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EXHIBIT 10.2
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LEASE ACQUISITION AGREEMENT
between
GRANITE FINANCIAL, INC.
(the "Company")
and
GF FUNDING CORP. IV
(the "Transferor")
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Dated as of December 1, 1997
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TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 ACQUISITION OF LEASE ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.01 Authorization and Issuance of Common Stock by the Transferor . . . . . . . . . . . . . . . . 4
Section 2.02 Lease Asset Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.03 Assumption of Indebtedness by the Transferor; Payment of Removal Price . . . . . . . . . . . 4
Section 2.04 Delivery of Lease Contracts; Filing of Financing Statements . . . . . . . . . . . . . . . . . 4
Section 2.05 Servicing of Lease Contracts and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.06 Review of Lease Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.07 Nature of Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 3 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.01 Representations and Warranties of the Company . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.02 Representations and Warranties of the Transferor . . . . . . . . . . . . . . . . . . . . . 14
Section 3.03 Purchase or Substitution Required Upon Breach of Certain Representations and Warranties . . 15
Section 3.04 Requirements for Purchase or Substitution of Lease Contracts and Acquisition
of Additional Lease Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 4 COVENANTS OF THE TRANSFEROR AND COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.01 Company Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.02 Transferor Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 4.03 Assignment of Lease Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 5 CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.01 Conditions to the Transferor's Obligations . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 6 TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.01 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.02 Default by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 7 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.01 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.02 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.04 Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.05 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.06 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.07 No Waivers; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.08 Binding Effect; Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.09 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.10 MBIA Default or Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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SCHEDULES
I SERIES LEASE SCHEDULES
EXHIBITS
A FORM OF COMPANY CERTIFICATE
B FORM OF LEASE CONTRACTS
C POOL CONCENTRATION LIMIT EXCEPTIONS AND
LEASE CONTRACT FILE EXCEPTIONS
D CONCENTRATION LIMITS
E FORM OF BROKER ASSIGNMENT AGREEMENTS
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LEASE ACQUISITION AGREEMENT
This LEASE ACQUISITION AGREEMENT (the "Lease Acquisition Agreement"),
dated as of December 1, 1997, is by and between Granite Financial, Inc. (the
"Company") and GF Funding Corp. IV (the "Transferor").
PRELIMINARY STATEMENT
The Transferor has entered into a Trust and Security Agreement, dated
as of December 1, 1997 (as amended from time to time, the "Trust and Security
Agreement"), with Norwest Bank Minnesota, National Association as the Trustee
(the "Trustee") and back-up servicer (the "Back-up Servicer") and Granite
Financial, Inc., as servicer (the "Servicer"), pursuant to which the Transferor
intends to create the GF Funding Corp. IV Master Trust (the "Trust") and to
cause the Trustee to issue the Certificates.
In furtherance thereof, the Transferor and the Company are entering
into this Lease Acquisition Agreement to provide for, among other things, the
acquisition by the Transferor of all of the right, title and interest in and to
certain Lease Assets, which the Transferor is and will from time to time convey
to the Trustee for the benefit of MBIA and the Certificateholders. As a
precondition to the effectiveness of this Lease Acquisition Agreement, the
Transferor, the Trustee, the Servicer and the Back-up Servicer will enter into
the Servicing Agreement to provide for the servicing of the Lease Assets.
In addition, under the Trust and Security Agreement, the Transferor is
conveying to the Trustee, among other things, all of the Transferor's rights
derived under this Lease Acquisition Agreement and the Servicing Agreement, and
the Company agrees that all covenants and agreements made by it in this Lease
Acquisition Agreement with respect to the Lease Assets shall also be for the
benefit of the Trustee, MBIA and all Certificateholders. In consideration for
its contribution and sale of the Lease Assets and its representations,
warranties, covenants and other agreements under this Lease Acquisition
Agreement, the Company has received all of the Common Stock of the Transferor
and such other consideration as may from time to time be paid hereunder.
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ARTICLE 1
DEFINITIONS
SECTION 1.01 DEFINED TERMS. For purposes of this Lease
Acquisition Agreement the following terms shall have the meanings specified
herein. Capitalized terms used herein but not otherwise defined shall have the
respective meanings assigned to such terms in the Trust and Security Agreement,
or if not defined therein, in the Servicing Agreement.
"Common Stock": All of the issued and outstanding shares of common
stock of the Transferor, which consists of 1,000 shares having a par value of
$.01 per share.
"Company Certificate": The Company Certificate substantially in the
form attached hereto as Exhibit A, one of which shall be entered into on any
Acquisition Date.
"Computer Tape": The diskette or other computer readable medium,
prepared by the Company, containing descriptions and payment information on
each Lease Contract on a Series Lease Schedule.
"Concentration Limits": The limitations as to the composition of the
Lease Contracts acquired by the Transferor hereunder, as described on Exhibit D
hereto, and as amended from time to time with the prior written consent of MBIA
and with notice to the Rating Agencies and the Certificateholders.
"Eligible Lease Contract": A Lease Contract that satisfies the
selection criteria set forth in Section 3.01(a) hereof as of the Initial
Delivery Date or Acquisition Date, as applicable.
"Existing Indebtedness": With respect to the Certificates, the
indebtedness that the Company shall incur from time to time which relates to
financings of the Lease Receivables and which shall be assumed by the
Transferor on the Initial Delivery Date or other Acquisition Date, as
applicable, as set forth in Schedule II to the applicable Company Certificate
conveying such Lease Receivables to the Transferor.
"Initial Delivery Date": December 23, 1997.
"Initial Series Lease Schedule": The list of Lease Contracts and
Lease Receivables attached to the Company Certificate delivered on the Initial
Delivery Date.
"Lease Assets": All right, title and interest in and to (a) the Lease
Contracts, including the proceeds of the Lease Contracts and all payments
received on or with respect to the Lease Contracts on or after the Cut-Off Date
or any Acquisition Date, other than payments due on the Lease Contracts before
the Cut-Off Date or Acquisition Date, (b) the Lease Contract Files, (c) the
Company's rights and interests in the Equipment, (d) all rights and interests
of the Company under each Insurance Policy related to the Lease Contracts and
related Equipment and Insurance Proceeds, (e) the Servicing Charges with
respect to the Lease Contracts and (f) all income and proceeds of the foregoing
or relating thereto.
"Lease Contract File": With respect to each Lease Contract, the
following documents:
(i) the one and only executed original counterpart of the
Lease Contract that constitutes "chattel paper" for purposes of
Sections 9-105(1)(b) and 9-305 of the UCC;
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(ii) copies of any evidence of insurance and any other
copies of documents evidencing or related to any Insurance Policy;
(iii) copies of such documents, if any, that the Company
keeps on file indicating that the lessor has a perfected security
interest in the related Equipment in accordance with its customary
procedures relating to an individual Lease Contract, Customer or
Equipment, including, in the case of titled Equipment a certificate of
title or application for certificate of title assigning all of the
Company=s interest in the related Equipment to the Transferor and the
Trustee, as applicable, naming the Transferor as the owner of the
titled Equipment (if the related Lease Contract is not a Loan
Contract) and naming the Trustee as first lienholder;
(iv) copies of evidence that the Customer received the
Equipment and that the Equipment was in good working order and
acceptable to the Customer at the time of receipt by the Customer; and
(v) copies of any Broker Assignment Agreements whereby
the Company acquired the Lease Contract from a broker.
"Lien": Any security interest, lien, charge, pledge, equity or
encumbrance of any kind other than liens for taxes due and payable after the
Initial Delivery Date or any Acquisition Date, mechanic's liens filed after the
Initial Delivery Date or any Acquisition Date and any liens that attach after
the Initial Delivery Date or any Acquisition Date by operation of law.
"Servicing Agreement": The Servicing Agreement dated as of December 1,
1997 by and among the Servicer, the Transferor, the Back-up Servicer and the
Trustee, as amended or supplemented from time to time.
"PUT": A provision in a Lease Contract obligating the lessee to
purchase the related Equipment upon termination.
"Substitute Lease Contract": The meaning set forth in Section 3.04(b)
hereof.
"Transfer Taxes": The meaning set forth in Section 3.01(a)(xxiv)
hereof.
"UCC": The Uniform Commercial Code, as the same may be in effect from
time to time in the relevant jurisdiction, or any successor statute.
"Underwriting Criteria": The credit and collection policies of the
Company, as reflected in the Company's Credit and Collection Policies Manual,
dated October 7, 1997, and including its credit and collection policies for the
Company's Specialty Lease Programs, dated November 3, 1997, a copy of which
has been delivered to MBIA.
"U.S.": United States of America
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ARTICLE 2
ACQUISITION OF LEASE ASSETS
SECTION 2.01 AUTHORIZATION AND ISSUANCE OF COMMON STOCK BY THE
TRANSFEROR. Subject to all the terms and conditions hereof and in reliance
upon the representations, warranties and covenants set forth in this Lease
Acquisition Agreement, as of the Initial Delivery Date the Transferor hereby
issues to the Company the Common Stock. Such Common Stock shall be issued in
the name of, and delivered directly to, the Company and the Company hereby
agrees to obtain directly from the Transferor such Common Stock, all in
accordance with the terms hereof.
