--------------------------------------------------------------------------------
TRANSFER AND SERVICING AGREEMENT
AMONG
CAPITA EQUIPMENT RECEIVABLES TRUST 1997-1
ISSUER
ANTIGUA FUNDING CORPORATION
DEPOSITOR
AT&T CAPITAL CORPORATION
IN ITS INDIVIDUAL CAPACITY AND AS SERVICER
BANKERS TRUST COMPANY
INDENTURE TRUSTEE
-------------------
DATED AS OF NOVEMBER 1, 1997
-------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
INTRODUCTION .......................................................................... 1
ARTICLE I DEFINITIONS ...................................................................... 1
SECTION 1.1. Definitions ...................................................... 1
SECTION 1.2. Usage of Terms ................................................... 10
SECTION 1.3. Calculations ..................................................... 10
SECTION 1.4. Section References ............................................... 10
SECTION 1.5. No Recourse ...................................................... 10
ARTICLE II CONVEYANCE OF CONTRACTS ......................................................... 12
SECTION 2.1. Conveyance of Contracts and Related Assets ....................... 12
SECTION 2.2. Custody of Contract Files ........................................ 13
SECTION 2.3. Further Assurances ............................................... 15
SECTION 2.4. Representations and Warranties of Depositor ...................... 15
SECTION 2.5. Nonpetition Covenant ............................................. 18
SECTION 2.6. Purchase of Contracts Upon Breach of Representations and
Warranties ....................................................... 18
ARTICLE III ADMINISTRATION AND SERVICING OF CONTRACTS ....................................... 20
SECTION 3.1. Duties of the Servicer ........................................... 20
SECTION 3.2. Collection of Contract Payments; Modifications
of Contracts ..................................................... 21
SECTION 3.3. Realization Upon Contracts ....................................... 23
SECTION 3.4. Insurance, Maintenance and Taxes ................................. 24
SECTION 3.5. Maintenance of Security Interests in Equipment ................... 27
SECTION 3.6. Covenants, Representations, and Warranties of Servicer ........... 27
SECTION 3.7. Sub-Servicers .................................................... 29
SECTION 3.8. Total Servicing Fee; Payment of Expenses by Servicer ............. 30
SECTION 3.9. Servicer's Certificate ........................................... 30
SECTION 3.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event ................................................ 31
SECTION 3.12. Access to Certain Documentation and Information
Regarding Contracts .............................................. 32
SECTION 3.13. Certain Duties of the Servicer under the Trust Agreement ......... 32
SECTION 3.14. Duties of the Servicer under the Indenture ....................... 33
SECTION 3.15. Errors and Omissions Policy or Bond .............................. 34
SECTION 3.16. Duties of the Servicer under the Class A-5
Swap Agreement ................................................... 34
ARTICLE IV COLLECTIONS AND DEPOSITS ........................................................ 35
SECTION 4.1. Initial Deposit .................................................. 35
SECTION 4.2. Collections ...................................................... 35
SECTION 4.3. Application of Collections ....................................... 36
Page
SECTION 4.4. Net Deposits ..................................................... 37
SECTION 4.5. Expiration of Lease Contracts .................................... 37
ARTICLE V TERMINATION ..................................................................... 38
SECTION 5.1. Optional Purchase of All Contracts; Liquidation of Trust Assets .. 38
ARTICLE VI THE DEPOSITOR 39
SECTION 6.1. Liability of Depositor ........................................... 39
SECTION 6.2. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor; Amendment of Certificate of
Incorporation .................................................... 39
SECTION 6.3. Limitation on Liability of Depositor and Others .................. 40
SECTION 6.4. Depositor May Own Notes .......................................... 40
ARTICLE VII THE SERVICER.................................................................. 41
SECTION 7.1. Liability of Servicer; Indemnities ............................... 41
SECTION 7.2. Merger or Consolidation of, or Assumption of the Obligations of,
the Servicer ..................................................... 42
SECTION 7.3. Limitation on Liability of Servicer and Others ................... 43
SECTION 7.4. Servicer Not to Resign ........................................... 43
SECTION 7.5. Corporate Existence .............................................. 44
ARTICLE VIII SERVICER TERMINATION EVENTS .................................................. 45
SECTION 8.1. Servicer Termination Event ....................................... 45
SECTION 8.2. Consequences of a Servicer Termination Event ..................... 46
SECTION 8.3. Indenture Trustee to Act; Appointment of Successor ............... 47
SECTION 8.4. Notification to Equity Certificateholder and Noteholders ......... 48
SECTION 8.5. Waiver of Past Defaults .......................................... 48
ARTICLE IX MISCELLANEOUS PROVISIONS ........................................................ 49
SECTION 9.1. Amendment ........................................................ 49
SECTION 9.2. Protection of Title to Trust Assets .............................. 50
SECTION 9.3. Governing Law .................................................... 52
SECTION 9.4. Severability of Provisions ....................................... 52
SECTION 9.5. Assignment ....................................................... 52
SECTION 9.6. Third-Party Beneficiaries ........................................ 52
SECTION 9.7. Counterparts ..................................................... 53
SECTION 9.8. Intention of Parties ............................................. 53
SECTION 9.9. Notices .......................................................... 53
SECTION 9.10. Income Tax Characterization ...................................... 53
SECTION 9.11. Limitation of Liability .......................................... 53
-ii-
EXHIBITS
Exhibit A-1 -- Schedule of Lease Contracts and Leased Equipment
Exhibit A-2 -- Schedule of Loan Contracts
Exhibit B -- Form of Servicer's Certificate
-iii-
THIS TRANSFER AND SERVICING AGREEMENT, dated as of November
1, 1997, is made among CAPITA EQUIPMENT RECEIVABLES TRUST 1997-1 (the "Issuer"),
ANTIGUA FUNDING CORPORATION, a Delaware corporation, as Depositor (the
"Depositor"), AT&T CAPITAL CORPORATION, a Delawareucorporation, in its
individual capacity and as Servicer (in its individual capacity, "TCC"; in its
capacity as Servicer, the "Servicer"), and BANKERS TRUST COMPANY, a New York
banking corporation, not in its individual capacity but solely as trustee under
the Indenture hereinafter referred to (the "Indenture Trustee").
In consideration of the mutual agreements herein contained,
and of other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. All terms defined in the
Indenture or the Trust Agreement (each as defined below) shall have the same
meaning in this Agreement. Whenever capitalized and used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
Accountants' Report: The report of a firm of nationally
recognized independent accountants described in Section 3.11.
Accounting Date: With respect to a Payment Date, the last
day of the preceding calendar month.
Administrative Fee: With respect to any Collection Period,
all administrative fees, expenses and charges collected in respect of the
Contracts during such Collection Period, including late fees, late payment
interest, documentation fees, insurance administration charges and that portion
of any Extension Fees allocated to the Servicer.
Affiliate: With respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
-1-
Agreement or "this Agreement": This Transfer and Servicing
Agreement, all amendments and supplements thereto and all exhibits and schedules
to any of the foregoing.
Book Value: With respect to any Leased Equipment, the
value of such Leased Equipment as shown on the accounting books and records of
TCC or the applicable Originator, as appropriate, as of the Cut-Off Date. The
Book Value for each item of Leased Equipment shall be set forth on Exhibit A-1
hereto.
Business Day: Any day (other than a Saturday, Sunday or
legal holiday) on which commercial banking institutions in New York, New York,
or any other location of any successor Servicer or successor Indenture Trustee,
are open for regular business.
Collection Account: The account designated as such in, and
established and maintained pursuant to, Section 8.02 of the Indenture.
Collection Period: With respect to a Payment Date, the
calendar month preceding the month in which such Payment Date occurs (such
calendar month being referred to as the "related" Collection Period with respect
to such Payment Date). With respect to an Accounting Date, the Collection Period
in which such Accounting Date occurs is referred to herein as the "related"
Collection Period with respect to such Accounting Date.
Collection Records: All manually prepared or computer
generated records relating to collection efforts or payment histories with
respect to the Contracts.
Contract File: The documents, electronic entries,
instruments and writings listed in Section 2.2 pertaining to a particular
Contract.
Contract Pool Principal Balance: With respect to any
Payment Date, the sum of the Contract Principal Balances (computed as of the
related Accounting Date) for all Contracts.
Contract Principal Balance: As of any Accounting Date,
with respect to any Contract:
(i) if such Contract does not by its terms permit prepayment or
early termination, the present value of the unpaid Scheduled Payments due
on such Lease Contract after such Accounting Date (excluding all
Scheduled Payments due on or prior to, but not received as of, such
Accounting Date, as well as any Scheduled Payments due after, but
received as of, such Accounting Date), after giving effect to any
Prepayments received on or prior to such Accounting Date, discounted
monthly at the rate of 8.00% per annum
-2-
(assuming, for purposes of such calculation, that each Scheduled Payment
is due on the last day of the applicable Collection Period),
(ii) if such Contract permits prepayment or early termination only
upon payment of an amount that is at least equal to the present value
(calculated in the manner described in clause (i) above) of the unpaid
Scheduled Payments due on such Contract after the date of such prepayment
or early termination, the amount specified in clause (i) above, and
(iii) if such Contract permits prepayment or early termination
without payment of an amount at least equal to the amount specified in
clause (ii) above, the lesser of (a) the unpaid principal balance of such
Loan Contract as of such Accounting Date (after giving effect to any
Scheduled Payments due on or prior to such Accounting Date, whether or
not received, as well as any Prepayments, and any Scheduled Payments due
after such Accounting Date, received as of such Accounting Date), and
(b) the present value of the unpaid Scheduled Payments due on such Loan
Contract after such Accounting Date (excluding all Scheduled Payments due
on or prior to, but not received as of, such Accounting Date, as well as
any Scheduled Payments due after, but received as of, such Accounting
Date), after giving effect to any Prepayments received on or prior to
such Accounting Date, discounted monthly at the rate of 8.00% per annum
(assuming, for purposes of such calculation, that each Scheduled Payment
is due on the last day of the applicable Collection Period);
provided that, for purposes of computing the Monthly Principal Amount or the
Requisite Cash Collateral Amount for a given Payment Date (as well as all
Payment Dates thereafter), the Contract Principal Balance of any Contract which
became a Liquidated Contract during the related Collection Period or was
required to be purchased by TCC as of the last day of the related Collection
Period in accordance with Section 2.6, will be deemed to be zero on and after
the last day of such Collection Period.
Contract Representations and Warranties: As defined in
Section 2.6.
Contracts: The Lease Contracts and the Loan Contracts.
Corporate Trust Office: With respect to the Owner Trustee,
the principal office of the Owner Trustee at which at any particular time its
corporate trust business shall be administered, which office on the date of
execution and delivery of this Agreement is located at 000 Xxxxxxx Xxxxxx, Xxxxx
12 East, New York, New York 10286, Attention: Corporate Trust
Administration--Asset Backed Unit; the telecopy number for the Corporate Trust
Office of the Owner Trustee on the date of execution and delivery of this
Agreement is (000) 000-0000; with respect to the Indenture Trustee, the
principal office of the Indenture Trustee at which at any particular time its
corporate trust business shall be administered, which office is
-3-
located at Four Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attn.:
Corporate Trust and Agency Group -- Structured Finance; the telecopy number for
the Corporate Trust Office of the Indenture Trustee on the date of execution and
delivery of this Agreement is (000) 000-0000.
Cut-Off Date: November 1, 1997.
Deposit Date: With respect to any Collection Period, the
Business Day immediately preceding the related Determination Date.
Depositor: Antigua Funding Corporation, a Delaware
corporation, or its successor in interest pursuant to Section 6.2.
Determination Date: With respect to any Collection Period,
the fifth Business Day immediately preceding the related Payment Date.
Eligible Servicer: TCC, the Indenture Trustee or another
Person whichuat the time of its appointment as Servicer (i) is servicing a
portfolio of equipment lease contracts, installment sale contracts, promissory
notes, loan and security agreements and/or other similar types of receivables
comparable to the Contracts, (ii) is legally qualified and has the capacity to
service the Contracts, (iii) has demonstrated the ability professionally and
competently to service a portfolio of equipment lease contracts, installment
sale contracts, promissory notes, loan and security agreements and other similar
types of receivables comparable to the Contracts with reasonable skill and care,
and (iv) has available software which is adequate to perform its duties and
responsibilities under this Agreement.
Equipment: With respect to any Contract, the property which
is leased or purchased pursuant to such Contract, or which otherwise provides
security for the payment of amounts payable thereunder.
Extension Fees: With respect to any Contract, any fee
received by the Servicer in consideration for the granting of an extension on
the payment of any Scheduled Payment due under such Contract. Any Extension Fees
received shall be allocated as follows: (1) 50% thereof shall be allocated to
the Issuer and shall constitute Pledged Revenues; and (2) 50% thereof shall be
allocated to the Servicer and shall constitute an Administrative Fee.
Indenture: The Indenture, dated as of November 1, 1997,
between the Issuer and the Indenture Trustee, as the same may be amended and
supplemented from time to time.
Indenture Trustee: The Person acting as Trustee under the
Indenture, its successors in interest and any successor Trustee under the
Indenture.
Independent Accountants: As defined in Section 3.11(a).
-4-
Initial Contract Pool Principal Balance: $1,146,940,285.
Insurance, Maintenance and Tax Accounts: The accounts which
are established and maintained pursuant to Section 3.4(a).
Insurance Policy: With respect to a Contract, any insurance
policy benefiting the lessor or secured party under the Contract providing loss
or physical damage, theft or similar coverage with respect to the Equipment.
Issuer: Capita Equipment Receivables Trust 1997-1.
Lease Contracts: The lease contracts listed on Exhibit A-1
hereto (excluding any such lease contract which has become a Purchased Contract)
and all rights and obligations under such contracts, including, without
limitation, all monies at any time paid or payable thereon or in respect thereof
from and after the Cut-Off Date (whether in the form of (i) Scheduled Payments
(including those Scheduled Payments due prior to, but not received as of, the
Cut-Off Date, but excluding those Scheduled Payments due on or after, but
received prior to, the Cut-Off Date), (ii) Prepayments, (iii) Liquidation
Proceeds, (iv) Extension Fees, (v) payments to be applied by the Servicer to the
payment of insurance charges, maintenance, taxes or other similar obligations,
(vi) payments to be retained by the Servicer in payment of Administrative Fees,
or otherwise), and all rights of the lessor in the related Equipment (other than
any ownership interest of the lessor in such Equipment), Insurance Policies and
any other security for the payment of amounts due under such contracts.
Leased Equipment: With respect to any Lease Contract, the
Equipment subject to such Lease Contract, as more particularly described on
Exhibit A-1 hereto.
