the compliance of the Issuer with the foregoing covenants;
and provided, further, that the duty of the Trustee to execute any instrument
required pursuant to this Section 9.05 shall arise only if a Responsible Officer
of the Trustee has actual knowledge of any failure of the Issuer to comply with
the provisions of this Section 9.05.
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SECTION 9.06. [Reserved].
SECTION 9.07. Performance of Obligations; Assignment and
Servicing Agreement.
(a) The Issuer will punctually perform and observe all of
its obligations and agreements contained in the Transaction Documents.
(b) The Issuer will not take any action or permit any action
to be taken by others which would release any Person from any of such Person's
covenants or obligations under any Lease or any other instrument included in the
Asset Pool, or which would result in the amendment, hypothecation,
subordination, termination, or discharge of, or impair the validity or
effectiveness of, any Lease or such other instrument, except as expressly
provided in this Indenture or the Assignment and Servicing Agreement.
(c) If any Authorized Officer shall have knowledge of the
occurrence of a default under the Assignment and Servicing Agreement, the Issuer
shall promptly notify the Trustee, the Insurer and the Noteholders in writing
thereof, and shall specify in such notice the action, if any, the Issuer is
taking in respect of such default. Unless consented to in writing by the Insurer
(if no Insurer Default has occurred and is continuing) or the holders of 66-2/3%
of the then Outstanding Principal Amount of the Notes (if an Insurer Default has
occurred and is continuing), the Issuer may not waive any default under or amend
the Assignment and Servicing Agreement.
SECTION 9.08. Negative Covenants.
The Issuer will not:
(a) sell, transfer, exchange or otherwise dispose of any
portion of the Asset Pool except as expressly permitted by this Indenture;
(b) claim any credit on, or make any deduction from, the
principal of, or interest on, any of the Notes by reason of the payment of any
taxes levied or assessed upon any portion of the Asset Pool;
(c) engage in any business or activity other than in
connection with, or relating to the ownership of, the Leases and the interests
in the Equipment (and other leases to which the Originator is a party and the
interests in the equipment subject thereto assigned to the Issuer by the Seller
in connection with the issuance of other series of the Issuer's Lease-Backed
Notes as contemplated by the Registration Statement), the issuance of the Notes
(and other series of the Issuer's Lease-Backed Notes as contemplated by the
Registration Statement), and the specific transactions contemplated by the
Transaction Documents;
(d) become liable for, issue, incur, assume, or allow to
remain outstanding any indebtedness or liabilities, or guaranty any indebtedness
of any Person, other than the Notes, except as contemplated by this Indenture,
the Registration Statement, the Insurance and Indemnity Agreement and the
Assignment and Servicing Agreement, subject to Section 9.13 hereof;
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(e) seek dissolution or liquidation in whole or in part or
reorganization of its business or affairs;
(f) (i) permit the validity or effectiveness of this
Indenture or any Grant hereby to be impaired, or permit the lien of this
Indenture to be amended, hypothecated, subordinated, terminated or discharged,
or permit any Person to be released from any covenants or obligations under this
Indenture, except as may be expressly permitted hereby, (ii) permit any Lien to
be created on or to extend to or otherwise arise upon or burden the Asset Pool
or any part thereof or any interest therein or the proceeds thereof other than
the lien of this Indenture, or (iii) subject to Section 4.01(c) of the
Assignment and Servicing Agreement, permit the lien of this Indenture not to
constitute a valid first priority security interest in the Asset Pool;
(g) make any loan or advance to any Affiliate of the Issuer
or to any other Person; or
(h) permit the termination of the Swap without obtaining a
replacement swap and replacement swap counterparty acceptable to the Insurer
within 30 days of the occurrence of such termination.
SECTION 9.09. Information as to Issuer.
The Issuer shall deliver to the Trustee and the Insurer and, the
Trustee shall deliver to each Rating Agency and to each holder of Outstanding
Notes (and, upon the written request of any Noteholder, to any prospective
transferee of any Notes):
(a) Notice of Event of Default - immediately upon becoming
aware of the existence of any condition or event which constitutes a Default or
an Event of Default, a written notice describing its nature and period of
existence and what action the Issuer is taking or proposes to take with respect
thereto; and
(b) Report on Proceedings - promptly upon the Issuer's
becoming aware of (i) any proposed or pending investigation of it by any
Governmental Authority or agency, or (ii) any pending or proposed court or
administrative proceeding which involves or may involve the possibility of
materially and adversely affecting the properties, business, prospects, profits
or condition (financial or otherwise) of the Issuer, a written notice specifying
the nature of such investigation or proceeding and what action the Issuer is
taking or proposes to take with respect thereto and evaluating its merits.
SECTION 9.10. Taxes.
(a) The Issuer shall pay all taxes when due and payable or
levied against its assets, properties or income, including any property that is
part of the Asset Pool. The Issuer will file or cause to be filed any necessary
tax returns.
(b) The parties hereto agree that it is their mutual intent
that, for all applicable tax purposes, the Notes will constitute indebtedness.
Further, each party hereto and each Noteholder (by accepting and holding a Note)
hereby covenants to every other party hereto and to every other Noteholder to
treat the Notes as indebtedness for all
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applicable tax purposes in all tax filings, reports and returns and otherwise,
and further covenants that neither it nor any of its Affiliates (within the
meaning of the first two sentences of the definition of such term as defined in
Section 1.01) will take, or participate in the taking of or permit to be taken,
any action that is inconsistent with the treatment of the Notes as indebtedness
for tax purposes. All successors and assignees of the parties hereto shall be
bound by the provisions hereof.
SECTION 9.11. Indemnification.
The Issuer agrees to indemnify and hold harmless the Trustee
(and its officers, directors, employees and agents), the Insurer and each
Noteholder (each an "Indemnified Party") against any and all liabilities,
losses, damages, penalties, costs and expenses (including costs of defense and
legal fees and expenses) which may be incurred or suffered by such Indemnified
Party without gross negligence or willful misconduct on the part of the
Indemnified Party or as a result of claims, actions, suits or judgments asserted
or imposed against it and arising out of the transactions contemplated hereby or
by the Assignment and Servicing Agreement, including without limitation, any
claims resulting from any use, operation, maintenance, repair, storage or
transportation of any item of Equipment, whether or not in the Issuer's
possession or under its control, and any tort claims and any fines or penalties
arising from any violation of the laws or regulations of any Governmental
Authority; provided that, all amounts payable pursuant to this Section 9.11
shall be fully subordinated to amounts payable under the Notes, shall be without
recourse to the Issuer except to the extent that all amounts otherwise due and
payable under the terms of this Indenture have been fully paid and shall not, to
the extent that such amounts are unpaid, constitute a claim against the Issuer
except to the extent that all amounts otherwise due and payable under the terms
of this Indenture have been fully paid. This section shall survive the
termination of this Indenture and the earlier removal or resignation of the
Trustee.
SECTION 9.12. Commission Reports; Reports to Trustee; Reports to
Noteholders.
To the extent it has not satisfied the following requirements by
reporting under Section 9.09 hereof, the Issuer shall:
(a) file with the Trustee and the Insurer, within 15 days
after the Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports which the
Issuer may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act (or copies of such portions thereof as may be
prescribed by rules and regulations of the Commission); or, if the Issuer is not
required to file with the Commission information, documents or reports pursuant
to either Section 13 or Section 15(d) of the Exchange Act, then the Issuer will
file with the Trustee and with the Commission, in accordance with rules and
regulations prescribed by the Commission, such of the supplementary and periodic
information, documents and reports required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed in such rules and regulations;
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(b) file with the Trustee, the Insurer and with the
Commission, in accordance with the rules and regulations prescribed by the
Commission, such additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants provided for in this
Indenture as may be required by such rules and regulations; and
(c) furnish to the Insurer and to the Trustee for
distribution to the Noteholders, as the names and addresses of such Noteholders
appear in the Note Register, in the manner and to the extent provided in Section
8.14 hereof, such summaries of any information, documents and reports required
to be filed with the Trustee pursuant to the provisions of Subsections (a) and
(b) of this Section 9.12 as may be required to be provided to such Noteholders
by the rules and regulations of the Commission under the provisions of the Trust
Indenture Act.