SECTION 2.02 LEASE ASSET ACQUISITIONS. In return for the Common
Stock and other rights created by this Lease Acquisition Agreement, as of the
Initial Delivery Date the Transferor is acquiring the Lease Assets listed on
the Initial Series Lease Schedule. The Company, from time to time hereafter,
shall transfer to the Transferor or originate on behalf of the Transferor, and
the Transferor shall acquire from the Company additional Lease Assets pursuant
to a Company Certificate in the case of Substitute Lease Contracts and Funded
Lease Contracts acquired on a Funding Date, with the applicable Amended Lease
Schedule attached thereto. The Company agrees that all Lease Contracts
transferred, assigned and originated on behalf of the Transferor hereunder
shall be Eligible Lease Contracts and that all Lease Assets acquired by the
Transferor shall conform with all of the requirements hereof. The Company
hereby acknowledges that its transfer and assignment of the Lease Assets to the
Transferor is absolute and irrevocable, without reservation or retention of any
interest whatsoever by the Company.
To the extent that the Company shall retain any files or documentation
pertaining to the Lease Assets, it shall hold such documents in trust for the
benefit of the Trustee as the owner thereof. The possession of any documents
or files pertaining to the Lease Assets by the Company is at the will of the
Transferor for the sole purpose of servicing such Lease Assets, and such
retention and possession by the Company is in a custodial capacity only. The
documents and files retained by the Company relating to the Lease Assets shall
be segregated from the books and records of the Company and shall be marked
appropriately to reflect clearly the sale of the related Lease Assets to the
Transferor and the assignment from the Transferor to the Trustee.
SECTION 2.03 ASSUMPTION OF INDEBTEDNESS BY THE TRANSFEROR; PAYMENT
OF REMOVAL PRICE. Subject to all the terms and conditions hereof and in
reliance upon the representations, warranties and covenants set forth herein,
on the Initial Delivery Date the Transferor hereby agrees to assume the
Existing Indebtedness and to repay the Existing Indebtedness with the proceeds
of the sale of the 1997 Class A Certificates on the Initial Delivery Date
simultaneously with the issuance of the 1997 Class A Certificates. In
addition, on any Funding Date the Transferor hereby agrees to assume and repay
any Existing Indebtedness relating to the Funded Lease Contracts with the
proceeds of the Funding and to remit any such excess proceeds to the Company as
additional consideration.
SECTION 2.04 DELIVERY OF LEASE CONTRACTS; FILING OF FINANCING
STATEMENTS.
(a) In connection with the Transferor's acquisition of the Lease
Assets, the Company, on behalf of the Transferor, shall deliver the original
Lease Contracts and all other items included in the Lease Contract Files to the
Trustee so that the Trustee may retain possession thereof as provided in the
Transaction Documents. In addition, the Company agrees to record and file
prior to the Initial Delivery Date or within the time period set forth in the
Trust and Security Agreement, at its own expense, financing statements (and
thereafter timely continuation statements with respect to such financing
statements) with respect to the Lease Assets, meeting the requirements of the
Transaction Documents.
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(b) In connection with each acquisition of Lease Assets by the
Transferor hereunder, the Company shall promptly, at its own expense, cause any
Electronic Ledger maintained by it to be marked to show that the Lease Assets
have been acquired by the Transferor in accordance with this Lease Acquisition
Agreement and transferred by the Transferor to the Trustee in accordance with
the Transaction Documents.
SECTION 2.05 SERVICING OF LEASE CONTRACTS AND EQUIPMENT. The
Servicer shall service the Lease Assets for the benefit of the Transferor (and
its successors and assigns), the Trustee, MBIA and the Certificateholders, in
accordance with the terms and conditions of the Transaction Documents.
Notwithstanding the foregoing, the Company acknowledges and agrees that its
obligations under this Lease Acquisition Agreement are independent of any
obligations it may have as Servicer and that its obligations under this Lease
Acquisition Agreement will continue in full force and effect, whether or not it
is acting as Servicer, until termination of this Lease Acquisition Agreement in
accordance with Section 6.01 hereof.
SECTION 2.06 REVIEW OF LEASE CONTRACTS. If the Company discovers
or is notified by the Trustee, MBIA or the Certificateholders that any Lease
Contracts are missing or defective (that is, mutilated, damaged, defaced,
incomplete, improperly dated, clearly forged or otherwise physically altered)
in any material respect, or, with respect to titled Equipment, that the
certificate of title naming the Transferor as owner (if the related Lease
Contract is not a Loan Contract) and naming the Trustee as first lienholder is
not in the Lease Contract File, as of the Funding Termination Date, the Company
shall correct or cure such omission, defect or other irregularity within 30
days from the date the Company discovered, or is notified by the Trustee, MBIA
or the Certificateholders of, such omission or defect. Otherwise, the Company
shall repurchase such Lease Contract from the Transferor or replace such Lease
Contract with a Substitute Lease Contract in accordance with Section 3.04(c)
hereof.
SECTION 2.07 NATURE OF TRANSFER.
(a) The transfers of Lease Assets by the Company to the Transferor
pursuant to this Lease Acquisition Agreement are intended to be absolute
assignments of all of the Company's right, title and interest in, to and under
such Lease Assets, without recourse, for all purposes.
(b) In the event that the transfers of Lease Assets by the Company
to the Transferor pursuant to this Lease Acquisition Agreement are deemed for
any reason to be less than a transfer of complete legal title of all of the
Company's right, title and interest in, to and under the Lease Assets, the
parties hereto intend that this Lease Acquisition Agreement operate to transfer
all of the Company's equitable interests in, to and under the Lease Assets to
the Transferor.
(c) In the event that the transfers of the Lease Assets from the
Company to the Transferor are deemed to be a secured financing, the Company
shall be deemed hereunder to have conveyed to the Transferor, and the Company
does hereby convey to the Transferor, a security interest in all of the
Company's right, title and interest in, to and under the Lease Assets, whether
now owned or hereafter acquired. For purposes of such conveyance, this Lease
Acquisition Agreement shall constitute a security agreement under applicable
law.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company hereby makes the following representations and
warranties as to each Lease Contract to the Transferor and for the benefit of
MBIA, the Trustee and the Certificateholders, on which the Transferor relies in
acquiring the Lease Assets. Such representations and warranties speak as of
the Initial Delivery Date with respect to Lease Contracts listed on the Initial
Series Lease Schedule or the Acquisition Date with respect to Additional Lease
Contracts unless otherwise indicated, but shall survive any subsequent
transfer, assignment, contribution or conveyance of the Lease Assets:
(i) The information set forth in the Initial Series Lease
Schedule is true and correct as of the Initial Delivery Date and the
information set forth in any Amended Lease Schedule is true and
correct as of the applicable Acquisition Date.
(ii) Each Lease Contract is by its terms an absolute and
unconditional obligation of the Customer, non-cancelable and, except
in certain instances involving loss or damage to the Equipment,
non-prepayable prior to the expiration of the initial term of such
Lease Contract; such Lease Contract does not provide for the
substitution, exchange or addition of any other items of Equipment
pursuant to such Lease Contract; and the rights with respect to such
Lease Contract are assignable by the lessor thereunder without the
consent of or notice to any Person. Each Lease Contract is net to the
lessor of any maintenance, taxes, insurance or other expenses and
contains provisions requiring the Customer to assume all risk of loss
or malfunction of the related Equipment.
(iii) The Company has heretofore provided to the Trustee
the sole original counterpart of such Lease Contract, as amended, and
except for amendments and supplements already reflected in such Lease
Contract on the Initial Delivery Date or Acquisition Date as
applicable and as reflected in the Series Lease Schedule, such Lease
Contract has not been amended, waived or modified. All such documents
constitute the entire agreement between the lessor and the lessee in
respect of the Equipment.
(iv) There is only one original executed counterpart of
such Lease Contract and it constitutes "chattel paper" for purposes of
section 9-105(1)(b) and 9-308 of the UCC which has been delivered to
the Trustee and the Company's Electronic Ledgers have been marked as
provided in Section 2.04(b) hereof.
(v) Such Lease Contract was not originated in, nor is it
subject to the laws of, any jurisdiction, the laws of which would make
unlawful the sale, transfer or assignment of such document under any
of the Transaction Documents, including any repurchase in accordance
with the Transaction Documents.