Lien: Any security interest, lien, charge, pledge,
preference, equity or encumbrance of any kind, including tax liens, mechanics'
liens and any liens that attach by operation of law.
Liquidated Contract: With respect to any Collection Period,
(i) a Contract which, during such Collection Period, was charged off as
uncollectible by the Servicer in accordance with its credit and collection
policies and procedures (which shall be no later than the date as of which the
Servicer has repossessed and disposed of the related Equipment and otherwise
collected all proceeds (including any proceeds of insurance to be applied as
described in Section 3.4(c)(ii)) which, in the Servicer's reasonable judgment,
can be collected under such Contract) following a default thereunder or upon
damage to or destruction of such Equipment (if such Equipment is not to be
replaced or repaired in accordance with Section 3.4(c)(i)), or (ii) a Contract
as to which, during such Collection Period,u10% or more of a Scheduled Payment
shall have become 180 days delinquent.
-5-
Liquidation Proceeds: All amounts received by the Servicer
(i) in connection with the liquidation of any Contract and disposition of the
related Equipment or (ii) as insurance proceeds with respect to any damaged or
destroyed Equipment to be applied as described in Section 3.4(c)(ii), in each
case net of (a) reasonable out-of-pocket expenses incurred by or on behalf of
the Servicer in connection with the collection of such Contract and the
maintenance, repossession, repair, storage and disposition of the related
Equipment (including taxes and insurance charges, to the extent in excess of
amounts available therefor and relating to such Contract in the Insurance,
Maintenance and Tax Accounts, as well as attorneys' fees) and (b) amounts that
are required to be refunded to the Obligor on such Contract; provided, however,
that the Liquidation Proceeds with respect to any Contract and disposition of
the related Equipment shall in no event be less than zero. Liquidation Proceeds
shall be allocated as follows: (1) in the case of any Loan Contract, all
Liquidation Proceeds shall be allocated to the Issuer; and (2) in the case of
any Lease Contract, Liquidation Proceeds shall be allocated pro rata between the
Issuer, on the one hand, and the Depositor, on the other, based upon the
Required Payoff Amount for such Lease Contract (determined as of the Collection
Period during which such Lease Contract became a Liquidated Contract) and the
Book Value of the related Leased Equipment, respectively; provided that, in the
event the Liquidation Proceeds exceed the sum of the Required Payoff Amount for
a given Lease Contract plus the Book Value of the related Leased Equipment, any
such excess shall be allocated solely to the Depositor.
Loan Contracts: The installment sale contracts, promissory
notes, loan and security agreements and other similar types of receivables
listed on Exhibit A-2 hereto (excluding any such contract, note, agreement or
receivable which has become a Purchased Contract) and all rights and obligations
under such contracts, including, without limitation, all monies at any time paid
or payable thereon or in respect thereof from and after the Cut-Off Date
(whether in the form of (i) Scheduled Payments (including those Scheduled
Payments due prior to, but not received as of, the Cut-Off Date, but excluding
those Scheduled Payments due on or after, but received prior to, the Cut-Off
Date), (ii) Prepayments, (iii) Liquidation Proceeds, (iv) Extension Fees,
(v) payments to be applied by the Servicer to the payment of insurance charges,
maintenance, taxes or other similar obligations, (vi) payments to be retained by
the Servicer in payment of Administrative Fees, or otherwise), and all rights of
the secured party in the related Equipment, Insurance Policies and any other
security for the payment of amounts due under such contracts.
Monthly Records: All records and data maintained by the
Servicer with respect to the Contracts in accordance with its customary
standards, policies and procedures.
Note Distribution Account: The account designated as such
in, and established and maintained pursuant to, Section 8.04 of the Indenture.
-6-
Note Majority: Holders of Notes representing a majority of
the Principal Balance of each Class of the Notes then Outstanding.
Obligor: The lessee, borrower, purchaser or any other
Person or Persons who are obligated to make payments under a Contract.
Opinion of Counsel: A written opinion of counsel acceptable
in form and substance and from counsel acceptable to the Owner Trustee and, if
such opinion or a copy thereof is required to be delivered to the Indenture
Trustee, to the Indenture Trustee.
Original Term: With respect to any Contract, the term of
such Contract as of the Cut-Off Date (which shall include any renewals or
extensions of the original term thereof prior to the Cut-Off Date), as such term
may be extended in accordance with Section 3.2(c) or as a result of a bankruptcy
proceeding with respect to the related Obligor, but excluding, in the case of
any Lease Contract, any other extensions or renewals thereof.
Originators: AT&T Capital Leasing Services, Inc., AT&T
Credit Corporation and NCR Credit Corp.
Owner Trustee: The Bank of New York, acting not
individually but solely as trustee, or its successor in interest, and any
successor Owner Trustee appointed as provided in the Trust Agreement.
Payment Date: The fifteenth day of each calendar month (or,
if such fifteenth day is not a Business Day, the next succeeding Business Day),
commencing December 15, 1997.
Person: Any legal person, including any individual,
corporation, partnership, joint venture, estate, association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof, or any other entity.
Pledged Revenues: (i) All Scheduled Payments on the
Contracts received on or after the Cut-Off Date (including all Scheduled
Payments due prior to, but not received as of, the Cut-Off Date, but excluding
any Scheduled Payments due on or after, but received prior to, the Cut-Off
Date); (ii) any Prepayments received on the Contracts on or after the Cut-Off
Date (other than, in the case of a Lease Contract, any portion thereof allocated
to the Depositor); (iii) the Purchase Amount of any Contracts purchased by TCC
in accordance with Section 2.6 (other than any portion thereof attributable to
the Book Value of the Leased Equipment); (iv) the amount paid by the Depositor
to purchase the Contracts pursuant to Section 5.1; (v) that portion of the
Liquidation Proceeds received in respect of any Contracts and the disposition of
the related Equipment on or after the Cut-Off Date and allocated to the Issuer;
(vi) that portion of any Extension Fees received on or after
-7-
the Cut-Off Date and allocated to the Issuer; and (vii) any earnings on the
investment of amounts credited to the Collection Account and the Note
Distribution Account.
Prepayment: With respect to any Collection Period for any
Contract, a voluntary prepayment during such Collection Period of amounts due
and owing under such Contract; provided that, in the case of any Lease Contract,
the amount, if any, by which any such Prepayment exceeds the Required Payoff
Amount for such Contract shall be allocated to the Depositor in respect of the
related Leased Equipment.
Principal Balance: As of any date,uwhen used with respect
to a Class of Notes, the original principal balance of such Class, less all
distributions previously made to such Class in respect of principal.
Purchase Agreements: The Purchase and Sale Agreement, dated
as of November 1, 1997, among TCC, the Originators and the Depositor; the
Purchase and Sale Agreement, dated as of December 1, 1996, among TCC, Leasing
Services and the Depositor; the Purchase and Sale Agreement, dated as of March
1, 1997, among TCC, the Originators and the Depositor; and the Purchase and Sale
Agreement, dated as of June 1, 1997, among TCC, the Originators and the
Depositor.
Purchase Amount: With respect to a Contract and related
Equipment required to be purchased by TCC in accordance with Section 2.6, the
sum of (i) the Required Payoff Amount for such Contract as of the Accounting
Date on which such obligation to so purchase arises, plus (ii) in the case of a
Lease Contract, the Book Value of the related Leased Equipment (that portion of
the Purchase Amount attributable to such Book Value to be allocated to the
Depositor).
Purchased Contract: As of any Deposit Date, any Contract
which TCC has purchased as of the related Accounting Date, as required by
Section 2.6, and as to which, on or before such Deposit Date, (i) that portion
of the Purchase Amount relating to the Required Payoff Amount for such Contract
has been deposited in the Collection Account, and (ii) that portion, if any, of
the Purchase Amount relating to the Book Value of the related Leased Equipment
has been distributed to the Depositor.
Related Assets: The assets, in addition to the Contracts,
transferred by the Depositor to the Issuer pursuant to Section 2.1(a).
Related Documents: The Trust Agreement, the Indenture, the
Equity Certificate, the Notes, the Purchase Agreements, the Class A-5 Swap
Agreement and the Cash Collateral Account Agreement. The Related Documents
executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.
-8-
Required Payoff Amount: With respect to any Collection
Period for any Contract, the sum of (i) the Scheduled Payment due in such
Collection Period, together with any Scheduled Payments due in prior Collection
Periods but not yet received, plus (ii) the Contract Principal Balance of such
Contract (after taking into account the Scheduled Payment due in such Collection
Period, whether or not received).
Responsible Officer: When used with respect to the
Servicer, the Depositor or any other Person other than the Indenture Trustee,
the President, any Vice-President or Assistant Vice-President or the Controller
of such Person, or any other officer or employee having similar functions; when
used with respect to the Indenture Trustee, the meaning set forth in the
Indenture.
Schedule of Contracts: Collectively, the schedules of Lease
Contracts and Loan Contracts (which shall be made available to the parties
hereto on a computer disk or other data storage medium) attached hereto as (or
described in) Exhibit A-1 and Exhibit A-2, respectively.
Scheduled Payment: With respect to any Collection Period
for any Contract during the Original Term of such Contract, the scheduled
payment or payments due under such Contract in such Collection Period other than
those portions of such payments which, under such Contract, are to be
(i) applied by the Servicer to the payment of insurance charges, maintenance,
taxes and other similar obligations, or (ii) retained by the Servicer in payment
of Administrative Fees.
Servicer: AT&T Capital Corporation, its successor in
interest pursuant to Section 8.2 or, after any termination of the Servicer upon
a Servicer Termination Event, any successor Servicer.
Servicer Termination Event: An event described in
Section 8.1.
Servicer's Certificate: With respect to each Determination
Date, a certificate, completed by and executed on behalf of the Servicer, in
accordance with Section 3.9, substantially in the form attached hereto as
Exhibit B.
Servicing Account: The account designated as such in, and
established and maintained pursuant to, Section 8.05 of the Indenture.
Servicing Fee: With respect to any Collection Period, the
fee payable to the Servicer for services rendered during such Collection Period,
which shall be equal to one-twelfth of the Servicing Fee Rate multiplied by the
Contract Pool Principal Balance determined as of the last day of the preceding
Collection Period (or, in the case of the Servicing Fee with respect to the
Collection Period commencing on the Cut-Off Date, the Contract Pool Principal
Balance as of the Cut-Off Date).
-9-
Servicing Fee Rate: 1.25% per annum.
Sub-Servicer: The Person named as servicer or sub-servicer
in any agreement between the Servicer and such Person by which such Person is
contractually obligated to perform on the Servicer's behalf all or a part of the
servicing obligations described herein.
TCC: AT&T Capital Corporation, a Delaware corporation.
Total Servicing Fee: The sum of the Servicing Fee, the
Administrative Fees and any earnings on the investment of amounts in the
Servicing Account.
Trust Accounts: The Collection Account, the Class C Funding
Account, the Note Distribution Account, the Servicing Account, the Insurance,
Maintenance and Tax Accounts and such other accounts as may be established in
the name of the Issuer or the Indenture Trustee pursuant to the Trust Agreement
or this Agreement.
Trust Agreement: The Trust Agreement, dated as of November
1, 1997, between the Depositor and the Owner Trustee, as the same may be amended
and supplemented from time to time in accordance with the terms thereof.
UCC: The Uniform Commercial Code as in effect in the
relevant jurisdiction.
SECTION 1.2. Usage of Terms. With respect to all terms used
in this Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other gender; references to "writing"
include printing, typing, lithography, and other means of reproducing words in a
visible form; references to agreements and other contractual instruments include
all subsequent amendments thereto or changes therein entered into in accordance
with their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation."
SECTION 1.3. Calculations. All calculations of the amount
of the Servicing Fee shall be made on the basis of a 360-day year consisting of
twelve 30-day months. All references to the Contract Principal Balance of a
Contract as of any date shall refer to the close of business on such date.
SECTION 1.4. Section References. All references to
Articles, Sections, paragraphs, subsections, exhibits and schedules shall be to
such portions of this Agreement unless otherwise specified.
SECTION 1.5. No Recourse. No recourse may be taken,
directly or indirectly, under this Agreement or any certificate or other writing
delivered in
-10-
connection herewith or therewith, against any stockholder, officer or director,
as such, of the Depositor, TCC, the Servicer, the Indenture Trustee or the Owner
Trustee or of any predecessor or successor of the Depositor, TCC, the Servicer,
the Indenture Trustee or the Owner Trustee.
-11-
ARTICLE II
CONVEYANCE OF CONTRACTS
SECTION 2.1. Conveyance of Contracts and Related Assets.
(a) Subject to the terms and conditions of this Agreement, the Depositor,
pursuant to the mutually agreed upon terms contained herein, hereby transfers,
assigns, and otherwise conveys to the Issuer, without recourse (but without
limitation of its obligations in this Agreement), as of the Closing Date, all of
the right, title and interest, including any security interest, whether now
owned or hereafter acquired, that the Depositor has or has power to convey, in
and to the following:
(i) the Contracts, including, without limitation, (A) all monies
at any time paid or payable thereon or in respect thereof from and after
the Cut-Off Date in the form of (1) Scheduled Payments (including those
Scheduled Payments due prior to, but not received as of, the Cut-Off
Date, but excluding those Scheduled Payments due on or after, but
received prior to, the Cut-Off Date), (2) Prepayments (other than, in the
case of a Lease Contract, any portion thereof allocated to the Depositor
in accordance with this Agreement), (3) Liquidation Proceeds (but only
that portion thereof allocated to the Issuer in accordance with this
Agreement), (4) Extension Fees, (5) payments to be applied by the
Servicer to the payment of insurance charges, maintenance, taxes or other
similar obligations, and (6) payments to be retained by the Servicer in
payment of Administrative Fees, but excluding any payments made and
attributable to the purchase price or use of any Leased Equipment upon
expiration of the related Lease Contract (whether upon completion of the
Original Term thereof, Prepayment thereof or otherwise), (B) all rights
of the lessor or the secured party, as the case may be, in the Equipment
related to the Loan Contracts and all present or future leases and other
contracts relating to such Equipment and all revenues, payments, rights
to payment, profits, accounts, chattel paper, products and contract
rights arising from or related to such Equipment or any use thereof or
from any such lease or other contract, (C) all rights of the lessor or
secured party, as the case may be, in all Insurance Policies and any
other security (other than any ownership interest of the lessor in the
Leased Equipment) for the payment of amounts due under the Contracts
(including all rights, if any, the lessor or the secured party may have
against vendors and other third parties for payments of such amounts),
(D) all items contained in the related Contract Files and any and all
other documents that are kept on file in accordance with the applicable
Originator's customary procedures relating to the Contracts, and (E) all
proceeds of the foregoing;
(ii) all funds on deposit from time to time in the Trust Accounts
and all investments therein and proceeds thereof; and
(iii) the Purchase Agreements (to the extent they relate to the
Contracts), including (A) any Purchase Amount paid (other than any
portion
-12-
thereof attributable to the Book Value of the Leased Equipment),
and (B) any deemed loan made by the Depositor to the Originators and all
security therefor, including the security interest in the Contracts and
Equipment granted by the Originators to the Depositor to secure such
deemed loan, as described in Section 2.2 of the Purchase Agreement, and
all proceeds of the foregoing.