SECTION 9.13. Insurer's Right with Respect to Subsequent
Issuances.
Unless consented to by the Insurer (which consent shall not be
unreasonably withheld), in the event the Issuer issues any subsequent series of
the Issuer's Lease-Backed Notes as contemplated by the Registration Statement
and such notes are not insured by the Insurer (such issuances, the "Specified
Subsequent Notes"):
(a) the indenture in connection with each such series of
Specified Subsequent Notes shall contain provisions substantially similar to
Sections 12.06, 12.07 and 12.08 hereof;
(b) the indenture in connection with each such series of
Specified Subsequent Notes shall provide that such series shall have separate
transaction accounts;
(c) the indenture in connection with each such series of
Specified Subsequent Notes shall provide that each such series shall provide for
its own trustee and servicing fees; and
(d) so long as the Policy remains in effect and no Insurer
Default has occurred and is continuing, (i) the Insurer has received
confirmation from S&P that the risk secured by the Policy has not been reduced
below a "BBB" risk by S&P and the rating assigned to the Notes has not been
reduced below "AAA" by S&P (or "A-1+" + by S&P in the case of the Class A-1
Notes, if still outstanding) as a result of the proposed issuance of the
Specified Subsequent Notes and (ii) Xxxxx'x has been notified of the issuance of
the Specified Subsequent Notes, and the Insurer has not been notified by Xxxxx'x
that A) the risk secured by the Policy has been reduced below a "Baa2" risk by
Xxxxx'x or B) the rating assigned to the Notes has been reduced below "Aaa" by
Xxxxx'x (or "P-1" by Xxxxx'x in the case of the Class A-1 Notes, if still
outstanding) as a result of the proposed issuance of the Specified Subsequent
Notes.
SECTION 9.14. Perfection Representations, Warranties and
Covenants.
In addition to the representations, warranties and covenants
contained in this Indenture, the Issuer hereby represents, warrants, and
covenants to the Trustee, the
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Holders and the Insurer as to itself and to the matters set forth below as
follows on the Closing Date and on each Payment Date thereafter:
(a) This Indenture creates a valid and continuing security
interest (as defined in the Uniform Commercial Code) in the Issuer's right,
title and interest in, and to, the Leases, Related Interests, Equipment and all
rights of the Issuer under the Assignment and Servicing Agreement in favor of
the Trustee for the benefit of the Holders and the Insurer, as long as no
Insurer Default has occurred and is continuing (the "Secured Party"), which
security interest is prior to all other liens, and is enforceable as such as
against creditors of and purchasers from the Issuer.
(b) The Issuer has a valid security interest in all of the
Seller's right, title and interest in, and to, the Leases, Related Interests,
Equipment and all rights of the Seller under the Assignment and Servicing
Agreement free and clear of any lien, claim or encumbrance of any Person,
excepting only liens for taxes, assessments or similar governmental charges or
levies incurred in the ordinary course of business that are not yet due and
payable or as to which any applicable grace period shall not have expired.
(c) The Leases constitute "tangible chattel paper," within
the meaning of the Uniform Commercial Code.
(d) The Related Interests constitute "accounts," the
Equipment constitutes "goods," the Issuer's security interest (as defined in the
Uniform Commercial Code) in the Equipment constitutes either a "general
intangible" or an "account," and the rights of the Issuer under the Assignment
and Servicing Agreement constitute "general intangibles" within the meaning of
the Uniform Commercial Code.
(e) The Issuer has caused, or promptly after the Issuance
Date will have caused, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest in the Leases, Related Interests,
Equipment and all rights of the Issuer under the Assignment and Servicing
Agreement granted to the Secured Party hereunder.
(f) Other than the security interest granted to the Secured
Party pursuant to this Indenture, the Issuer has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Leases, Related
Interests, Equipment or any of the rights of the Issuer under the Assignment and
Servicing Agreement. The Issuer has not authorized the filing of, and is not
aware of, any financing statements against the Issuer that include a description
of the Collateral or of any of the items that comprise the Collateral other than
any financing statement relating to the security interest granted to the Secured
Party hereunder. All financing statements referred to in this paragraph contain
a statement that: "A purchase of or security interest in any collateral
described in this financing statement will violate the rights the Secured
Party."
(g) The Issuer is not aware of any judgment, ERISA or tax
lien filings against the Issuer that cover the Collateral.
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(h) None of the tangible chattel paper that constitute or
evidence the Leases has any marks or notations indicating that they have been
pledged, assigned or otherwise conveyed to any Person other than the Secured
Party.
(i) Survival of Perfection Representations. Notwithstanding
any other provision of this Indenture or any other Transaction Document, the
representations, warranties and covenants relating to perfection set forth in
this Section 9.14 shall be continuing, and remain in full force and effect
(notwithstanding any replacement of the Servicer or termination of the
Servicer's rights to act as such) until such time as all obligations under this
Indenture have been finally and fully paid and performed.
(j) No Waiver or Breach. The parties to this Indenture: (i)
shall not, without obtaining the consent of the Insurer (so long as no Insurer
Default has occurred and is continuing) or otherwise each Holder and providing
notice to each of S&P and Xxxxx'x, waive any of the representations, warranties
and covenants relating to perfection set forth in this Section 9.14; and (ii)
shall provide S&P and Xxxxx'x with prompt written notice of any breach of any of
the representations, warranties and covenants relating to perfection set forth
in this Section 9.14; and shall not, without obtaining the consent of the
Insurer (so long as no Insurer Default has occurred and is continuing) or
otherwise each Holder, waive a breach of any of the representations, warranties
and covenants relating to perfection set forth in this Section 9.14 and, in each
case, each of S&P and Xxxxx'x shall confirm that the ratings then assigned to
the Notes have not been affected by such waiver or breach, as the case may be.
(k) Servicer to Maintain Perfection and Priority. The
Servicer covenants that, in order to evidence the interests of the Seller, the
Issuer and the Secured Party under the Transaction Documents, the Servicer shall
take such action, or execute and deliver such instruments as may be necessary or
advisable (including, without limitation, such actions as are requested by the
Seller, the Issuer or the Secured Party) to maintain and perfect, as a first
priority interest, the respective security interests of the Seller, the Issuer
and the Secured Party in the Leases, Related Interests, Equipment and the rights
of each of the Seller and the Issuer under the Assignment and Servicing
Agreement.
(l) Goods; Priority. No creditor of the Issuer has in its
possession any goods that constitute or evidence the Collateral (other than the
Secured Party in certain limited instances).
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SECTION 9.15. Representations and Warranties.
The Issuer represents and warrants as of the Issuance Date and
on each Payment Date that:
(a) Corporate Organization and Authority.
(i) it is a limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization;
(ii) it has all requisite power and authority and all
necessary licenses and permits to own and operate its properties and to carry on
its business as now conducted and to enter into and perform its obligations
under this Assignment and Servicing Agreement, and the transactions contemplated
hereby; and
(iii) it has duly qualified and is authorized to do business
and is in good standing as a foreign limited liability company in each
jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary.
(b) Transactions Legal and Authorized.