(vi) Such Lease Contract is, and on the Initial Delivery
Date or Acquisition Date, as applicable, will be, in full force and
effect in accordance with its terms and neither the Company nor any
other obligated party has or will have suspended or reduced any
payments or obligations due or to become due thereunder by reason of a
default by the other party to such Lease Contract; as of the Initial
Delivery Date or Acquisition Date, as applicable, the Customer party
to
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such Lease Contract is not more than 30 days delinquent in making a
Scheduled Payment (without regard to advances, if any, made by the
Servicer) and there are no proceedings pending, or to the best of the
Company's knowledge, threatened asserting insolvency of such Customer;
there has been no other default, breach or violation and no event
permitting acceleration under such Lease Contract; there are no
proceedings pending, or to the best of the Company's knowledge,
threatened, wherein such Customer, any other obligated party or any
governmental agency has alleged that such Lease Contract is illegal or
unenforceable; and none of the Scheduled Payments are subject to any
set-off or credit of any kind.
(vii) Such Lease Contract is the valid, binding and legally
enforceable full recourse obligation of the parties thereto,
enforceable in accordance with its terms, subject, as to enforcement,
to applicable bankruptcy, insolvency, reorganization and other similar
laws of general applicability relating to or affecting creditors'
rights generally and to general principles of equity regardless of
whether enforcement is sought in a court of law or equity.
(viii) All filings (including Uniform Commercial Code
filings), notices, transfers and recordings as required under the
Trust and Security Agreement or applicable law and that may be
necessary to perfect the first priority security interest of the
Transferor and the Trustee in the Lease Contracts and the related
Lease Receivables being acquired hereunder, have been accomplished and
are in full force and effect; provided, however, that the Company
shall not be required to file any assignments of financing statements
with respect to the Equipment underlying the Lease Contracts. The
Company has a first priority perfected security interest in the
Equipment underlying all Loan Contracts and in any Equipment exceeding
$35,000 in value underlying any other Lease Contracts. The Company
will obtain within thirty calendar days of the Initial Delivery Date
or Acquisition Date (as applicable), a certificate of title for each
item of titled Equipment, naming the Trustee as first lienholder and
with respect to Lease Contracts which are not Loan Contracts, also
naming the Transferor as owner of such titled Equipment.
(ix) Such Lease Contract being acquired by the Transferor
is substantially in the form of lease contracts attached hereto as
Exhibit B (which may include addendums in the forms included in such
Exhibit B), except for immaterial modifications or deviations from the
form lease contracts which appear in certain Lease Contracts or which
may appear in the future form Lease Contracts of the Company, which
immaterial modifications or deviations will not have a material
adverse effect on the Certificateholders or MBIA and will not reduce
the Scheduled Payments or other payments due under such Lease
Contract; provided, however, that some Lease Contracts may include a
rider providing additional or alternate terms regarding the purchase
of the Equipment upon the expiration of such Lease Contract. The
Broker Assignment Agreement pursuant to which Lease Contracts were
acquired by the Company from brokers is substantially in the form of
Exhibit E attached hereto.
(x) Such Lease Contract was either (A) originated by the
Company on behalf of itself or the Transferor or purchased from a
broker in the ordinary course of business and meets the Company's
Underwriting Criteria, or (B) purchased from a leasing company that
originated such Lease Contract pursuant to agreed upon and
well-articulated underwriting and documentation standards acceptable
to MBIA and with whom the Company has regularly dealt with in the
past, which standards are consistent with the Underwriting Criteria.
The origination and collection practices used by the Company with
respect to such Lease Contract have been in all respects legal,
proper, prudent and customary in the equipment financing and servicing
business. Such Lease Contract is not a consumer lease. Any
acquisition from a broker is a true
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sale or absolute transfer and not a loan to the broker or a joint
venture/co-ownership arrangement with the broker.
(xi) In determining whether to lease Equipment to any
particular Customer, the Company considered each Customer's ability
to pay any PUT Payments included in the terms of such Lease Contract.
In determining whether to lease Equipment to any particular Customer,
the Company considered such Customer's ability to pay any increases
in the rental payments due under the terms of such Lease Contract.
(xii) The Equipment related to such Lease Contract was
properly delivered to the Customer in good repair, without defects and
in satisfactory order and, to the best knowledge of the Company, is
currently in proper working order as of the Initial Delivery Date or
Acquisition Date as applicable. Each Customer has accepted the
Equipment leased to it and, after reasonable opportunity to inspect
and test such Equipment, has not notified the Company of any defects
therein. The named Customer is the end user of the Equipment that is
the subject of the Lease Contract and no Customer has, to the
Company's knowledge, sublet the Equipment to any other party.
(xiii) Except as approved in writing by MBIA, each Lease
Receivable derives from a Lease Contract that has an original stated
term of at least 12 months and not more than 60 months. Each such
Lease Contract is within its original term and has not had any
extensions.
(xiv) Except with respect to such Lease Contracts as are
approved by MBIA (which approval right is limited to Lease Contracts
having an aggregate IPB that does not exceed 2% of the Aggregate IPB),
each Customer under each Lease Contract will have made at least one
lease payment with respect to such Lease Contract, including any
security deposit or advance payment made by the Customer upon the
execution of the Lease Contract or the delivery of the Equipment.
Each Lease Contract obligates the related Customer to make all
Scheduled Payments thereunder in full notwithstanding the collection
by the lessor of a security deposit with respect thereto. The
calculation of the Implicit Principal Balance of each Lease Receivable
does not include any security deposits or advance payments collected
by or on behalf of the lessor which are applied to Scheduled Payments.
(xv) None of the Customers is a lessee that is a merchant
with respect to the Equipment leased under any Lease Contract, and
none of the Customers is the U.S. or any state, or agency, department
or instrumentality or political subdivision of the U.S. or any state.
Each Lease Contract is payable in U.S. dollars and the obligor
thereon is a U.S. resident with a billing address in the U.S.
(xvi) All requirements of applicable Federal, state and
local law, and regulations thereunder in respect of such Lease
Contract have been complied with in all material respects, including,
without limitation, usury laws, the Federal Truth-in-Lending Act, the
Fair Credit Reporting Act, the Fair Debt Collection Practices Act, and
any other applicable consumer credit, equal opportunity and disclosure
laws, if any, and such Lease Contract complied in all material
respects at the time it was originated or made and now complies in all
material respects with all legal requirements of the jurisdiction in
which it was originated.
(xvii) With the sole exception of the Customer's right to
quiet enjoyment, such Lease Contract is not and will not be subject to
any right of rescission, set-off, claim, counterclaim or
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defense, including the defense of usury and the operation of any of
the terms of such Lease Contract or the exercise by the Company or the
Customer of any right under such Lease Contract will not render such
Lease Contract unenforceable in whole or in part nor subject to any
right of rescission, setoff, claim, counterclaim or defense, and no
such right of rescission, set-off, claim, counterclaim or defense,
including a defense arising out of a breach of the Customer's right of
quiet enjoyment of the Equipment, has been asserted with respect
thereto.
(xviii) The Company has duly fulfilled all obligations on the
lessor's part to be fulfilled under or in connection with the
origination, acquisition and assignment of the Lease Assets including,
without limitation, giving any notices or consents necessary to effect
the acquisition of the Lease Assets by the Transferor and the Company
has done nothing to impair the rights of the Trust Estate and the
Certificateholders in the Lease Contract or payments with respect
thereto. The Company has obtained all necessary licenses, permits and
charters required to be obtained by the Company, which failure to
obtain would render any portion of the Transaction Documents
unenforceable or would have a material adverse effect on MBIA or the
Certificateholders.
(xix) Such Lease Contract and the Company's interest in the
Equipment leased thereunder have not been sold, transferred, assigned
or pledged by the Company to any Person other than the Transferor
(except for security interests in the Lease Assets which shall be
terminated on or prior to the Initial Delivery Date or Acquisition
Date as applicable), and upon execution and delivery of this Lease
Acquisition Agreement by the Company and the repayment by the
Transferor of any Existing Indebtedness, the Transferor will have all
of the right, title and interest in and to the Lease Assets, free and
clear of all Liens and any interest of the Company or its successors,
except for the interests of the Customer pursuant to the Lease
Contract and the interest of the Trustee under the Trust and Security
Agreement, and upon the Transferor's conveyance of the Lease Assets to
the Trustee, the Trustee will either be the owner thereof or have a
first priority perfected security interest therein.
(xx) Such Lease Contract requires that the Customer
maintain the Equipment leased thereunder in good and workable order
and that the Customer obtain and maintain physical damage insurance or
purchase insurance from the Company covering the Equipment. Insurance
coverage required to be maintained by the Customer under such Lease
Contract is of a type customary for the equipment covered thereby and
consistent with industry practice for monitoring compliance thereof.
Insurance and the loss payee endorsement on Equipment having a
purchase price in excess of $35,000 is in full force and effect.
(xxi) The Company purchased each item of Equipment from
either (A) the manufacturer or other supplier or broker following
receipt of an invoice from such manufacturer, supplier or broker or
(B) a Customer following confirmation that such item of Equipment was
on such Customer's premises. The sale to the Transferor of the Lease
Assets does not violate the terms or provisions of any lease or any
other agreement to which the Company is a party or by which it is
bound.