The foregoing does not constitute, nor is it intended to result in, the creation
or assumption by the Issuer, the Owner Trustee, the Indenture Trustee, any
Noteholder or the Equity Certificateholder of any obligation of the Depositor,
the Servicer or any other Person in connection with the Contracts or the related
Equipment or any agreement or instrument relating thereto, including any
obligation to the Obligors.
(b) Subject to the terms and conditions of this Agreement,
upon the transfer of the Contracts and other assets pursuant to Section 2.1(a),
the Depositor will be entitled to (i) the Leased Equipment and any payments made
and attributable to the purchase price or use of the Leased Equipment upon
expiration of the related Lease Contract (whether upon completion of the
Original Term thereof, Prepayment thereof or otherwise), (ii) that portion of
any Prepayments and Liquidation Proceeds received on or after the Cut-Off Date
and allocated to the Depositor in accordance with this Agreement and (iii) that
portion of any Purchase Amount attributable to the Book Value of the Leased
Equipment.
(c) As security for the payment of amounts described in
Section 2.1(a)(i)(3), the Depositor hereby grants to the Issuer a security
interest in all of the right, title and interest that the Depositor has or has
power to convey, whether now owned or hereafter acquired, in and to the Leased
Equipment and all proceeds thereof.
SECTION 2.2. Custody of Contract Files.
(a) The Owner Trustee, on behalf of the Issuer, hereby
appoints the Servicer, and the Servicer hereby accepts such appointment, to act
as the agent of the Issuer as custodian of the following documents or
instruments (with respect to each Contract), which will be, as of the Closing
Date, in the possession of the Servicer or its agents:
(i) The fully executed original of the Contract or a
facsimile copy thereof (together with any agreements modifying the
Contract, including, without limitation, any extension agreements);
(ii) Documents evidencing or related to any Insurance
Policy, or copies thereof; and
-13-
(iii) Such documents, if any, that the applicable
Originator keeps on file in accordance with its customary procedures
indicating that the Equipment is owned or leased by the Obligor and
subject to the interest of the lessor or secured party.
(b) The Servicer agrees to maintain the Contract Files at
the locations where they are currently maintained, or at such other locations as
shall from time to time be identified to the Indenture Trustee by written
notice. The Servicer may temporarily move individual Contract Files or any
portion thereof without notice as necessary to conduct collection and other
servicing activities in accordance with its customary practices and procedures.
(c) As custodian, the Servicer shall have and perform the
following powers and duties:
(i) hold the Contract Files on behalf of the Equity
Certificateholder, the Depositor, the Owner Trustee, the Issuer, the
Noteholders and the Indenture Trustee, maintain accurate records
pertaining to each Contract to enable it to comply with the terms and
conditions of this Agreement and the Related Documents, maintain a
current inventory thereof and certify to the Trustee annually that it
continues to maintain possession of such Contract Files;
(ii) implement written policies and procedures with respect
to persons authorized to have access to the Contract Files and the
receipting for Contract Files taken from their storage area by an
employee of the Servicer for purposes of servicing or any other purposes;
and
(iii) attend to all details in connection with maintaining
custody of the Contract Files on behalf of the Equity Certificateholder,
the Depositor, the Owner Trustee, the Issuer, the Noteholders and the
Indenture Trustee.
(d) In performing its duties under this Section, the
Servicer agrees to act with reasonable care, using that degree of skill and care
that it exercises with respect to similar contracts owned and/or serviced by it.
The Servicer shall promptly report to the Indenture Trustee any failure by it to
hold the Contract Files as herein provided and shall promptly take appropriate
action to remedy any such failure. In acting as custodian of the Contract Files,
the Servicer agrees further not to assert any beneficial ownership interests in
the Contracts or the Contract Files. The Servicer agrees to indemnify the Equity
Certificateholder, the Depositor, the Owner Trustee, the Issuer, the Noteholders
and the Indenture Trustee for any and all liabilities, obligations, losses,
damages, payments, costs or expenses of any kind whatsoever which may be imposed
on, incurred or asserted against the Equity Certificateholder, the Depositor,
the Owner Trustee, the Issuer, the Noteholders or the Indenture Trustee as the
result of any act or omission by the Servicer relating to
-14-
the maintenance and custody of the Contract Files; provided, however, that the
Servicer will not be liable for any portion of any such amount resulting from
the negligence or willful misconduct of the Equity Certificateholder, the
Depositor, the Owner Trustee, the Issuer, any Noteholder or the Indenture
Trustee.
SECTION 2.3. Further Assurances. Following the Closing
Date, the Depositor shall, at the reasonable request of the Owner Trustee, the
Indenture Trustee or the Servicer, and at the Depositor's expense, execute and
deliver any further instruments of transfer or other documents, and shall take
all such other actions that may be necessary, appropriate or desirable, to fully
convey the Contracts and the Related Assets to the Issuer or otherwise to
evidence, effectuate or implement the transactions contemplated hereby. In
addition, the Depositor, as agent for the Issuer, shall defend the Contracts and
the Related Assets against any and all claims and demands of all Persons at any
time claiming the same or any interest therein adverse to that of the Issuer.
SECTION 2.4. Representations and Warranties of Depositor.
By its execution of this Agreement, the Depositor makes the following
representations and warranties. Unless otherwise specified, such representations
and warranties speak as of the Closing Date.
(a) Organization and Good Standing. The Depositor has been
duly organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with power and authority to own
its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and now has, power, authority and legal right to acquire,
own and transfer the Contracts and the other property transferred to the
Issuer.
(b) Due Qualification. The Depositor is duly qualified to
do business as a foreign corporation in good standing, and has obtained
all necessary licenses and approvals, in all jurisdictions where the
failure to do so would materially and adversely affect the performance of
its obligations under this Agreement and the Related Documents.
(c) Power and Authority. The Depositor has the power and
authority to execute and deliver this Agreement and the Depositor's
Related Documents and to carry out the terms hereof and thereof; the
Depositor has full power and authority to transfer and assign the Trust
Assets to be transferred and assigned to and deposited with the Issuer by
it and has duly authorized such transfer and assignment to the Issuer by
all necessary corporate action; and the execution, delivery and
performance of this Agreement and the Depositor's Related Documents have
been duly authorized by the Depositor by all necessary corporate action.
-15-
(d) No Consent Required. No consent, license, approval or
authorization of, or registration or declaration with, any Person or any
governmental authority, bureau or agency is required in connection with
the execution, delivery or performance of this Agreement and the Related
Documents, except for such as have been obtained, effected or made or as
described in paragraph (m) below.
(e) Valid Transfer; Binding Obligations. This Agreement
effects, as of the Closing Date, a valid transfer and assignment of the
Contracts and the other Trust Assets, enforceable against the Depositor
and creditors of and purchasers from the Depositor; and this Agreement
and the Depositor's Related Documents, when duly executed and delivered,
shall constitute legal, valid and binding obligations of the Depositor
enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(f) No Violation. The execution and delivery of this
Agreement and the Related Documents, the consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents
shall not conflict with, result in any breach of any of the terms and
provisions of or constitute (with or without notice or lapse of time, or
both) a default under the certificate of incorporation or by-laws of the
Depositor, or any indenture, agreement, mortgage, deed of trust or other
instrument to which the Depositor is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than this Agreement,
or violate any law, order, rule or regulation applicable to the Depositor
of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Depositor or any of its properties.
(g) No Proceedings. There are no proceedings or
investigations pending or, to the Depositor's knowledge, threatened
against the Depositor, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having
jurisdiction over the Depositor or its properties (A) asserting the
invalidity of this Agreement or any of the Related Documents, (B) seeking
to prevent the consummation of any of the transactions contemplated by
this Agreement or any of the Related Documents, (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents, or
(D) seeking to adversely affect (i) the federal income tax or
-16-
other federal, state or local tax attributes of the Equity Certificate or
the Notes or (ii) the federal, state or local tax treatment of any of the
transactions contemplated by this Agreement and the Related Documents.
(h) Place of Business. The principal executive offices of
the Depositor, and the offices where the Depositor keeps its records
concerning the Contracts and related documents, are located at 00
Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx.
(i) Registration Statement. No stop order suspending the
effectiveness of the Registration Statement relating to the Notes has
been issued, and no proceeding for that purpose has been instituted or is
threatened, by the Securities and Exchange Commission.
(j) Filings. Since the effective date of the Registration
Statement relating to the Notes, there has occurred no event required to
be set forth in an amendment or supplement to the Registration Statement
or Prospectus that has not been so set forth, and there has been no
document required to be filed under the Securities Exchange Act of 1934
and the rules and regulations of the Securities and Exchange Commission
thereunder that upon such filing would be deemed to be incorporated by
reference in the Prospectus that has not been so filed.
(k) Right to Transfer. The Depositor has the right to
transfer the Contracts and Related Assets to the Issuer pursuant to
Section 2.1(c) (subject, in the case of amounts in the Insurance,
Maintenance and Tax Accounts, to the rights of the Obligors therein),
free of any Lien. Upon the transfer and assignment of the Contracts and
Related Assets to the Issuer pursuant to Section 2.1(a), the Issuer will
have good title thereto and will be the sole owner thereof (subject, in
the case of amounts in the Insurance, Maintenance and Tax Accounts, to
the rights of the Obligors therein), free of any Lien.
(l) No Impairment. No person has a participation in or
other right to receive Scheduled Payments under any Contract, and the
Depositor has taken no action to convey any right to any Person that
would result in such Person having a right to Scheduled Payments received
with respect to any Contract.
(m) Lawful Assignment. No Contract was originated in, or is
subject to the laws of, any jurisdiction the laws of which would make
unlawful, void or voidable the transfer and assignment of such Contract
from the Depositor to the Issuer under this Agreement. Each Contract may
be sold, assigned and transferred by the Depositor to the Issuer without
the consent of, or prior approval from, or any notification to, the
applicable Obligor, other than (i) certain Contracts (which, in
proportion to the aggregate of all of the
-17-
Contracts, are not material) that require notification of the assignment
to the Obligor, which notification will be given by the Servicer not
later than 10 days following the Closing Date, and (ii) certain Contracts
(which, in proportion to the aggregate of all of the Contracts, are not
material) that require the consent of the Obligor, which consent will be
obtained by the Servicer not later than 10 days following the Closing
Date.
(n) All Filings Made. All filings and other actions
required to be made, taken or performed by any Person in any jurisdiction
to give the Issuer a first priority perfected lien or ownership interest
in the Contracts has been made, taken or performed.
(o) Schedule of Contracts Accurate. The information with
respect to the Contracts contained in the Schedule of Contracts is true
and correct in all material respects.
(p) No Adverse Selection. No selection procedures adverse
to the Noteholders were utilized in selecting the Contracts from those
lease and loan contracts available for transfer by the Depositor to the
Owner Trust.
SECTION 2.5. Nonpetition Covenant. None of the Depositor, the Servicer,
the Owner Trustee (in its individual capacity or on behalf of the Trust)
nor TCC shall petition or otherwise invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Issuer or the Depositor 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 the Depositor or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the
Issuer or the Depositor.
SECTION 2.6. Purchase of Contracts Upon Breach of
Representations and Warranties. Prior to or concurrently with the execution and
delivery of this Agreement, TCC, the Originators and the Depositor have entered
into the Purchase Agreements, the rights of the Depositor under which (to the
extent they relate to the Contracts) have been assigned by the Depositor to the
Issuer pursuant to Section 2.1(a). Under the Purchase Agreements, TCC and the
Originators have made certain representations and warranties to the Depositor
with respect to the Contracts (the "Contract Representations and Warranties"),
and each Purchase Agreement by its terms provides that, upon transfer of the
Contracts and Related Assets to the Issuer pursuant to this Agreement, such
representations and warranties are deemed made as of the Cut-off Date or the
Closing Date, as applicable. As of the second Accounting Date following its
discovery or its receipt of notice of any breach of the Contract Representations
and Warranties that materially and adversely affects the value of any Contract
(including any Liquidated Contract), TCC shall, unlessusuch breach shall have
been cured in all material respects, (i) purchase such Contract from the Issuer,
and (ii) in the case of a Lease Contract, purchase the related Leased
-18-
Equipment from the Depositor. On or before the related Deposit Date, TCC shall
pay the Purchase Amount to the Servicer on behalf of the Owner Trustee and the
Depositor, as their interests may appear. The obligations of the Depositor with
respect to any such breach of representations and warranties shall be limited to
taking any and all actions necessary to enable the Owner Trustee to enforce
directly the obligations of TCC to purchase the applicable Contract under the
Purchase Agreement. It is understood and agreed that, except as set forth in the
following paragraph, the obligation of TCC to purchase any Contract, together
with the related Equipment, as to which a breach has occurred and is continuing
shall, if such obligation is fulfilled, constitute the sole remedy against TCC
for such breach available to the Owner Trustee on behalf of the Equity
Certificateholder, to the Depositor or the Indenture Trustee on behalf of the
Noteholders and to the Depositor, as their interests may appear.
In addition to the foregoing and notwithstanding whether
the Contract and related Equipment shall have been purchased by TCC, TCC shall
indemnify the Equity Certificateholder, the Depositor, the Owner Trustee, the
Issuer, the Noteholders and the Indenture Trustee against all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of counsel, which may be asserted against or incurred by any of them as a result
of third party claims arising out of the events or facts giving rise to such
breach.