The transactions contemplated by this Indenture and the
Assignment and Servicing Agreement:
(i) have been duly authorized by all necessary action on the
part of the Issuer, as a limited liability company, and do not require any
member approval, or approval or consent of any trustee or holders of any
indebtedness or obligations of the Issuer except such as have been duly
obtained;
(ii) are within the powers of the Issuer, as a limited
liability company; and
(iii) are legal and will not conflict with, result in any
breach in any of the provisions of, constitute a default under, or result in the
creation of any Lien upon any property of the Issuer (other than as contemplated
by this Indenture and the other Transaction Documents) under the provisions of,
any agreement, charter instrument, by-law or other instrument to which the
Issuer is a party or by which it or its property may be bound or result in the
violation of any law, regulation, rule, order or judgment applicable to the
Issuer or its properties, or any order to which the Issuer or its properties is
subject, of or by any government or governmental agency or authority.
(c) Execution and Delivery.
The execution and delivery of this Indenture and the Assignment
and Servicing Agreement:
(i) are within the powers of the Issuer, as a limited
liability company; and
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(ii) are legal and will not conflict with, result in any
breach in any of the provisions of, constitute a default under, or result in the
creation of any Lien upon any property of the Issuer (other than as contemplated
by this Indenture and the other Transaction Documents) under the provisions of,
any agreement, charter instrument, by-law or other instrument to which the
Issuer is a party or by which it or its property may be bound or result in the
violation of any law, regulation, rule, order or judgment applicable to the
Issuer or its properties, or any order to which the Issuer or its properties is
subject, of or by any government or governmental agency or authority.
(d) Governmental Consents.
Except as contemplated by this Indenture and the Transaction
Documents, no consent, approval or authorization of, or filing, registration or
qualification with, any governmental authority is necessary or required on the
part of the Issuer in connection with the execution and delivery of this
Indenture or the Assignment and Servicing Agreement.
(e) Compliance with Law.
The Issuer:
(i) is not in violation of any laws, ordinances,
governmental rules or regulations to which it is subject;
(ii) has not failed to obtain any licenses, permits,
franchises or other governmental authorizations necessary to the ownership of
its property or to the conduct of its business and, as of the date hereof, has
no pending litigation; and
(iii) is not in violation of any term of any agreement,
charter instrument, by-law or other instrument to which it is a party or by
which it may be bound, which violation or failure to obtain might materially
adversely affect the Asset Pool or the business or condition (financial or
otherwise) of the Issuer.
(f) Nonconsolidation.
The Issuer is, and at all times since its formation has been
operated in such a manner that it would not be substantively consolidated with
the Originator or the Seller and such that the separate existence of any of the
Originator, the Seller or the Issuer would not be disregarded in the event of a
bankruptcy or insolvency of the Issuer or the Issuer, and in such regard:
(i) the Issuer is not involved in the day-to-day management
of the Originator or the Seller;
(ii) the Issuer maintains separate corporate records and
books of account from the Originator and the Seller and otherwise observes
corporate formalities;
(iii) the financial statements and books and records of the
Issuer will reflect the separate existence of the Originator and the Seller;
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(iv) the Issuer maintains its assets separately from the
assets of the Originator and the Seller (including through the maintenance of a
separate bank account), the Issuer's funds and assets, and records relating
thereto, have not been and are not commingled with those of the Originator or
the Seller (except temporarily as permitted by the Indenture and the Assignment
and Servicing Agreement), the separate creditors of the Originator or the Seller
will be entitled to be satisfied out of the Originator's and the Seller's
respective assets prior to any value in the Originator or the Seller becoming
available to the Originator's or the Seller's equityholders or the Issuer's
creditors and transactions between the Issuer and the Seller and the Originator
are generally reflective of fair market value transactions;
(v) all business correspondence of the Issuer and other
communications are conducted in the Issuer's own name and on its own stationery;
and
(vi) neither the Originator nor the Seller acts as an agent
of the Issuer in any capacity and the Issuer does not act as agent for the
Originator or the Seller, but instead presents itself to the public as a limited
liability company separate from the Originator and the Issuer.
ARTICLE X
SUPPLEMENTAL INDENTURES
SECTION 10.01. Supplemental Indentures Without Consent of
Noteholders.
(a) Without the consent of any Noteholders, the Issuer, by
an Issuer Order, and the Trustee, at any time and from time to time, may, with
the written consent of the Insurer (if no Insurer Default has occurred and is
continuing) enter into one or more indentures supplemental hereto, for any of
the following purposes:
(i) to add to the covenants of the Issuer for the benefit of
the Noteholders, or to surrender any right or power herein conferred upon the
Issuer;
(ii) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision herein; or
(iii) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or to better assure, convey and
confirm unto the Trustee any property subject or required to be subjected to the
lien of this Indenture; provided such action pursuant to this Section 10.01(a)
shall not materially and adversely affect the interests of the Noteholders in
any respect or in the reduction or withdrawal of the then current ratings of the
Outstanding Notes.
(b) The Trustee shall promptly deliver to each Noteholder
and each Rating Agency, a copy of any supplemental indenture entered into
pursuant to Section 10.01(a).
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SECTION 10.02. Supplemental Indentures with Consent of
Noteholders.
(a) With the written consent of the Insurer (if no Insurer
Default has occurred and is continuing) or the holders of not less than 66-2/3%
of the then Outstanding Principal Amount of the Notes and by Act of said
Noteholders delivered to the Issuer and the Trustee (if an Insurer Default has
occurred and is continuing), the Issuer, by an Issuer Order, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Noteholders under this Indenture; provided, that, subject to the express rights
of the Insurer under the Transaction Documents, no supplemental indenture shall
be entered into if it would result in the reduction or withdrawal of the then
current ratings of the Outstanding Notes and no supplemental indenture shall,
without the written consent of the holder of each Outstanding Note affected
thereby:
(i) change the Stated Maturity of any Note or the Principal
Payments or Interest Payments due or to become due on any Payment Date with
respect to any Note, or change the priority of payment thereof as set forth
herein, or reduce the principal amount thereof or the Note Interest Rate
thereon, or change the place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Maturity thereof;
(ii) reduce the percentage of the Outstanding Principal
Amount of the Notes the consent of whose Noteholders is required for any such
supplemental indenture, for any waiver of compliance with provisions of this
Indenture or Events of Default and their consequences, or for any Act of
Noteholders;
(iii) modify any of the provisions of this Section except to
increase any percentage or fraction set forth therein or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
written consent of the holder of each Outstanding Note affected thereby;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding"; or
(v) permit the creation of any Lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the Asset
Pool or, except as provided in Sections 5.01 or 5.02, terminate the lien of this
Indenture on any property at any time subject hereto or deprive any Noteholder
of the security afforded by the lien of this Indenture.
(b) The Trustee shall promptly deliver to the Insurer and
each Noteholder and each Rating Agency, a copy of any supplemental indenture
entered into pursuant to this Section 10.02.
(c) Any modification to the terms of this Indenture that
materially, directly, and adversely impacts the Counterparty shall require the
prior written consent of the Counterparty, which consent shall not be
unreasonably withheld.
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SECTION 10.03. Execution of Supplemental Indentures.
In executing any supplemental indenture or any amendment,
modification or supplement to any other Transaction Document the Trustee and the
Insurer shall be entitled to receive, and (subject to Section 8.01) shall be
protected in relying upon, an Opinion of Counsel stating that the execution of
such instrument is authorized or permitted by this Indenture or such applicable
Transaction Document. The Trustee may, but shall not be obligated to, enter into
any supplemental indenture which affects the Trustee's own rights, duties,
obligations, immunities or indemnities under this Indenture or otherwise.