(xxiii) The Equipment leased under such Lease Contract has an
original cost of less than $250,000.
(xxiv) The transfer, assignment and conveyance of the Lease
Assets by the Company pursuant to this Lease Acquisition Agreement and
the assignment of the Lease Assets by the
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Transferor to the Trustee are not subject to and will not result in
any tax, fee or governmental charge payable by the Company or the
Transferor to any Federal, state or local government ("Transfer
Taxes") other than Transfer Taxes which have or will be paid by the
Company as due. In the event that the Transferor or the Trustee
receives actual notice of any Transfer Taxes arising out of the
transfer, assignment and conveyance of the Lease Assets, on written
demand by the Transferor, or upon the Company otherwise being given
notice thereof, the Company shall pay, and otherwise indemnify and
hold the Transferor, the Trustee, MBIA and the Trust Estate harmless,
on an after-tax basis, from and against any and all such Transfer
Taxes (it being understood that the Certificateholders, the Trustee,
MBIA and the Trust Estate shall have no obligation to pay such
Transfer Taxes).
(xxv) Each Lease Contract File delivered to the Trustee
contains each applicable item described in the definition of Lease
Contract File.
(xxvi) For tax purposes, none of the Lease Contracts
constitutes a "true lease."
(b) The Company hereby makes the following representations and
warranties to the Transferor, and for the benefit of MBIA, the Trustee and the
Certificateholders, on which the Transferor relies in acquiring the Lease
Assets and issuing the Certificates. Such representations and warranties speak
as of the Initial Delivery Date with respect to Lease Contracts listed on the
Initial Series Lease Schedule or the Acquisition Date with respect to
Additional Lease Contracts, unless otherwise indicated, but shall survive any
subsequent transfer, assignment, contribution or conveyance of the Lease
Assets:
(i) Except as described in Exhibit C hereto, the overall
pool of Lease Assets acquired by the Transferor on the Initial
Delivery Date and as of any subsequent Acquisition Date shall comply
with the Concentration Limits set forth on Exhibit D hereto.
(ii) The Company used no selection procedures that
identified the Lease Contracts being acquired on the Initial Delivery
Date or any Acquisition Date as being less desirable or valuable than
other equipment leases owned by the Company.
(iii) The Computer Tape from which the selection of the
Lease Contracts being acquired on the Initial Delivery Date was
derived, was made available to the Transferor's accountants that are
providing any comfort letter to MBIA, any Certificateholders or the
Placement Agent in connection with any information contained in a
Private Placement Memorandum relating thereto, and such information
was complete and accurate as of its date and includes a description of
the same Lease Contracts that are described in the Initial Series
Lease Schedule and the payments due thereunder as of the Cut-Off Date.
(c) The Company hereby makes the following representations and
warranties to the Transferor and for the benefit of MBIA, the Trustee and the
Certificateholders on which the Transferor relies in acquiring the Lease Assets
and issuing the Certificates. Such representations and warranties speak as of
the Initial Delivery Date and each Acquisition Date unless otherwise indicated,
but shall survive any subsequent transfer, assignment, contribution or
conveyance of the Lease Assets:
(i) As of the Initial Delivery Date, the Company has been
duly organized and is validly existing and in good standing as a
corporation under the laws of the State of Delaware with corporate
power and authority to own its properties and to transact the business
in which it is now engaged, and the Company is duly qualified to do
business in and is in good standing
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under the laws of each State in which any Equipment or any Customer is
located and where it is required under applicable law to effect such
qualification, except where the failure to so qualify would not have a
material adverse effect on the ability of the Company to perform its
obligations under the Transaction Documents or on any of the Lease
Contracts, the Lease Receivables or the Equipment.
(ii) The performance of the obligations of the Company
under this Lease Acquisition Agreement and the other Transaction
Documents and the consummation of the transactions herein and therein
contemplated will not conflict with or result in any breach of any of
the terms or provisions of, or constitute with or without notice,
lapse of time or both, a default under the Certificate of
Incorporation or Bylaws of the Company, or any material indenture,
agreement, mortgage, deed of trust or other instrument to which the
Company is a party or by which it is bound, or result in the creation
or imposition of any Lien (except the Lien created by the Transaction
Documents) upon any of the property or assets of the Company pursuant
to the terms of such indenture, mortgage, deed of trust, or other
agreement or instrument to which the Company is a party or by which
the Company is bound or to which any of the Company's property or
assets is subject, nor will such action result in any violation of the
provisions of the Company's Certificate of Incorporation or Bylaws or
any statute or any order, rule or regulation of any court or any
regulatory authority or other governmental agency or body having
jurisdiction over the Company or any of its properties; and no
consent, approval, authorization, order, registration or qualification
of or with or other action of any court, or any such regulatory
authority or other governmental agency or body is required for
consummation of the transactions contemplated by this Lease
Acquisition Agreement and the other Transaction Documents except such
consents, approvals and authorizations which have been obtained or
such registrations or qualifications which have been made.
(iii) This Lease Acquisition Agreement and each other
Transaction Document to which the Company is a party have been duly
authorized, executed and delivered by the Company and such agreements
are the valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective
terms, subject as to enforcement to applicable bankruptcy, insolvency,
reorganization and other similar laws of general applicability
relating to or affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is sought in a
court of law or equity.
(iv) As of the Initial Delivery Date, the Company's
address indicated in Section 7.03 hereof is the chief executive
office, principal place of business and the office where the Company
keeps its records concerning the Lease Contracts, Lease Receivables
and the Equipment, and the Company has done business only under the
name "Granite Financial, Inc." or "Granite Financial, LLC."
(v) The Company does not believe, nor does it have any
reasonable cause to believe, that it cannot perform each and every
covenant contained in this Lease Acquisition Agreement.
(vi) The transactions contemplated by the Transaction
Documents are being consummated by the Company in furtherance of its
ordinary business purposes, with no contemplation of insolvency and
with no intent to hinder, delay or defraud any of its present or
future creditors.
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(vii) The consideration received by the Company pursuant to
this Lease Acquisition Agreement is fair consideration having value
reasonably equivalent to or in excess of the value of the Lease Assets
and the performance of the Company's obligations hereunder.
(viii) At the time of the transactions contemplated by the
Transaction Documents, both immediately before and after and as a
result of such transactions, the Company will not:
(A) be insolvent such that the sum of its debts
is greater than all of its respective property, at a fair
valuation;
(B) be engaged in or about to engage in, business
or a transaction for which any property remaining with the
Company will be an unreasonably small capital or the remaining
assets of the Company will be unreasonably small in relation to
its respective business or the transaction; or
(C) have intended to incur or believed it would
incur, debts that would be beyond its respective ability to
pay as such debts mature or become due.
At all such times, the Company's assets and cash flow will enable it
to meet its present obligations in the ordinary course of business as
they become due.
(ix) Both immediately before and after the transactions
contemplated by the Transaction Documents (A) the present fair salable
value of the Company's assets was or will be in excess of the amount
that will be required to pay its probable liabilities as they then
exist and as they become absolute and matured; and (B) the sum of the
Company's assets was or will be greater than the sum of its debts,
valuing its assets at a fair salable value.
(x) The acquisition of the Lease Assets by the Transferor
pursuant to this Lease Acquisition Agreement is not subject to the
bulk transfer or any similar statutory provisions in effect in any
applicable jurisdiction.
(xi) There are no proceedings or investigations pending,
or to the knowledge of the Company, threatened, against or affecting
the Company in or before any court, governmental authority or agency
or arbitration board or tribunal (including, but not limited to any
such proceeding or investigation with respect to any environmental or
other liability resulting from the ownership or use of any of the
Equipment) which, individually or in the aggregate, involve the
possibility of materially and adversely affecting the properties,
business, prospects, profits or condition (financial or otherwise) of
the Company, or the ability of the Company to perform its obligations
under this Lease Acquisition Agreement. The Company is not in default
with respect to any order of any court, governmental authority or
agency or arbitration board or tribunal.
(xii) All tax returns or extensions required to be filed by
the Company in any jurisdiction have in fact been filed, and all
taxes, assessments, fees and other governmental charges upon the
Company, or upon any of the respective properties, income or
franchises of the Company, shown to be due and payable on such returns
have been, or will be, paid when due. All such tax returns are true
and correct and the Company has no knowledge of any proposed
additional tax assessment against it in any material amount nor of any
basis therefor. The provisions for taxes on the books of the Company
are in accordance with generally accepted accounting principles.
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(xiii) The Company (A) is not in violation of any laws,
ordinances, governmental rules or regulations to which it is subject,
(B) 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 (C) is not in
violation in any material respect of any term of any agreement,
charter instrument, bylaw or 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 business or condition (financial or
otherwise) of the Company.