-19-
ARTICLE III
ADMINISTRATION AND SERVICING OF CONTRACTS
SECTION 3.1. Duties of the Servicer. The Servicer is
hereby authorized to act as agent for the Issuer and the Depositor and in such
capacity shall manage, service, administer and make collections on the
Contracts, and perform the other actions required by the Servicer under this
Agreement. The Servicer agrees that its servicing of the Contracts shall be
carried out in accordance with customary and usual procedures of institutions
which service equipment lease contracts, installment sale contracts, promissory
notes, loan and security agreements and other similar types of receivables
comparable to the Contracts and, to the extent more exacting, the degree of
skill and attention that the Servicer exercises from time to time with respect
to all comparable such contracts that it services for itself or others. In
performing such duties, so long as TCC is the Servicer, it shall comply in all
material respects with its customary standards, policies and procedures in
effect from time to time. The Servicer may at any time change its customary
standards, policies and procedures; provided that any such change shall not
materially impair the collectibility of any Contract nor the Servicer's ability
to perform its obligations under this Agreement and the Related Documents. The
Servicer's duties shall include, without limitation, billing, collection and
posting of all payments, responding to inquiries of Obligors on the Contracts,
investigating delinquencies, sending invoices to Obligors, accounting for
collections and furnishing monthly and annual statements to the Owner Trustee
and the Indenture Trustee with respect to distributions, monitoring the status
of Insurance Policies with respect to the Equipment and performing the other
duties specified herein. The Servicer shall also administer and enforce all
material rights and responsibilities of the lessor or secured party under the
Contracts and provided for in the Insurance Policies, to the extent that such
Insurance Policies relate to the Contracts, the Equipment or the Obligors. To
the extent consistent with the standards, policies and procedures otherwise
required hereby, the Servicer shall follow its customary standards, policies and
procedures and shall have full power and authority to do any and all things in
connection with such managing, servicing, administration and collection that it
may deem necessary or desirable, including the authority to forego collection
efforts under circumstances deemed appropriate by the Servicer in accordance
with its customary standards, policies and procedures. Without limiting the
generality of the foregoing, the Servicer is hereby authorized and empowered by
the Owner Trustee to execute and deliver, on behalf of the Equity
Certificateholder, the Depositor and the Issuer or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Contracts
and with respect to the Equipment in accordance with its customary standards,
policies and procedures. The Servicer is hereby authorized to commence, in its
own name (or in the name of the Issuer, provided the Servicer has obtained the
Owner Trustee's consent, which consent shall not be unreasonably withheld), a
legal proceeding to enforce a Contract pursuant to Section 3.3 or to commence or
participate in any other legal proceeding
-20-
(including, without limitation, a bankruptcy proceeding) relating to or
involving a Contract, an Obligor or the related Equipment. If the Servicer
commences or participates in such a legal proceeding in its own name, the Issuer
shall thereupon be deemed to have automatically assigned such Contract to the
Servicer solely for purposes of commencing or participating in any such
proceeding as a party or claimant, and the Servicer is authorized and empowered
by the Owner Trustee to execute and deliver in the Servicer's name any notices,
demands, claims, complaints, responses, affidavits or other documents or
instruments in connection with any such proceeding. The Owner Trustee shall
furnish the Servicer with any powers of attorney and other documents which the
Servicer may reasonably request and which the Servicer deems necessary or
appropriate and take any other steps which the Servicer may deem necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Agreement.
SECTION 3.2. Collection of Contract Payments;
Modifications of Contracts.
(a) Consistent with the standards, policies and procedures
required by this Agreement, the Servicer shall make reasonable efforts to
collect all payments called for under the terms and provisions of the Contracts
as and when the same shall become due, and shall follow such collection
procedures as it follows with respect to all comparable contracts that it
services for itself or others and otherwise act with respect to the Contracts,
the related Equipment, the Insurance Policies and the other Trust Assets in such
manner as will, in the reasonable judgment of the Servicer, maximize the amount
to be received by the Issuer and the Depositor with respect thereto. The
Servicer is authorized in its discretion to waive any Administrative Fees or
Extension Fees that may be collected in the ordinary course of servicing any
Contract.
(b) The Servicer may at any time agree to a modification
or amendment of a Contract in accordance with its credit and collection policies
and procedures (it being acknowledged that any modification or amendment of a
Contract resulting from a bankruptcy proceeding with respect to the Obligor will
not be deemed to have been agreed to by the Servicer hereunder):
(i) in order to (A) change the Obligor's regular due date
to a date within the Collection Period in which such due date occurs or
(B) re-amortize (over the remainder of the original term) the Scheduled
Payments on a Contract following a partial Prepayment (provided that the
sum of such partial Prepayment and the Contract Principal Balance of the
Contract after the re-amortization is at least equal to the Required
Payoff Amount for such Contract prior to the partial Prepayment), or
(ii) for any other purpose, provided that no such
modification or amendment shall:
-21-
(A) change the amount or the due date of any Scheduled
Payment (except as provided in clauses (i)(A) and (B) above,
Section 3.2(c)(i) or Section 3.2(d)),
(B) release the related Equipment from the Contract, unless
(1) equipment of equal or greater value is substituted, (2) the
remaining related Equipment has a value at least equal to the
Required Payoff Amount of the Contract plus the Book Value of such
remaining equipment, or (3) the release is pursuant to a partial
Prepayment (which, in the case of a partial Prepayment on a Lease
Contract, meets the requirements of Section 3.2(d)) and the ratio
of the value of the related Equipment to the Contract Principal
Balance of the Contract after such Prepayment and release is at
least equal to such ratio prior to such Prepayment and release;
(C) cause any of the representations or warranties
contained in the Contract Representations and Warranties
(excluding, for this purpose, those representations and warranties
contained in clauses (F), (N) (except as such representation or
warranty relates to the requirement that payments be made on the
Contract regardless of the condition or suitability of the related
Equipment and notwithstanding any defense, set-off or counterclaim
against the manufacturer, lessor or lender), (B) or (AA)) to cease
to be true; or
(D) except as provided in clause (ii)(A) above, result in
the Contract Principal Balance or Required Payoff Amount of the
Contract being less than it would have been absent such
modification or amendment.
(c) The Servicer may grant payment extensions on a
Contract in accordance with its credit and collection policies and procedures
(it being acknowledged that any extensions on a Contract resulting from a
bankruptcy proceeding with respect to the Obligor will not be deemed to have
been granted by the Servicer hereunder) if the Servicer believes in good faith
that such extension is necessary to avoid a termination and liquidation of such
Contract and will maximize the amount to be received by the Issuer with respect
to such Contract; provided, however, that:
(i) the aggregate period of all extensions granted on a
Contract shall not exceed six months; and
(ii) in no event may any Contract be extended beyond the
Collection Period immediately preceding the final Stated Maturity Date.
-22-
Nothing in this Section 3.2(c) shall be deemed to prevent the Servicer from
extending or renewing, or otherwise accepting the continued performance by the
Obligor under, a Contract after expiration of its stated term.
(d) The Servicer may, in its discretion, allow a
Prepayment, in whole or in part, of any Lease Contract which, by its terms, is
not prepayable, but only if the amount of such Prepayment (or, in the case of a
partial Prepayment, the sum of such Prepayment and the remaining Contract
Principal Balance of the Lease Contract after application of such Prepayment),
together with such additional amounts as are (i) available to the Servicer for
the purpose of prepaying such Lease Contract (excluding any monies otherwise
constituting Pledged Revenues) and (ii) deposited in the Collection Account
contemporaneously with the deposit therein of such Prepayment, is at least equal
to the Required Payoff Amount for such Lease Contract.
(e) The Servicer shall remit all payments by or on behalf
of the Obligors (other than amounts constituting Administrative Fees) received
by the Servicer to the Servicing Account as soon as practicable, but in no event
later than the second Business Day after receipt thereof.
SECTION 3.3. Realization Upon Contracts. Consistent with
the standards, policies and procedures required by this Agreement, the Servicer
shall, except as provided in the following paragraph, take such action as is
reasonably necessary (including making commercially reasonable efforts to
repossess (or otherwise comparably convert the ownership of) and dispose of the
related Equipment) to collect from the Obligor or otherwise all amounts payable
under any Contract as to which the Obligor is in default in the making of one or
more Scheduled Payments thereunder, if the Servicer has determined such default
is not likely to be cured. The Servicer will not be required to repossess (or
otherwise comparably convert the ownership of) any Equipment the repossession of
which, in accordance with the Servicer's credit and collection policies and
procedures, and based on the Servicer's good faith estimate of the value of the
Equipment and its availability, would not be reasonable. The Servicer is
authorized to follow such customary practices and procedures as it shall deem
necessary or advisable, consistent with the standard of care required by Section
3.1, which practices and procedures may include the sale of the related
Equipment at public or private sale, the submission of claims under an Insurance
Policy and other actions by the Servicer in order to realize upon such a
Contract. The foregoing is subject to the provision that, in any case in which
the Equipment shall have suffered damage, the Servicer shall not expend funds in
connection with any repair or towards the repossession of such Equipment unless
it shall determine in its reasonable judgment that such repair and/or
repossession shall increase the proceeds of liquidation of the related Contract
by an amount greater than the amount of such expenses. All amounts received upon
liquidation of a Contract (except as otherwise provided below), including any
proceeds derived from the disposition of the related Equipment, shall be
remitted by the Servicer to the Servicing Account as soon as
-23-
practicable, but in no event later than the second Business Day after receipt
thereof. The Servicer shall, to the extent the proceeds of such liquidation are
sufficient therefor, be entitled to recover all reasonable out-of-pocket
expenses incurred by it in the course of liquidating a Contract, which amounts
may be retained by the Servicer from such proceeds (and shall not be required to
be deposited as provided in Section 3.2(e)) to the extent of such expenses. The
Servicer shall be entitled to retain in the Servicing Account, from liquidation
proceeds, a reserve for out-of-pocket liquidation expenses in an amount equal to
such expenses, in addition to those previously incurred, as it reasonably
estimates will be incurred. Upon completion of such liquidation, the remainder
of any such reserve, after reimbursement to the Servicer of all out-of-pocket
liquidation expenses, shall constitute Liquidation Proceeds and be transferred
as provided in Section 4.2(a). The Servicer shall, in accordance with Section
3.4(f), pay on behalf of the Issuer and the Depositor any sales, use, personal
property and other taxes assessed on repossessed Equipment, as well as any sales
or similar taxes on the disposition thereof, and shall be entitled to
reimbursement of any such tax from liquidation proceeds with respect to the
related Contract as provided in Section 3.4(b).
Although it is intended that the Servicer repossess and
dispose of any Equipment in a commercially reasonable manner with a view to
realizing proceeds at least equal to the fair market value of the Equipment, the
Servicer may, in its discretion, choose to dispose of Equipment through a new
lease or in some other manner which provides for payment for the Equipment over
time. In any such event, the Servicer will be required to pay from its own
funds, and deposit in the Servicing Account, an amount which, in its reasonable
judgment, is equal to the fair market value of such Equipment (less any related
out-of-pocket liquidation expenses), and the Servicer will be entitled to all
payments received thereafter in respect of such Equipment. Any such amounts so
deposited by the Servicer shall be treated as additional Liquidation Proceeds
with respect to the related Contract and Equipment.
SECTION 3.4. Insurance, Maintenance and Taxes.
(a) The Servicer shall establish one or more insurance,
maintenance and tax accounts (collectively, the "Insurance, Maintenance and Tax
Accounts") in the name of the Servicer and for the benefit of the respective
Obligors and, to the extent provided herein, the Issuer and the Depositor. The
Servicer shall deposit into the Insurance, Maintenance and Tax Accounts any
payments made by or on behalf of Obligors which constitute (i) insurance charges
paid by an Obligor to the lessor or secured party under a Contract, (ii) any
insurance payments or recoveries paid by an insurance company or comparable
third party and related to the damage to, or destruction of, the Equipment
related to such Contract (unless paid directly by such insurance company or
comparable third party directly to the Obligor), (iii) any payments made by or
on behalf of Obligors which constitute amounts paid by an Obligor to the lessor
or secured party under a Contract in respect of the maintenance of the related
Equipment, and (iv) taxes paid by the Obligor with
-24-
respect to the related Contract or Equipment (except for any such payments in
respect of taxes which were paid by the applicable Originator prior to the
Cut-Off Date, which payments shall constitute Scheduled Payments hereunder).
None of the foregoing payments shall constitute Pledged Revenues except under
the circumstances described in clause (c)(ii) below.
(b) The Servicer may pay from its own funds, or may
withdraw amounts from the Insurance, Maintenance and Tax Accounts, when and if
appropriate, to pay, when due (i) all insurance charges in the amounts received
under clause (a)(i) above, (ii) any amounts payable under any applicable
maintenance contract or otherwise with respect to the maintenance of the related
Equipment in the amounts received under clause (a)(iii) above, and (iii) all
taxes in the amounts received under clause (a)(iv) above. If the Servicer has
paid any such insurance charges, maintenance costs or taxes from its own funds
(including any such amounts that may have been paid prior to the Closing Date),
the Servicer shall be entitled to reimbursement therefor from any appropriate
amounts available therefor in the Insurance, Maintenance and Tax Accounts, from
payments thereafter received from the applicable Obligor in respect thereof or
from liquidation proceeds in the event such Contract is liquidated. The Servicer
is authorized in its discretion to waive its right to receive reimbursement of
any such amount.
(c) Amounts on deposit in the Insurance, Maintenance and
Tax Accounts which represent amounts received by the Servicer pursuant to clause
(a)(ii) above shall be applied by the Servicer as follows: (i) if equipment is
purchased to replace the Equipment that was damaged or destroyed, and such
replacement equipment is (in the reasonable opinion of the Servicer) of
comparable use and equivalent value to the Equipment that was damaged or
destroyed, or if the Equipment is to be repaired, the Servicer shall release
such amount so received from the insurance company or comparable third party in
payment or reimbursement for such replacement equipment or such repair; and
(ii) if such replacement option is not exercised or the Equipment is not to be
repaired, then the Servicer shall treat such amount as Liquidation Proceeds and
(A) if the related Contract is a Loan Contract, transfer such amount from the
Insurance, Maintenance and Tax Accounts to the Collection Account, and (B) if
the related Contract is a Lease Contract, (I) transfer that portion thereof
which is allocated to the Issuer (as described in the second sentence of the
definition of "Liquidation Proceeds") from the Insurance, Maintenance and Tax
Accounts to the Collection Account, and (II) distribute the balance thereof from
the Insurance, Maintenance and Tax Accounts to the Depositor.
(d) The Servicer may xxx to enforce or collect upon the
Insurance Policies, in its own name, if possible, or as agent of the Issuer and
the Depositor. If the Servicer elects to commence a legal proceeding to enforce
an Insurance Policy, the act of commencement shall be deemed to be an automatic
assignment of the rights of the Issuer and the Depositor under such Insurance
Policy to the Servicer for purposes of collection only. If, however, in any
enforcement suit or legal
-25-
proceeding it is held that the Servicer may not enforce an Insurance Policy on
the grounds that it is not a real party in interest or a holder entitled to
enforce the Insurance Policy, the Owner Trustee, on behalf of the Issuer and the
Depositor, shall take such steps as the Servicer deems necessary to enforce such
Insurance Policy, including bringing suit in its name or the name of the Owner
Trustee for the benefit of the Equity Certificateholder and the Depositor and
the Indenture Trustee for the benefit of the Noteholders.