SECTION 10.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes, and
every Noteholder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 10.05. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new Notes so modified as to conform, in the opinion of the Issuer, to any such
supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Trustee in exchange for Outstanding Notes.
SECTION 10.06. Compliance with Trust Indenture Act.
Every amendment, supplement or waiver to this Indenture or the
Notes shall comply with the Trust Indenture Act as then in effect.
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. Satisfaction and Discharge of Indenture.
(a) This Indenture shall cease to be of further effect
(except as to any surviving rights of indemnification, registration, transfer or
exchange of Notes herein expressly provided for), and the Trustee, on demand of
and at the expense of the Issuer, shall execute proper instruments provided to
it acknowledging satisfaction and discharge of this Indenture, when
(i) 100 days shall have elapsed since either
(A) all Notes theretofore authenticated and
delivered (other than (1) Notes which have been destroyed,
lost or stolen and which have
86
been replaced or paid as provided in Section 2.04 and (2) Notes
for whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as provided
in Section 9.03(c)) have been delivered to the Trustee for
cancellation; or
(B) the final installments of principal on all such
Notes not theretofore delivered to the Trustee for cancellation
(1) have become due and payable, or
(2) will become due and payable at their
Stated Maturity, as applicable, within
one year,
and the Issuer has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust for the
purpose an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the
Trustee for cancellation, for principal and interest to the date
of such deposit (in the case of Notes which have become due and
payable) or to the Stated Maturity thereof;
(ii) the Issuer has paid or caused to be paid all Insurer
Secured Obligations and all Trustee Secured Obligations and the Policy has been
surrendered for cancellation subject to Section 4.03; and
(iii) the Issuer has delivered to the Trustee and the Insurer
an Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
At such time, the Trustee shall deliver to the Issuer or, upon an Issuer Order,
its assignee, all cash, securities and other property held by it as part of the
Asset Pool other than funds deposited with the Trustee pursuant to Section
11.01(a)(i)(B), for the payment and discharge of the Notes.
(b) Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Issuer to the Trustee under Sections 8.06 and
9.11, and, if money shall have been deposited with the Trustee pursuant to
Section 11.01(a)(i)(B), the obligations of the Trustee under Section 11.02 and
Section 9.03(c), shall survive.
(c) The Trustee shall provide prompt written notice to each
Rating Agency of any satisfaction and discharge of this Indenture pursuant to
this Article 11.
SECTION 11.02. Application of Trust Money.
Subject to the provisions of Section 9.03(c), all money
deposited with the Trustee pursuant to Sections 11.01 and 9.03 shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment to the
87
Persons entitled thereto, of the principal and interest for whose payment such
money has been deposited with the Trustee.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by operation of Trust Indenture Act Section
318(a), the duties imposed by Section 318(c) shall control.
SECTION 12.02. Communication by Noteholders with Other
Noteholders.
Noteholders may communicate, pursuant to Trust Indenture Act
Section 312(b), with other Noteholders with respect to their rights under this
Indenture or the Notes. The Issuer, the Trustee, the Note Registrar and all
other parties shall have the protection of Trust Indenture Act Section 312(c).
SECTION 12.03. Location of Leases.
Subject to the provisions of Section 1.04(e) of the Assignment
and Servicing Agreement, the Servicer shall maintain the Leases at its office in
Macon, Georgia or at such other offices of the Servicer as shall from time to
time be identified by prior written notice to the Trustee and the Insurer.
Subject to the foregoing, the Servicer may temporarily move individual Leases or
any portion thereof without notice as necessary to conduct collection and other
servicing activities.
SECTION 12.04. Officers' Certificate and Opinion of Counsel as
to Conditions Precedent.
Upon any request or application by the Issuer (or any other
obligor upon the Notes) to the Trustee to take any action under this Indenture
or the other Transaction Documents, the Issuer (or such other Obligor) shall
furnish to the Trustee and the Insurer:
(a) an Officers' Certificate (which shall include the
statements set forth in Section 12.05) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel (which shall include the
statements set forth in Section 12.05) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been complied with.
88
SECTION 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
SECTION 12.06. Nonpetition.
The Secured Party (or any successor trustee, co-trustee or
separate trustee) shall not petition or otherwise invoke the process of any
Governmental Authority for the purpose of commencing or sustaining a case
against the Issuer under any federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or any substantial part of
its respective property, or ordering the winding up or liquidation of the
affairs of the Issuer during the period ending one year and one day after
satisfaction and discharge of this Indenture; provided, however, that nothing
herein shall prohibit the Trustee (or any successor trustee, co-trustee or
separate trustee) from filing proofs of claim or otherwise participating in any
such proceedings instituted by any other Person.
In addition, each Noteholder, by accepting a Note, and the
Trustee, by entering into this Indenture, hereby covenants and agrees that no
claim may be brought against the Issuer, its directors, officers or
shareholders, with respect to any assets collateralizing any other debt
obligation of the Issuer.
SECTION 12.07. Non-Recourse.
Except as otherwise provided in Section 7.08, the Noteholders
shall not at any time have any recourse on the Notes or under this Indenture
against the Issuer other than against the Asset Pool including, but not limited
to, amounts deposited into the Collection Account pursuant to Section 3.03.
SECTION 12.08. Subordination of Interest of Noteholders.
Notwithstanding any term of this Indenture, but except as
provided in Section 7.07 hereof, the Issuer and the Trustee agree and, by its
holding of a Note, each Noteholder will be deemed to agree that, to the extent
the Noteholders are deemed to have any interest or claim to any assets of the
Issuer other than the Asset Pool including,
89
but not limited to, amounts deposited into the Collection Account pursuant to
Section 3.03, such Noteholder's claim or interest shall be subordinate to the
claims or rights (including any rights with respect to post-petition interest)
of such other debtholders to those assets. In addition, each Noteholder agrees
that this agreement to subordinate its claim or interest constitutes a
subordination agreement for purposes of Section 510(a) of the Bankruptcy Code.
90
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first above written.
IKON RECEIVABLES FUNDING, LLC,
as Issuer
By: IKON RECEIVABLES FUNDING, INC.,
its Manager
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Treasurer
BNY MIDWEST TRUST COMPANY,
not in its individual capacity but solely
as Trustee
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
IOS CAPITAL, LLC, as Servicer
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
Title: President
CLASS A-1 NOTE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
IKON RECEIVABLES FUNDING, LLC
____% CLASS A-1 LEASE-BACKED NOTE, SERIES 2003-1
CUSIP NO. ____________
No. R-1 $____________
IKON Receivables Funding, LLC, a limited liability company duly
organized and existing under the laws of Delaware (herein called the "Issuer",
which term includes any successor Person under the Indenture referred to
herein), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of $____________, payable in monthly installments
beginning May 15, 2003, in accordance with the Indenture. Interest will accrue
on the unpaid principal hereof from the date of issuance, at the rate of
1.30813% per annum, until the full amount of principal hereof is otherwise paid
or made available for payment and shall be computed on the basis of a year of
360 days and the actual number of days in that Interest Accrual Period. Interest
accruing as provided above for each Interest Accrual Period will be payable on
the Payment Date corresponding to that Interest Accrual Period.
Principal and interest on this Class A-1 Note shall be paid on
the 15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing May 15, 2003, either by check to the
registered address of the Holder of this Class A-1 Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and surrender of
this Note at the Corporate Trust Office of the Trustee or at the principal
office of any Paying Agent appointed pursuant to the Indenture.