(xiv) As of the date thereof, the Private Placement
Memorandum related to 1997 Class A Certificates does not contain any
untrue statement of fact, or omit to state any fact, that would have a
material adverse effect on the Lease Contracts or on the ability of
the Trust Estate to realize the benefits thereof.
(xv) It is the intention of the Company that the Lease
Assets be acquired by the Transferor and that the beneficial interest
in and title to the Lease Assets not be part of the Company's estate
in the event of the filing of a bankruptcy petition by or against the
Company under any bankruptcy law.
(xvi) Immediately prior to the acquisition of any Lease
Assets by the Transferor pursuant to this Lease Acquisition Agreement,
the Company was the sole owner of such Lease Assets and with respect
to each Loan Contract and each Lease Contract as to which the
underlying Equipment had a purchase price in excess of $35,000, had a
valid first perfected security interest in the related Equipment, and
had good and marketable title thereto, free and clear of all Liens
(except for the Existing Indebtedness and security interests in the
Lease Assets which shall be terminated on or prior to the Initial
Delivery Date with respect to Lease Contracts listed on the Initial
Series Lease Schedule or the Acquisition Date with respect to
Additional Lease Contracts); and the acquisition of the Lease Assets
by the Transferor does not violate the terms or provisions of any
Lease Asset.
(xvii) Upon the issuance of the Common Stock to the Company
in accordance with the terms of this Lease Acquisition Agreement, the
Company will be the registered owner of all of the issued and
outstanding common stock of the Transferor, all of which Common Stock
will be validly issued, fully paid and nonassessable.
(xviii) The Company intends to treat the transfer of the
Lease Assets to the Transferor as a sale for accounting purposes and a
contribution to the Transferor for Federal, State and local income tax
purposes.
(xix) The present value of all benefits vested under all
"employee pension benefit plans," as such term is defined in Section 3
of ERISA, maintained by the Company, or in which employees of the
Company are entitled to participate, as from time to time in effect
(herein called "Pension Plans"), does not exceed the value of the
assets of the Pension Plans allocable to such vested benefits (based
on the value of such assets as of the last annual valuation date). No
prohibited transactions, accumulated funding deficiencies, withdrawals
or reportable events have occurred with respect to any Pension Plans
that, in the aggregate, could subject the Company to any material tax,
penalty or other liability. No notice of intent to terminate a
Pension Plan has been filed, nor has any Pension Plan been terminated
under Section 4041(f) of ERISA, nor has
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the Pension Benefit Guaranty Corporation instituted proceedings to
terminate, or appoint a trustee to administer, a Pension Plan and no
event has occurred or condition exists which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan.
(xx) The transfer of the Lease Assets pursuant to this
Lease Acquisition Agreement constitutes the valid transfer by the
Company to the Transferor of all of the Company's right, title and
interest in the Lease Assets. The Company has valid business reasons
for contributing and selling the Lease Assets to the Transferor
pursuant to this Lease Acquisition Agreement rather than obtaining a
loan secured by the Lease Assets. The Transferor will be operated
generally so as to not be substantively consolidated with the Company.
SECTION 3.02 REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR.
The Transferor hereby makes the following representations and warranties to the
Company for the benefit of MBIA, the Trustee and Certificateholders, on which
representations and warranties the Company relies in entering into this Lease
Acquisition Agreement with the Transferor. The Company agrees that any breach
by the Transferor of any such representations and warranties shall not limit or
excuse the full performance of the Company's obligations hereunder. Such
representations and warranties speak as of the Initial Delivery Date and each
Acquisition Date unless otherwise indicated, but shall survive any subsequent
transfer, assignment, contribution or conveyance of the Lease Assets:
(a) The Transferor has been duly organized and is validly existing
in good standing as a corporation under the laws of the State of Delaware, with
corporate power and authority to own its properties, perform its obligations
under the Transaction Documents and to transact the business in which it is now
engaged or in which it proposes to engage; the Transferor is duly qualified to
do business and is in good standing in each State in which the nature of its
business requires it to be so qualified, except where failure to so qualify
would not have a material adverse effect on the ability of the Transferor to
perform its obligations under the Transaction Documents.
(b) The transfer to and receipt by the Transferor of the Lease
Contracts and the related Lease Receivables and the Equipment pursuant to this
Lease Acquisition Agreement and the consummation of the transactions
contemplated herein and in the Transaction Documents will not conflict with or
result in breach of any of the terms or provisions of, or constitute (with or
without notice, lapse of time or both) a default under the Certificate of
Incorporation or By- laws of the Transferor or any material indenture,
agreement, mortgage, deed of trust or other instrument to which the Transferor
is a party or by which it is bound, or result in the creation or imposition of
any Lien (except for the Lien created by the Trust and Security Agreement) upon
any of the property or assets of the Transferor pursuant to the terms of, such
indenture, mortgage, deed of trust, or other agreement or instrument to which
the Transferor is a party or by which it is bound or to which any of the
property or assets of the Transferor is subject, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or By-laws
of the Transferor or any statute or any order, rule or regulation of any court
or regulatory authority or other governmental agency or body having
jurisdiction over the Transferor or any of its properties; and no consent,
approval, authorization, order, registration or qualification of or with or
other action of any court or any such regulatory authority or other
governmental agency or body is required for the acquisition of the Lease
Contracts and the related Lease Receivables and the Company's interest in the
Equipment hereunder.
(c) The Transaction Documents have been duly authorized, executed
and delivered by the Transferor by all necessary corporate action and
constitute valid and legally binding obligations of the
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Transferor enforceable against the Transferor in accordance with their terms,
subject as to enforcement to bankruptcy, insolvency, reorganization and other
similar laws of general applicability relating to or affecting creditors'
rights generally and to general principles of equity regardless of whether
enforcement is sought in a court of equity or law.
(d) There are no proceedings or investigations to which the
Transferor is a party pending or, to the knowledge of the Transferor,
threatened, before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality (i) asserting the invalidity of this
Lease Acquisition Agreement, (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions contemplated by
this Lease Acquisition Agreement, or (iii) seeking any determination or ruling
that would materially and adversely affect the performance by the Transferor of
its obligations under, or the validity or enforceability of, this Lease
Acquisition Agreement.
(e) All approvals, authorizations, consents, orders or other
actions of any Person or of any court, governmental agency or body or official,
required in connection with the execution and delivery of this Lease
Acquisition Agreement, have been or will be taken or obtained on or prior to
the Initial Delivery Date.
(f) The Transferor's address indicated in Section 7.03 hereof is
the principal place of business and chief executive office of the Transferor.
SECTION 3.03 PURCHASE OR SUBSTITUTION REQUIRED UPON BREACH OF
CERTAIN REPRESENTATIONS AND WARRANTIES. If (i) the Company, the Transferor,
the Trustee, the Servicer, the Back-up Servicer or MBIA discovers the breach of
any representations or warranties set forth in Section 3.01 hereof which
materially and adversely affects the value of a Lease Contract, the related
Equipment, or the interests of the Certificateholders or MBIA, or a breach of
any of the representations and warranties set forth in Sections 3.01(a)(ii),
3.01(a)(v), 3.01(a)(vii), 3.01(a)(xix) or 3.01(c)(iii), or (ii) the Company or
the Transferor discovers the occurrence of any missing or defective document as
specified in Section 2.06 hereof, or (iii) the Trustee shall fail to receive
evidence acceptable to MBIA that each assignment of a financing statement
required under Section 3.01(a)(viii) hereof or certificate of title application
required under Section 3.01(a)(viii) has been filed within the time period set
forth therein, then the party discovering such breach or condition shall give
prompt written notice to the other parties and the Company shall, within 30
days from the date the Company was notified of, or otherwise discovers, such
breach or condition, cure such breach or condition. If the Company fails to
cure such breach in the applicable time period, the Company shall either (1)(a)
purchase such Lease Contract and related Equipment from the Transferor at the
Removal Price or (b) provide a Substitute Lease Contract and Equipment or (2)
if the breach relates to a representation or warranty regarding the selection
criteria of the Lease Contracts as a whole and is not cured (as the liquidated
damages remedy therefor) by the Company, either (a) purchase such
non-conforming Lease Contracts and related Equipment from the Transferor or (b)
provide Substitute Lease Contracts as set forth above, so that the
representations and warranties with respect to the selection criteria are
correct, as evidenced by an Officer's Certificate of the Company to the Trustee
and MBIA. The Removal Price for a purchased Lease Contract and the related
Equipment shall be paid, and any Substitute Lease Contract shall be delivered,
by the Company to the Transferor in accordance with Section 3.04(c) hereof. It
is understood and agreed that the obligation of the Company to cure or purchase
or replace any Lease Contract as to which such a breach has occurred shall
constitute the sole remedy respecting such breach available to the Transferor,
the Certificateholders or the Trustee on behalf of such Holders (except for any
indemnities provided under Section 4.01(j) hereof or under the Trust and
Security Agreement) for any losses, claims, damages and liabilities arising
from the Transferor's ownership of such Lease Contract or the inclusion of such
Lease Contract in the Trust Estate.