(e) Consistent with its customary standards, policies and
procedures, with respect to each Contract, the Servicer shall maintain insurance
against casualty loss with respect to any Equipment financed by or leased
pursuant to the Contract, to the extent the Contract requires the lessor or
secured party under the Contract to maintain such insurance, and shall otherwise
require the Obligor under the Contract to maintain such insurance, to the extent
the Contract requires that such insurance be maintained by the Obligor. The
Servicer shall not otherwise be liable to the Owner Trustee, the Indenture
Trustee, the Depositor or any Noteholder or Equity Certificateholder for any
casualty loss with respect to any Equipment related to a Contract, except to the
extent otherwise explicitly provided in this Agreement.
(f) The Servicer shall determine and pay when due all
sales, use, personal property and other taxes payable in respect of the
Equipment related to each Contract. To the extent the Servicer has previously
received from the related Obligor payments with respect to such taxes and has
deposited such payments in the Insurance, Maintenance and Tax Accounts in
accordance with clause (a)(iv) above, the Servicer shall, in accordance with
clause (b)(iii) above, either (i) pay such taxes from amounts withdrawn from the
Insurance, Maintenance and Tax Accounts, or (ii) pay such taxes from its own
funds and thereafter reimburse itself from amounts withdrawn from the Insurance,
Maintenance and Tax Accounts. In the event the Servicer has not previously
received payments from the Obligor for this purpose, or to the extent any such
payments received were insufficient to pay the taxes due, the Servicer shall
nonetheless pay such taxes from its own funds and shall xxxx the Obligor for any
amounts so paid. The Servicer shall be entitled to reimbursement for any taxes
so paid from its own funds, as provided in clause (b)(iii) above. Failure on the
part of the Servicer to perform its duties in a timely fashion under this clause
shall constitute a breach of this Agreement by the Servicer for which indemnity
will be available in accordance with Section 7.1.
(g) The Servicer shall give prompt written notice to the
Indenture Trustee of the Servicer's failure to pay when due any insurance charge
or tax payment required to be paid pursuant to this Section 3.4 and the reason
for such failure. Upon receipt of any such notice, or if the Indenture Trustee
has otherwise received notice of any such failure to pay an insurance charge or
tax payment, the Indenture Trustee shall take such actions as are reasonably
necessary (including the withdrawal of monies, if any, available therefor in the
Insurance, Maintenance and Tax Accounts and attributable to payments previously
made by the related Obligor and payment of such insurance charge or tax payment)
to cause any such amounts
-26-
to be paid. The Indenture Trustee shall be permitted to withdraw monies from the
Insurance, Maintenance and Tax Accounts for purposes of performing its
obligations under this paragraph, but shall not, in any event, be required to
use its own funds for such purposes.
SECTION 3.5. Maintenance of Security Interests in
Equipment. To the extent the Servicer's credit and collection policies and
procedures in this regard would so require (it being acknowledged that, in
certain instances, such credit and collection policies and procedures would not
so require), the Servicer shall take such steps as are necessary to maintain
perfection of any security interest created by each Contract in the related
Equipment on behalf of the Issuer and the Depositor, including, but not limited
to, obtaining the execution by the Obligors and the recording, registering,
filing, re-recording, re-filing, and re-registering of all security agreements,
financing statements and continuation statements as are necessary to maintain
such security interest granted by the Obligors under the respective Contracts.
The Owner Trustee hereby authorizes the Servicer, and the Servicer agrees (to
the extent the Servicer's credit and collection policies and procedures in this
regard would so require), to take any and all steps necessary to re-perfect such
security interest on behalf of the Issuer and the Depositor as necessary because
of the relocation of Equipment or for any other reason.
SECTION 3.6. Covenants, Representations, and Warranties of
Servicer. By its execution and delivery of this Agreement, the Servicer makes
the following representations, warranties and covenants.
(a) The Servicer covenants as follows:
(i) Liens in Force. The Equipment securing
each Contract shall not be released in whole or in part from any
interest the lessor or secured party may have in such Equipment
under the terms of the Contract, except upon payment in full of
the Contract or as otherwise contemplated herein;
(ii) No Impairment. The Servicer shall do
nothing to impair the rights of the Issuer, the Equity
Certificateholder, the Depositor or the Noteholders in the
Contracts, the Insurance Policies or the other Trust Assets; and
(iii) No Amendments. The Servicer shall not
extend or otherwise amend the terms of any Contract with respect
to the Scheduled Payments thereon, except (A) in accordance with
Section 3.2, or (B) at such time as the Notes are no longer
Outstanding, with the consent of the Owner Trustee.
(iv) Licenses and Approvals. The Servicer will
maintain all necessary licenses and approvals in all jurisdictions
where
-27-
the failure to do so would materially and adversely affect
the performance of its obligations under this Agreement and the
Related Documents.
(b) The Servicer represents, warrants and covenants as of
the date of execution and delivery of this Agreement:
(i) Organization and Good Standing. The
Servicer has been duly organized and is validly existing and in
good standing under the laws of its jurisdiction of organization,
with power, authority and legal right to own its properties and to
conduct its business as such properties are currently owned and
such business is currently conducted, and had at all relevant
times, and now has, power, authority and legal right to enter into
and perform its obligations under this Agreement and the
Servicer's Related Documents;
(ii) Due Qualification. The Servicer is duly
qualified to do business as a foreign corporation in good
standing, and has obtained all necessary licenses and approvals,
in all jurisdictions where the failure to do so would materially
and adversely affect the performance of its obligations under this
Agreement and the Related Documents;
(iii) Power and Authority. The Servicer has
the power and authority to execute and deliver this Agreement and
to carry out the terms hereof; and the execution, delivery and
performance of this Agreement and the Servicer's Related Documents
have been duly authorized by the Servicer by all necessary
corporate action;
(iv) Binding Obligation. This Agreement and
the Servicer's Related Documents shall each constitute the legal,
valid and binding obligation of the Servicer enforceable in
accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(v) No Violation. The execution and delivery
of this Agreement, the consummation of the transactions
contemplated by this Agreement and the Servicer's Related
Documents, and the fulfillment of the terms hereof, shall not
conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of
time, or both) a default under, the articles of incorporation or
bylaws of the Servicer, or any indenture, agreement, mortgage,
deed of trust or other instrument to which the Servicer is a party
or by which it is bound, or result in the creation or imposition
of
-28-
any Lien upon any of its properties pursuant to the terms of
any such indenture, agreement, mortgage, deed of trust or other
instrument, other than this Agreement or any Related Document, or
violate any law, order, rule or regulation applicable to the
Servicer of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or any of its properties;
(vi) No Proceedings. There are no proceedings
or investigations pending or, to the Servicer's knowledge,
threatened against the Servicer, before any court, regulatory
body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Servicer or its
properties (A) asserting the invalidity of this Agreement or any
of the Servicer's Related Documents, (B) seeking to prevent the
issuance of the Equity Certificate or the Notes or the
consummation of any of the transactions contemplated by this
Agreement or any of the Servicer's Related Documents, or
(C) seeking any determination or ruling that might materially and
adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this
Agreement or any of the Servicer's Related Documents or
(D) seeking to adversely affect (i) the federal income tax or
other federal, state or local tax attributes of the Equity
Certificate or the Notes or (ii) the federal, state or local tax
treatment of any of the transactions contemplated by this
Agreement and the Related Documents; and
(vii) No Consents. The Servicer is not
required to obtain the consent of any other party or any consent,
license, approval or authorization, or registration or declaration
with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Servicer's Related
Documents.
(viii) All Filings Made. All filings and other
actions required to be made, taken or performed by any Person in
any jurisdiction to give the Issuer a first priority perfected
lien or ownership interest in the Contracts has been made, taken
or performed.
(ix) Schedule of Contracts Accurate. The
information with respect to the Contracts contained in the
Schedule of Contracts is true and correct in all material
respects.
SECTION 3.7. Sub-Servicers. The Servicer may, without the
Owner Trustee's or the Indenture Trustee's consent, maintain or enter into one
or more agreements with Sub-Servicers for the servicing and administration of
the Contracts
-29-
by such Sub-Servicers. Notwithstanding the terms or existence of any such
agreement between the Servicer and a Sub-Servicer, the Servicer shall not be
relieved of any of its obligations under this Agreement by reason of such
agreement and shall be obligated to the same extent and under the same terms and
conditions as if the Servicer alone was servicing and administering the
Contracts, and neither the Owner Trustee nor the Indenture Trustee shall have
any obligation to deal with anyone other than the Servicer with respect to the
servicing of the Contracts.
SECTION 3.8. Total Servicing Fee; Payment of Expenses by
Servicer. On each Payment Date, the Servicer shall be entitled to receive out of
the Collection Account the Servicing Fee (less that portion thereof to be
retained and applied by the Trustee in accordance with the Cash Collateral
Account Agreement) for the related Collection Period pursuant to Section
8.03(i) of the Indenture. The Servicer shall be entitled to retain, as
additional servicing compensation under this Agreement, any Administrative Fees
and any earnings on the investment of amounts in the Servicing Account. The
Servicer shall be required to pay all expenses incurred by it in connection with
its activities under this Agreement (including taxes imposed on the Servicer and
all expenses incurred in connection with reports to Noteholders). In addition,
the Servicer (i) shall pay to the Indenture Trustee, and the Indenture Trustee
shall be entitled to, certain annual fees and shall reimburse the Indenture
Trustee for all ordinary and reasonable out-of-pocket expenses incurred or made
by it in connection with the performance of its duties under the Indenture and
its other Related Documents (excluding those incurred or made in the performance
of its duties under Article V of the Indenture, as referred to in Section
6.07(b) of the Indenture), and (ii) shall pay to the Owner Trustee, and the
Owner Trustee shall be entitled to, certain annual fees and shall reimburse the
Owner Trustee for all ordinary and reasonable out-of-pocket expenses incurred or
made by it in connection with the performance of its duties under the Trust
Agreement. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the agents, counsel, accountants and experts of
the Indenture Trustee and the Owner Trustee, as appropriate.
SECTION 3.9. Servicer's Certificate. No later than 10:00
a.m. New York City time on each Determination Date, the Servicer shall deliver
to the Owner Trustee, the Indenture Trustee, the Class A-5 Swap Counterparty and
each Rating Agency a Servicer's Certificate executed by a Responsible Officer of
the Servicer containing, among other things, (i) all information necessary to
enable the Indenture Trustee to make the withdrawals and distributions required
by Sections 8.03, 8.04 and 8.06 of the Indenture, (ii) all information necessary
to enable the Indenture Trustee to send the statements to Noteholders required
by Section 7.05 of the Indenture,uand (iii) all information necessary to enable
the Indenture Trustee to reconcile all deposits to, and withdrawals from, the
Servicing Account and the Collection Account for the related Collection Period
and Payment Date, including the accounting required by Section 4.4. Contracts
purchased by TCC on the related Deposit Date or by the Depositor on the related
Accounting Date, and each Contract which became a Liquidated Contract or which
was paid in full during the related
-30-
Collection Period, shall be identified by account number (as set forth in the
Schedule of Contracts). A copy of such Servicer's Certificate may be obtained by
any Noteholder (or by any Note Owner, upon certification that such Person is a
Note Owner and payment of any expenses associated with the distribution thereof)
by a request in writing to the Indenture Trustee addressed to the Corporate
Trust Office.
SECTION 3.10. Annual Statement as to Compliance; Notice of
Servicer Termination Event.
(a) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and each Rating Agency, on or before March 31 (or 90 days
after the end of the Servicer's fiscal year, if other than December 31) of each
year, beginning on March 31, 1998, a certificate signed by any Responsible
Officer of the Servicer, dated as of December 31 (or other applicable date) of
the immediately preceding year, stating that (i) a review of the activities of
the Servicer during the preceding 12-month period (or such other period as shall
have elapsed from the Closing Date to the date of the first such certificate)
and of its performance under this Agreement has been made under such officer's
supervision, and (ii) to such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
period, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
(b) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and each Rating Agency, promptly after having obtained
knowledge thereof, but in no event later than two Business Days thereafter,
written notice in a certificate signed by any Responsible Officer of the
Servicer of any event which with the giving of notice or lapse of time, or both,
would become a Servicer Termination Event under Section 8.1(a). The Depositor or
the Servicer shall deliver to the Owner Trustee, the Indenture Trustee, the
Servicer or the Depositor (as applicable) and each Rating Agency promptly after
having obtained knowledge thereof, but in no event later than three Business
Days thereafter, written notice in a certificate signed by any Responsible
Officer of the Servicer of any event which with the giving of notice or lapse of
time, or both, would become a Servicer Termination Event under any other clause
of Section 8.1.
SECTION 3.11. Annual Independent Accountants' Report.
(a) The Servicer shall cause a firm of nationally
recognized independent certified public accountants (the "Independent
Accountants"), who may also render other services to the Servicer, to deliver to
the Owner Trustee, the Indenture Trustee and each Rating Agency, on or before
March 31 (or 90 days after the end of the Servicer's fiscal year, if other than
December 31) of each year, beginning on March 31, 1998, with respect to the
twelve months ended the immediately preceding December 31 (or other applicable
date) (or such other period as shall have elapsed from the Closing Date to the
date of such certificate), a
-31-
statement (the "Accountant's Report") addressed to the Board of Directors of the
Servicer, to the Owner Trustee and to the Indenture Trustee, to the effect that
such firm has (i) audited the financial statements of the Servicer and issued
its report thereon and that such audit was made in accordance with generally
accepted auditing standards, which require that the Independent Accountants plan
and perform the audit to obtain reasonable assurance as to whether the financial
statements of the Servicer are free of material misstatement, and (ii) examined
management's assertion that the Servicer maintained effective control over the
servicing of equipment lease contracts, installment sales contracts, promissory
notes, loan and security agreements and/or other similar types of receivables
under servicing agreements substantially similar one to another, in accordance
with established or stated criteria, and that such examination was performed in
accordance with standards established by the American Institute of Certified
Public Accountants. In the event such firm requires the Indenture Trustee to
agree to the procedures performed by such firm, the Servicer shall direct the
Indenture Trustee in writing to so agree; it being understood and agreed that
the Indenture Trustee will deliver such letter of agreement in conclusive
reliance upon the direction of the Servicer, and the Indenture Trustee makes no
independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.
(b) The Accountants' Report shall also indicate that the
firm is independent of the Depositor and the Servicer within the meaning of the
Code of Professional Ethics of the American Institute of Certified Public
Accountants.