This Class A-1 Note is one of a duly authorized issue of Class A
Notes of the Issuer designated as its 1.30813% Class A-1 Lease-Backed Notes,
Series 2003-1" (herein called the "Class A-1 Notes") limited in aggregate
principal amount to $253,200,000, issued under the Indenture, dated as of April
1, 2003 (herein called the "Indenture"), among the Issuer, IOS Capital, LLC as
Servicer, and BNY Midwest Trust Company, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Issuer, the Trustee and the Holders and of the
terms upon which the Class A-1 Notes are authenticated and delivered. Unless
otherwise defined herein, all capitalized terms used herein shall have the
meanings set forth in the Indenture.
The Class A-1 Notes are entitled to the benefits of a financial
guarantee insurance policy issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class A-1 Notes on each
Payment Date, all as more fully set forth in the Indenture.
The Stated Maturity of the Class A-1 Notes is the Payment Date
in May 2004 on which date the Outstanding Principal Amount of the Class A-1
Notes shall be due and payable.
The Class A-1 Notes are subject to redemption, without premium,
at the option of the Issuer as of any Payment Date on which the Discounted
Present Value of the Performing Leases is less than or equal to ten percent
(10%) of the aggregate Discounted Present Value of the Leases as of the Cut-Off
Date after giving effect to all principal Payment on such Payment Date.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Class A-1 Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
This Class A-1 Note will be secured by the pledge to the Trustee
of the Asset Pool.
If an Event of Default under the Indenture occurs, the Trustee
shall, at the written direction of the Insurer (if no Insurer Default has
occurred and is continuing) or of Holders of not less than 66-2/3% of the
aggregate principal amount of the Notes at the time Outstanding (if an Insurer
Default has occurred and is continuing), and, if an Insurer Default has occurred
and is continuing, may, declare due and payable in the manner and with the
effect provided in the Indenture, the principal of all the Class A-1 Notes (but
not less than all the Class A-1 Notes). Notice of such declaration will be given
by mail to Holders, as their names and addresses appear in the Note Register, as
provided in the Indenture. Upon payment of such principal amount together with
all accrued interest, the
A-1-2
obligations of the Issuer with respect to the payment of principal and interest
on this Class A-1 Note shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders under the Indenture at
any time by the Issuer and the Trustee with the written consent of the Insurer
(with or without the written consent of any Holder of the Notes if no Insurer
Default has occurred and is continuing) or the Holders of not less than 66-2/3%
in aggregate principal amount of the Notes at the time Outstanding (if an
Insurer Default has occurred and is continuing). The Indenture also contains
provisions permitting the Insurer (with or without the written consent of any
Holder of the Notes if no Insurer Default has occurred and is continuing) or the
Holders of not less than 66-2/3% in aggregate principal amount of the Notes at
the time Outstanding (if an Insurer Default has occurred and is continuing), on
behalf of all the Holders, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Insurer (with or without
the consent of any Holder of the Notes if no Insurer Default has occurred and is
continuing) or the Holder of this Class A-1 Note (if an Insurer Default has
occurred and is continuing) shall be conclusive and binding upon such Holder and
upon all future Holders of this Class A-1 Note and of any Class A-1 Note issued
upon the registration of transfer hereof or in exchange here for or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Class A-1 Note or any Class A-1 Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class A-1 Note is registrable in the
Note Register, upon surrender of this Class A-1 Note for registration of
transfer at the office or agency of the Trustee in the City of Chicago, Illinois
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class A-1
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Class A-1 Notes are issuable only in registered form without
coupons in minimum denominations of $1,000,000. As provided in the Indenture and
subject to certain limitations therein set forth, Class A-1 Notes are
exchangeable for a like aggregate principal amount of Class A-1 Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Issuer, the Trustee, the Insurer and any agent of the
Issuer, the Trustee or the Insurer may treat the Person in whose name this Class
A-1 Note is registered as the owner hereof for all purposes, whether or not this
Class A-1 Note may be overdue, and
A-1-3
neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
Each Noteholder, by acceptance of this Note, covenants and
agrees to treat the Notes as indebtedness for purposes of federal income, state
and local income and franchise and any other income taxes.
The Indenture and this Class A-1 Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the State
of New York.
A-1-4
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed under its corporate seal.
Dated: April 23, 2003
IKON RECEIVABLES FUNDING, LLC
By: IKON RECEIVABLES FUNDING, INC.,
its Manager
By:
--------------------------------
Authorized Officer
Trustee's Certificate of Authentication
This is one of the Class A-1 Notes referred to in the within
mentioned Indenture.
BNY MIDWEST TRUST COMPANY,
not in its individual capacity but
solely as Trustee
By:
--------------------------------
Authorized Officer
A-1-5
ASSIGNMENT FORM
If you the holder want to assign this Class A-1 Note, fill in
the form below and have your signature guaranteed:
I or we assign and transfer this Class A-1 Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ____________, agent to transfer this Class A-1 Note on
the books of the Issuer. The agent may substitute another to act for him.
Dated: ---------------- Signed: -----------------------------
-----------------------------
(sign exactly as the name
appears on the other side of
this Class A-1 Note)
Signature Guarantee ------------------------------------------------------------
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Class A-1 Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank. Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class A-1 Note and the signed "power of attorney" in separate
envelopes. For added protection, use certified or registered mail for a Class
A-1 Note.
A-1-6
CLASS A-2 NOTE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
IKON RECEIVABLES FUNDING, LLC
____% CLASS A-2 LEASE-BACKED NOTE, SERIES 2003-1
CUSIP NO. ____________
No. R-1 $____________
IKON Receivables Funding, LLC, a limited liability company duly
organized and existing under the laws of Delaware (herein called the "Issuer",
which term includes any successor Person under the Indenture referred to
herein), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of $____________, payable in monthly installments
beginning on May 15, 2003, in accordance with the Indenture. Interest will
accrue on the unpaid principal hereof from the date of issuance, at the rate of
____% per annum, until the full amount of principal hereof is otherwise paid or
made available for payment and shall be computed on the basis of a year of 360
days comprised of twelve thirty day months or, with respect to the May 15, 2003
Payment Date, since April 23, 2003.
Principal and interest on this Class A-2 Note shall be paid on
the 15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing May 15, 2003, either by check to the
registered address of the Holder of this Class A-2 Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and surrender of
this Note at the Corporate Trust Office of the Trustee or at the principal
office of any Paying Agent appointed pursuant to the Indenture.
This Class A-2 Note is one of a duly authorized issue of Class A
Notes of the Issuer designated as its 1.68% Class A-2 Lease-Backed Notes, Series
2003-1" (herein called the "Class A-2 Notes") limited in aggregate principal
amount to $26,700,000 issued under the Indenture, dated as of April 1, 2003,
(herein called the "Indenture"), among the Issuer, IOS Capital, LLC as Servicer,
and BNY Midwest Trust Company, as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Issuer, the Trustee and the Holders and of the terms upon which the Class
A-2 Notes are authenticated and delivered. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings set forth in the
Indenture.
The Class A-2 Notes are entitled to the benefits of a financial
guarantee insurance policy issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class A-2 Notes on each
Payment Date, all as more fully set forth in the Indenture.
The Stated Maturity of the Class A-2 Notes is the Payment Date
in November 2005 on which date the Outstanding Principal Amount of the Class A-2
Notes shall be due and payable.
The Class A-2 Notes are subject to redemption, without premium,
at the option of the Issuer as of any Payment Date on which the Discounted
Present Value of the Performing Leases is less than or equal to ten percent
(10%) of the aggregate Discounted Present Value of the Leases as of the Cut-Off
Date after giving effect to all principal Payment on such Payment Date.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Class A-2 Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
This Class A-2 Note will be secured by the pledge to the Trustee
of the Asset Pool.