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SECTION 3.04 REQUIREMENTS FOR PURCHASE OR SUBSTITUTION OF LEASE
CONTRACTS AND ACQUISITION OF ADDITIONAL LEASE CONTRACTS.
(a) If the Company purchases any Lease Contract under Sections
2.06 or 3.03 hereof, or if the Transferor removes any Lease Contract under
Section 4.04(d) of the Trust and Security Agreement, or removes any Lease
Contract under Section 3.09 of the Servicing Agreement, such Lease Contract
shall be purchased or removed by the Company or the Transferor, as applicable,
at the Removal Price. All purchases shall be accomplished at the times
specified in subsection (c) below.
(b) (1) If the Company substitutes any Lease Contract under
Section 2.06 or 3.03 hereof, or if the Transferor substitutes any Lease
Contract under Section 4.04(d) of the Trust and Security Agreement or under
Section 3.09 of the Servicing Agreement (a "Substitute Lease Contract"), or (2)
if the Company conveys to the Transferor or originates on behalf of the
Transferor any Additional Lease Contract, each such Additional Lease Contract
(i) shall be an Eligible Lease Contract; (ii) shall be with a Customer whose
credit is equal to or better than that of the Customer under any other Lease
Contract; (iii) shall be written on one of the Company's standard lease forms;
(iv) shall be accompanied by (A) a Company Certificate substantially in the
form of Exhibit A hereto subjecting such Lease Contract to the provisions
hereof and providing with respect to such Substitute Lease Contract or Funded
Lease Contract, an Amended Lease Schedule and (B) evidence of the UCC filings
required, as set forth in the Trust and Security Agreement; (v) shall not have
been selected using any other procedures that identified the Lease Contract as
being less desirable or valuable than other comparable equipment leases owned
by the Company; and (vi) shall not cause the Concentration Limits to be
violated.
In addition to the above criteria, the following shall apply in
connection with any Additional Lease Contract, as applicable: (1) any
Substitute Lease Contracts assigned by the Company on any date in substitution
for Lease Contracts on the Series Lease Schedule shall have an aggregate
Implicit Principal Balance at least equal to the aggregate Implicit Principal
Balance of the Lease Contracts on such Series Lease Schedule being withdrawn,
computed as to both the Substitute Lease Contracts and the withdrawn Lease
Contracts using the applicable Discount Rate; and (2) an Additional Lease
Contract may have Scheduled Payments that are due after the last day of the
month preceding the Stated Maturity of the related Class A Certificates, but
such payments shall not be counted in any Implicit Principal Balance
computation.
Upon the substitution of any Substitute or the addition of any Funded
Lease Contract pursuant to the provisions of this Section 3.04(b), the Company
hereby agrees that such Substitute or Funded Lease Contract will be subject to
all the terms and provisions of this Lease Acquisition Agreement, the Servicing
Agreement and the Trust and Security Agreement just as if such Substitute or
Funded Lease Contract had been one of the original Lease Contracts acquired on
the Initial Delivery Date. Upon the substitution of a Substitute or the
addition of a Funded Lease Contract pursuant to this Section 3.04(b), the
Transferor and the Company shall also comply with the provisions and
limitations set forth in the Trust and Security Agreement. All substitutions
shall be accomplished at the time specified in subsection (c) below.
(c) Any purchase or substitution of a Lease Contract by the
Company in accordance with Sections 2.06 or 3.03 hereof or this Section 3.04
shall be made either by remittance of the Removal Price to the Servicer for
deposit into the Collection Account in accordance with Section 3.03(c) of the
Servicing Agreement or by substitution of a Substitute Lease Contract, as
applicable, on or prior to the
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Determination Date next following the expiration of the cure period set forth
in Sections 2.06 or 3.03 hereof, as applicable. Such substitution or purchase
shall be effective as of the Payment Date immediately following such
Determination Date.
(d) Any voluntary purchase or substitution of a Lease Contract by
the Company pursuant to the terms of the Servicing Agreement or Trust and
Security Agreement in the event of a default, delinquency, prepayment or
modification with respect to such Lease Contract shall satisfy the same
requirements for a purchase or substitution, as the case may be, as are set
forth in this Section 3.04.
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ARTICLE 4
COVENANTS OF THE TRANSFEROR AND COMPANY
SECTION 4.01 COMPANY COVENANTS. The Company hereby covenants and
agrees with the Transferor as follows:
(a) Except as hereinafter provided, the Company will keep in full
effect its existence, rights and franchises as a corporation in the State of
Delaware, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Lease
Acquisition Agreement or any of the Lease Contracts and to perform its duties
hereunder; provided, however, that the Company may reorganize as a corporation
in another state if the Transferor has provided to MBIA and the
Certificateholders an Officer's Certificate to the effect that (i) such action
will not cause the Company to breach any obligation hereunder and (ii) such
action would be in the best interests of the Company and would not have an
adverse effect on the Trust Estate. Any person into which the Company may be
merged or consolidated, or to whom the Company has sold substantially all of
its assets, or any corporation resulting from any merger, conversion or
consolidation to which the Company shall be a party, or any Person succeeding
to the business of the Company shall be the successor of the Company hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that (u) MBIA shall have given its prior written consent,
(v) immediately after giving effect to such transaction, the substance of each
representation or warranty made pursuant to Section 3.01(c) shall be accurate,
(w) such successor executes an agreement or assumption, in form reasonably
satisfactory to the Trustee and MBIA, to perform every obligation under this
Lease Acquisition Agreement, (x) such successor has a net worth that is
sufficient to perform in accordance with the Transaction Documents and that is
at least equal to the greater of the Net Worth Requirement or the net worth of
the Company immediately prior to such sale, merger or consolidation, (y) the
Company shall have delivered to the Transferor an Officer's Certificate and an
Opinion of Counsel each stating that such consolidation, merger, or succession
and such agreement of assumption complies with this Section 4.01 and that all
conditions precedent, if any, provided for in this Lease Acquisition Agreement
relating to such transaction have been complied with, and (z) the Company shall
have delivered to the Transferor and MBIA and the Trustee an Opinion of Counsel
either (1) stating that, in the opinion of such counsel, all financing
statements, continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interest of the
Transferor in the Lease Contracts and reciting the details of such filings, or
(2) stating that, in the opinion of such Counsel, no such action shall be
necessary to preserve and protect such interest.
(b) Neither the Company nor any of the directors, officers,
employees or agents of the Company shall be under any liability to the
Transferor, the Trustee or the Certificateholders for any action taken or for
refraining from the taking of any action in good faith pursuant to this Lease
Acquisition Agreement, or for errors in judgment not involving recklessness or
gross negligence; provided, however, that this provision shall not protect the
Company against any breach of warranties or representations made herein, or
failure to perform its obligations in strict compliance with this Lease
Acquisition Agreement, or any liability which would otherwise be imposed by
reason of any breach of the terms and conditions of this Lease Acquisition
Agreement. The Company, and any director, officer, employee or agent of the
Company, may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Company shall not be under any obligation to appear in,
prosecute, or defend any legal action that is not incidental to its obligations
as the contributor of the Lease Assets under this Lease Acquisition Agreement
and that in its opinion may involve it in any expense or liability.
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(c) The Company, from time to time, at its own expense, shall
execute and file such additional financing statements (including continuation
statements) as may be necessary to preserve the Liens described in Section
3.01(a)(viii) hereof as may be reasonably requested by the Transferor, MBIA or
the Trustee and are reasonably satisfactory in form and substance to the
Trustee and MBIA.
(d) The Company will not change its name, identity or corporate
structure in any manner that would, could, or might make any financing
statement or continuation statement misleading within the meaning of section
9-402 (7) of the UCC, unless it shall have given the Transferor and the Trustee
at least 30 days prior written notice thereof and shall have provided evidence
of appropriate UCC filings.
(e) The Company will give the Transferor, MBIA and the Trustee at
least 30 days prior written notice of any relocation of its principal executive
office if, as a result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and the Company shall
provide evidence of appropriate UCC filings
(f) The Company will duly fulfill all obligations on its part to
be fulfilled under or in connection with each Lease Contract, will not change
or modify the terms of the Lease Contracts except as expressly permitted by the
terms of the Transaction Documents and will do nothing to impair the rights of
the Transferor, MBIA or the Trustee in the Lease Assets. In the event that the
rights of the Company under any Lease Contract, any guaranty of the related
Customer's obligations under any Lease Contract, or any Insurance Policy are
not assignable or have not, in fact, been assigned to the Transferor or to the
Trustee, the Company will enforce such rights on behalf of the Transferor and
the Trustee.