(c) A copy of the Accountants' Report may be obtained by
any Noteholder (or by any Note Owner, upon certification that such Person is a
Note Owner and payment of any expenses associated with the distribution thereof)
by a request in writing to the Indenture Trustee addressed to the Corporate
Trust Office.
SECTION 3.12. Access to Certain Documentation and
Information Regarding Contracts. The Servicer shall provide to representatives
of the Owner Trustee and the Indenture Trustee reasonable access to the
documentation regarding the Contracts. In each case, such access shall be
afforded without charge but only upon reasonable request and during normal
business hours. Nothing in this Section shall derogate from the obligation of
the Servicer to observe any applicable law, rule or contractual provision with
an Obligor prohibiting disclosure of information regarding the Obligors, and the
failure of the Servicer to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this Section.
SECTION 3.13. Certain Duties of the Servicer under the
Trust Agreement. The Servicer shall, and hereby agrees that it will, monitor the
Issuer's compliance with all applicable provisions of federal securities laws,
notify the Issuer of any actions to be taken by the Issuer necessary for
compliance with such laws and
-32-
prepare on behalf of the Issuer all notices, filings or other documents or
instruments required to be filed under such laws.
SECTION 3.14. Duties of the Servicer under the Indenture.
The Servicer shall, and hereby agrees that it will, perform on behalf of the
Issuer and the Owner Trustee the following duties of the Issuer or the Owner
Trustee, as applicable, under the Indenture (references are to the applicable
Sections in the Indenture):
(a) the direction to the Paying Agents, if any, to
deposit moneys with the Indenture Trustee (Section 3.03);
(b) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes and each other instrument and
agreement included in the Trust Estate (Section 3.04);
(c) the preparation of all supplements, amendments,
financing statements, continuation statements, instruments of further
assurance and other instruments, in accordance with Section 3.05 of the
Indenture, necessary to protect the Trust Estate (Section 3.05);
(d) the annual delivery of Opinions of Counsel, in
accordance with Section 3.06 of the Indenture, as to the Trust Estate,
and the annual delivery of the Officer's Certificate and certain other
statements, in accordance with Section 3.09 of the Indenture, as to
compliance with the Indenture (Sections 3.06 and 3.09);
(e) the preparation and obtaining of documents and
instruments required for the release of the Issuer from its obligations
under the Indenture (Section 4.01);
(f) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officer's Certificate and the obtaining of the Opinion of Counsel and the
Independent Certificate relating thereto (Section 4.01);
(g) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee
and any written instruments necessary in connection with the resignation
or removal of any co-trustee or separate trustee (Sections 6.08 and
6.11);
(h) the opening of one or more accounts in the Issuer's
name, the preparation of Issuer Orders, Officer's Certificates and
Opinions of
-33-
Counsel and all other actions necessary with respect to
investment and reinvestment of funds in the Trust Accounts (Sections
8.02, 8.04 and 8.05);
(i) the determination, and giving notice, of the amounts,
if any, specified in clauses (i) through (iii) of Section 8.06(c) of the
Indenture for each Payment Date (Section 8.06);
(j) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures (Sections 9.01, 9.02 and 9.03);
(k) the preparation of all Officer's Certificates, Opinions
of Counsel and Independent Certificates with respect to any requests by
the Issuer to the Indenture Trustee to take any action under the
Indenture (Section 11.01); and
(l) the recording of the Indenture, if applicable
(Section 11.15).
SECTION 3.15. Errors and Omissions Policy or Bond. Within
30 days after the Closing Date, the Servicer shall obtain, and shall thereafter
maintain, a policy or policies of insurance or a financial guaranty bond
covering errors and omissions by the Servicer. Such policy or bond shall be in
such form and amount as is generally customary among persons that service a
portfolio of equipment lease contracts, installment sale contracts, promissory
notes, loan and security agreements and/or other similar types of receivables
having an unpaid balance of at least $100,000,000 and which are generally
regarded as servicers acceptable to institutional investors. Each such policy or
bond shall name the Issuer, the Indenture Trustee and the Depositor as
additional insured parties or loss payees thereunder as their respective
interests may appear.
SECTION 3.16. Duties of the Servicer under the Class A-5
Swap Agreement. The Servicer shall, and hereby agrees that it will, perform on
behalf of the Issuer and the Owner Trustee the following duties of the Issuer or
the Owner Trustee, as applicable, under the Class A-5 Swap Agreement (references
are to the applicable Sections or (in the case of the Schedule constituting a
part thereof) Parts of the Class A-5 Swap Agreement):
(a) Part 3(b) (fourth, fifth, eighth and ninth items
referred to therein) of the Schedule thereto;
(b) Part 5(p) of the Schedule thereto (to the extent the
Servicer is required to deliver any such documents to the Owner Trustee
in accordance with this Agreement or any Related Document); and
(c) Section 6(d)(i).
-34-
ARTICLE IV
COLLECTIONS AND DEPOSITS
SECTION 4.1. Initial Deposit. On the Closing Date, the
Servicer shall deposit in the Servicing Account (i) all Scheduled Payments and
Prepayments of Contracts received by the Servicer on or after the Cut-Off Date
(including those Scheduled Payments due prior to, but not received as of, the
Cut-Off Date, but excluding those Scheduled Payments due on or after, but
received prior to, the Cut-Off Date) and on or prior to the second Business Day
immediately preceding such date and (ii) all Liquidation Proceeds (including
proceeds of Insurance Policies to be treated as such in accordance with Section
3.4) realized in respect of the Contracts and related Equipment and applied by
the Servicer after the Cut-Off Date.
SECTION 4.2. Collections.
(a) Pursuant to the Indenture, the Indenture Trustee has
established the Servicing Account. The Servicer shall make deposits to and
transfers from the Servicing Account, and shall be entitled to make withdrawals
therefrom, as provided in this Agreement. The Servicer shall remit to the
Servicing Account all payments by or on behalf of the Obligors on the Contracts
(other than amounts constituting Administrative Fees) and all Liquidation
Proceeds (including (1) proceeds of Insurance Policies to be treated as such in
accordance with Section 3.4 and (2) deficiency amounts paid by the Servicer with
respect to the disposition of Equipment to be treated as such in accordance with
the last paragraph of Section 3.3) received by the Servicer, in each case, as
soon as practicable, but in no event later than the second Business Day after
receipt thereof. Within three Business Days after the deposit of such payments
and proceeds therein, the Servicer shall transfer all amounts credited to the
Servicing Account on account of such payments and proceeds (i) to the extent
they constitute Pledged Revenues, to the Collection Account, and (ii) to the
extent they represent amounts allocated to the Depositor, to the Depositor.
Notwithstanding the foregoing, the Servicer may utilize an alternative
remittance schedule acceptable to the Servicer if the Servicer provides to the
Indenture Trustee written confirmation from each Rating Agency that such
alternative remittance schedule will not result in the downgrading or withdrawal
by the Rating Agency of the rating then assigned to the Notes. Amounts from time
to time in the Servicing Account shall be invested in accordance with Section
8.07 of the Indenture, and the Servicer shall be entitled to any earnings on
such investments as additional servicing compensation hereunder. In the event of
any losses on such investments, the Servicer shall deposit in the Servicing
Account the amount thereof, net of any earnings otherwise distributable to the
Servicer.
(b) The Servicer shall remit to the Collection Account
(i) that portion of any Purchase Amount relating to the Required Payoff Amount
received by the Servicer upon the purchase by TCC of any Contract pursuant to
Section 2.6, and (ii) that portion of the amount paid by the Depositor to
purchase the Contracts
-35-
pursuant to Section 5.1 as is required to be deposited in the Collection Account
pursuant to such Section.
(c) Notwithstanding the provisions of subsections (a) and
(b) hereof, the Servicer will be entitled to be reimbursed from amounts on
deposit in the Servicing Account or the Collection Account with respect to a
Collection Period for amounts previously deposited in the Servicing Account or
the Collection Account but later determined by the Servicer in good faith to
(i) have resulted from mistaken deposits or postings or checks returned for
insufficient funds, or (ii) be required to be repaid to an Obligor. The amount
to be reimbursed hereunder may be retained pursuant to Section 4.4 at any time
or may otherwise be paid to the Servicer on the related Payment Date pursuant to
Section 8.03(i) of the Indenture upon certification by the Servicer of such
amounts and the provision of such information to the Indenture Trustee as may be
necessary to verify the accuracy of such certification.
(d) The Servicer shall remit directly to the Depositor that
portion of any Purchase Amount relating to the Book Value of any Leased
Equipment received by the Servicer upon the purchase by TCC of any Contract
pursuant to Section 2.6.
SECTION 4.3. Application of Collections. For the purposes
of this Agreement, all collections for a Collection Period shall be applied by
the Servicer as follows:
(a) With respect to each Contract, payments by or on behalf
of the Obligor thereof (other than Administrative Fees with respect to
such Contract, to the extent collected) shall be applied to Scheduled
Payments and Prepayments in accordance with the terms of such Contract
and the Servicer's credit and collection policies and procedures. With
respect to each Liquidated Contract, that portion of the Liquidation
Proceeds allocated to the Issuer shall be applied, for purposes of this
Agreement and the Indenture only, to Scheduled Payments and Prepayment on
the Contract as if the Liquidation Proceeds had been paid by the Obligor
on the Accounting Date, and then to any other amounts due and payable
with respect to such Contract. The Servicer shall not be entitled to any
Administrative Fees with respect to a Liquidated Contract unless the
Required Payoff Amount for such Contract has been deposited in the
Collection Account.
(b) With respect to each Contract that has become a
Purchased Contract as of any Deposit Date, that portion of the Purchase
Amount relating to the Required Payoff Amount shall be applied, for
purposes of this Agreement and the Indenture only, to Scheduled Payments
and Prepayment on the Contract as if the Purchase Amount had been paid by
the Obligor on the related Accounting Date. All payments by or on behalf
of an Obligor received with respect to any Purchased Contract after the
Accounting Date immediately preceding the Deposit Date on which the
Purchase Amount was
-36-
paid by TCC, shall be paid to TCC and shall not be included in Pledged
Revenues.
(c) With respect to each Contract that has been purchased
by the Depositor pursuant to Section 5.1, the purchase price shall be
applied, for purposes of this Agreement and the Indenture only, to
Scheduled Payments and Prepayments on the Contract as if such purchase
price had been paid by the Obligor on the Accounting Date. All payments
by or on behalf of an Obligor received with respect to any Contract so
purchased after the Accounting Date on which the purchase price was paid
by the Depositor, shall be paid to the Depositor and shall not be
included in the Amount Available.
SECTION 4.4. Net Deposits. So long as no Servicer
Termination Event shall have occurred and be continuing with respect to the
Servicer, the Servicer may make the remittances or transfers to be made by it
pursuant to Section 4.2 net of amounts (which amounts may be netted prior to any
such remittance or transfer) that would otherwise be distributed to it pursuant
to Section 8.03(i) of the Indenture; provided, however, that the Servicer shall
account for all of such amounts in the related Servicer's Certificate as if such
amounts were deposited and distributed separately; and provided, further, that
the amounts that would otherwise be distributed to the Servicer pursuant to
Section 8.03(i) of the Indenture shall not include that portion of the Servicing
Fee for the related Collection Period to be applied by the Indenture Trustee in
accordance with the Cash Collateral Account Agreement. If an error is made by
the Servicer in calculating the amount to be deposited or retained by it, with
the result that an amount less than required is deposited in the Collection
Account, the Servicer shall make a payment of the deficiency to the Collection
Account immediately upon becoming aware, or receiving notice from the Indenture
Trustee, of such error.
SECTION 4.5. Expiration of Lease Contracts. In the case of
any Lease Contract which has reached the end of its Original Term, is not in
default and as to which, in accordance with the terms of such Lease Contract,
the lessor thereunder is entitled to the related Equipment, the Servicer shall
take such action as the Depositor shall direct to cause title to such Equipment
in the Depositor to be free and clear of any Liens created by this Agreement or
any Related Document. Any payments thereafter made by the Obligor in respect of
such Equipment, whether on the related Lease Contract or otherwise, shall be the
property of the Depositor or its designated assignee.
-37-
ARTICLE V
TERMINATION
SECTION 5.1. Optional Purchase of All Contracts;
Liquidation of Trust Assets.
(a) At such time as the sum of the Aggregate Principal
Balance of the Notes is less than 10% of the Initial Contract Pool Principal
Balance, the Depositor shall have the option to purchase the corpus of the
Issuer (excluding any rights the Issuer may have with respect to the Cash
Collateral Account); provided, however, that the amount to be paid for such
purchase (as set forth in the following sentence) shall, in any event, be
sufficient to pay the full amount of unpaid principal of and interest payable on
the Notes on the related Payment Date. To exercise such option, the Depositor
shall, (i) furnish written notice to the Servicer, the Owner Trustee and the
Indenture Trustee of its intent to exercise such option, not later than 25 days
(or such lesser number of days as shall be satisfactory to the Indenture
Trustee) prior to the related Payment Date, and (ii) on the related Accounting
Date, pay to the Servicer the aggregate purchase price for the Contracts (which
shall be an amount equal to the sum of the Required Payoff Amounts for all of
the Contracts), plus the appraised value of any other property (including the
right to receive any future recoveries) held as part of the Issuer, such
appraisal to be conducted by an appraiser mutually agreed upon by the Depositor
and the Indenture Trustee (or, if the Notes are no longer Outstanding, the Owner
Trustee), and shall succeed to all interests in and to the Trust Assets. The
fees and expenses related to such appraisal shall be paid by the Depositor. The
Servicer shall immediately deposit the purchase price so paid into the
Collection Account, to be treated as Available Pledged Revenues and distributed
in accordance with Section 8.03 of the Indenture.
(b) Notice of any termination of the Issuer shall be given
by the Servicer to the Owner Trustee and the Indenture Trustee as soon as
practicable (but in no event more than three Business Days) after the Servicer
has received notice thereof.
-38-
ARTICLE VI
THE DEPOSITOR
SECTION 6.1. Liability of Depositor. The Depositor shall be
liable hereunder only to the extent of the obligations in this Agreement
specifically undertaken by the Depositor and the representations made by the
Depositor.
SECTION 6.2. Merger or Consolidation of, or Assumption of
the Obligations of, Depositor; Amendment of Certificate of Incorporation.
(a) The Depositor shall not merge or consolidate with any
other Person or permit any other Person to become the successor to the
Depositor's business except in accordance with the requirements of this Section.