If an Event of Default under the Indenture occurs, the Trustee
shall, at the written direction of the Insurer (if no Insurer Default has
occurred and is continuing) or of Holders of not less than 66-2/3% of the
aggregate principal amount of the Notes at the time Outstanding (if an Insurer
Default has occurred and is continuing), and, if an Insurer Default has occurred
and is continuing, may, declare due and payable in the manner and with the
effect provided in the Indenture, the principal of all the Class A-2 Notes (but
not less than all the Class A-2 Notes). Notice of such declaration will be given
by mail to Holders, as their names and addresses appear in the Note Register, as
provided in the Indenture. Upon payment of such principal amount together with
all accrued interest, the
A-2-2
obligations of the Issuer with respect to the payment of principal and interest
on this Class A-2 Note shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders under the Indenture at
any time by the Issuer and the Trustee with the written consent of the Insurer
(with or without the written consent of any Holder of the Notes if no Insurer
Default has occurred and is continuing) or the Holders of not less than 66-2/3%
in aggregate principal amount of the Notes at the time Outstanding (if an
Insurer Default has occurred and is continuing). The Indenture also contains
provisions permitting the Insurer (with or without the written consent of any
Holder of the Notes if no Insurer Default has occurred and is continuing) or the
Holders of not less than 66-2/3% in aggregate principal amount of the Notes at
the time Outstanding (if an Insurer Default has occurred and is continuing), on
behalf of all the Holders, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Insurer (with or without
the consent of any Holder of the Notes if no Insurer Default has occurred and is
continuing) or the Holder of this Class A-2 Note (if an Insurer Default has
occurred and is continuing) shall be conclusive and binding upon such Holder and
upon all future Holders of this Class A-2 Note and of any Class A-2 Note issued
upon the registration of transfer hereof or in exchange here for or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Class A-2 Note or any Class A-2 Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class A-2 Note is registrable in the
Note Register, upon surrender of this Class A-2 Note for registration of
transfer at the office or agency of the Trustee in the City of Chicago, Illinois
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class A-2
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Class A-2 Notes are issuable only in registered form without
coupons in minimum denominations of $1,000,000. As provided in the Indenture and
subject to certain limitations therein set forth, Class A-2 Notes are
exchangeable for a like aggregate principal amount of Class A-2 Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Issuer, the Trustee, the Insurer and any agent of the
Issuer, the Trustee or the Insurer may treat the Person in whose name this Class
A-2 Note is registered as the owner hereof for all purposes, whether or not this
Class A-2 Note may be overdue, and
A-2-3
neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
Each Noteholder, by acceptance of this Note, covenants and
agrees to treat the Notes as indebtedness for purposes of federal income, state
and local income and franchise and any other income taxes.
The Indenture and this Class A-2 Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the State
of New York.
A-2-4
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed under its corporate seal.
Dated: April 23, 2003
IKON RECEIVABLES FUNDING, LLC
By: IKON RECEIVABLES FUNDING, INC.,
its Manager
By:
---------------------------------
Authorized Officer
Trustee's Certificate of Authentication
This is one of the Class A-2 Notes referred to in the within
mentioned Indenture.
BNY MIDWEST TRUST COMPANY,
not in its individual capacity but
solely as Trustee
By:
---------------------------------
Authorized Officer
A-2-5
ASSIGNMENT FORM
If you the holder want to assign this Class A-2 Note, fill in
the form below and have your signature guaranteed:
I or we assign and transfer this Class A-2 Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ____________, agent to transfer this Class A-2 Note on
the books of the Issuer. The agent may substitute another to act for him.
Dated: ---------------- Signed: ---------------------------------
---------------------------------
(sign exactly as the name
appears on the other side of
this Class A-2 Note)
Signature Guarantee ------------------------------------------------------------
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Class A-2 Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank. Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class A-2 Note and the signed "power of attorney" in separate
envelopes. For added protection, use certified or registered mail for a Class
A-2 Note.
A-2-6
CLASS A-3a NOTE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
IKON RECEIVABLES FUNDING, LLC
VARIABLE RATE CLASS A-3a LEASE-BACKED NOTE, SERIES 2003-1
CUSIP NO. ____________
No. R-1 $____________
IKON Receivables Funding, LLC, a limited liability company duly
organized and existing under the laws of Delaware (herein called the "Issuer",
which term includes any successor Person under the Indenture referred to
herein), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of $____________, payable in monthly installments on
each Payment Date, in accordance with the Indenture. Interest will accrue on the
unpaid principal hereof from the date of issuance, for each Interest Accrual
Period, at the rate per annum equal to the sum of 0.24% and LIBOR for that
Interest Accrual Period, until the full amount of principal hereof is otherwise
paid or made available for payment and shall be computed on the basis of a year
of 360 days and the actual number of days in that Interest Accrual Period.
Interest accruing as provided above for each Interest Accrual Period will be
payable on the Payment Date corresponding to that Interest Accrual Period.
Principal and interest on this Class A-3a Note shall be paid on
the 15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing May 15, 2003, either by check to the
registered address of the Holder of this Class A-3a Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and surrender of
this Note at the Corporate Trust Office of the Trustee or at the principal
office of any Paying Agent appointed pursuant to the Indenture.
This Class A-3a Note is one of a duly authorized issue of Class
A Notes of the Issuer designated as its "Class A-3a Lease-Backed Notes, Series
2003-1" (herein called the "Class A-3a Notes") limited in aggregate principal
amount to $206,400,000, issued under the Indenture, dated as of April 1, 2003
(herein called the "Indenture"), among the Issuer, IOS Capital, LLC as Servicer,
and BNY Midwest Trust Company, as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Issuer, the Trustee and the Holders and of the terms upon which the Class
A-3a Notes are authenticated and delivered. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings set forth in the
Indenture.
The Class A-3a Notes are entitled to the benefits of a financial
guarantee insurance policy issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class A-3a Notes on each
Payment Date, all as more fully set forth in the Indenture.
The Stated Maturity of the Class A-3a Notes is the Payment Date
in December 2007, on which date the Outstanding Principal Amount of the Class
A-3a Notes shall be due and payable.
The Class A-3a Notes are subject to redemption, without premium,
at the option of the Issuer as of any Payment Date on which the Discounted
Present Value of the Performing Leases is less than or equal to ten percent
(10%) of the aggregate Discounted Present Value of the Leases as of the Cut-Off
Date after giving effect to all principal Payment on such Payment Date.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Class A-3a Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
This Class A-3a Note will be secured by the pledge to the
Trustee of the Asset Pool.
If an Event of Default under the Indenture occurs, the Trustee
shall, at the written direction of the Insurer (if no Insurer Default has
occurred and is continuing) or of Holders of not less than 66-2/3% of the
aggregate principal amount of the Notes at the time Outstanding (if an Insurer
Default has occurred and is continuing), and, if an Insurer Default has occurred
and is continuing, may, declare due and payable in the manner and with the
effect provided in the Indenture, the principal of all the Class A-3a Notes (but
not less than all the Class A-3a Notes). Notice of such declaration will be
given by mail
A-3a-2
to Holders, as their names and addresses appear in the Note Register, as
provided in the Indenture. Upon payment of such principal amount together with
all accrued interest, the obligations of the Issuer with respect to the payment
of principal and interest on this Class A-3a Note shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders under the Indenture at
any time by the Issuer and the Trustee with the written consent of the Insurer
(with or without the written consent of any Holder of the Notes if no Insurer
Default has occurred and is continuing) or the Holders of not less than 66-2/3%
in aggregate principal amount of the Notes at the time Outstanding (if an
Insurer Default has occurred and is continuing). The Indenture also contains
provisions permitting the Insurer (with or without the written consent of any
Holder of the Notes if no Insurer Default has occurred and is continuing) or the
Holders of not less than 66-2/3 in aggregate principal amount of the Notes at
the time Outstanding (if an Insurer Default has occurred and is continuing), on
behalf of all the Holders, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Insurer (with or without
the consent of any Holder of the Notes if no Insurer Default has occurred and is
continuing) or the Holder of this Class A-3a Note (if an Insurer Default has
occurred and is continuing) shall be conclusive and binding upon such Holder and
upon all future Holders of this Class A-3a Note and of any Class A-3a Note
issued upon the registration of transfer hereof or in exchange here for or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Class A-3a Note or any Class A-3a Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class A-3a Note is registrable in the
Note Register, upon surrender of this Class A-3a Note for registration of
transfer at the office or agency of the Trustee in the City of Chicago, Illinois
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class A-3a
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Class A-3a Notes are issuable only in registered form
without coupons in minimum denominations of $1,000,000. As provided in the
Indenture and subject to certain limitations therein set forth, Class A-3a Notes
are exchangeable for a like aggregate principal amount of Class A-3a Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A-3a-3
The Issuer, the Trustee, the Insurer and any agent of the
Issuer, the Trustee or the Insurer may treat the Person in whose name this Class
A-3a Note is registered as the owner hereof for all purposes, whether or not
this Class A-3a Note may be overdue, and neither the Issuer, the Trustee nor any
such agent shall be affected by notice to the contrary.