(g) The Company will comply, in all material respects, with all
acts, rules, regulations, orders, decrees and directions of any governmental
authority applicable to the Lease Assets or any part thereof; provided,
however, that the Company may contest any act, regulation, order, decree or
direction in any reasonable manner which shall not materially and adversely
affect the rights of the Transferor, MBIA or the Trustee in the Lease Assets.
(h) The Company will advise the Transferor, MBIA and the Trustee
promptly, in reasonable detail, of the occurrence of any breach by the Company
following discovery by the Company of such breach of any of its
representations, warranties and covenants contained herein.
(i) The Company will execute or endorse, acknowledge, and deliver
to the Transferor and the Trustee from time to time such schedules,
confirmatory assignments, conveyances, powers of attorney, and other
reassurances or instruments and take such further similar actions relating to
the Lease Contracts, the related Lease Receivables, Equipment and the rights
covered by the Transaction Documents, as the Transferor or the Trustee may
reasonably request to preserve and maintain title to the Lease Assets and the
rights of the Trustee, MBIA and the Certificateholders therein against the
claims of all persons and parties.
(j) The Company agrees to indemnify, defend and hold the
Transferor, the Trustee, MBIA and the Certificateholders harmless from and
against any and all loss, liability, damage, judgment, claim, deficiency or
expense (including interest, penalties, reasonable attorney's fees and amounts
paid in settlement) that is caused by (i) a breach at any time by the Company
of its representations, warranties and covenants contained in Section 3.01
hereof or this Section 4.01 or (ii) any material information furnished by the
Company which is set forth in any schedule delivered hereunder, being untrue in
any
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respect when any such representation was made or schedule delivered, provided
that the Company shall not have any liability with respect to a representation
or warranty as to any specific Lease Contract, Lease Receivable or Equipment
other than to purchase such Lease Contract or substitute for such Lease
Contract in accordance with Section 3.03 hereof unless such breach of
representation or warranty is the result of the Company's fraud, gross
negligence, bad faith or willful misconduct. The Company shall also indemnify
the Trustee, the Servicer, MBIA and the Certificateholders for any cost or
expense incurred by them in the enforcement of this Lease Acquisition Agreement
or as a result of the Company's failure to perform its obligations hereunder.
The obligations of the Company under this Section 4.01(j) shall be considered
to have been relied upon by the Transferor, the Trustee and MBIA and shall
survive the execution, delivery and performance of this Lease Acquisition
Agreement, regardless of any investigation made by or on behalf of the
Transferor, until termination of the Trust and Security Agreement. If the
Company has made any indemnity payments pursuant to this Section 4.01(j) and
thereafter any Person recovers the amount of the related loss or any portion
thereof from others, such Person will promptly repay the amount recovered to
the Company, without interest. The Company shall also indemnify and hold
harmless the Trustee, the Servicer, MBIA and the Certificateholders from and
against any and all loss, liability, damage, judgment, claim, deficiency or
expense (including interest, penalties, reasonable attorney's fees and amounts
paid in settlement) attributable to any claim made against any of them on
account of personal injury or property damage resulting from the operation of
the Equipment.
(k) The Company will do nothing to disturb or impair the
acquisition hereunder by the Transferor of the Lease Assets.
(l) The Company (i) will (A) maintain its books and records
separate from the books and records of the Transferor and (B) maintain bank
accounts separate from those of the Transferor and the Company's shareholders,
(C) prepare (and issue to its creditors) only financial statements which are
separate from those of its shareholders, (D) maintain two Independent directors
on the Transferor's board of directors, so long as the Company is a shareholder
of the Transferor, (E) maintain an arm's length relationship with the
Transferor, (F) conduct its business solely in its own name so as not to
mislead others as to the identity of the company with which those others are
concerned, (G) disclose the effects of these transactions on its annual
financial statements in accordance with generally accepted accounting
principles and will also disclose on such financial statements that the Trust
Estate and the assets of the Transferor are not available to pay creditors of
the Company, and (ii) will not (V) hold itself out or permit itself to be held
out as having agreed to pay or as being liable for the debts of the Transferor,
(W) commingle its assets or funds with those of the Transferor, (X) take any
action that would cause the dissolution or liquidation of the Transferor, (Y)
guarantee (directly or indirectly), endorse or otherwise become contingently
liable (directly or indirectly) for the obligations of the Transferor, or (Z)
institute against the Transferor, or join any other person in instituting
against the Transferor, any case, proceeding or other action under any existing
or future bankruptcy, insolvency or similar laws. This subsection (l) shall
survive termination of this Lease Acquisition Agreement.
(m) The Company shall notify the Transferor, the Trustee and MBIA
promptly after becoming aware of any Lien on any Lease Asset.
(n) On each date as of which the Company substitutes a Substitute
Lease Contract or assigns Funded Lease Contracts to the Transferor in
accordance with Sections 2.06 or 3.04(b) hereof, or otherwise assigns Lease
Contracts to the Transferor, the Company shall provide to the Transferor a
Company Certificate substantially in the form of Exhibit A hereto subjecting
such Lease Contract to the provisions hereof and providing with respect to such
Lease Contracts the information required in the Amended Lease Schedule.
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(o) For financial accounting purposes (and notwithstanding the tax
treatment of the transactions contemplated by the Transaction Documents), the
annual financial statements of the Company will disclose the effects of the
transactions contemplated by the Transaction Documents as a sale by the Company
to the Transferor and a sale by the Transferor to the Trustee in accordance
with generally accepted accounting principles. The financial statements of the
Company and the Transferor will also disclose that the Trust Estate and the
assets of the Transferor are not available to pay creditors of the Company.
The resolutions, agreements and other instruments underlying the Transaction
Documents will be continuously maintained by the Company as official records.
(p) The Company shall comply with Section 2.11 of the Trust and
Security Agreement concerning the treatment of this transaction for Federal,
State and local income tax purposes.
(q) The Company as Servicer will, at its own cost and expense, (i)
retain the Electronic Ledger as a master record of the Lease Contracts and
Equipment and copies of all documents relating to each Lease Contract (other
than the original executed Lease Contracts) as custodian for the Transferor,
the Trust and other Persons, if any, with interests in the Lease Contracts and
Equipment and (ii) xxxx the Electronic Ledgers to the effect that the Lease
Contracts and Equipment have been acquired by the Transferor and that they have
been transferred and assigned to the Trustee pursuant to the Trust and Security
Agreement.
(r) In the event that the Company elects to transfer the Common
Stock to an Affiliate or pledge a security interest in the Common Stock, the
Company agrees that each of the following conditions shall be satisfied: (i)
such transfer or pledge shall be made in connection with a financing by such
Affiliate or the Company, as applicable, secured by the Common Stock, (ii) if
transferred, the Common Stock shall be held by one entity and if that entity is
an Affiliate, such entity shall be organized as a bankruptcy remote special
purpose entity, (iii) the Company shall, on behalf of the Transferor, obtain an
agreement from the transferee or the secured party substantially to the effect
that (x) it will take no action that would cause the Transferor to breach any
of its covenants under any Transaction Document, (y) that for a period of one
year and one day after the termination of the Trust and Security Agreement, it
will not file any involuntary petition or otherwise institute any bankruptcy,
reorganization, insolvency or liquidation proceeding or other proceeding under
any federal or state bankruptcy or similar law against the Transferor and (z)
the transferee agrees to pay any tax or ERISA liabilities imposed upon the
Transferor or the Trust Estate to the extent attributable to the Transferor or
the Trust Estate becoming a member of the consolidated tax group of such
transferee, and (iv) the Company shall provide such bankruptcy and tax opinions
as MBIA, the Transferor, or the Certificateholders may reasonably request.
SECTION 4.02 TRANSFEROR COVENANTS. The Transferor hereby
covenants and agrees with the Company as follows:
(a) The Transferor hereby acknowledges and agrees that its rights
in the Equipment are expressly subject to the rights of the related Customers
in such Equipment pursuant to the applicable Lease Contract. The Transferor
covenants and agrees that, so long as a Customer shall not be in default of any
of the provisions of the applicable Lease Contract, neither the Transferor nor
any assignee of the Transferor will disturb the Customer's quiet and peaceful
possession of the related Equipment and the Customer's unrestricted use thereof
for its intended purpose.
(b) If in any enforcement suit or legal proceeding it is held that
the Company may not enforce a Lease Contract on the ground that it is not a
real party in interest or holder entitled to enforce the Lease Contract, the
Transferor shall, at the Transferor's expense, take such steps as the
Transferor
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deems necessary to enforce the Contract, including bringing suit in the
Transferor's name or causing the Trustee to bring suit in the Trustee's name.
(c) The Transferor warrants that, until the transfer of the
Equipment to the Trustee, it will own and possess the Equipment subsequent to
its acquisition thereof and that it will warrant and defend its title to such
Equipment against all Persons, claims and demands whatsoever. The Transferor
shall not assign, sell, pledge, or exchange, or in any way encumber or
otherwise dispose of the Equipment, except as permitted under the Trust and
Security Agreement.