The certificate of incorporation of any corporation (i) into which the Depositor
may be merged or consolidated, (ii) resulting from any merger or consolidation
to which the Depositor shall be a party, or (iii) succeeding to the business of
Depositor, shall contain provisions relating to limitations on business and
other matters substantively identical to those contained in the Depositor's
certificate of incorporation. Any such successor corporation shall execute an
agreement of assumption of every obligation of the Depositor under this
Agreement and each Related Document and, whether or not such assumption
agreement is executed, shall be the successor to the Depositor under this
Agreement without the execution or filing of any document or any further act on
the part of any of the parties to this Agreement. The Depositor shall provide
prompt written notice of any merger, consolidation or succession pursuant to
this Section 6.2 to the Owner Trustee, the Indenture Trustee and the Rating
Agencies. Notwithstanding the foregoing, the Depositor shall not merge or
consolidate with any other Person or permit any other Person to become a
successor to the Depositor's business, unless (w) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 2.4 shall have been breached (for purposes hereof, such representations
and warranties shall speak as of the date of the consummation of such
transaction) and no event that, after notice or lapse of time, or both, would
become an Event of Default or a Servicer Termination Event shall have occurred
and be continuing, (x) the Depositor shall have delivered to the Owner Trustee
and the Indenture Trustee a certificate of a Responsible Officer of the
Depositor and an Opinion of Counsel each stating that such consolidation, merger
or succession and such agreement of assumption comply with this Section 6.2 and
that all conditions precedent, if any, provided for in this Agreement relating
to such transaction have been complied with, (y) the Depositor shall have
delivered to the Owner Trustee and the Indenture Trustee an Opinion of Counsel,
stating that, in the opinion of such counsel, either (A) all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary to preserve and protect the interest of the Issuer
in the Trust Assets and reciting the details of the filings or (B) no such
action shall be necessary to preserve and protect such interest, and (z) the
Rating Agency Condition shall have been satisfied.
-39-
(b) The Depositor hereby agrees that it shall not (i) take
any action prohibited by Article XVI of its certificate of incorporation or
(ii) without the prior written consent of the Owner Trustee and the Indenture
Trustee and without satisfaction of the Rating Agency Condition, amend Article
III, Article IX, Article XIV or Article XVI of its certificate of incorporation.
SECTION 6.3. Limitation on Liability of Depositor and
Others. The Depositor and any director or officer or employee or agent of the
Depositor may rely in good faith on the advice of counsel or on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising under this Agreement. The Depositor shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its obligations as transferor of the Contracts under this
Agreement and that in its opinion may involve it in any expense or liability.
SECTION 6.4. Depositor May Own Notes. Each of the Depositor
and any Affiliate of the Depositor may in its individual or any other capacity
become the owner or pledgee of Notes with the same rights as it would have if it
were not the Depositor or an Affiliate thereof except as otherwise specifically
provided herein or in the Related Documents. Notes so owned by or pledged to the
Depositor or such Affiliate shall have an equal and proportionate benefit under
the provisions of this Agreement or any Related Document, without preference,
priority, or distinction as among all of the Notes; provided that the Notes
owned by the Depositor or any Affiliate thereof, during the time such Notes are
owned by them, shall be without voting rights for any purpose set forth in this
Agreement or any Related Document. The Depositor shall notify the Owner Trustee
and the Indenture Trustee in writing promptly after it or any of its Affiliates
become the owner or pledgee of a Note.
-40-
ARTICLE VII
THE SERVICER
SECTION 7.1. Liability of Servicer; Indemnities.
(a) The Servicer (in its capacity as such and, in the case
of TCC, without limitation of its obligations under the Purchase Agreement)
shall be liable hereunder only to the extent of the obligations in this
Agreement specifically undertaken by the Servicer and the representations made
by the Servicer.
(b) The Servicer shall indemnify, defend and hold harmless
the Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, their
respective officers, directors, agents and employees, the Equity
Certificateholder and the Noteholders from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent that such cost,
expense, loss, claim, damage or liability arose out of, or was imposed upon the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the Equity
Certificateholder or the Noteholders through the Servicer's breach of this
Agreement, the gross negligence, willful misfeasance or bad faith of the
Servicer in the performance of its duties under this Agreement or by reason of
reckless disregard of its obligations and duties under this Agreement.
(c) The Servicer shall indemnify, defend and hold harmless
the Owner Trustee, in its individual capacity, its officers, directors, agents
and employees, from and against all costs, taxes (other than income taxes on
fees and expenses payable to the Owner Trustee), expenses, losses, claims,
damages and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties contained in the Trust
Agreement and the Related Documents, except to the extent that such cost, taxes
(other than income taxes), expense, loss, claim, damage or liability (A) is due
to the willful misfeasance or gross negligence of the Owner Trustee, or
(B) arises from the Owner Trustee's breach of any of its representations or
warranties set forth in Section 7.3 of the Trust Agreement.
(d) The Servicer shall indemnify, defend and hold harmless
the Indenture Trustee, in its individual capacity, its officers, directors,
agents and employees, from and against all costs, taxes (other than income taxes
on fees and expenses payable to the Indenture Trustee), expenses, losses,
claims, damages and liabilities arising out of or incurred in connection with
the acceptance or performance of the trusts and duties contained in the
Indenture and the Related Documents, except to the extent that such cost, taxes
(other than income taxes), expense, loss, claim, damage or liability (A) is due
to the willful misfeasance or gross negligence of the Indenture Trustee, or
(B) arises from the Indenture Trustee's breach of any of its representations or
warranties set forth in Section 6.13 of the Indenture. Indemnification under
this Section 7.1(d) shall be available, however, only if and to the extent that
reimbursement pursuant to Section 6.07 of the
-41-
Indenture is not available (either because the Indenture Trustee is deemed not
to be entitled to reimbursement under such Section 6.07 for such cost, taxes
(other than income taxes), expense, loss, claim, damage or liability, or because
insufficient funds are available to the Indenture Trustee pursuant to such
Section 6.07).
(e) Indemnification under this Article shall include,
without limitation, reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer has made any indemnity payments pursuant to this
Article and the recipient thereafter collects any of such amounts from others,
the recipient shall promptly repay such amounts collected to the Servicer,
together with any interest earned thereon.
(f) TCC, in its individual capacity, hereby acknowledges
that the indemnification provisions in each of the Purchase Agreements
benefiting the Depositor (to the extent they relate to the Contracts) have been
assigned to the Issuer, the Owner Trustee and the Indenture Trustee, and are
enforceable by each hereunder.
(g) The provisions of this Section shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee and the
termination of the Related Documents.
SECTION 7.2. Merger or Consolidation of, or Assumption of
the Obligations of, the Servicer. The Servicer shall not merge or consolidate
with any other Person, convey, transfer or lease substantially all its assets as
an entirety to another Person, or permit any other Person to become the
successor to the Servicer's business unless, after the merger, consolidation,
conveyance, transfer, lease or succession, the successor or surviving entity
shall be an Eligible Servicer and shall be capable of fulfilling the duties of
the Servicer contained in this Agreement. Any corporation (i) into which the
Servicer may be merged or consolidated, (ii) resulting from any merger or
consolidation to which the Servicer shall be a party, (iii) which acquires by
conveyance, transfer, or lease substantially all of the assets of the Servicer,
or (iv) succeeding to the business of the Servicer, in any of the foregoing
cases shall execute an agreement of assumption to perform every obligation of
the Servicer under this Agreement and, whether or not such assumption agreement
is executed, shall be the successor to the Servicer under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties to this Agreement, anything in this Agreement to the contrary
notwithstanding; provided, however, that nothing contained herein shall be
deemed to release the Servicer from any obligation. The Servicer shall provide
written notice of any merger, consolidation or succession pursuant to this
Section to the Owner Trustee, the Indenture Trustee and each Rating Agency.
Notwithstanding the foregoing, the Servicer shall not merge or consolidate with
any other Person or permit any other Person to become a successor to the
Servicer's business, unless (a) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.6 shall
have been breached (for purposes hereof, such representations and
-42-
warranties shall speak as of the date of the consummation of such transaction)
and no event that, after notice or lapse of time, or both, would become a
Servicer Termination Event shall have occurred and be continuing, (b) the
Servicer shall have delivered to the Owner Trustee and the Indenture Trustee a
certificate of a Responsible Officer of the Servicer and an Opinion of Counsel
each stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, (c) the Servicer shall have delivered to the Owner Trustee and the
Indenture Trustee an Opinion of Counsel, stating that, in the opinion of such
counsel, either (1) all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary to preserve
and protect the interest of the Owner Trustee in the Trust Assets and reciting
the details of the filings or (2) no such action shall be necessary to preserve
and protect such interest, and (d) the Rating Agency Condition has been
satisfied.
SECTION 7.3. Limitation on Liability of Servicer and
Others. Neither the Servicer nor any of the directors or officers or employees
or agents of the Servicer shall be under any liability to the Issuer, the Equity
Certificateholder, the Depositor, the Noteholders, the Owner Trustee or the
Indenture Trustee except as provided in this Agreement, for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement; provided, however, that this provision shall not protect the Servicer
or any such person against any liability that would otherwise be imposed by
reason of a breach of this Agreement or willful misfeasance, bad faith or gross
negligence (excluding errors in judgment) in the performance of duties, by
reason of reckless disregard of obligations and duties under this Agreement or
any violation of law by the Servicer or such person, as the case may be;
provided further, that this provision shall not affect any liability to
indemnify the Owner Trustee and the Indenture Trustee for costs, taxes,
expenses, claims, liabilities, losses or damages paid by the Owner Trustee or
the Indenture Trustee, each in its individual capacity. The Servicer and any
director, officer, employee or agent of the Servicer may rely in good faith on
the advice of counsel or on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising under this
Agreement.
SECTION 7.4. Servicer Not to Resign. Subject to the
provisions of Section 7.2, the Servicer shall not resign from the obligations
and duties imposed on it by this Agreement as Servicer except upon a
determination that by reason of a change in legal requirements the performance
of its duties under this Agreement would cause it to be in violation of such
legal requirements in a manner which would have a material adverse effect on the
Servicer, and a Note Majority does not elect to waive the obligations of the
Servicer to perform the duties which render it legally unable to act or to
delegate those duties to another Person. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Owner Trustee and the Indenture Trustee. No resignation
of the Servicer shall become effective until a successor
-43-
Servicer that is an Eligible Servicer shall have assumed the responsibilities
and obligations of the Servicer; provided, however, that in the event a
successor Servicer is not appointed within 60 days after the Servicer has given
notice of its resignation and has provided the Opinion of Counsel required by
this Section, the Servicer may petition a court for its removal.
SECTION 7.5. Corporate Existence. The Servicer shall
maintain its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which the failure to so qualify would have an adverse effect on the validity or
enforceability of any Contract or this Agreement or on the ability of the
Servicer to perform its duties under this Agreement.
-44-
ARTICLE VIII
SERVICER TERMINATION EVENTS
SECTION 8.1. Servicer Termination Event. For purposes of
this Agreement, each of the following shall constitute a "Servicer Termination
Event":
(a) Any failure by the Servicer to deposit within the time
periods specified in this Agreement in the Collection Account for
distribution to Noteholders, or to distribute to the Depositor, any
proceeds or payment required to be so deposited or distributed under the
terms of this Agreement (or, if TCC is the Servicer, the Purchase
Agreement) that continues unremedied for a period of five Business Days
(three Business Days with respect to payment of Purchase Amounts) after
written notice is received by the Servicer from the Indenture Trustee or
after discovery of such failure by a Responsible Officer of the Servicer;
or
(b) Failure by the Servicer to deliver to the Indenture
Trustee and the Owner Trustee the Servicer's Certificate by the third
Business Day prior to the related Payment Date, or failure on the part of
the Servicer to observe its covenants and agreements set forth in Section
7.2; or
(c) Failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement (or, if TCC is the Servicer, any of
the Purchase Agreements (to the extent they relate to the Contracts),
which failure (i) materially and adversely affects the rights of the
Issuer, the Equity Certificateholder or the Noteholders, and
(ii) continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Owner Trustee, the Indenture
Trustee or any Noteholder; or
(d) (i) The commencement of an involuntary case under the
federal bankruptcy laws, as now or hereinafter in effect, or another
present or future federal or state bankruptcy, insolvency or similar law
and such case is not dismissed within 60 days; or (ii) the entry of a
decree or order for relief by a court or regulatory authority having
jurisdiction in respect of the Servicer in an involuntary case under the
federal bankruptcy laws, as now or hereafter in effect, or another
present or future, federal or state, bankruptcy, insolvency or similar
law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Servicer or of any
substantial part of their respective properties or ordering the winding
up or liquidation of the affairs of the Servicer; or
(e) The commencement by the Servicer of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect, or any
other
-45-
present or future, federal or state, bankruptcy, insolvency or
similar law, or the consent by the Servicer to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Servicer or of
any substantial part of its property or the making by the Servicer of an
assignment for the benefit of creditors or the failure by the Servicer
generally to pay its debts as such debts become due or the taking of
corporate action by the Servicer in furtherance of any of the foregoing;
or
(f) Any representation, warranty or statement of the
Servicer made in this Agreement or any certificate, report or other
writing delivered by the Servicer pursuant hereto shall prove to be
incorrect in any material respect as of the time when the same shall have
been made, the incorrectness of such representation, warranty or
statement has a material adverse effect on the Issuer or Noteholders,
and, within 30 days after written notice thereof shall have been given to
the Servicer or the Depositor by the Owner Trustee, the Indenture Trustee
or any Noteholder, the circumstances or condition in respect of which
such representation, warranty or statement was incorrect shall not have
been eliminated or otherwise cured.
SECTION 8.2. Consequences of a Servicer Termination Event.
If a Servicer Termination Event shall occur and be continuing, the Indenture
Trustee may, and at the written direction of a Note Majority (or, at such time
as the Notes are no longer Outstanding, an Equity Certificate Majority) shall,
by notice given in writing to the Servicer and the Owner Trustee, terminate all
of the rights and obligations of the Servicer under this Agreement. On or
afteruthe receipt by the Servicer of such written notice, all authority, power,
obligations and responsibilities of the Servicer under this Agreement, whether
with respect to the Equity Certificate, the Notes, the Trust Assets or
otherwise, shall be terminated and automatically shall pass to, be vested in and
become obligations and responsibilities of the Indenture Trustee (unless and
until a successor Servicer is appointed in accordance with Section 8.3);
provided, however, that the Indenture Trustee shall have no liability with
respect to any obligation which was required to be performed by the terminated
Servicer prior to the date that the Indenture Trustee becomes the Servicer or
any claim of a third party based on any alleged action or inaction of the
terminated Servicer. The Indenture Trustee is authorized and empowered by this
Agreement to execute and deliver, on behalf of the terminated 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 notice of termination. The terminated Servicer agrees to
cooperate with the Indenture Trustee in effecting the termination of the
responsibilities and rights of the terminated Servicer under this Agreement,
including, without limitation, the transfer to the Indenture Trustee for
administration by it of all cash amounts that shall at the time be held by the
terminated Servicer for deposit, or have been deposited by the terminated
Servicer, in any of the Trust Accounts or thereafter received with respect to
the Contracts and the delivery to the Indenture Trustee of all Contract Files,
Monthly Records and Collection Records and a computer tape in
-46-
readable form (in the format then being used by the Servicer) as of the most
recent Business Day containing all information necessary to enable the Indenture
Trustee or a successor Servicer to service the Contracts and the other Trust
Assets. The terminated Servicer shall grant the Owner Trustee, the Indenture
Trustee and the successor Servicer reasonable access to the terminated
Servicer's premises at the terminated Servicer's expense.