Each Noteholder, by acceptance of this Note, covenants and
agrees to treat the Notes as indebtedness for purposes of federal income, state
and local income and franchise and any other income taxes.
The Indenture and this Class A-3a Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the State
of New York.
A-3a-4
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed under its corporate seal.
Dated: April 23, 2003
IKON RECEIVABLES FUNDING, LLC
By: IKON RECEIVABLES FUNDING, INC.,
its Manager
By:
---------------------------------
Authorized Officer
Trustee's Certificate of Authentication
This is one of the Class A-3a Notes referred to in the within
mentioned Indenture.
BNY MIDWEST TRUST COMPANY,
not in its individual capacity but
solely as Trustee
By:
---------------------------------
Authorized Officer
A-3a-5
ASSIGNMENT FORM
If you the holder want to assign this Class A-3a Note, fill in
the form below and have your signature guaranteed:
I or we assign and transfer this Class A-3a Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ____________, agent to transfer this Class A-3a Note on
the books of the Issuer. The agent may substitute another to act for him.
Dated: ---------------- Signed: ---------------------------------
---------------------------------
(sign exactly as the name
appears on the other side of
this Class A-3a Note)
Signature Guarantee -----------------------------------------------------------
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Class A-3a Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank. Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class A-3a Note and the signed "power of attorney" in separate
envelopes. For added protection, use certified or registered mail for a Class
A-3a Note.
A-3a-6
CLASS A-3b NOTE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
IKON RECEIVABLES FUNDING, LLC
____% CLASS A-3b LEASE-BACKED NOTE, SERIES 2003-1
CUSIP NO. ____________
No. R-1 $____________
IKON Receivables Funding, LLC, a limited liability company duly
organized and existing under the laws of Delaware (herein called the "Issuer",
which term includes any successor Person under the Indenture referred to
herein), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of $____________, payable in monthly installments
beginning on May 15, 2003, in accordance with the Indenture. Interest will
accrue on the unpaid principal hereof from the date of issuance, at the rate of
2.33% per annum, until the full amount of principal hereof is otherwise paid or
made available for payment and shall be computed on the basis of a year of 360
days comprised of twelve thirty day months, or with respect to the May 15, 2003
Payment Date, since April 23, 2003.
Principal and interest on this Class A-3b Note shall be paid on
the 15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing May 15, 2003, either by check to the
registered address of the Holder of this Class A-3b Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and surrender of
this Note at the Corporate Trust Office of the Trustee or at the principal
office of any Paying Agent appointed pursuant to the Indenture.
This Class A-3b Note is one of a duly authorized issue of Class
A Notes of the Issuer designated as its "Class A-3b Lease-Backed Notes, Series
2003-1" (herein called the "Class A-3b Notes") limited in aggregate principal
amount to $206,400,000, issued under the Indenture, dated as of April 1, 2003
(herein called the "Indenture"), among the Issuer, IOS Capital, LLC as Servicer,
and BNY Midwest Trust Company, as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Issuer, the Trustee and the Holders and of the terms upon which the Class
A-3b Notes are authenticated and delivered. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings set forth in the
Indenture.
The Class A-3b Notes are entitled to the benefits of a financial
guarantee insurance policy issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class A-3b Notes on each
Payment Date, all as more fully set forth in the Indenture.
The Stated Maturity of the Class A-3b Notes is the Payment Date
in December 2007, on which date the Outstanding Principal Amount of the Class
A-3b Notes shall be due and payable.
The Class A-3b Notes are subject to redemption, without premium,
at the option of the Issuer as of any Payment Date on which the Discounted
Present Value of the Performing Leases is less than or equal to ten percent
(10%) of the aggregate Discounted Present Value of the Leases as of the Cut-Off
Date after giving effect to all principal Payment on such Payment Date.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Class A-3b Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
This Class A-3b Note will be secured by the pledge to the
Trustee of the Asset Pool.
If an Event of Default under the Indenture occurs, the Trustee
shall, at the written direction of the Insurer (if no Insurer Default has
occurred and is continuing) or of Holders of not less than 66-2/3% of the
aggregate principal amount of the Notes at the time Outstanding (if an Insurer
Default has occurred and is continuing), and, if an Insurer Default has occurred
and is continuing, may, declare due and payable in the manner and with the
effect provided in the Indenture, the principal of all the Class A-3b Notes (but
not less than all the Class A-3b Notes). Notice of such declaration will be
given by mail to Holders, as their names and addresses appear in the Note
Register, as provided in the Indenture. Upon payment of such principal amount
together with all accrued interest, the
A-3b-2
obligations of the Issuer with respect to the payment of principal and interest
on this Class A-3b Note shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders under the Indenture at
any time by the Issuer and the Trustee with the written consent of the Insurer
(with or without the written consent of any Holder of the Notes if no Insurer
Default has occurred and is continuing) or the Holders of not less than 66-2/3%
in aggregate principal amount of the Notes at the time Outstanding (if an
Insurer Default has occurred and is continuing). The Indenture also contains
provisions permitting the Insurer (with or without the written consent of any
Holder of the Notes if no Insurer Default has occurred and is continuing) or the
Holders of not less than 66-2/3% in aggregate principal amount of the Notes at
the time Outstanding (if an Insurer Default has occurred and is continuing), on
behalf of all the Holders, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Insurer (with or without
the consent of any Holder of the Notes if no Insurer Default has occurred and is
continuing) or the Holder of this Class A-3b Note (if an Insurer Default has
occurred and is continuing) shall be conclusive and binding upon such Holder and
upon all future Holders of this Class A-3b Note and of any Class A-3b Note
issued upon the registration of transfer hereof or in exchange here for or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Class A-3b Note or any Class A-3b Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class A-3b Note is registrable in the
Note Register, upon surrender of this Class A-3b Note for registration of
transfer at the office or agency of the Trustee in the City of Chicago, Illinois
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class A-3b
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Class A-3b Notes are issuable only in registered form
without coupons in minimum denominations of $1,000,000. As provided in the
Indenture and subject to certain limitations therein set forth, Class A-3b Notes
are exchangeable for a like aggregate principal amount of Class A-3b Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Issuer, the Trustee, the Insurer and any agent of the
Issuer, the Trustee or the Insurer may treat the Person in whose name this Class
A-3b Note is registered as the owner hereof for all purposes, whether or not
this Class A-3b Note may be overdue,
A-3b-3
and neither the Issuer, the Trustee nor any such agent shall be affected by
notice to the contrary.