(d) The Transferor shall comply with Section 2.11 of the Trust and
Security Agreement concerning the treatment of this transaction for Federal,
State and local income tax purposes.
SECTION 4.03 ASSIGNMENT OF LEASE ASSETS. The Company understands
that the Transferor will convey to the Trustee all of its right, title and
interest in and to this Lease Acquisition Agreement and the Lease Assets. The
Company consents to such conveyance and further agrees that all
representations, warranties, covenants and agreements the Company made herein
shall also be for the benefit of and inure to the Trustee, MBIA and all
Certificateholders from time to time.
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ARTICLE 5
CONDITIONS PRECEDENT
SECTION 5.01 CONDITIONS TO THE TRANSFEROR'S OBLIGATIONS. The
obligations of the Transferor to provide the Company with the consideration
provided for in this Lease Acquisition Agreement shall be subject to the
satisfaction of the following conditions:
(a) All representations and warranties of the Company contained in
Section 3.01(a) and (b) of this Lease Acquisition Agreement and all information
provided in the Initial Series Lease Schedule or Amended Lease Schedule, as
applicable, shall be true and correct on the Initial Delivery Date with respect
to Lease Contracts listed on the Initial Series Lease Schedule or the
Acquisition Date with respect to Additional Lease Contracts, all
representations and warranties in Sections 3.01(c) hereof, shall be true and
correct as of the Initial Delivery Date with respect to Lease Contracts listed
on the Initial Series Lease Schedule or the Acquisition Date with respect to
Additional Lease Contracts, and, in connection with the Initial Delivery Date,
the Company shall have delivered to the Transferor, the Trustee, MBIA and each
original purchaser of the 1997 Certificates an Officer's Certificate to such
effect;
(b) The Company shall have delivered all other information
theretofore required or reasonably requested by the Transferor to be delivered
by the Company hereunder, duly certified by an officer of the Company, and the
Company shall have substantially performed all other obligations required to be
performed by the provisions of this Lease Acquisition Agreement;
(c) On or prior to the Initial Delivery Date with respect to Lease
Contracts listed on the Initial Series Lease Schedule or the Acquisition Date
with respect to Additional Lease Contracts, the Company shall have delivered
the Lease Contracts and the other items in the Lease Contract Files to the
Trustee and there shall have been made all filings, recordings and/or
registrations, and there shall have been given, or taken, any notice or any
other similar action, as may be necessary in the opinion of the Transferor, in
order to establish and preserve the right, title and interest of the Transferor
in the Lease Assets;
(d) On or before the Initial Delivery Date, the Transferor, the
Servicer, the Back-Up Servicer and the Trustee shall have entered into the
Servicing Agreement;
(e) All of the 1997 Class A Certificates shall be issued and sold
on the Initial Delivery Date and the Transferor shall receive the full
consideration due it upon the issuance of such 1997 Class A Certificates and
the Existing Indebtedness shall have been satisfied.
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ARTICLE 6
TERM AND TERMINATION
SECTION 6.01 TERM. This Lease Acquisition Agreement shall
commence as of the date of execution and delivery hereof and shall continue in
full force and effect until the later of (i) payment with respect to the last
Lease Asset or (ii) termination of the Trust and Security Agreement.
SECTION 6.02 DEFAULT BY THE COMPANY. If the Company breaches its
representations and warranties set forth in Section 3.01 of this Lease
Acquisition Agreement or its covenants set forth in Section 4.01 of this Lease
Acquisition Agreement and such default shall not have been cured for a period
of 30 days (or such other cure period as may be specified in Section 3.03), or
if the Company shall become insolvent or make an assignment for the benefit of
its creditors or have a receiver appointed for all or substantially all of its
properties, or if any proceedings are commenced, or consented to, by the
Company are not stayed or dismissed within 60 days after being commenced
against the Company under any bankruptcy, insolvency or other law for the
relief of debtors, the Transferor shall have the right, with the prior written
consent of the Trustee and MBIA, in addition to any other rights it may have
under any applicable law, to terminate its obligations under this Lease
Acquisition Agreement upon prior written notice to the Company; provided that
any termination of this Lease Acquisition Agreement shall not release the
Company from any obligation under this Lease Acquisition Agreement.
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ARTICLE 7
MISCELLANEOUS
SECTION 7.01 AMENDMENTS. This Lease Acquisition Agreement and the
rights and obligations of the parties hereunder may not be changed orally but
only by an instrument in writing signed by the party against which enforcement
is sought together with the prior written consent of the Trustee and MBIA but
without the consent of any Certificateholder. Promptly after the execution of
any amendment, the Transferor shall send to the Trustee, MBIA, each
Certificateholder, and each Rating Agency, a conformed copy of each such
amendment.
SECTION 7.02 GOVERNING LAW. THIS LEASE ACQUISITION AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES.
SECTION 7.03 NOTICES. All demands, notices and communications
hereunder and under the Trust and Security Agreement shall be in writing and
shall be delivered or mailed by registered or certified United States mail,
postage prepaid, and addressed, in the case of the Company, to 00000 Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxx X-0 , Xxxxxx, XX 00000, Attention: President, and in
the case of the Transferor, to 00000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx X-0, Xxxxxx,
XX 00000, Attention: President, and in the case of MBIA to 000 Xxxx Xxxxxx,
Xxxxxx, Xxx Xxxx 00000, Attention: Structured Finance - Insured Portfolio
Management (SF-IPM). All notices and demands shall be deemed to have been
given either at the time of the delivery thereof to any officer of the Person
entitled to receive such notices and demands at the address of such Person for
notices hereunder, or on the third day after the mailing thereof to such
address, as the case may be. Any Person may change the address for notices
hereunder by giving notice of such change to the other Person.
SECTION 7.04 SEPARABILITY CLAUSE. Any provisions of this Lease
Acquisition Agreement which are prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 7.05 ASSIGNMENT. Except as provided in Section 4.01(a)
hereof, this Lease Acquisition Agreement may not be assigned or delegated by
the Company without the prior written consent of the Transferor, MBIA and the
Trustee and, except as provided in Section 4.03 hereof, may not be assigned or
delegated by the Transferor without the prior written consent of the Company,
MBIA and Trustee.
SECTION 7.06 FURTHER ASSURANCES. Each of the Company and the
Transferor agrees to do such further acts and things and to execute and deliver
to the Trustee and MBIA such additional assignments, agreements, powers and
instruments as are required by the Trustee to carry into effect the purposes of
this Lease Acquisition Agreement or to better assure and confirm unto the
Trustee, MBIA and the Certificateholders their rights, powers or remedies
hereunder. If any Customer shall be in default under any Lease Contract, upon
reasonable request from the Servicer, the Company will take all reasonable
steps to assist in enforcing such Lease Contract and preserving and maintaining
title to the Lease Assets and the rights of the Trustee, MBIA and the
Certificateholders therein against the claims of all persons and parties to the
extent the Company is capable of performing such requested steps and the
Servicer reasonably determines that the assistance of the Company is necessary
to effect the intent and purposes hereof.
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SECTION 7.07 NO WAIVERS; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of the Transferor or the
Company, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise of any right, remedy,
or privilege hereunder preclude any other or further exercise hereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privilege provided by law.
SECTION 7.08 BINDING EFFECT; THIRD PARTY BENEFICIARIES. This
Lease Acquisition Agreement will inure to the benefit of and be binding upon
the parties hereto, and shall inure to the benefit of the Trustee, MBIA, the
Certificateholders, and their respective successors and permitted assigns.
SECTION 7.09 SET-OFF.
(a) The Company hereby irrevocably and unconditionally waives all
right of set-off that it may have under contract (including this Lease
Acquisition Agreement), applicable law or otherwise with respect to any funds
or monies of the Transferor or the Trust Estate at any time held by or in the
possession of the Company.
(b) The Transferor shall have the right to set-off against the
Company any amounts to which the Company may be entitled and to apply such
amounts to any claims the Transferor may have against the Company from time to
time under this Lease Acquisition Agreement. Upon any such set-off the
Transferor shall give notice of the amount thereof and the reasons therefor.
SECTION 7.10 MBIA DEFAULT OR TERMINATION. If an MBIA Default or
Termination occurs and is continuing, MBIA's right to consent hereunder and to
direct the Trustee shall be void and, in such event, in all provisions of this
Agreement wherein MBIA's consent or direction is required or permitted, the
consent or direction of the Controlling Certificateholders shall be required or
permitted unless a larger number of Certificateholders is required under the
relevant provisions of this Agreement.
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IN WITNESS WHEREOF, the Company and the Transferor have caused this
Lease Acquisition Agreement to be duly executed by their respective officers
thereunto duly authorized as of the date and year first above written.
GRANITE FINANCIAL, INC., Company
By:
-----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
GF FUNDING CORP. IV,
Transferor
By:
-----------------------------
Name: Xxxxxxx X. Xxxxxx
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