SECTION 8.3. Indenture Trustee to Act; Appointment of
Successor.
(a) On and afteruthe time the Servicer receives a notice of
termination pursuant to Section 8.2, the Indenture Trustee shall be the
successor in all respects to the Servicer in its capacity as servicer under this
Agreement and the transactions set forth or provided for in this Agreement, and
shall be subject to all the responsibilities, restrictions, duties, liabilities
and termination provisions relating thereto placed on the Servicer by the terms
and provisions of this Agreement. As compensation therefor, the Indenture
Trustee shall be entitled to receive the Total Servicing Fee. The Owner Trustee
and the Indenture Trustee shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(b) Notwithstanding the foregoing, the Indenture Trustee
may, if it shall be unwilling to so act, or shall, if it is legally unable to so
act, appoint, or petition a court of competent jurisdiction to appoint, any
Eligible Servicer as the successor to the Servicer hereunder in the performance
of all or any part of the responsibilities, duties or liabilities of the
Servicer hereunder. Pending appointment of a successor pursuant to the preceding
sentence, the Indenture Trustee shall act as successor Servicer unless it is
legally unable to do so, in which event the outgoing Servicer shall continue to
act as Servicer until a successor has been appointed and accepted such
appointment.
(c) In connection with such appointment and assumption, the
Indenture Trustee may make such arrangements for the compensation of such
successor out of payments on the Contracts as it and such successor shall agree;
provided, however, that no such monthly compensation shall, without the written
consent of the Depositor and 100% of the Noteholders, exceed the Total Servicing
Fee. The Indenture Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
(d) If a successor Servicer is acting as Servicer
hereunder, it shall be subject to termination under Section 8.2 upon the
occurrence of any Servicer Termination Event applicable to it as Servicer.
(e) At such time as any successor Servicer (including the
Indenture Trustee) becomes Servicer hereunder, it shall agree to perform all of
the obligations of the Servicer under, and be subject to the terms of, the Cash
Collateral Account
-47-
Agreement, and shall take such actions as the parties to the Cash Collateral
Account Agreement may reasonably request to evidence such agreement.
SECTION 8.4. Notification to Equity Certificateholder and
Noteholders. Upon any termination of, or appointment of a successor to, the
Servicer pursuant to this Article VIII, the Owner Trustee shall give prompt
written notice thereof to the Equity Certificateholder and to each Rating
Agency, and the Indenture Trustee shall give prompt written notice thereof to
Noteholders at their respective addresses appearing in the Note Register.
SECTION 8.5. Waiver of Past Defaults. A Note Majority may
waive any default by the Servicer in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Termination Event arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
-48-
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. Amendment.
(a) This Agreement may be amended by the Depositor, the
Servicer, the Issuer and the Indenture Trustee without the consent of any of the
Noteholders (i) to cure any ambiguity, (ii) to correct or supplement any
provisions in this Agreement that may be inconsistent with any other provision
herein, or (iii) to make any other provisions with respect to matters or
questions arising under this Agreement that are not inconsistent with the
provisions hereof; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the interests
of the Noteholders.
(b) This Agreement may also be amended from time to time by
the Depositor, the Servicer, the Issuer and the Indenture Trustee with the
consent of a Note Majority (which consent of any Holder of a Note given pursuant
to this Section or pursuant to any other provision of this Agreement shall be
conclusive and binding on such Holder and on all future Holders of such Note and
of the Note issued upon the transfer thereof or in exchange thereof or in lieu
thereof whether or not notation of such consent is made upon the Note) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement, or of modifying in any manner the rights of
the Holders of Notes; provided, however, that no such amendment shall
(a) increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Contracts or distributions required to be
made on any Note or the rate of interest payable thereon, (b) amend any
provisions of Section 5.06 or 8.03 of the Indenture in such a manner as to
affect the priority of payment of interest or principal to Noteholders, or
(c) reduce the aforesaid percentage required to consent to any such amendment or
any waiver hereunder, without the consent of the Holders of all Notes then
Outstanding and affected thereby; and provided, further, that no such amendment
shall be effective unless and until the Rating Agency Condition has been
satisfied.
(c) Promptly after the execution of any such amendment or
consent, the Indenture Trustee shall furnish written notification of the
substance of such amendment or consent to each Noteholder.
(d) It shall not be necessary for the consent of
Noteholders pursuant to Section 9.1(b) to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of Noteholders provided for in this Agreement) and of evidencing
the authorization of the execution thereof by Noteholders shall be subject to
such reasonable requirements as the Indenture Trustee may prescribe, including
the establishment of record dates.
-49-
(e) Prior to the execution of any amendment to this
Agreement, the Owner Trustee and the Indenture Trustee shall be entitled to
receive and conclusively rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement, in
addition to the Opinion of Counsel referred to in Section 9.2(h). The Owner
Trustee and the Indenture Trustee may, but shall not be obligated to, enter into
any such amendment which affects the Owner Trustee's or the Indenture Trustee's,
as the case may be, own rights, duties or immunities under this Agreement or
otherwise.
SECTION 9.2. Protection of Title to Trust Assets.
(a) The Depositor shall execute and file such financing
statements and cause to be executed and filed such continuation and other
statements (including those prepared by the Servicer pursuant to Section
3.14(c)), all in such manner and in such places as may be required by law fully
to preserve, maintain and protect the interest of the Issuer, the Owner Trustee
and the Indenture Trustee in the Trust Assets and in the proceeds thereof;
except that (i) UCC-1 financing statements and continuation statements, listing
the Obligor as debtor and the related Equipment as collateral, need be filed
only as required by Section 3.5; and (ii) no assignments of any such financing
statements relating to the Equipment shall be filed to reflect the assignment of
the Contracts by the Originators to the Depositor and by the Depositor to the
Issuer. The Depositor shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither the Depositor nor the Issuer shall change its
name, identity or corporate structure in any manner that would, could or might
make any financing statement or continuation statement filed by the Depositor in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Owner Trustee and
the Indenture Trustee at least 60 days' prior written notice thereof, and shall
promptly file appropriate amendments to all previously filed financing
statements and continuation statements.
(c) Each of the Depositor, the Servicer and the Issuer
shall give the Owner Trustee and the Indenture Trustee at least 60 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. The Servicer shall at all times
maintain each office from which it services Contracts and its principal
executive office within the United States of America.
(d) The Servicer shall maintain accounts and records as to
each Contract accurately and in sufficient detail to permit (i) the reader
thereof to know at
-50-
any time the status of such Contract, including payments and recoveries made and
payments owing (and the nature of each) and (ii) reconciliation between payments
or recoveries on (or with respect to) each Contract and the amounts from time to
time deposited in the Collection Account in respect of such Contract.
(e) The Servicer shall maintain its computer systems so
that, from and after the time of transfer and assignment under this Agreement of
the Contracts to the Issuer, the Servicer's master computer records (including
any backup archives) that refer to any Contract indicate clearly that the
Contract is owned by the Issuer. Indication of the Issuer's ownership of a
Contract shall be deleted from or modified on the Servicer's computer systems
when, and only when, the Contract has been paid in full, liquidated (including
receipt of all recoveries reasonably expected to be collected) or purchased by
the Depositor or TCC.
(f) Upon receipt by the Servicer of reasonable prior
notice, the Servicer shall permit any of the Owner Trustee, the Indenture
Trustee and their respective agents, at any time during the Servicer's normal
business hours to inspect, audit and make copies of and abstracts from the
Servicer's records regarding any Contracts or any other portion of the Trust
Assets. Upon receipt by the Servicer of reasonable prior notice, the Servicer
shall permit any of the Owner Trustee, the Indenture Trustee and the Depositor
and their respective agents, at any time during the Servicer's normal business
hours but no more frequently than once per calendar year (or, if a Servicer
Termination Event shall have occurred and be continuing, as often as reasonably
requested), to inspect, audit and make copies of and abstracts from the
Servicer's records regarding the Servicer's servicing procedures and the
Servicer's properties relating to its servicing activities.
(g) The Servicer shall furnish to the Owner Trustee and the
Indenture Trustee at any time upon request a list (which may, at the option of
the Servicer, be on a computer disk or other electronic storage medium) of all
Contracts then held as part of the Trust Assets, together with a reconciliation
of such list to the Schedule of Contracts and to each of the Servicer's
Certificates furnished before such request indicating removal of Contracts from
the Issuer. Upon request, the Servicer shall furnish a copy of any list to the
Depositor. Subject to the following sentence, the Owner Trustee shall hold any
such list and Schedule of Contracts for examination by interested parties during
normal business hours at the Corporate Trust Office upon reasonable notice by
such Persons of their desire to conduct an examination. The Owner Trustee shall
and shall cause its representatives to hold in confidence all information
thereon relating to the identity of the Obligors except to the extent disclosure
may be required by 'SS' 9-208 of the UCC or by other applicable law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Owner Trustee may reasonably determine that such disclosure
is consistent with its obligations under the Indenture.
(h) The Depositor and the Servicer shall deliver to the
Owner Trustee and the Indenture Trustee simultaneously with the execution and
delivery
-51-
of this Agreement and of each amendment thereto and upon the occurrence of the
events giving rise to an obligation to give notice pursuant to Section 9.2(b) or
(c), an Opinion of Counsel either (a) stating that, in the opinion of such
Counsel, all financing statements and continuation statements have been executed
and filed that are necessary fully to preserve and protect the interest of the
Issuer and the Indenture Trustee in the Contracts and the other Trust Assets,
and reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (b) stating that, in the opinion of
such counsel, no such action is necessary to preserve and protect such interest.
(i) The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee, within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months after
the Closing Date, an Opinion of Counsel, either (a) stating that, in the opinion
of such counsel, all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the interest
of the Issuer and the Indenture Trustee in the Contracts, and reciting the
details of such filings or referring to prior Opinions of Counsel in which such
details are given, or (b) stating that, in the opinion of such counsel, no
action shall be necessary to preserve and protect such interest.
SECTION 9.3. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 9.4. Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Equity
Certificate or the Notes or the respective rights of the Holders thereof.
SECTION 9.5. Assignment. Notwithstanding anything to the
contrary contained in this Agreement, except as provided in Section 7.2 or
Section 8.2 (and as provided in the provisions of the Agreement concerning the
resignation of the Servicer), this Agreement may not be assigned by the
Depositor or the Servicer without (i) the prior written consent of the Owner
Trustee, the Indenture Trustee and a Note Majority, and (ii) satisfaction of the
Rating Agency Condition.
SECTION 9.6. Third-Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Nothing in this Agreement, express
or implied,
-52-
shall give to any Person, other than the parties hereto and their successors
hereunder, any benefit or any legal or equitable right, remedy or claim under
this Agreement.
SECTION 9.7. Counterparts. For the purpose of facilitating
its execution and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute but
one and the same instrument.
SECTION 9.8. Intention of Parties. The parties hereto
intend that, in the event that the conveyance of the Contracts and other Trust
Assets pursuant to this Agreement is determined to be made as security for a
loan made by the Issuer, the Equity Certificateholder or the Noteholders to the
Depositor, the Depositor hereby grants to the Issuer to secure such loan a first
priority security interest in all of the Depositor's right, title and interest
in and to the rights and property intended to be conveyed to the Issuer pursuant
to Section 2.1(a). This Agreement shall, in such event, constitute a security
agreement under applicable law.
SECTION 9.9. Notices. All demands, notices and
communications under this Agreement shall be in writing, personally delivered or
mailed by certified mail-return receipt requested, or by facsimile transmission,
and shall be deemed to have been duly given upon receipt (a) in the case of TCC,
the Depositor or the Servicer, at the following address: 00 Xxxxxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: General Counsel, (b) in the case of the
Owner Trustee, at its Corporate Trust Office, and (c) in the case of the
Indenture Trustee, at its Corporate Trust Office, or at such other address as
shall be designated by any such party in a written notice to the other parties.
SECTION 9.10. Income Tax Characterization. The Depositor
has structured the Trust Agreement, the Indenture, the Cash Collateral Account
Agreement, the Notes and the Equity Certificate with the intention that the
Notes will qualify under applicable federal, state, local and foreign tax law as
indebtedness of the Depositor secured by the Contracts. The Depositor and the
Servicer agree to treat and to take no action inconsistent with the treatment of
the Notes as such indebtedness for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income.
SECTION 9.11. Limitation of Liability. It is expressly
understood and agreed by the parties hereto that (a) this Agreement is executed
and delivered by The Bank of New York, not individually or personally but solely
as Owner Trustee of the Issuer under the Trust Agreement, in the exercise of the
powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by The Bank of New York but is made and intended for the purpose for
binding only the Issuer, (c) nothing
-53-
herein contained shall be construed as creating any liability on The Bank of New
York, individually or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly waived by
the parties to this Agreement and by any person claiming by, through or under
them and (d) under no circumstances shall The Bank of New York be personally
liable for the payment of any indebtedness or expenses of the Issuer or be
liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Issuer under this Agreement or any related
documents.
-54-
IN WITNESS WHEREOF, the Issuer, the Depositor, TCC, the
Servicer and the Indenture Trustee have caused this Transfer and Servicing
Agreement to be duly executed by their respective officers as of the day and
year first above written.
ISSUER:
CAPITA EQUIPMENT RECEIVABLES
TRUST 1997-1
By THE BANK OF NEW YORK,
not in its individual capacity but solely
as Owner Trustee
By /s/ Xxxxxx X. Laser
----------------------------------------
Name: Xxxxxx X. Laser
Title: Assistant Vice President
DEPOSITOR:
ANTIGUA FUNDING CORPORATION
By /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Treasurer
AT&T CAPITAL CORPORATION
In its individual capacity and as Servicer
By /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President and Treasurer
INDENTURE TRUSTEE:
BANKERS TRUST COMPANY
not in its individual capacity but
solely as Indenture Trustee
By /s/ Xxxxx Monestra
----------------------------------------
Name: Xxxxx Monestra
Title: Trust Officer
-55-