Each Noteholder, by acceptance of this Note, covenants and
agrees to treat the Notes as indebtedness for purposes of federal income, state
and local income and franchise and any other income taxes.
The Indenture and this Class A-3b Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the State
of New York.
A-3b-4
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed under its corporate seal.
Dated: April 23, 2003
IKON RECEIVABLES FUNDING, LLC
By: IKON RECEIVABLES FUNDING, INC.,
its Manager
By:
---------------------------------
Authorized Officer
Trustee's Certificate of Authentication
This is one of the Class A-3b Notes referred to in the within
mentioned Indenture.
BNY MIDWEST TRUST COMPANY,
not in its individual capacity but
solely as Trustee
By:
---------------------------------
Authorized Officer
A-3b-5
ASSIGNMENT FORM
If you the holder want to assign this Class A-3b Note, fill in
the form below and have your signature guaranteed:
I or we assign and transfer this Class A-3b Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ____________, agent to transfer this Class A-3b Note on
the books of the Issuer. The agent may substitute another to act for him.
Dated: ---------------- Signed: ---------------------------------
---------------------------------
(sign exactly as the name
appears on the other side of
this Class A-3b Note)
Signature Guarantee ------------------------------------------------------------
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Class A-3b Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank. Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class A-3b Note and the signed "power of attorney" in separate
envelopes. For added protection, use certified or registered mail for a Class
A-3b Note.
A-3b-6
CLASS A-4 NOTE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
IKON RECEIVABLES FUNDING, LLC
____% CLASS A-4 LEASE-BACKED NOTE, SERIES 2003-1
CUSIP NO. ____________
No. R-1 $____________
IKON Receivables Funding, LLC, a limited liability company duly
organized and existing under the laws of Delaware (herein called the "Issuer",
which term includes any successor Person under the Indenture referred to
herein), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of $____________, payable in monthly installments
beginning on May 15, 2003, in accordance with the Indenture. Interest will
accrue on the unpaid principal hereof from the date of issuance, at the rate of
3.27% per annum, until the full amount of principal hereof is otherwise paid or
made available for payment and shall be computed on the basis of a year of 360
days comprised of twelve thirty day months, or with respect to the May 15, 2003
Payment Date, since April 23, 2003.
Principal and interest on this Class A-4 Note shall be paid on
the 15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing May 15, 2003, either by check to the
registered address of the Holder of this Class A-4 Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and surrender of
this Note at the Corporate Trust Office of the Trustee or at the principal
office of any Paying Agent appointed pursuant to the Indenture.
This Class A-4 Note is one of a duly authorized issue of Class A
Notes of the Issuer designated as its "Class A-4 Lease-Backed Notes, Series
2003-1" (herein called the "Class A-4 Notes") limited in aggregate principal
amount to $159,385,000, issued under the Indenture, dated as of April __, 2003
(herein called the "Indenture"), among the Issuer, IOS Capital, LLC as Servicer,
and BNY Midwest Trust Company, as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Issuer, the Trustee and the Holders and of the terms upon which the Class
A-4 Notes are authenticated and delivered. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings set forth in the
Indenture.
The Class A-4 Notes are entitled to the benefits of a financial
guarantee insurance policy issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class A-4 Notes on each
Payment Date, all as more fully set forth in the Indenture.
The Stated Maturity of the Class A-4 Notes is the Payment Date
in July 2011, on which date the Outstanding Principal Amount of the Class A-4
Notes shall be due and payable.
The Class A-4 Notes are subject to redemption, without premium,
at the option of the Issuer as of any Payment Date on which the Discounted
Present Value of the Performing Leases is less than or equal to ten percent
(10%) of the aggregate Discounted Present Value of the Leases as of the Cut-Off
Date after giving effect to all principal Payment on such Payment Date.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Class A-4 Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
This Class A-4 Note will be secured by the pledge to the Trustee
of the Asset Pool.
If an Event of Default under the Indenture occurs, the Trustee
shall, at the written direction of the Insurer (if no Insurer Default has
occurred and is continuing) or of Holders of not less than 66-2/3% of the
aggregate principal amount of the Notes at the time Outstanding (if an Insurer
Default has occurred and is continuing), and, if an Insurer Default has occurred
and is continuing, may, declare due and payable in the manner and with the
effect provided in the Indenture, the principal of all the Class A-4 Notes (but
not less than all the Class A-4 Notes). Notice of such declaration will be given
by mail to Holders, as their names and addresses appear in the Note Register, as
provided in the Indenture. Upon payment of such principal amount together with
all accrued interest, the
A-4-2
obligations of the Issuer with respect to the payment of principal and interest
on this Class A-4 Note shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders under the Indenture at
any time by the Issuer and the Trustee with the written consent of the Insurer
(with or without the written consent of any Holder of the Notes if no Insurer
Default has occurred and is continuing) or the Holders of not less than 66-2/3%
in aggregate principal amount of the Notes at the time Outstanding (if an
Insurer Default has occurred and is continuing). The Indenture also contains
provisions permitting the Insurer (with or without the written consent of any
Holder of the Notes if no Insurer Default has occurred and is continuing) or the
Holders of not less than 66-2/3% in aggregate principal amount of the Notes at
the time Outstanding (if an Insurer Default has occurred and is continuing), on
behalf of all the Holders, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Insurer (with or without
the consent of any Holder of the Notes if no Insurer Default has occurred and is
continuing) or the Holder of this Class A-4 Note (if an Insurer Default has
occurred and is continuing) shall be conclusive and binding upon such Holder and
upon all future Holders of this Class A-4 Note and of any Class A-4 Note issued
upon the registration of transfer hereof or in exchange here for or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Class A-4 Note or any Class A-4 Note.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class A-4 Note is registrable in the
Note Register, upon surrender of this Class A-4 Note for registration of
transfer at the office or agency of the Trustee in the City of Chicago, Illinois
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class A-4
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Class A-4 Notes are issuable only in registered form without
coupons in minimum denominations of $1,000,000. As provided in the Indenture and
subject to certain limitations therein set forth, Class A-4 Notes are
exchangeable for a like aggregate principal amount of Class A-4 Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Issuer, the Trustee, the Insurer and any agent of the
Issuer, the Trustee or the Insurer may treat the Person in whose name this Class
A-4 Note is registered as the owner hereof for all purposes, whether or not this
Class A-4 Note may be overdue, and
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neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
Each Noteholder, by acceptance of this Note, covenants and
agrees to treat the Notes as indebtedness for purposes of federal income, state
and local income and franchise and any other income taxes.
The Indenture and this Class A-4 Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the State
of New York.
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IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed under its corporate seal.
Dated: April 23, 2003
IKON RECEIVABLES FUNDING, LLC
By: IKON RECEIVABLES FUNDING, INC.,
its Manager
By:
---------------------------------
Authorized Officer
Trustee's Certificate of Authentication
This is one of the Class A-4 Notes referred to in the within
mentioned Indenture.
BNY MIDWEST TRUST COMPANY,
not in its individual capacity but
solely as Trustee
By:
---------------------------------
Authorized Officer
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ASSIGNMENT FORM
If you the holder want to assign this Class A-4 Note, fill in
the form below and have your signature guaranteed:
I or we assign and transfer this Class A-4 Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ____________, agent to transfer this Class A-4 Note on
the books of the Issuer. The agent may substitute another to act for him.
Dated: ---------------- Signed: ---------------------------------
---------------------------------
(sign exactly as the name
appears on the other side of
this Class A-4 Note)
Signature Guarantee ------------------------------------------------------------
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Class A-4 Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank. Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class A-4 Note and the signed "power of attorney" in separate
envelopes. For added protection, use certified or registered mail for a Class
A-4 Note.
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